MINISTRY OF COMMERCE
NOTIFICATION
New
Delhi, the 29th September, 1997
Subject: Review of Anti-dumping duties concerning imports of PVC Resin – Final Findings.
ADD/IW/53/96.
- Having regard to the Customs Tariff Act
1975 SB amended In 1995 end the Custom a Tariff (Identification, Assessment and Collection
of Anti Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995,
thereof:
A
PROCEDURE
1.
The Procedure described below has been followed:
i. The Designated Authority
(hereinafter referred to as the Authority) Issued a
public notice vide Notification no ADD/IW/53/&6 dated the 30th Sept., 1996.
initiating review of definitive Anti-dumping duties recommended on imports of Poly Vinyl Chloride Resin (also referred to as PVC Resin hereinafter) originating in
or exported from Brazil, Republic of Korea (also referred to as Korea or
Korea RP hereinafter). Mexico and the United States of America (also referred to as
USA hereinafter) vide notification no. 14/4/9 2-TPD dated 30th July, 1993 and definitive And Dumping Duties imposed by the Central Government
vide notification no 4/94 dated 18th Jan., 1994.
ii. The
investigations concluded by the Designated Authority vide Notification no. W4/92-TPD dated 30th July, 1993 have been
referred to as “the previous
investigations”.
iii.
The Authority issued a public notice dated 30th Sept., 1996 published in
the Gazette of India, Extraordinary, initiating review of anti-dumping duties concerning
imports of PVC Resin, classified under custom heading 3904 of Schedule I of the Customs
Tariff Act, 1975 originating in or exported from Brazil, Korea RP, Mexico and USA (also
referred to as the subject countries hereinafter);
iv. The Authority forwarded a copy of the public notice to all the known exporters and industry associations (whose details were made available by PVC Resin Manufacturers Association in the previous investigations) and gave them an opportunity to make their views known in writing in accordance with the rule 6(2);
iv. The Authority forwarded a copy of the public notice too all the known exporters and industry associations (whose details were made available by PVC Resin Manufacturers Association in the previous investigations) and gave them an opportunity to make their views known in writing in accordance with the rule 6(2).
v he Authority forwarded a
copy of the public notice to all the known
associations of consumers of PVC Resin in India (whose details were made available by
PREMA in the previous infestations) and advised them to make their views
know^ in writing within forty days from the date of the letter,
vi.
Request was made to the Central
Board of Excise
and Customs (CBEC)
to arrange details of import of PVC Resin made in India during the past three years including
the period of review No information was however, received
from CBEC.
vii. The Authority sent questionnaire,
to elicit relevant information, to the following
exporters, in accordance with the rule 6(4),
v
Vista Chemical Company, USA,
v
Shintech inc., USA.
v
Borden Chemicals & Plastics, USA,
v
Formsa Plastics Corpn., USA,
v
Lucky Goldstar International, Korea RP,
v
Hangyang Chemical Corpn , Korea RP;
v
Grupo Primex S A DE C V , Mexico,
v
U B International, Singapore.
v
Vinmar Inc , USA
v
Companhia Petroquimica, Brazil,
v
Kunstoplast of America Inc , USA
None
of the exporters, however, fifed response to the questionnaire
viii
The Embassies of the subject countries in New Delhi were informed about the
initiation of the review in accordance with rule 6(2) with a request to advise the
exporters/producers from their country to respond to the questionnaire within the
prescribed time. A copy of the letter and questionnaire sent to the exporters was also
sent to the Embassies, alongwith a list of known exporters/producers;
ix.
A questionnaire was sent to the following associations of consumers of PVC Resin in
India calling for necessary information in accordance with rule 6(4):
v
Organisation of Plastics Processors of India,
Mumbai;
v
All India Cloth Association, Mumbai;
v
All India PVC Flooring Manufacturers Association,
New Delhi;
v
Indian Plastics Federation, Calcutta;
v
Gujarat State Plastic Manufacturers Association,
Ahmedabad;
v
All India Federation of Plastic Industries, New
Delhi;
v
All India Plastics Manufacturers Association,
Mumbai.
None of the parties, however, filed response to the questionnaire.
x. A questionnaire was sent to PVC Resin Manufacturers Association (herein referred to as PREMA also) calling for necessary information in accordance with rule 6(4). PREMA requested for time upto 31.1.1997 to file information. The extension was allowed upto 10.1.1997. PREMA, however, again requested time upto 31.1.1997, pleading that it was collecting information on dumping from overseas sources. The Authority allowed time upto 31.1.1997 in view of the fact that none of the other parties to the investigations furnished any information and the information to be furnished by PREMA was of significant importance. Response was filed by PREMA on 30.1.1997.
xi.
The Authority held a public hearing on 20th Aug., 1997 to hear the views
orally, which was attended by the following:
v
PVC Resin Manufacturers Association;
v
All India Federation of Plastic Industries.
The All India Plastic Manufacturers Association sent their written comments, though the association did not attend the hearing. The written comments received have been considered while notifying these findings.
The parties attending the public hearing were requested to file written submissions of the views expressed orally. The parties were advised to collect copies of the views expressed by the opposing parties and were requested to offer their rebuttals;
xii.
The Authority kept available non-confidential version of the evidence presented by
various interested parties in the form of a public file maintained and kept open for
inspection by an interested party.
xiii.
Investigation was carried out for the period starting from 1st April,
1995 to 31st March, 1996.
xiv. In
accordance with Rule 16 of the Rules supra, the essential facts/basis considered for these
findings were disclosed to all known interested parties and comments received on the same
have also been duly considered in these findings.
B.
VIEWS OF PREMA
2. PVC Resin
Manufacturers Association made the following submissions:
i)
Despite reduction in definitive duties as compared to provisional duties
recommended by the Authority, the importers did not claim a refund of excess duty. It may
be concluded that the level of anti-dumping duty stands vindicated.
ii)
The level of injury suffered by the five Indian PVC producers; accounting for over
50% of domestic capacity is to the tune of Rs.3208 pmt. Since dumping margin has also
increased there is a need to increase the level of anti-dumping IPCL’s recently
commissioned plant are also considered. Price depression, price suppression, loss of
production, sale and growth suffered by the domestic industry were a direct consequence of
imports from the subject countries other than Brazil. Imports from Brazil have been
erratic. No other factor causing injury can be termed to have denied a fair return to the
industry.
iii)
The present level of anti-dumping duties for all countries except Brazil is
absolutely inadequate. Brazil has exported very small quantities (75 MT).
iv) On
Dumping:
a) The mindset of the subject countries can be gauged by the fact that imports between April-October 1996 were very high at 1152 MT (USA), 1463 MT (Korea RP). Korea RP exported at US $ 600 pmt CIF in the month of October, 1996 when the international prices were moving in the range of US $ 680-710 pmt.
b)
The trend of FOB export prices to India and home market price in USA and Korea RP
establish that the exporters from these countries are still dumping their products. This
is evident from the table below:
Period |
USA |
Korea
RP |
||
|
Home Market
Prices |
Export Price |
Home Market
Prices |
Export Price |
Q2, 1995 |
1018 |
950 |
1058 |
1019 |
Q3, 1995 |
949 |
1010 |
1036 |
670 |
Q4, 1995 |
766 |
679 |
786 |
659 |
Q1, 1996 |
702 |
524 |
744 |
593 |
Decline in Q1, 96 as
compared to Q2, 95 |
316 (31%) |
426 (45%) |
314 (30%) |
426 (42%) |
c) Though both domestic as well as export prices have declined, the decline in the export price (42-45%) is much sharper than decline in the home market price (30-31%).
d)
In response to the disclosure of essential facts made by the Authority, PREMA
contended that the export price should be determined on the basis of Daily Customs
Clearance reports published by various Customs House in ports, in view of the following:
i.
In the data compiled by DGCI&S, in case the information supplied by a port is
delayed by over six months, then the DGCI&S does not reflect the information as per
clearance dates but reflects the information on the basis of their own compilation, thus
distorting the imports quantity and prices.
ii.
Customs authorities have been clearing Emulsion/Paste grade resin (ITC
code 39042101) under me- tariff coda of Suspension grade (ITC codes 39041000/
30042102/ 39042109).
PREMA requested for an oral heating to elaborate these submissions.
v) On
injury:
a) The dumping from South Korea and USA has led to drastic reduction in prices by the domestic producers causing grave injury.
b)
Domestic producers had to offer substantial trade discounts and credit benefits on
their already declining prices in order to complete with the ready availability of dumped
imports. The average realisations fell short of basic prices by Rs. 2760 pmt (94-95) and
Rs. 3194 pmt (95-96). The domestic manufacturers were prevented from effecting price
increases which otherwise were due in view of steep hike in prices of major in-puts, such
as Ethylene, EDC and VCM.
c) The exportable surplus capacity in USA rose to 273 kMT in Q1, 1996 from 197 kMT in Q2, 1995, whereas the same doubled in case of Korea RP in the corresponding period. The surplus capacity available pose a threat to Indian industry, capacity of which is expected to cross 1 million tonnes by the turn of the century. The subject countries have the following surplus capacities:
(figures in k MT)
Country |
1996 |
1997 |
1998 |
1999 |
USA |
1661 |
1657 |
2058 |
2084 |
Korea RP |
135 |
226 |
294 |
233 |
Mexico |
238 |
229 |
211 |
198 |
Brazil |
114 |
102 |
72 |
59 |
d) The demand for PVC in India is projected to grow at a healthy 13% to cross 8 lakh tonnes by 2000 resulting in surplus available capacity as may be seen from the following table:
(Figs in
‘000 MT) |
96/97 |
97/98 |
98/99 |
99/2000 |
Indian PVC
Consumption |
567 |
641 |
725 |
819 |
Indian PVC Capacity |
813 |
813 |
893 |
1043 |
Surplus Unutilised
Capacity |
246 |
172 |
168 |
224 |
e) In view of huge surplus capacity within the country, continuous imports of PVC will only result in depressing the capacity utilisation.
f) Sales and capacity utilisation have declined during the period whereas inventory has increased.
g) Closing stocks as a percentage of average monthly domestic sales have averaged at more than 80% during investigation period and the same are continually climbing.
h) IPCL has recently commissioned a 150 kmt plant.
i) Threats from dumped imports may adversely affect planned investments and further growth of the domestic industry.
v) The Authority should revise duties as follows:
Rs. per MT
Country |
Existing duties |
Proposed duties |
Mexico |
1619 |
3208 |
Korea RP |
1253 |
3208 |
USA |
504 |
2304 |
Brazil |
2036 |
2036 |
vi)
The above duties should be levied for five years with immediate effect as the same
is the minimum time frame for the global PVC industry to reach near demand-supply balance.
C.
VIEWS OF EXPORTERS, IMPORTERS AND OTHER INTERESTED PARTIES
3. None of the exporters has responded to the Authority and offered any comments. The associations of the consumers have expressed their views, and the same are briefly mentioned below:
i)
The landed price of imports is significantly higher than indigenous prices;
ii)
The PVC Plastic industry has experienced retarded growth in the last three years
due to high prices of raw materials:
iii)
The per capita consumption of Plastic in India is amongst the lowest in the Asian
Region and the world;
iv)
There has been a slow down in exports due to high prices of raw materials;
v) PVC products are
eco-friendly and replace conventional materials which are limited resources;
vi)
The anti-dumping duties on PVC Resin should be withdrawn, especially in view of the
following:
v
The changed international environment;
v
Accelerating the growth of the PVC Plastics
industry which would increase its consumption also;
v
Increasing exports of PVC Plastic products.
vii)
International price of PVC Resin has been fluctuating according to market
conditions in the world. Price of PVC Resin has gone up from US $ 500 pmt in Jan., 1993 to
US $ 700 pmt at present (with the exchange rate also increasing from Rs. 26 per US $ to
Rs. 36 per US $ in the corresponding period). Whereas the prices of PVC Resin have gone
up, as stated above, there has been no change in the prices of feedstock in the
corresponding period.
viii)
The processors must be given advantage of the world market prices in the context of
liberalization of economy.
ix)
Domestic producers who claim to have world capacity plants keep increasing their
prices according to the international market price. One of the producers increased its
prices four times in a month to align with the world market price.
D
EXAMINATION BY AUTHORITY
4.
The submissions made by PREMA, consumer associations and other interested parties
have been examined, considered and, wherever appropriate, have been dealt hereinafter.
5.
The claim of PREMA that the importers who had paid excess anti-dumping duty
provisionally levied and did not claim refund after imposition of lower definitive
anti-dumping duty is irrelevant to decide the present review.
6.
The request of PREMA that the revised duties requested should be levied for five
years on the grounds that the this time period is the minimum time frame for the global
PVC industry to reach near demand-supply balance is not supported by law, as the
anti-dumping rules permit levy of anti-dumping duty for a period of five years, albeit
with a provision of review before the expiry of the period.
E.
PRODUCT UNDER CONSIDERATION AND LIKE ARTICLES
7. The final findings notified earlier with regard to the product under consideration and like articles remains unchanged.
F.
DOMESTIC INDUSTRY
8. In the investigations conducted earlier, the Authority had considered the following units as forming part of the domestic industry, based on the information furnished by PREMA.
v
Chemplast Sanmar Ltd.,
v
Reliance Industries Ltd.,
v
DCM Shriram Consolidated Ltd.,
v
DCW Ltd.
It
was found that PREMA furnished information, in response to the Authority’s request,
with regard to injury, including the extent of injury suffered by the domestic industry,
on the basis of the data in respect of the following producers:
v
DCM Shriram Consolidated Ltd.,
v
DCW Ltd.,
v
Chemplast Sanmar Ltd.,
v
Finolex Pipes Ltd.,
v
National Organic Chemical Industries Ltd.
It
was found from the information filed by PREMA that collective production of units,
information in respect of which was filed by PREMA, did not account for majority
production of PVC Resin in India. PREMA was, therefore, requested to furnish information
in respect of other Indian producers also so as to ensure that the information furnished
by PREMA accounted for majority production of PVC Resin in India. PREMA furnished
information in respect of Reliance Industries Ltd. The information filed by PREMA in thus
in respect of following Indian producers.
v
DCM Shriram Consolidated Ltd.,
v
DCW Ltd.,
v
Chemplast Sanmar Ltd.,
v
Finolex Pipes Ltd.,
v
National Organic Chemical Industries Ltd.
v
Reliance Industries Ltd.
Collective
production of the above units accounted for major proportion of the total Indian
production of PVC Resin. These companies, therefore, collectively constitute domestic
industry within the meaning of the Rules.
G.
DUMPING
9. The Authority sent exporters questionnaires to all the known exporters for the purpose of determination of normal value in accordance with Section 9A(1)c. However, none of the exporters responded to the Authority and have not furnished any information. The Authority, therefore, holds that none of the exporters from the subject countries have co-operated with the Authority as envisaged under the Rules.
10.
PREMA has furnished information with regard to normal values and export prices and
the same is discussed hereinbelow:
Dumping claimed by PREMA:
11. Normal value in case of USA and Korea may be determined on the basis of information furnished by Arthur D’Little, U.K. In case of Mexico, the domestic prices have been claimed on basis of import parity price from the US, tariff rate of 7 percent, freight of US $ 90 pmt payable on PVC Resin imported into Mexico and transportation cost differential of US $ 40 pmt. The normal values claimed by PREMA for the subject countries are as under:
Period |
USA |
Korea RP |
Mexico |
Brazil |
Q2, ‘95 |
1018 |
1058 |
1359 |
970 |
Q3, ‘95 |
949 |
1036 |
1274 |
1000 |
Q4, ‘95 |
766 |
786 |
1049 |
970 |
Q1, ‘96 |
702 |
744 |
970 |
842 |
Fall from Q2 to Q1 |
316 31% |
314 30% |
389 29% |
128 13% |
12. These prices are after adjusting the same for differences in transportation and packing costs, as detailed above in case of Mexico, and as detailed hereinbelow for USA and Korea RP.
13.
Adjustments in home market prices in case of USA and Korea RP claimed by
PREMA.
a. USA: Difference in transportation costs (US $ 24 pmt in case of domestic and US $ 10 pmt in case of exports), Packing premium of US $ 44 pmt for delivery in 2525 kgs. as opposed to bulk delivery by rail car.
b.
Korea RP: There is no freight
differential as both the destinations are located at similar distances.
In view of the fact that none of the exporters from the subject countries has
furnished any information and in the absence of any other information, either supporting
or contradictory, the Authority has determined normal valued in the subject countries on
the basis of claims made by PREMA.
14.
PREMA claimed export prices on the basis of data compiled by the Directorate
General of Commercial Intelligence and Statistics (DGCI &S). Though PREMA claimed that
import volume as per customs daily listings are higher than the volumes as per the
DGCI&S, it had not disputed in its submissions that export price as per the statistics
compiled by DGCI&S represents correct export price of PVC Resin imported from eh
subjects countries. PREMA, however, contended in response to the Authority’s
disclosure of essential facts that the export price as per DGCI&S cannot have
precedence over Daily Customs Clearance reports. The Authority notes that the argument has
been raised by PREMA after disclosure of essential facts. Moreover, the export prices
worked out by PREMA from the Customs Daily Clearances are based on information compiled
from the data of Mumbai, Calcutta, Madras, Porbunder, Okha and Kandla ports, whereas the
information compiled BY DGCI&S covers all ports in India, and therefore, more
authentic and reliable. The claim made by PREMA is not admissible not only due to the fact
that the same has been made after disclosure, but also due to the fact that the
information compiled is not for all ports in India. The Authority, therefore, considers it
appropriate to determine export prices on the basis of statistics compiled by DGCI&S.
15.
PREMA has claimed ocean freight and insurance @ US $ 100 pmt in case of USA, US $
70 pmt in case of Korea RP, US $ 120 pmt in case of Mexico and US $ 145 pmt in case of
Brazil. The Authority has allowed adjustment for ocean freight and insurance as claimed by
PREMA.
16. The
export prices and normal values so determined have been considered as ex-works prices.
17. Since
none of the exporters from the subject countries has responded to the Authority’s
request for information, the Authority has not determined dumping margins for individual
exporters. The Authority took into account the information furnished by PREMA, as no other
party furnished any factual information, for the purpose of fair comparison between the
normal values and the export prices and compared normal values with weighted average
export prices, for each of the subject countries. The comparison shows the following
dumping margins:
Country |
Dumping
margin (US $ per MT) |
Brazil |
14 |
Korea RP |
318 |
Mexico |
313 |
USA |
64 |
H.
INJURY AND CAUSAL LINK
18. Imports of PVC Resin after April 1996 are irrelevant to decide dumping and/or injury in the present investigations. The contention of PREMA that dumping from Korea RP and/or USA led to drastic reduction in prices by the domestic producers is also unsubstantiated. It is found that imports from Korea RP and USA entered at an average price of Rs. 42125 and 41367 pmt, whereas the fair selling price of the domestic industry, as claimed by PREMA, was Rs. ***** pmt. Since imports from the subject countries entered in the Indian market at prices significantly higher than the fair selling price claimed by the domestic industry, it cannot be said that the imports from the subject countries are causing injury to the domestic industry. Any difference between the fair selling price and the net realisations by the domestic industry, therefore, cannot be attributed to the dumped imports.
19. The
contention of PREMA that the domestic producers had to offer substantial trade discounts
and/or credit benefits on their already declining prices in view of the dumped imports is
not established. The dumped imports were available at prices significantly higher than the
fair selling price claimed by PREMA and, therefore, the same cannot be held as a reason
for offering trade discounts or for lower net realisations.
20. The
contention of PREMA that the domestic producers were prevented from effecting price
increases, which were due in view of steep hike in the prices of major in-puts in view of
dumped imports is also not established, as the imported products were available at prices
significantly higher than the fair selling price which the domestic industry should have
received, thus leaving sufficient cushion to the domestic industry to effect any price
increase upto the landed cost of the imported goods from the subject countries in so far
as the imports from these countries are concerned. The reasons for inability of the
domestic producers to effect price increases also cannot be, therefore, attributed to the
availability of the dumped imports.
21. The
contention of PREMA that the courtiers have created excess exportable capacity also does
not establish any injury to the domestic industry from the dumped imports. The dumping
cannot be held to have caused any injury to the domestic producers, as the goods were
exported by the exporters from these countries at landed prices significantly higher than
the fair selling price of the domestic industry. The surplus capacities which might be
available in the subject countries in future is also irrelevant.
22. The
surplus utilised capacity in India during investigation period or in the future does not
establish injury to the domestic industry.
23.
PREMA has not established that the lower price realisations than the fair selling
price to the extent of Rs. 3208 pmt by the domestic industry is due to dumped imports.
24. The
argument that the level of injury would exceed Rs. 9300 pmt, in case production cost of
IPCL’s recently commissioned plant are consider, is unsubstantiated and, therefore,
may be rejected.
LANDED VALUE
25. The landed value have been calculated considering the weighted average export price as per the statistics compiled by SGCI&S, after adding the prevailing level of customs duties and one percent landing and two percent handling charges. Separate landed values have been calculated for each country. The anti-dumping duties in force on imports from these countries have not been included in the landed values.
J. OTHER ISSUES
26. The fact that Brazil has exported very small quantities does not warrant removal of anti-dumping duty on imports from Brazil, even if the volumes are deminimus. Imports of the subject goods after imposition of anti-dumping duty have to be viewed in the context of the anti dumping duty in force on such goods. The low volume of imports from any of these countries could be a result of the very imposition of anti dumping duty. It would, therefore, not be appropriate to remove anti-dumping duty in force on any product merely on the ground that the imports are de-minimus.
K.
FINAL FINDINGS
27. The Authority concludes, after considering the foregoing that:
v PVC Resin originating in or exported from the subject countries has been exported to India below its normal value.
v The domestic industry has not suffered any material injury from imports of PVC Resin from the subject countries.
v No injury has been caused to the domestic industry by the exports of PVC Resin originating in or exported from the subject countries.
28. It is considered appropriate to discontinue the anti-dumping duties in force on imports of PVC Resin on exports originating in or exported from USA, Brazil, Mexico and Korea RP. The Authority may, however, on sufficient cause being shown, review these findings before the expiry of five years from the date of first.
29. Subject to above, the final findings notified vide notification No. 14/4/92-TPD dated 30th July, 1994 is confirmed.
30. An appeal against this order shall lie to the Customs, Excise and Gold (Control) Appellate Tribunal in accordance with the Act supra.
DEEPAK
CHATTERJEE,
Designated Authority