The cement industry in Pakistan has long faced repeated cartel concerns, according to a recent study by the Competition Commission of Pakistan (CCP). The report highlights decades of suspected price coordination among major producers.
These cartel concerns have emerged multiple times over the past 30 years. The industry structure makes it vulnerable. Cement is a uniform product with limited variation. It also has excess production capacity. These conditions often encourage price coordination.
The study notes that the first major wave of cartel concerns appeared in 1992. This happened after the privatisation of state-owned cement plants. Demand also increased after flooding in the country. At that time, regulators confirmed coordinated price increases. However, penalties were weak and mostly administrative.
In the late 1990s, similar cartel concerns resurfaced. Cement companies again increased prices at the same time. Regulators said these increases were not linked to higher production costs. Despite orders to stop such practices, enforcement remained limited.
Legal delays also weakened action during this period. Many decisions were challenged in courts. In some cases, government economic bodies intervened instead of regulators. This reduced the impact of enforcement efforts and allowed cartel concerns to continue.
In the early 2000s, the situation did not improve significantly. In 2003, regulators ordered 18 manufacturers to reduce prices. However, court rulings restricted regulatory powers. This made it difficult to control suspected collusion.
Further cartel concerns were reported in 2007 when prices rose sharply again. Investigators lacked strong tools at the time. They did not have whistleblower systems or search powers, which limited evidence collection.
A major change came after the Competition Ordinance of 2007. It strengthened the CCP’s authority. In 2008, investigators uncovered a formal arrangement among cement producers. The agreement involved production quotas designed to keep prices high.
This case led to a record fine of Rs6.3 billion in 2009. It was one of the largest penalties linked to cartel concerns in Pakistan’s history. However, lengthy court proceedings delayed final resolution.
The CCP report concludes that despite stronger laws, cartel concerns in the cement sector remain a recurring challenge. Enforcement gaps and legal delays continue to limit long-term impact.
In other news read more about: Pakistan Cement Sector Expected to Post Strong Growth in FY26
