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Cement makers trying to form cartel. (Corporate Briefs).

Cement manufacturers are making desperate efforts to again form a cartel. Though they believe it is the only available channel to protect the industry but the consumers who have opinion otherwise say such tactics were basically meant for a profit making spree by pushing prices irrationally up.

The cement prices were Rs. 240 and Rs. 245 a bag by October last year when the cartel disbanded and it brought rates down to Rs. 200 a bag within a month.

The downward trend continued during the last four months as the cement prices fell to Rs. 165 and Rs. 175 at the retail level across the country, against Rs. 245 and Rs. 250 before November.

Lowering down of cement prices have triggered off construction activities and the consumers were taking it as a good opportunity. But repeated requests to the All Pakistan Cement Manufacturers Association by some of the manufacturers for making a cartel show their anxiety.

Lucky Cement is interested in reaching the cartel understanding more than others. It claimed that the industry was losing Rs. 429 million per month. It was not only a question of Lucky Cement rather it was a 'matter of the survival of the industry as a whole.

Sources said basically the fight between south and north zones and additional quota to Lucky Cement as an incentive for Karachi over and above its quota for north zone were basic reasons for breaking-up of cartel.

Cement: market analysts are not foreseeing any such understanding in the near future. They said that a good number of cement makers were against any cartel making in the name of understanding and they may oppose any such move even if APCMA called a meeting to hear their point of view. They believed that the market forces should decide the price of cement. In this regard, they quoted consumption, which stood higher than post. November 2002 when prices were determined by APCMA.
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Publication:Economic Review
Article Type:Brief Article
Geographic Code:90ASI
Date:Feb 1, 2003
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