Assam Petrochemicals is a public sector undertaking of Government of Assam established for production of methanol and formalin.
The order came on a complaint filed by Assam Plywood Manufacturers Association which alleged that Assam Petrochemicals is abusing its dominant position by charging a discriminatory price of formalin in Assam and West Bengal.
While it charges Rs 15,300 per metric tonne (PMT) in Assam, it charges only Rs 11,000 PMT in West Bengal.
Assam Petrochemicals stated that the production capacity of its factory is much more than the market requirement of formalin in Assam, Nagaland and Arunachal Pradesh, and therefore it is dependent on market outside these states.
It said that ex-factory formalin price is calculated on the basis of prices being offered by competitors and thereby, it sells formalin below the cost price in the region outside Assam, Nagaland and Arunachal Pradesh on account of low prices offered by its competitors, due to which it has also incurred losses.
"The Commission is of the opinion that irrespective of the fact that whether the relevant product market of supply of formalin is confined to state of Assam or whether it is extended upto the adjacent states including West Bengal, it is apparent from the submission made by OP that there are multiple players in the market," the Competition Commission of India (CCI) said.
Opposite party (OP) refers to Assam Petrochemicals.
It further added that the presence of multiple players indicates that buyers have the option to choose their supplies in Assam and in the adjacent states including West Bengal. Therefore, it appears that no purchaser is dependent on a single formalin supplier.
"Neither OP appears to be dominant in the market for supply of formalin in the state of Assam nor does the impugned conduct appear to be abusive," CCI said. SRS RVK