To be published in Part –I, Section 1 of the Gazette of India Extraordinary

GOVERNMENT OF INDIA
MINISTRY OF COMMERCE & INDUSTRY
PRELIMINARY FINDINGS NOTIFICATION

Subject:- Anti-dumping investigation concerning imports of Partially Oriented Yarn ( POY) from Republic of Korea and Turkey –Preliminary Findings.

No.36/1/2001-DGAD. - The Government of India having regard to the Customs Tariff Act, 1975 as amended in 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, thereof:

1. The procedure described below has been followed with regard to the investigations:

i. The Designated Authority (hereinafter referred to as Authority), under the Rules, received written application from M/s Association of Synthetic Fibre Industry, 125 Uday Park, Ist Floor, New Delhi-110 049 on behalf of the domestic industry, alleging dumping of POY originating in or exported from Republic of Korea and Turkey.

ii. The Authority, on the basis of sufficient evidence submitted by the Petitioner, decided to initiate investigations against imports of POY from Republic of Korea and Turkey. The Authority notified Embassies of Republic of Korea and Turkey in India about the receipt of dumping allegation before proceeding to initiate the investigations in accordance with sub-rule 5(5) of the Rules;

iii. The Authority issued a public notice dated 20^th August, 2001 published in the Gazette of India, Extraordinary, initiating anti-dumping investigations concerning imports of POY, classified under Customs Tariff Heading 54.02 under HS Classification and 5402.42 under Indian Customs Tariff Classification. The petitioners have also stated that PFY classified under 5402.33 and Flat Yarns classified under 5402.43 and other variants of yarns of polyester are also misclassified under the heading 5402 meant for ‘Partially Oriented Yarns of Polyesters (POY). The classification is, however indicative only and in no way binding on the present investigations;

iv. The Authority forwarded a copy of the public notice to the known exporters (whose details were made available by the petitioner) and industry associations and gave them an opportunity to make their views known in writing in accordance with the rule 6(2);

v. The Authority forwarded a copy of the public notice to the known importers of POY in India and advised them to make their views known 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 imports of POY for the past three years, including the period of investigation.

vii. The Authority provided a copy of the petition to the known exporters and the Embassies of Republic of Korea and Turkey in India in accordance with rules 6(3) supra;

viii. The Authority sent questionnaire, to elicit relevant information, to the following known exporters, in accordance with the rule 6(4);

ix. The Embassies of Korea and Turkey in New Delhi were informed about the initiation of the investigations in accordance with rule 6(2) with a request to advise the exporters/ producers from their country to respond to the questionnaire with in the prescribed time. A copy of the letter, petition and questionnaire sent to the exporters was also sent to them, alongwith the list of known exporters and producer from Republic of Korea and Turkey.

x. The questionnaire was also sent to the following importers of POY in India calling for necessary information in accordance with rule 6(4);

xi. Additional information regarding injury was sought from the petitioner, which was also received;

xii. The Authority made available non-confidential version of the evidence presented by various interested parties in the form of a public file kept open for inspection by the interested parties;

xiii. The Authority sought and verified information deemed necessary for the investigation.

xiv. The Authority also conducted cost investigation (based on the information received) and worked out optimum cost of production / cost to make and sell in India on the basis of Generally Accepted Accounting Principles.

xv. The investigations covered the period of 1^st April, 2000 to 31^th March, 2001 (12 months);

xvi. *** in this notification represents information furnished by an interested party on confidential basis and so considered by the Authority under the Rules;

2.0 The petitioners have stated that the petition earlier filed by the domestic industry seeking imposition of anti dumping duty for imports of POY from Korea RP, Thailand, Indonesia, Taiwan and Malaysia was accepted by the Authority and the investigations were initiated against all above countries except Korea RP. No investigations were initiated due to inappropriate information with regard to import prices published by the DGC&IS. The preliminary findings recommended by the Designated Authority upholds that the dumped imports from Thailand, Indonesia, Taiwan and Malaysia have caused material injury to the domestic industry and the interim duty have been imposed on imports from these sources. The imports from Korea RP, Turkey continues to be at the dumped prices and all causing material injury to the domestic industry. They have requested for imposition of appropriate anti dumping duties on imports from Korea RP & Turkey.

They have stated that they have been informed by their members M/s. Korteks AS, Sonmez Filaments and Nergis TEKSTIL AS would be cooperating with the Authority in the anti dumping investigations.

The association has forwarded a letter from M/s. Sonmez Filaments stating that they have not exported the subject goods to India either directly or through any affiliated company.

M/s. Nergis and Sonmez Filaments have stated that they have not exported the subject goods to India.

4.0 The submissions made by the petitioner, exporters and importers to the extent they are relevant under the Rules and have a bearing upon the case, have been examined and dealt with at appropriate places hereunder.

5.1 The Product Under Consideration in the present investigation is Partially Oriented Yarn, originating and exported form Indonesia, Taiwan, Thailand and Malaysia . Partially Oriented Yarn is generally known as "POY" in the commercial and market parlance and has been referred to as POY in this investigation. POY is a yarn of polyester and is made in wide range from 50 Denier to 530 Denier to meet the requirement of different segments. Denier relates to the fineness of the yarn, lower the denier, finer the yarn. POY is an intermediate, which is subject to further processes (e.g. texturing or draw-twisting) to make it suitable for weaving or knitting into fabrics. POY is different form PFY (having custom classification 5402.43) and PFY is not within the scope of the present investigations.

5.2 The POY is classified under Chapter 54 of the Customs Tariff Act. Description of Chapter 54,in so far as it concerns POY is as follows:

The classification is , however, indicative only and is in no way binding on the scope of the present investigation.

5.3 Authority notes that no arguments have been raised by any interested parties disputing that the POY produced by the petitioners and the POY produced and exported by the exporters are different with regard to product under consideration.

6.1 Rule 2(d) of the Anti dumping Rules specifies that "Like Articles" means an Article, which is identical or alike in respects to the product under investigation or in the absence of such an Article, another article, having characteristics closely resembling those of the articles under examination;

6.2 The petitioners have claimed that there is no known difference in the goods produced by the participating companies in particular and by the Indian industry in general & POY exported from the subject countries which can have an impact on price. POY produced by Indian industry and imported from these countries are similar in terms of characteristics such as physical & chemical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing and tariff classification of the goods. The two are technically and commercially substitutable. The consumers have used the POY imported from these countries and POY produced by the domestic industry interchangeably. POY produced by the participating companies and imported from these countries is to be treated as like articles under the anti-dumping rules. There is no argument raised by any interested party contrary to the above claim of petitioners.In view of the above, the Authority holds that POY being produced by the domestic industry and those being imported form the subject countries are Like Articles within the meaning of the Rules;

7.1 Petitioners have claimed that there are more than 34 producers of POY in India who have created capacity for POY production. The petition is filed by ASFI on behalf of the domestic industry and the companies that have conveyed their willingness to participate in the proposed invesstigations are M/s Century Enka Ltd., M/s Indo Rama Synthetics(I) ltd, M/s Reliance Industries, Ltd, and is supported by M/s DCL Polyester Ltd, M/s Sanghi, Polyesters Ltd, and M/s Recron Synthetics Ltd,. The share of participating and supporting companies account to about 65% of total Indian production during the period of investigation and threfore, have the standing. The production statistics of petitioners and other producers during the POI are as under:-

As seen from the above, the Participating companies accounted for a major proportion of production during the period of investigation .

7.2 The Authority therefore holds that the petitioners satisfy the standing to file the present petition and the Participating companies constitute "Domestic Industry" under the Rules.

8.0 NORMAL VALUE EXPORT PRICE AND DUMPING MARGIN AND EXAMINATION BY THE AUTHORITY IS DISCUSSED HEREUNDER.

(i) "the comparable price, in the ordinary course of trade, for the like article when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6); or

(ii) when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either-

(a) comparable representative price of the like article when exported from the exporting country or territory or an appropriate third country as determined in accordance with the rules made under sub-section (6); or

(b) the cost of production of the said article in the country of origin alongwith reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6):

Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transshipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin".

The company has given transaction wise details of sales made in the home market. The company has provided daily exchange rate. The invoice price and value for all domestic transactions have been converted by the Authority in terms of US $ based on the monthly average of the exchange rates. The domestic transactions are in the ordinary course of trade, as the same are above cost of production claimed by the exporter.

The company has sold two types of POY in the Indian market. The normal value have been, therefore, determined considering only these two types of POY (133 Dx and 283Dx) sold in the home market.

The Authority has determined average selling price for the two types of POY sold by the company in the domestic market during the POI. Price adjustment has been claimed on account of credit in the domestic market. The Authority has allowed adjustment on account of credit on the basis of weighted average of credit given by the exporter in the home market. The cost of credit has been considered as the weighted average of cost for 2000 and 2001, for the purpose of preliminary findings.

The export price has been separately determined for the two types exported. Adjustments have been claimed on account of ocean freight, insurance, commission, inland freight, handling. The Authority has allowed the adjustment, as claimed.

The average of normal value for the two types of POY sold in the domestic market has been compared with the average of export price for the two types. The dumping margin for the two types so arrived at, have been averaged on the basis of volume of exports for the two types.

The exporter has sold a number of POY types in the two market. The transaction-wise details of sales made in the home market shows that the majority of sales in the home market are in the ordinary course of trade. The weighted average selling price has been determined from the transaction-wise sales details provided by the exporter. No price adjustment has been claimed by the exporter. Thus, the weighted average selling price has been treated as normal value, by the Authority, for the purpose of preliminary findings.

With regard to export price, the exporter has provided transaction-wise export details, which contains information with regard to ocean freight and insurance. Transaction-wise ex-factory export price has been determined from the information provided by the exporter. Accordingly, the Authority has determined weighted average ex-factory export price.

The exporters have stated that they have not exported any polyester yarn including POY to Indian market in the last five years. Further, they have stated that all POY produced by them is for their own consumption, hence no exports.

8.5 Authority also notes that none of the other exporters from Korea RP have responded to this investigation. In the circumstances, Authority has relied on the information furnished by the petitioners with respect to constructed normal value and export price. Accordingly, Authority assessed the normal value and export price at ex-factory level.

The Authority notes that no information in the prescribed proforma has been filed by any other exporter from subject countries except for exporters discussed in above paragraphs. The Authority has, therefore, proceeded on the basis of Rule 6(8) i.e. with the best information available.

Accordingly, the Normal Value and export price for ‘other exporters’ from a particular country has been based on the information furnished by the petitioner/ best available information for the purpose of preliminary findings.

8.7 Dumping Margin: The Rules relating to comparison provides comparison of normal value and export price provides as follows:

"While arriving at margin of dumping, the designated authority shall make a fair comparison between the export price and the normal value. The comparison shall be made at the same level of trade, normally at the ex-works level, and in respect of sales made at as nearly as possible the same time. Due allowance shall be made in each case, on its merits, for differences which affect price comparability, including differences in conditions and terms of sales, taxation, levels of trade, quantities, physical characteristics, and any other differences which are demonstrated to affect price comparability".

8.8 Accordingly, the Authority has determined the normal value and export price at ex-factory level for cooperative exporters and other non cooperative exporters for the purpose of preliminary findings pending final determination.

Country	Name of the exporter	Normal Value US$/kg	Export Price US$/kg	Dumping Margin (DM) US $/kg	D M as a % of Export price
Turkey	M/s SASA Dupont Sabanci Polyester AS	***	***	***	47.42
	M/s M/s.Korteks Mensucat Sabatu Ve Ticaret AS.,Turkey, (Korteks )	***	***	***	62.97
	Other Exporters	***	***	***	139.40
Korea RP	All Exporters	***	***	***	77.86

9.0 Under Rule 11 supra, Annexure-II, When a finding of injury is arrived at, such finding shall involve determination of the injury to the domestic industry, "… taking into account all relevant facts, including the volume of dumped imports, their effect on prices in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles…." In considering the effect of the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the price of the like article in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases which otherwise would have occurred, to a significant degree;

9.1 Rule (iii) of the Annexure II to the Rules requires that in case imports of a product from more than one country are being simultaneously subjected to anti-dumping investigation, The Authority will cumulatively assess the effect of such imports. Such assessment can be, however, made only if it is determined that:

a) the margin of dumping in relation to the imports from each country is more than two percent expressed as percentage of export price and the volume of the imports from each country is three percent of the import of the like article in India, and

b) the cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic article.

While examining the volume of the dumped imports, the Designated Authority notes that the volume of total imports which was 49870MT in 99-00 declined to 27663 MT during POI. However, share of imports have cumulatively increased from subject countries as may be seen from the table below.

	Unit	1998-99	1999-2000	POI
Imports	Volume
Korea RP	MT	4772	3498	1843
Turkey	MT	-	206	998
Subject countries	MT	4772	3704	2841
Countries attracting duties (Tiwan, Thailand, Indonesia and Malaysia)	MT	17708	43644	24215
Other countries	MT	1506	2522	633
Imports total	MT	23986	49870	27663
Share in Imports
Korea RP	%	19.89	7.01	6.66
Turkey	%	0.0	0.41	3.60
Subject countries	%	19.89	7.42	10.26
Countries attracting duties(Taiwan Thailand,Indonesia & Malaysia)	%	73.83	87.52	87.45
Other countries	%	6.28	5.06	2.29
Imports total	%	100.00	100.00	100.00

Production	MT	745,377	801,020	826,144
Total Demand	MT	769,363	850,890	853,807

Authority has taken into consideration DGCI&S data for the year 1998-99 as MITCON data is not available for that period. The Authority is relying upon MITCON data for 1999-2000 and 2000-2001, as the DGCI&S data includes imports of PFY also.

The information provided by MITCON is only in respect of major customs ports in the Country. Further, the MITCON data has been analysed in detail and imports misclassified as POY have been excluded. It may thus be seen that the volume of imports is still more than deminimus and significant and the same has increased from 7.42% to 10.26% (as per MITCON data).

Authority notes over the years the sharp reduction in the export price from Korea RP and the commencement of exports from Turkey at dumped prices in substantial volumes, resulted in steep reduction in the landed price of imports from the subject countries, as may be seen from the following table:

Years	Korea		Turkey
	Export price	Landed price	Export price	Landed price
1997-98	70.76	96.23		-
1998-99	58.02	76.18		-
1999-00	41.67	56.82	33.68*	45.92
2000-01	38.94	47.20	39.54	47.92

The steep decline in the landed price of imports (alongwith reduction in the prices by other countries resorting to dumping) forced the domestic industry to reduce its prices far below its cost of production, resulting in severe financial losses to the domestic industry.

Production,sales and capacity utilization of the participating companies are as given in the table below:

Years	Production in MT	Capacity Utilization %	Sales in MT
1998-99	330839	91.59	302492
1999-00	352675	97.64	311263
2000-01	369381	102.26	343481

The production,sales and capacity utilisation has shown improvement in the year 1998-99, 1999-2000 & 2000-01.

Authority notes that the industry has been forced to reduce its prices significantly, far below the cost of production during the period of investigation, due to steep reduction in import prices, resulting in material injury to the domestic industry.

The dumped imports have forced the domestic industry to reduce its prices in spite of increase in the cost of production. The landed value of the imported material during the period of investigation is significantly below the selling prices of the domestic industry.

The employment level in the participating companies has not undergone any significant change due to poor operating levels.

The industry has been forced to reduce its selling prices much below its cost of production, resulting in financial losses. The losses have increased in 2000-01, in view of substantial increase in the cost of production and inability of the industry to increase prices in view of lower landed prices. Further, the attempt to increase the selling prices by the domestic industry resulted in steep increase in the import volumes.

a) The dumping margins from the subject countries are significant and volume of imports are more than de-minimus;

b) The volume of Import is significant and share of subject countries in imports of POY has increased;

c) The export price has declined significantly. The cost of production should have increased for the exporters from the subject countries in the current year in view of increase in the PTA/DMT/MEG prices, whereas the export price has reduced in the period of investigation;

d) The imports were causing severe price undercutting and prevented the domestic industry from effecting legitimate price increases;

e) The domestic industry has been forced to sell at prices significantly below the optimum cost of production and fair selling price;

f) The cost of production of the Indian producers increased significantly, whereas the industry could not increase its prices in view of cheaper imports.

In addition to material injury already suffered by the domestic industry, the domestic industry is facing threat of material injury. The capacity created in the subject countries are much higher than their domestic consumption. Further, the capacity utilization are lower at present and therefore, significant unutilized capacity exists with the exporters. The excess of capacity over their domestic consumption is more than the gross Indian demand,

The imports from the subject countries are being at dumped prices. A number of countries are already being investigated, wherein the preliminary findings notified by the Designated Authority confirms large scale dumping. The Imports from countries other than subject countries are either de-minimus or the prices are higher or the Designated Authority is already conducting Anti Dumping investigations against imports from these countries. The market intelligence of the domestic industry also does not suggest any significant imports at dumped prices from other countries. The imports from other countries have, therefore, not caused any injury to the domestic industry.

Demand for POY has not declined. Decline in demand is, therefore, not a factor, which could have caused injury to the domestic industry.

Reduction in the prices by the prices by the producers in the subject countries and the countries attracting duties is the cause for the injury to the domestic industry. There is no other factor such as trade restrictive practices or export performance, which has caused injury to the domestic industry. In fact, the domestic industry is well established with regard to production and sale of POY.

11.1 The purpose of anti dumping duties, in general, is to eliminate dumping which is in general interest of the country. It is recognized that the imposition of anti dumping duties might affect the price levels of the products manufactured using the subject goods and consequently might have some influence on relative competitiveness of these products. However, fair competition on the Indian market will not be reduced by the anti dumping measures, particularly if the levy of the anti dumping duty is restricted to an amount necessary to redress the injury to the domestic industry. On the contrary, imposition of anti dumping measures would remove the unfair advantages gained by dumping practices, would prevent the decline of the domestic industry and help maintain availability of wider choice to the consumers of subject goods . Imposition of anti dumping measures would not restrict imports from the subject countries in any way, and therefore, would not affect the availability of the product to the consumers.

11.2. To ascertain the extent of anti-dumping duty necessary to remove the injury to the domestic industry, the Authority relied upon reasonable selling prices of subject goods in India for the domestic industry, by considering the optimum cost of production at optimum level of capacity utilisation for the domestic industry.

12.1 The exporters from Korea RP and Turkey have been exporting subject goods below normal value resulting in dumping;

12.3 The injury has been caused cumulatively by the dumped imports of the subject goods from the subject countries;

13.0 It is considered necessary to impose anti dumping duties provisionally, pending final determination, on all imports of subject goods as mentioned above originating in or exported from Korea RP and Turkey.

Accordingly, the Authority has decided to recommend provisional Anti-dumping Duty on POY originating from subject coutries. The Anti-dumping Duty shall be the amounts in US $ /Kg mentioned in column 3 below from the date of notification to be issued in this regard by the Central Government, on all imports of POY originating in or exported from subject countries falling under Chapter 54 of the Customs Tariff Act, pending final determination.

M. Landed value of imports for the purpose shall be the assessable value as determined by the customs under the Customs Act, 1962 and all duties of customs except duties levied under Section 3, 3A,8B and 9, 9A of the Customs Tariff Act, 1975.

N. Exporters, importers, petitioners and other interested parties known to be concerned are being addressed separately by the Authority, who may make known their views, within forty days from the date of the dispatch of the letter. Any other interested party may also make known its views within forty days from the date of publication of these findings.

17.0 The following procedure would be followed subsequent to notifying the preliminary findings:

18.0 The Authority invites comments on these findings from all interested parties and the same would be considered in the final findings;

19.0 Exporters, importers, petitioner and other interested parties known to be concerned are being addressed separately by the Authority who may make known their views, within forty days of the dispatch of this notification. Any other interested party may also make known its views within forty days from the date of publication of these findings.

20.0 The Authority would conduct the verification to the extent deemed necessary for the purpose of this anti-dumping investigation.

21.0 The Authority would provide opportunity to all interested parties for oral submission;

22.0 The Authority would disclose essential facts before announcing the final findings.

Chapter/ Subheading	Description
Chapter 54	Man Made Filaments
Four Digit 54.02	Synthetic filament yarn (other than sewing thread), not put up for retail sale, including synthetic monofilament of less than 67 decitex
Other yarn, single, untwisted or with a twist not exceeding 50 turns per meter:
Six Digit 5402.42	Of polyesters, Partially Oriented

Petitioners	MT	369381
Supporting Companies	MT	149240
Other IndianProducers	MT	284835
Total Domestic Production	MT	803456

Share of Petiotioners and Supporting companies	%	64.54

Country/ Countries	Name of the exporter	US $/Kg
Turkey	M/s SASA Dupont Sabanci Polyester AS, Turkey	0.351
	M/s .Korteks Mensucat Sabatu Ve Ticaret AS.,Turkey, ( Korteks )	0.391
	Other Exporters	0.441
Korea RP	All Exporters	0.358