PP Fabric from Malaysia, Indonesia and Three others in Anti-dumping Investigation on Petition of Global Nonwovens Ltd

[Anti-dumping Initiation Notification F.No.14/23/2015-DGAD dated 15^th June 2016]

Subject: Petition for initiation of anti-dumping investigations on the imports of “Non Woven Fabric” originating in or exported from Malaysia, Indonesia, Thailand, Saudi Arabia and China PR

M/s Global Nonwovens Limited (hereinafter referred to as the ‘petitioner/applicant’) has filed an application before the Designated Authority (hereinafter also referred to as the Authority) in accordance with the Customs Tariff Act, 1975 as amended from time to time (hereinafter also referred to as the Act) and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of injury) Rules, 1995 as amended from time to time (hereinafter also referred to as the Rules) for imposition of Anti-dumping duty on imports of Non-Woven Fabric (hereinafter referred to as the “subject goods”) originating in or exported from Malaysia, Indonesia, Thailand, Saudi Arabia and China PR (hereinafter referred to the “subject countries”).

Product under consideration

2. The product under consideration in the petition is “Nonwoven fabric made of Polypropylene of GSM 25 or less”. These Nonwoven fabrics are broadly defined as sheet or web structures bonded together by entangling filaments mechanically, thermally, or chemically. They are flat, porous sheets that are made directly from molten plastic. They are not made by weaving or knitting and do not require converting the fibers to yarn. The product under consideration can be produced in a number of different types or varieties, which essentially differ in thickness of fabric denominated in GSM, or in the manner in which fabric is formed. The production process involves passing of molten polypropylene through pair of hot cylinders which acts as a bonding agent. This can be either in spun-bond technique or in melt blown technique.

3. The product under consideration is generally classified under Chapter 56 of the Customs Tariff Act under sub heading 56031100, 56039100 etc. It is clarified that the HS codes are only indicative and the product description shall prevail in all circumstances.

Like Article

4. The petitioner submitted that subject goods produced by the petitioner companies and the subject goods imported from the subject countries are like articles. There is no known difference between the subject goods exported from subject countries and that produced by the petitioner. Non woven Fabric produced by the domestic industry and imported from subject countries are comparable in terms of essential product characteristics such as physical & chemical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing and tariff classification of the goods. Consumers can use and are using the two interchangeably. The two are technically and commercially substitutable and hence should be treated as ‘like article’ under the Rules. Therefore, for the purpose of the present investigation, the subject goods produced by the applicant in India are being treated as ‘Like Article’ to the subject goods being imported from the subject country.

Domestic Industry & Standing

5. The Application has been filed by M/s Global Nonwovens Limited, as domestic industry of the product under consideration. According to the Petitioner, they are the sole producers of the subject goods in Domestic tariff Area in India. There is another manufacturer but in SEZ namely M/s Ahlstrom Fibre Composites India Pvt. Ltd. who are also manufacturing the subject goods and have given a support letter. The petitioner has certified that there are no imports of the product under consideration by the petitioner or any of its related party from the subject countries. Since the production of the petitioner accounts for “a major proportion” in the total production of the product under consideration in India, the petitioner satisfies the standing and constitutes Domestic Industry within the meaning of the Rules.

Countries involved

6. The present investigation is in respect of alleged dumping of the product under consideration from Malaysia, Indonesia, Thailand, Saudi Arabia and China PR.

Normal Value

7. The petitioner has claimed that China PR should be treated as a non-market economy and has determined normal value in accordance with Para 7 and 8 of Annexure I of the Rules. In view of the non-market economy presumption and subject to rebuttal of the same by the responding exporters, normal value of the subject goods in China PR has been estimated in terms of Para 7 of Annexure I to the Rules. The applicant has determined the normal value based on cost of production in India, duly adjusted with selling, general and administrative expenses and reasonable profit.

8. Further, the applicant has also constructed the normal values in respect of Malaysia, Indonesia, Thailand and Saudi Arabia on the grounds that they were neither able to get any documentary evidence nor reliable information with regard to domestic prices of the subject goods in the said countries. Further, such information is also not available in public domain. The Authority has prima-facie considered the normal value of subject goods in subject countries on the basis of constructed values as made available by the applicants for the purpose of this initiation.

Export Price

9. The applicant has determined the export price on the basis of data published by DGCIS and IBIS. Price adjustments have been claimed on account of commission, ocean freight, port expenses, inland freight, marine insurance, VAT adjustment and bank charges. During the course of investigation, the Authority will also analyse transaction-wise import data from Directorate General of Commercial Intelligence & Statistics (DGCI&S)

Dumping Margin

10. The normal value and the export price have been compared at ex-factory level, which show significant dumping margin in respect of the subject country. There is sufficient prima facie evidence that the normal value of the subject goods in the subject country is significantly higher than the ex-factory export price, indicating, prima facie, that the subject goods are being dumped into the Indian market by the exporters from the subject country.

Injury and Causal Link

11. The applicant has set up a new facility for production of the product under consideration and commenced commercial production within the investigation period. The applicant has claimed that dumping of the product under consideration in India is materially retarding the establishment of the domestic industry. The applicant has furnished information on various parameters relating to injury for the period for which it has commercial production. The domestic industry is forced to sell the product at prices materially below the fair prices envisaged by the domestic industry before commencement of production. The applicant has thus claimed that even when its commercial production has begun, the domestic industry is yet to find its place in the market.

12. The applicant has claimed that domestic industry has suffered material injury from dumped imports exemplified by various parameters such as significant increase in imports in absolute terms as also relative to the production and consumption in India, significant price undercutting, capacity utilization market share, continued financial losses, return on investments, cash flow, inventories, etc. The demand for the product under consideration has increased over the injury period and subject imports have increased in absolute terms. The imports are undercutting the domestic prices. The imports have suppressed/depressed the domestic prices over the injury period. With regard to consequent impact of the imports on the domestic industry, it is noted that performance of the domestic industry has deteriorated in respect of parameters such as profits; return on capital employed and cash profits. The domestic industry is suffering significant financial losses, cash losses and negative return on investments.

13. And whereas, the Authority prima facie finds that sufficient evidence of dumping of the subject goods, originating in or exported from the subject countries; injury to the domestic industry and causal link between the alleged dumping and injury exist to justify initiation of an anti-dumping investigation, the Authority hereby initiates an investigation into the alleged dumping, and consequent injury to the domestic industry in terms of Para 5 of the Rules, to determine the existence, degree and effect of alleged dumping and to recommend the amount of antidumping duty, which if levied, would be adequate to remove the ‘injury’ to the domestic industry.

Initiation of anti-dumping investigations

14. The Designated Authority, in view of the foregoing paragraphs, initiates antidumping investigations into the existence, degree and effect of alleged dumping of the subject goods originating in or exported from the subject country.

Period of Investigation (POI)

15. The period of investigation for the purpose of present investigation is from 1st July 2015 to 31st March 2016 (9 months) considering that Petitioner has commenced trial production in March 2015 and commercial production in July 2015 only. However, the injury analysis is proposed to be carried out on the basis of quarter to quarter comparison of actual performance and projected estimates/targets.

Submission of Information

16. The exporters in the subject countries, their government through their Embassy in India, the importers and users in India known to be concerned and the domestic industry are being addressed separately to submit relevant information in the form and manner prescribed and to make their views known to the Authority at the following address:

The Designated Authority

Directorate General of Anti-Dumping & Allied Duties

Department of Commerce,

Jeevan Tara Building, 4^th Floor

5, Parliament Street

New Delhi -110001

17. Any other interested party may also make its submissions relevant to the investigation in the prescribed form and manner within the time limit set out below. Any party making any confidential submission before the Authority is required to make a non-confidential version of the same available to the other parties.

Time Limit

18. Any information relating to the present investigation should be sent in writing so as to reach the Authority at the address mentioned above not later than forty days (40 days) from the date of publication of this Notification. If no information is received within the prescribed time limit or the information received is incomplete, the Authority may record its findings on the basis of the facts available on record in accordance with the AD Rules.

19. All the interested parties are hereby advised to intimate their interest (including the nature of interest) in the instant matter and file their questionnaire responses and offer their comments to the domestic industry’s application within forty days (40 days) from the date of publication of this Notification. The information must be submitted in hard copies as well as soft copies.

Submission of information on confidential basis

20. The parties making any submission (including Appendices/Annexure attached thereto), before the authority including questionnaire response, are required to file the same in two separate sets, in case "confidentiality" is claimed on any part thereof.

21. The “confidential” or “non-confidential” submissions must be clearly marked as “confidential” or “non-confidential” at the top of each page. Any submission made without such marking shall be treated as non-confidential by the Authority and the Authority shall be at liberty to allow the other interested parties to inspect such submissions. Soft copies of both the versions will also be required to be submitted, along with the hard copies, in two (2) sets of each.

22. The confidential version shall contain all information which are by nature confidential and/or other information which the supplier of such information claims as confidential. The information which is claimed to be confidential by nature or the information on which confidentiality is claimed because of other reasons, the supplier of the information is required to provide a good cause statement along with the supplied information as to why such information cannot be disclosed.

23. The non-confidential version is required to be a replica of the confidential version with the confidential information preferably indexed or blanked out (in case indexation is not feasible) and summarized depending upon the information on which confidentiality is claimed. The non-confidential summary must be in sufficient detail to permit a reasonable understanding of the substance of the information furnished on confidential basis. However, in exceptional circumstances, party submitting the confidential information may indicate that such information is not susceptible to summary, and a statement of reasons why summarization is not possible, must be provided to the satisfaction of the Authority.

24. The Authority may accept or reject the request for confidentiality on examination of the nature of the information submitted. If the Authority is satisfied that the request for confidentiality is not warranted or if the supplier of the information is either unwilling to make the information public or to authorize its disclosure in generalized or summary form, it may disregard such information.

25. Any submission made without a meaningful non-confidential version thereof or without a good cause statement on the confidentiality claim shall not be taken on record by the Authority.

26. The Authority on being satisfied and accepting the need for confidentiality of the information provided, shall not disclose it to any party without specific authorization of the party providing such information.

Inspection of Public File

27. In terms of Rule 6(7) of the AD Rules, any interested party may inspect the public file containing non-confidential version of the evidence submitted by other interested parties.

Non-cooperation

28. In case where an interested party refuses access to, or otherwise does not provide necessary information within a reasonable period, or significantly impedes the investigation, the Authority may record its findings on the basis of the facts available to it and make such recommendations to the Central Government as deemed fit.