DG Safeguards Initiates Investigation on Dioctyl Phthalate Imports on Complaint of KLJ Plasticizers Plus Three
[Ref: F.No.
D-22011/ 13/2011 dated 23 May 2012]
Sub: Initiation of
safeguard investigation concerning imports of Dioctyl
Phthalate (DOP) 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 M/s. KLJ Plasticizers Ltd, Silvassa,
M/s N K Polymers & Additives Mfg Co., Daman, M/s Payal Polyplast Ltd, Daman and
M/s PCL Oil & Solvents Ltd, Daman for imposition of Safeguard Duty on imports
of Dioctyl Phthalate (DOP) into India to protect the
domestic producers of Dioctyl Phthalate (DOP) against
serious injury caused by the increased imports of Dioctyl
Phthalate (DOP) into India.
2. Domestic Industry: The application has been filed by M/s KLJ Plasticizers Ltd, Silvassa, M/s N K Polymers & Additives Mfg Co., Daman, M/s Payal Polyplast Ltd, Daman and M/s PCL Oil & Solvents Ltd,
Daman for imposition of Safeguard Duty on imports of Dioctyl
Phthalate (DOP). The applicants, taken together, account for
91% of the total production of the said product in India.
3. Product Involved: The product under consideration is Bis
(2-ethylhexyl) phthalate, commonly abbreviated DEHP, is an organic compound
with the formula C6H4 (C8H17COO)2. It is also known as
dioctyl phthalate and abbreviated as DOP in
market/trade parlance. It is the most important “phthalate”, being the diester of phthalic acid and the branched-chain
2-ethylhexanol. This product is a colourless viscous liquid, soluble in oil, but
not in water. It possesses good plasticizing properties. Being produced on a
massive scale by many companies, it has acquired many names and acronyms,
including BEHP and di-2-ethyl hexyl phthalate. It is widely used as a plasticizer
in manufacturing of articles made of PVC. Plastics may contain 1% to 40% of
DEHP. It is also used as a hydraulic fluid and as a dielectric fluid in
capacitors. DEHP also finds use as a solvent in glowsticks
as it has suitable properties and the low cost. It has been used as a
plasticizer in medical devices such as intravenous tubing and bags, catheters,
nasogastric tubes, dialysis bags and tubing, and blood bags, transfusion tubing
and air tubes. Dioctyl Phthalate (DOP) is classified
under Customs sub-heading No. 29173920 under the Customs Tariff Act, 1975.
4. Period of investigation (POI): This is a fresh case based on the serious injury caused by the increased
imports being faced by the domestic industry. The POI has been taken from
2008-09 onwards till 2011-12 (Q3).
5. Increased Imports: Dioctyl Phthalate (DOP) is imported into
India from a number of countries, and primarily from Republic of Korea, Taiwan
and Malaysia. The imports of Dioctyl Phthalate (DOP)
have shown an increasing trend in absolute terms as well as compared to the
domestic production. The imports and domestic production of Dioctyl
Phthalate (DOP) during 2008-09 to 2011-12 (till Q3) remained as under:
|
Year |
Total Imports (MT) |
Domestic Production (MT) |
|
2008-09 |
40608 |
60242 |
|
2009-10 |
35210 |
69468 |
|
2010-11 |
35346 |
77492 |
|
2011-12(Apr-Dec) |
37450 |
51710 |
|
2011-12(Annualized) |
49934 |
68946 |
The Imports have increased from 35210 MT in 2009-10
to 35346 MT in 2010-11 and further to 49934 MT in 2011-12(annualized) which
shows an increase of 42% which is substantial. Further the imports with respect
to domestic production were 50.68 % in 2009-10 which increased to 72.42 % in
2011-12(annualized).
6. Injury: The applicants
have claimed that the increased imports of Dioctyl
Phthalate (DOP) have caused and are threatening to cause serious injury to the
domestic producers of Dioctyl Phthalate(DOP)
as indicated by the following factors:
a) Production: The domestic production has
fallen sharply from 77492MT in 2010-11 to 68946 MT in 2011-12(annualized) after
showing a rising trend from 2008-09 to 2010-11.
|
YEAR |
Index |
Production (MT) |
|
2008-09 |
100 |
60242 |
|
2009-10 |
115 |
69468 |
|
2010-11 |
129 |
77492 |
|
2011-12(Apr-Dec) |
|
51710 |
|
2011-12(annualized) |
114 |
68946 |
(b) Domestic sales: Domestic sales have also
declined from 72035 MT in 2010-11 to 61912 MT in 2011-12(annualized) after
showing a rising trend from 2008-09 to 2010-11. This is evident from the table
below:
|
Year |
Index |
Domestic Sales (MT) |
|
2008-09 |
100 |
58880 |
|
2009-10 |
115 |
67959 |
|
2010-11 |
122 |
72035 |
|
2011-12 (Apr-Dec) |
|
46434 |
|
2011-12(annualized) |
105 |
61912 |
(c) Consumption/Demand: The sale has increased till
2010-11 but has declined thereafter sharply even though there is a surge in
demand for the same period. As the import has increased from 2009-10 till
2011-12 (annualised), the increase in imports have affected the DI’s share of
sale, resulting in injury.
|
Year |
DI Sale (MT) |
Demand (MT) |
Import(MT) |
% of DI sale in Demand. |
|
2008-09 |
58880 |
99488 |
40608 |
59 |
|
2009-10 |
67959 |
103169 |
35210 |
66 |
|
2010-11 |
72035 |
107381 |
35346 |
67 |
|
2011-12 (Apr-Dec) |
46434 |
83884 |
37450 |
55 |
|
2011-12(annualized) |
61912 |
111846 |
49934 |
55 |
(d) Exports: There has been a continuous growth in
exports by the DI till the most recent period that too at lower prices in order
to minimize losses due to mounting inventory, especially during 2009-10 to
2011-12 (annualized). This situation is further aggravated by increase in
demand but sharp decrease in share of sale in domestic market in the most
recent period.
|
Year |
Domestic Sale(MT) |
Indexed average domestic Sale price (Rs./Kg) |
Export(MT) |
Indexed average Export Sale price (Rs./Kg) |
|
2008-09 |
58880 |
100 |
1326 |
100 |
|
2009-10 |
67959 |
93 |
1892 |
86 |
|
2010-11 |
72035 |
118 |
4274 |
105 |
|
2011-12 (Apr-Dec) |
46434 |
124 |
6194 |
112 |
|
2011-12(Annualised) |
61912 |
124 |
8258 |
112 |
(e) Capacity Utilization: Capacity
utilization of the domestic industry has declined in the most recent period,
from 50% in 2010-11 to 42% in 2011-12(annualized). As compared to 2010-11, the
capacity utilization has further declined in the most recent period by 8 % even
though there is an addition of 6.42 % in the installed capacity.
|
Year |
Installed Capacity (MTS) |
Capacity utilization % |
|
2008-09 |
155750 |
39 |
|
2009-10 |
155750 |
45 |
|
2010-11 |
155750 |
50 |
|
2011-12 (April -Dec) |
124313 |
42 |
|
2011-12 (Annualized) |
165750 |
42 |
(f) Share of domestic industry in domestic
consumption: Market share of domestic industry has fallen significantly.
The applicants had market share of 94% in 2009-10 in domestic market which fell
to 91% during 2010-11 and remained at 91% in 2011-12(annualized).
(g) Profit/loss – the profitability of the
domestic industry has steeply deteriorated to such a situation that the
domestic industry is now suffering financial losses. This is evident from the
table below:-
|
Financial Year |
Profit (Rs.in lakhs) |
|
2008-09 |
-1599 |
|
2009-10 |
471 |
|
2010-11 |
448 |
|
2011-12 (Annualized) |
-4600 |
(h) Inventories – The average inventories
with the domestic industry have increased significantly. The table below
depicts the inventories level which have witnessed an increasing
trend from 823 MT in 2009-10 to 1338 in 2011-12(annualized), reflecting the plight
of the domestic industry.
|
YEAR |
Index |
Inventory(MT) |
|
2008-09 |
100 |
1066 |
|
2009-10 |
77 |
823 |
|
2010-11 |
115 |
1223 |
|
2011-12(April-Dec) |
129 |
1376 |
|
2011- 12 (annualized) |
126 |
1338 |
7. The domestic
industry has requested for immediate imposition of safeguard measures in their
application. The domestic industry’s request for imposition of provisional
safeguard duty is in light of critical circumstances, since interim measures
are imperative in view of steep deterioration in performance of the domestic
industry as a result of increased imports of product under consideration.
Significant drop in sales volumes of the domestic industry and consequently in
production, capacity utilization, rising inventories and significant drop in
profits to a situation of financial losses, justify immediate imposition of
safeguard duty on imports of DOP.
8. The application has been examined
and it has been found that prima facie increased imports of Dioctyl
Phthalate (DOP) have caused and are threatening to cause serious injury to the
domestic producers of Dioctyl Phthalate (DOP) and
such increase in imports has caused irreparable damage to the domestic industry
and accordingly, it has been decided to initiate an investigation 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.
Telefax: 011-23741542/ 23741537
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 21 days from the date of this notice.