DG Safeguards Initiates Investigation on Sodium Dichromate Import on Vishnu Chemicals Hyderabad Complaint

[Safeguard Initiation Notification F.No. D-22011/05/2014 dated 26th May 2014]

Sub: Initiation of Safeguard Investigation concerning Imports of “Sodium di-chromate” into India.

An application has been filed before me under Rule 5 of the Custom Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997, by M/s. Vishnu Chemicals, Flat No 1, Suvarna House, Sangeethanagar Colony, Somajiguda, Hyderabad-500082 for imposition of Safeguard Duty on imports of “Sodium dichromate” into India to protect the domestic producer of Sodium dichromate against serious injury /threat of serious injury caused by the increased imports of Sodium dichromate.

2.  Domestic Industry

The application has been filed by. M/s. Vishnu Chemicals, Flat No 1, Suvarna House, Sangeethanagar Colony, Somajiguda, Hyderabad-500082 for imposition of Safeguard Duty on imports of Sodium dichromate. The applicants account for more than 70% of the total production of Sodium dichromate in India.

Product under consideration: The present application is filed for imposition of Safeguard duty on imports of “Sodium dichromate” which is PUC. The product under consideration is classifiable under Customs sub –heading No.28413000

3.  Period of investigation (POI)

Present application is a fresh case based on serious injury /threat of serious injury to domestic industry caused by increased import of Sodium dichromate into India. The POI in the case has been taken from 2010-11 to 2013-14.

4.  Source of information

The import data for the product under consideration has been taken from DGCI&S till January, 2014 and same has been relied upon and taken into consideration for analysis. The domestic data from 2010-11 to 2013-14 has been submitted by the applicant and the same has been verified by on-site visits to the manufacturing units of the domestic industry by the department. The verified data has been taken into consideration for injury analysis.

5.  Increased Imports

Imports of Sodium dichromate into India have shown significant increase. The data relating to imports of Sodium dichromate from 2010-11 to Jan 2014 as per DGCIS data, is as under:

Financial Year

Total Import (MT)

Import Indexed

2010-11

4765

100

2011-12

5516

116

2012-13

7205

151

2013-14 (upto Jan 2014)

9503

-

2013-14 (Annalized)

11404

239

It is evident that imports of the product under consideration have sharply increased during the injury period. The imports have increased from 4765 MT in 2010-11 to 11404 MT till 2013-14 (Annualized.) recording an increase of 139 %. Thus, import has increased on absolute basis during the entire period of investigation.

6.  Serious Injury to the Domestic industry

The applicants (hereinafter referred to as DI) have claimed that the increased imports of Sodium dichromate have caused and are threatening to cause serious injury to the domestic producers of Sodium dichromate .The threat of serious injury to domestic industry is clearly visible from the data provided by the applicants as detailed below:

a)  Production: The domestic production of DI decreased up to FY2012-13, but increased marginally in year 2013-14. The production index of Domestic Industry fell to 96 in 2013-14 from 100 in FY 2010-11, as shown below:

Financial Year

Production (MT)

Production Indexed

2010-11

30407

100

2011-12

30383

100

2012-13

28608

94

2013-14

29128

96

b)  Increased Imports w.r.t total production: Sodium dichromate is imported into India from a number of countries, and mainly from. South Africa, Russia and Kazakhistan The imports of Sodium dichromate have shown an increasing trend in absolute terms as well as compared to the total production. The imports and production of Sodium dichromate during financial year 2010-11 to 2013-14 are as under:

Financial Year

Total Imports (MT)

All India Production (MT)

% of Increase in import with respect to production

2010-11

4765

42487

11.22

2011-12

5516

42463

12.99

2012-13

7205

39188

18.39

2013-14

11404

39708

28.72

The Imports have increased from 4765 MT in 2010-11 to 11404 MT in 2013-14 (Annualised) which shows an increase of 139%. The import with respect to total production was 11.22 % in 2010-11 and increased to 28.72 % in 2013-14.

c)  Market Share & Changes in levels of Sales:

Financial Year

Import (MT)

Sales of DI (MT)

Sales of other Indian Producers(MT)

Total Demand (MT)

% of Market Share

DI

Import

2010-11

4765

12138

12080

43320

28

11

2011-12

5516

12846

12080

43499

30

13

2012-13

7205

17151

10580

46148

37

16

2013-14

11404

15780

10580

51355

31

22

Market share of the DI has declined sharply in the recent period (2013-14) whereas share of the import has increased significantly. Applicant had a market share of 37% in 2012-13, it has declined to 31 % in year 2013-14. During the same period market share of import has increased from 16% to 22%. It clearly shows that the DI suffered noticeable loss in sales as well as market share, caused by increased imports during the recent period (2013-14)

d)  Capacity Utilization: The increasing imports are resulting in significant idling of production capacity of the domestic producers. The capacity utilization by the DI has remained constant during period of investigation as can be seen in the Table below:

Financial Year

Installed Capacity(MT)

Production (MT)

Capacity Utilisation (%)

2010-11

93200

30407

33

2011-12

86000

30383

35

2012-13

86000

28608

33

2013-14

86000

29129

34

e)  Profit/loss –The profitability of the domestic industry has steeply deteriorated and the domestic industry is now suffering financial losses. This is evident from the table below:-

Sr.No.

Year

Unit

2010-11

2011-12

2012-13

2013-14

1

Profit/loss

Rs/Kg

(*.**)

(*.**)

(*.**)

(**.**)

2

Indexed

 

-100

-82

-162

-313

f)  Inventories: In view of surging imports and loss of market share, the inventories with the domestic industry have also increased as compared to base year 2010-11. The table below depicts the inventory levels which have witnessed a surge during period of investigation reflecting the plight of the domestic industry.

Financial Year

MT

2010-11

429

2011-12

1094

2012-13

851

2013-14

513

g)  Productivity: The productivity has gone down during the entire period of investigation.. However, DI has witnessed increase in productivity in the year 2013-14.

Financial Year

Production (MT)

Productivity per day (MT)

2010-11

30407

86.88

2011-12

30383

86.81

2012-13

28608

81.74

2013-14

29129

83.23

h)  Employment:

Financial Year

Nos

2010-11

537

2011-12

509

2012-13

491

2013-14

490

The employment has shown continuous decreasing trend during the period of investigation period

7.  The DI has requested in their application for immediate imposition of Safeguard duty on imports of Sodium dichromate 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 due to serious injury and threat to serious injury as a result of increased imports of the product under consideration.

8.  The application has been examined and it has been found that prima facie increased imports of Sodium dichromate have caused and are threatening to cause serious injury to the domestic producer of Sodium dichromate and as such it has been decided to initiate an investigation in the matter through this notice.

9.  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

10.  All known interested parties are also being addressed separately.

11.  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.