Unwrought Aluminium under Safeguard Investigation
on Vedanta, BALCO and Hindalco Complaint
· Import Share in Total Market
Remains Constant in Five Year POI, Production Increases
· Increased Imports Said to Hurt
Industry
[Safeguard Initiation Notice No. D-22011/10/2016/Pt-II
dated 19th April 2016]
Sub:
Initiation of Safeguard Investigation concerning Imports of “Unwrought Aluminium
(Aluminium not alloyed and Aluminium alloys)” into India.
An
application has been filed before me under Rule 5 of the Customs Tariff
(Identification and Assessment of Safeguard Duty) Rules, 1997, by (i) M/s. Vedanta limited –Aluminium & Power, Bhurkamunda, Distt.
Jharsuguda-768202, Odisha (ii) M/s Bharat Aluminium Company Ltd, Aluminium Sadan, Core-6, Scope Office Complex, Lodi Road, New
Delhi-110003 and (iii) M/s Hindalco Industries
Limited, Century Bhavan, 3rd Floor, Dr. Annie Besant Road, Worli,
Mumbai 400030 for imposition of Safeguard Duty on imports of “Unwrought Aluminium (Aluminium not
alloyed and Aluminium alloys)” into India to protect the domestic producers of “Unwrought Aluminium (Aluminium not
alloyed and Aluminium alloys)” against serious injury /threat of serious injury
caused by the increased imports of “Unwrought Aluminium ( Aluminium not
alloyed and Aluminium alloys)’’
2. Domestic Industry
The application has been jointly filed
by (i) M/s. Vedanta limited – Aluminium & Power,
(ii) M/s Bharat Aluminium Company Ltd and (iii) M/s Hindalco
Industries Limited for imposition of Safeguard Duty on imports of “Unwrought
Aluminium”. On perusal of the application and latest data provided by the
Applicants it is seen that the applicants account for more than 50% of the
total production of “Unwrought Aluminium (Aluminium not alloyed and Aluminium
alloys)” falling under Tariff Heading 7601 in India and hence, the applicants
qualify as Domestic Industry in the product “Unwrought Aluminium (Aluminium
not- alloyed and Aluminium alloy)” .
3. Product Involved
The product under consideration
Unwrought Aluminium (Aluminium not alloyed and Aluminium alloys) (hereinafter
referred to as PUC) is classified under Customs Tariff Heading No.7601 of
Chapter 76 of the Customs Tariff Act 1975.
4. Period of investigation (POI)
Present application is
based on serious injury /threat of serious injury to domestic industry caused
by increased import of PUC. The Period of Investigation in the case has been
taken from 2011-12 onwards till 2015-16 (Annualised).
5. Source of information
The import data till
January, 2016 for the product under consideration has been taken from Export
Import Data Bank, Ministry of Commerce (http://www.commerce.nic.in/eidb/icomq.asp) and the domestic data
from 2011-12 to 2015-16 has been submitted by the applicant and the same has
been verified from the excise records and taken into consideration for
analysis.
6. Increased Imports
Imports of PUC into India
have shown significant increase. The data relating to imports of Unwrought
Aluminium (alloyed and not alloyed) from 2011-2012 onwards is as under:
|
Financial Year |
Total Import (MT) |
Import Indexed |
|
2011-12 |
242533 |
100 |
|
2012-13 |
308279 |
127 |
|
2013-14 |
348889 |
144 |
|
2014-15 |
343428 |
142 |
|
2015-16 (April - Jan, 2016) |
360308 |
|
|
2015-16 (Annualized) |
432370 |
178 |
It is seen that in the imports of the
PUC there is a substantial increase during the injury period. The imports have
increased from 2,42,533 MT in 2011-12 to 4,32,370 MT
till 2015-16 (Annualized.) recording an increase of 78%.
7. Serious Injury to the Domestic
industry
The applicants (hereinafter referred to
as DI) have claimed that the increased imports of PUC have caused and are
threatening to cause serious injury to the domestic producers of PUC. To
support their case of the threat of serious injury to the domestic industry
they have supplied the data with regard to various performance parameters and
the same has been analysed as detailed below:
a) Production
of DI: The figures of
domestic production of DI during the period of investigation are as shown
below:
|
Financial Year |
Production (MT) |
Production Indexed |
|
2011-12 |
887286 |
100 |
|
2012-13 |
931776 |
105 |
|
2013-14 |
1051100 |
118 |
|
2014-15 |
1353271 |
153 |
|
2015-16 |
1563639 |
176 |
It is observed that the production of
PUC of the DI has increased over the investigation period.
b) Increased
Imports w.r.t total production: PUC
is imported into India from a number of countries, and mainly from UAE,
Malaysia, Russia, South Africa, Oman, Qatar, Baharain,
and Thailand. Though the imports of PUC have increased in absolute terms, their
share when compared to the total production has more or less remained the same
as is seen from the import and production data of PUC during the financial year
2011-12 to 2015-16 (Annualized) as under:
|
Financial Year |
Total Imports (MT) |
All India Production (MT) |
Percentage of import with respect to all India production |
|
2011-12 |
242533 |
1927464 |
13 |
|
2012-13 |
308279 |
2073367 |
15 |
|
2013-14 |
348889 |
2088900 |
17 |
|
2014-15 |
343428 |
2549372 |
13 |
|
2015-16 |
432370 (Annualised) |
2818978 |
15 |
The Imports in absolute terms have
increased from 2,42,533 MT in 2011-12 to 4,32,370 MT in
2015-16 (Annualised) which shows an increase of approximately 78%. The import
as a percentage of total production was 13 % in 2011-12 and it has increased to
15% in 2015-16.
c) Market
Share & Changes in levels of Sales:
|
(In MT) |
|||||||||
|
Financial Year |
Import |
Sales of Domestic Industry (DI) |
Captive consumption |
Sales of other Indian Producers |
Total Demand |
% of Market Share |
|
||
|
|
|
|
|
|
|
Import |
DI(excluding captive) |
DI (including captive consumption) |
Others |
|
2011-12 |
242533 |
636917 |
443811 |
945192 |
2268453 |
11 |
28 |
48 |
42 |
|
2012-13 |
308279 |
718198 |
567975 |
997410 |
2591862 |
12 |
28 |
50 |
38 |
|
2013-14 |
348889 |
671085 |
618920 |
940006 |
2578900 |
14 |
26 |
50 |
36 |
|
2014-15 |
343428 |
670398 |
605452 |
1134836 |
2754114 |
12 |
24 |
46 |
41 |
|
2015-16 |
432370* |
893565 |
537977 |
1063907 |
2927819 |
15 |
31 |
49 |
36 |
*(Annualised)
During the period 2011-12
to 2015-16 the demand of the product has increased. The market share of import
has increased from 11% in 2011-12 to 15% in 2015-16. During the same period the
share of domestic industry only increased from 28% to 31% despite a significant
level of increase in production capacities involving large capital investment. When
calculated along with captive consumption, the share of DI remained stagnant at
close to 50%.
d) Capacity Utilization: The installed capacity
includes products of other tariff headings also. However, the capacity
utilisation has been calculated with regard to actual production of Tariff
heading 7601. The increasing imports are resulting in significant idling of
production capacity of the domestic producers as can be seen in the Table
below:
|
Financial Year |
Installed Capacity (MT) |
Production (MT) |
Capacity Utilisation (%) |
|
2011-12 |
2325096 |
887286 |
38 |
|
2012-13 |
2317954 |
931776 |
40 |
|
2013-14 |
2557393 |
1051100 |
41 |
|
2014-15 |
2904841 |
1353271 |
47 |
|
2015-16 |
3258465 |
1563639 |
48 |
e) Profit/loss
–The profitability of the domestic
industry has deteriorated in the recent year (2015-16) and the domestic
industry is now suffering financial losses. This is seen from the table below:-
|
Financial Year |
Profitability: Domestic profit (Rs.
Lacs) (Indexed) |
|
2011-12 |
100 |
|
2012-13 |
39 |
|
2013-14 |
7 |
|
2014-15 |
89 |
|
2015-16 (Annualized) |
(275) |
f) Inventories
–The figures of inventories with the
domestic industry are as shown below:
|
Financial Year |
Index |
|
2011-12 |
100 |
|
2012-13 |
53 |
|
2013-14 |
46 |
|
2014-15 |
97 |
|
2015-16 |
49 |
It is observed that the inventory
levels have fluctuated and have decreased between 2014-15 to
2015-16.
g) Productivity
& Employment:
There is increase in the level of
employment keeping in tandem with increasing capacity. During the period
2011-12 to 2015-16, the domestic industry has been able to improve the
productivity.
|
Financial Year |
Production (MT) |
Productivity per day (MT) |
Employment (Indexed) |
|
2011-12 |
887286 |
2535 |
100 |
|
2012-13 |
931776 |
2662 |
95 |
|
2013-14 |
1051100 |
3003 |
112 |
|
2014-15 |
1353271 |
3866 |
111 |
|
2015-16 |
1563639 |
4468 |
105 |
8. The DI has requested in their application for immediate imposition
of Safeguard duty on imports of alloyed and not alloyed unwrought Aluminium
into India for a period of four years. They have also requested for imposition
of provisional Safeguard duty in view of the steep deterioration in performance
of the domestic industry as a result of increased imports of the product under
consideration.
9. After examining the application on different economic parameters,
it is seen that prima facie, despite improvement in productivity, increased
imports of PUC (alloyed and not alloyed unwrought Aluminium) in absolute term
have caused losses to the domestic industry and are threatening to cause
serious injury to the domestic producers of the PUC and as such it has been
decided to initiate an investigation in the matter through this notice.
10. All interested parties may make their views known within a period of
30 days from the date of this notice to:
The Director General (Safeguards)
Bhai Vir Singh Sahitya Sadan; 2nd Floor, Bhai Vir Singh Marg,
Gole Market, New Delhi-110 001, India.
Telephone: 011- 23741537, FAX: 011-23741542
E-mail: dgsafeguards@nic.in
11. All known interested parties are also being addressed separately.
12. Any other party to the investigation who wishes to be considered
as an interested party may submit its request so as to reach the Director
General (Safeguards) on the aforementioned address within 15 days from the date
of this notice.