Dumping
Investigation Initiated on Phenol from Japan and Thailand
[Ref: F.
No. 14/27/2009-DGAD dated 11th August 2009]
Sub: Initiation of
anti-dumping investigation concerning imports of Phenol originating in or
exported from Japan & Thailand.
Whereas Hindustan Organic Chemicals Ltd. (herein
after referred to as applicant) have filed an application before the Designated
Authority (hereinafter referred to as the Authority), in accordance with the
Customs Tariff Act, 1975 as amended in 1995 (herein after referred to as the
Act) and Customs Tariff (Identification, Assessment and Collection of Anti
Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995
(herein after referred to as the Rules), alleging dumping of Phenol, (hereinafter
referred to as subject goods), originating in or exported from Thailand and
Japan, (herein after referred to as “subject countries”) and requested for
initiation of Anti Dumping investigations for levy of anti dumping duties on
the subject goods. The request is supported by M/S S I Group-India Ltd.
2. AND
WHEREAS, the Authority finds sufficient prima facie evidence of dumping of the
subject goods from the subject Countries, injury to the domestic industry and
causal link between the dumping and injury exist, the Authority hereby
initiates an investigation into the alleged dumping, and consequent injury to
the domestic industry in terms of the Rules 5 of the said Rules, to determine
the existence, degree and effect of any alleged dumping and to recommend the
amount of antidumping duty which, if levied, would be adequate to remove the
injury to the domestic industry.
Product under Consideration
3. The
product under consideration for the investigation is Phenol, also known as
Carbolic Acid. The product is marketed in two grades Crystalline and Hydrated.
The two grades are differentiated on the basis of flow characteristics of
Phenol. Phenol is used in the manufacture of Phenol formaldehyde Resins,
Laminates, Plywood, Particle Boards, Bisphenol-A alkyl Phenols Pharmaceuticals, Dephenyl
Oxide etc.
4. Phenol is
a basic organic chemical, normally classified under Chapter 29 of the Customs
Tariff Act. However, imports are reported under Chapter 27 also. The product is
classifiable under Customs Tariff heading no. 2907.11 and 2707.60. The Customs
classifications are, however, indicative only and in no way binding on the
scope of the present investigation.
Domestic Industry and Standing
5. The
application has been filed by M/s. Hindustan Organic Chemicals Limited and
supported by M/S S I Group-India Ltd. There are only two known producers of the
subject goods in the Country. According to the information provided in the
application, the production of Hindustan Organic Chemicals Limited constitute
58% of Indian production during Apr’08-Sept’08 and 55% during Oct’08-Mar’09 and
along with the supporter, it constitutes 100% of the Indian Production. Thus,
the applicant shall constitute “domestic industry” for the purpose of the
present investigations.
6. The
Authority, after examining the above, determines that the applicant constitutes
domestic Industry within the meaning of the Rule 2 and the application
satisfies the criteria of standing in terms of Rule 5 of the Rules supra.
Countries Involved
7. The
countries involved in the present investigation are Thailand and Japan.
Like Article
8. Applicant
has claimed that there is no significant difference in Phenol produced by the
applicant and Phenol exported from subject countries. Both products are
comparable 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. Both the products are technically and commercially
substitutable and hold closely resembling characteristics. It is further
claimed that the consumers have used the two interchangeably. Therefore, for
the purpose of present investigation, subject goods produced by the applicant
are being treated as “Domestic Like Article” to the
subject goods imported from subject countries within the meaning of the Anti
Dumping Rules.
Normal Value
9. In the
absence of availability of data in respect of the domestic sales in Thailand
and Japan, the applicant has constructed normal value on the basis of
constructed cost of production of subject goods in subject countries. 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
applicant, subject to adjustment in the higher interest cost claimed in respect
of Thailand, and the same has been considered by the Authority for the purpose
of initiation.
Export Price
10. The
export price of the subject goods from the subject Countries has been claimed
on the basis of data obtained from International Business Information Services
(IBIS), Mumbai. Price Adjustments have been claimed on account of Ocean
Freight, Marine Insurance, Port Expenses and Inland Freight etc. and scaling
down the same to reasonable limits normally adopted by the Authority. There is
sufficient evidence of export prices claimed by the applicant for the subject
goods from the subject countries.
Dumping Margin
11. Normal
value and export price have been compared at ex-factory level in respect of the
subject countries. There is sufficient evidence that the normal value of the
subject goods in Thailand and Japan, so arrived is significantly higher than
the ex-factory export price indicating, prima facie, that the subject goods are
being dumped by exporters from subject countries into the Indian market.
Injury and Causal Link
12. The
applicant has claimed that injury to the domestic industry has not been caused
due to the factors other than the dumped imports, as shown below:
i. The subject goods are being imported
primarily from Japan, Thailand and the countries already attracting duty. The
imports from other countries are minimal.
ii. There
is some decline in demand in 2008-09 as compared to preceding year but it was
significantly higher than 2005-06 and 2006-07. While demand declined, subject
imports increased significantly in absolute terms and in relation to demand and
production.
iii. The
pattern of consumption with regard to PUC has not undergone any change and
therefore could not have contributed to the injury.
iv. There is
no trade restrictive practice, which could have contributed to the injury to
the domestic industry.
v. Technology
for production of subject goods has not undergone any change and therefore, not
a factor of injury.
vi. The
applicant does not have significant export activities for the product
concerned. The export performance of the applicant therefore, has not caused
any injury to the domestic industry.
vii. The
productivity of the applicant has declined solely due to dumping.
13. Applicant
has submitted that once it is shown that there is an adverse volume and price
effect from dumped imports, and the effects of injury caused by dumped imports
then, the only basis on which to conclude that the injury is not caused by the
dumped imports is through non-attribution analysis, i.e., that other factors
have caused the injury. As listed known other factors do not establish that
injury has been caused by these other factors, the only inescapable conclusion
is that the injury to the domestic industry has been caused by the dumped
imports from a number of sources including subject countries. While the above
parameters establish that injury to the domestic industry has not been caused
by the other factors, applicant has submitted that the following parameters
establish that the injury to the domestic industry has been caused by the
dumped imports.
a.
Imports from the
subject countries were undercutting the prices of the domestic industry. As a
direct consequence, the volume of imports increased significantly.
b.
Increase in the
volume of dumped imports resulted in decline in sale volumes of the domestic
industry.
c.
Decline in the
sales volumes of the domestic industry resulted in decline in the market share
of the domestic industry.
d.
Decline in
prices of the domestic industry resulted in deterioration in profits, and
consequently cash flow and return on capital employed for the domestic
industry.
14. There is
sufficient evidence that the dumped imports of subject goods from subject
countries are, prima facie, causing material injury to the domestic industry.
Initiation of Antidumping Investigation
15. The
Designated Authority, in view of the foregoing paragraphs, initiates anti-dumping
investigations into the existence, degree and effect of alleged dumping of the
subject goods originating in or exported from the subject Countries.
Period of Investigation
16. The
Period of Investigation for the purpose of the present investigation is 1st
October 2008 to 30th June2009 (9 months). The injury investigation period will,
however, cover the period 2006-07, 2007-08, 2008-09 and the POI.
Submission of Information
17. The
exporters in the subject Countries, their Government through the Embassy, the
importers in India known to be concerned with this investigation 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
Designated Authority at the following address:
The Designated Authority
Directorate General of Anti Dumping & Allied
Duties,
Ministry of Commerce & Industry,
Department of Commerce,
Government of India,
Room No. 240, Udyog Bhavan,
New Delhi – 110107.
18. As per
Rule 6(5) of Rule supra, the Designated Authority is also providing opportunity
to the industrial users of the article under investigation and to
representative consumer organizations, who can furnish information relevant to
the investigation regarding dumping, injury and causality. Any other interested
party may also make its submissions relevant to the investigation within the
time limit set out below.
Time Limit
19. 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 from the date of publication of this notification. The known exporters and
importers, who are being addressed separately, are however required to submit
the information within forty days from the date of the letter addressed to them
separately.
Submission of Information
20. In terms
of Rule 6(7) of the Rules, the interested parties are required to submit
non-confidential summary of any confidential information provided to the
Authority and if in the opinion of the party providing such information, such
information is not susceptible to summarization, a statement of reason thereof,
is required to be provided. 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 Designated Authority
may record findings on the basis of facts available and make such
recommendations to the Central Government as deemed fit.
Inspection of Public File
21. In terms
of Rule 6(7), the Designated Authority maintains a public file. Any interested
party may inspect the public file containing non-confidential version of the
evidence submitted by interested parties.