Dumping Investigation Initiated on Resin Bonded Fibre Boards
from China, Indonesia, Malaysia and Sri Lanka on Complaint by Balaji Action Buildwell, Delhi
[Ref: No.
14/29/2010-DGAD Dated 11November 2011
Initiation Notification
Subject:
Initiation of anti-dumping investigation concerning imports of ‘Resin or other organic substances bonded wood or ligneous
fibre boards of thickness below 6mm, except insulation boards, laminated fibre
boards and boards which are not bonded
either by resin or other organic substances’ originating in or exported from China PR, Indonesia, Malaysia
and Sri Lanka.
No. 14/29/2010-DGAD: Whereas M/s. Balaji
Action Buildwell, (hereinafter referred to as the
Applicant ) has filed an application before the Designated Authority
(hereinafter referred to as the Authority), in accordance with the Customs
Tariff Act, 1975, as amended, (hereinafter 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, as amended, (hereinafter referred to as the AD Rules), alleging dumping
of ‘Resin or other organic substances bonded wood or ligneous fibre boards
of thickness below 6mm, except insulation boards, laminated fibre boards and
boards which are not bonded either by resin or other organic substances’ (hereinafter
also referred to as the subject goods) originating in or exported from China
PR, Indonesia, Malaysia and Sri Lanka (hereinafter also referred to as the
subject countries) and has requested for initiation of anti-dumping
investigation and levy of anti dumping measures.
Product under consideration
2. The product under consideration in the present investigation is ‘Resin
or other organic substances bonded wood or ligneous fibre boards of thickness
below 6mm, hereinafter, referred to as ‘fibre board’, except insulation boards,
laminated fibre boards and boards which are not bonded either by resin or other
organic substances’.
3. Fibre board is custom wood or craft wood composite engineered
product, and is made of heat pressed resin bonded wood fibre. Fibre board can
be further mechanically processed, such as laminated, surface coated, carved,
moulded, etc. Scope of the product under consideration includes all products
classifiable under customs heading 4411, except (a) fibre boards of thickness
6mm or above, (b) insulation boards, (c) laminated fibre boards and (d) boards
which are not bonded either by resin or other organic substances.
4. Fibre boards are wood based boards, available in different sizes
and thicknesses. However, unlike solid wood made of single piece, they are
high-strength engineered product - made from wood or lignocellulosic
material- refined into fibres, and then reconstituted with a resin binder at
elevated temperatures, to form boards.
5. Fibre boards, being an engineered product, have certain advantages
over solid wood (made out of single solid piece of wood). Fibre board has
stronger tolerance to moisture changes, as compared to solid wood, because it
is made of wood fibre arranged in overlapping pattern. It has better
adaptability to environmental changes, and is very versatile. Fibre board has
various applications, like in furniture, handicraft, consumer articles, etc.
6. The product under consideration is classified under Chapter 44 of
the Customs Tariff Act. The product under consideration does not have a
dedicated customs classification code. Customs classifications are indicative
only and in no way binding on the scope of this investigation.
Domestic Like Article
7. The Applicant claims that there is no known difference in the
product produced by the Applicant and that exported from the subject countries.
Both the products have comparable characteristics in terms of parameters such
as physical & chemical characteristics, manufacturing process &
technology, functions & uses, product specifications, distribution &
marketing and tariff classification, etc. Comparison of essential product
properties in respect of domestic product and imported product would show that
the goods produced by the domestic industry are comparable to the imported
goods in terms of essential product properties.
8. The technology and production process adopted by the domestic
industry and by the producers from the subject countries are comparable to the
best of the knowledge of the Applicant.
9. Thus, the subject goods produced by the Applicant are being
treated as like article to the product under consideration imported from the
subject countries within the meaning of the AD Rules for the purpose of this
investigation.
Domestic industry &
‘Standing’
10. As per the application, there are two producers of the product in
India, namely M/s. Balaji Action Buildwell
(the Applicant) and M/s Green Ply Industries Ltd. M/s Green Ply Industries Ltd.
has supported the present application. Thus, the applicant along with the
supporter account for 100% of the production of the subject goods in India.
11. It is noted that the Applicant Company has imported the subject goods
of different thickness in small quantities for the comparison with the product
produced in-house to the extent of *** cbm during
2010-11, which accounts for approximately *** % of the total imports. These
imports were made in order to bench-mark the product being produced by the
company by research and development and not for trading and that the volume of
imports is miniscule in comparison with the production of the Applicant.
12. The Applicant has claimed that the company’s thrust continues to be
on own production rather than on imports and the Applicant should therefore be
considered as eligible domestic industry within the meaning of the AD Rules.
13. Rule 2(b) of the AD Rules provides that domestic producers which
are either related to the exporters or importers or which are themselves
importers of the allegedly dumped articles may be excluded when determining the
domestic industry in certain situations. The Authority notes that a domestic
producer might import the product under consideration for one or more bona-fide
reasons, including for testing, research & development, seed-marketing
purposes (imports of the product to test the quality etc).
It is also noted that the imports do not form the core activity of the company
and it has not abdicated its role of a domestic producer.
14. In view of the above, it would be inappropriate to exclude such a
domestic producer from being treated as domestic industry. The authority finds
merit in the claim of the Applicant that it should not be excluded as a domestic
producer of the subject goods in India and be considered as the domestic
industry for the purposes of this application.
15. The Applicant accounts for more than 50% of the total Indian
production (87% approx) and therefore is a major
producer of the subject goods. Thus, the application has been made by or on
behalf of the domestic industry and satisfies the requirements of ‘Standing’
under Rule 5 of the AD Rules. Further, the Applicant constitutes ‘Domestic
Industry’ in terms of Rule 2(b) of the AD Rules.
Countries involved
16. The countries involved in the present investigation are China PR,
Indonesia, Malaysia and Sri Lanka (hereinafter also referred to as the subject
countries).
Normal value
Normal value in case of
countries other than China PR
17. The Applicant has stated that they have made efforts to procure
information/ evidence of the price of subject goods in the domestic market of
subject countries, including procuring price list of quotations of producers of
subject goods in subject countries; which included a review of known trade
journals, web-site information of the foreign producers, customs data from
exporting countries and communication to the Indian Embassy in the exporting
countries. However, they have not been able to get any information/evidence of
price of the subject goods in the domestic market of the subject countries. It
has been claimed that there is no public information available with regard to
the prices at which the product under consideration was sold in the domestic
markets of the subject countries. Further, they also could not procure evidence
for third country prices as there is no dedicated code for the product under
consideration. In view of the above, they have estimated the Normal values in
the subject countries by considering the constructed normal value approach. For
the purpose, the Applicant has estimated cost of production of the foreign
producers by adopting such information as is reasonably and publically
available.
18. Thus, the Authority has prima-facie considered the normal value of
the subject goods in the subject countries on the basis of constructed values
for the purpose of the initiation of this investigation.
Normal value in case of
China PR
19. The Applicant has contended that China PR is a non-market economy
and that it has been treated as non-market economy by European Union and United
States in the past three years. In India, the Designated Authority has also
treated China PR as a non-market economy. It has submitted that Market economy
status cannot be granted unless the responding exporters from China PR satisfy
the criteria as enshrined under the AD Rules.
20. The Applicant has contended that normal value for China PR could
not be determined on the basis of price or constructed value in a market
economy third country for the reason that the relevant information is not
available to them. It has been further contended that such normal value must be
“comparable price in the ordinary course of trade for the like article when
meant for consumption in such market economy third country” and that in order
to arrive at normal value on this basis, the Authority shall require complete
& exhaustive verifiable information on all domestic sales made by a
cooperating producer in such third country, along with its cost of production
and all other associated information and evidences (including all information
in the ordinary course of trade). Principles of fair comparison as laid down
under Article 2.4 of the Agreement are also relevant in this respect. It has
thus been stated that it has not been able to procure such information from a
producer in market economy third country.
21. The Applicant has further claimed that India is an appropriate
surrogate country for China PR and that not only the consideration of India as
a surrogate country would result in access to accurate and adequate
information; besides, there is no factual basis to consider that India would
not be a proper surrogate country. India has been considered as an appropriate
surrogate by other Investigating Authorities too. The normal value in China can
thus be determined on the basis of (a) price in India, and (b) cost of
production in India, duly adjusted, including selling, general and administrative
expenses and profit. The Applicant has thus estimated normal value on the basis
of cost of production in India, duly adjusted, in view of the fact that the
selling price is a loss making price.
22. It
is noted that sufficient information and evidence is not available on record in
respect of the price or constructed value of a market economy third country
that has the comparable level of development vis a vis China
PR, particularly considering the subject goods. Thus, in view of the above
facts, for the purpose of initiation of this investigation, it is proposed to
determine the Normal value in respect of exporters/producers from China PR on
available reasonable basis, in terms of second proviso of para
7 of Annexure 1 to the AD Rules. Accordingly, the ex-works Normal Value of the
product under consideration have been determined based on constructed costs of
production, duly adjusted.
Export price
23. The Applicant has relied upon transaction-wise import data as
procured by them form IBIS. Considering that the comparison of normal value and
export price must be at the same level of trade, it is necessary to compare the
two at the same level of trade. The export prices being
assessable value while the normal values being at ex-factory level, the export
prices have been adjusted for ocean freight, marine insurance, documentation
charges, cleaning charges, and manifestation charges.
Dumping margin
24. There is sufficient evidence available on record that the normal
values of the subject goods in the subject countries are significantly higher
than the net export prices, prima-facie indicating that the subject goods
originating in or exported from the subject countries are being dumped, to
justify initiation of an anti-dumping investigation.
‘Injury’ and Causal link
25. On a prima facie basis, it is seen that the imports from the
subject countries have substantially increased, which should have declined,
given that the domestic industry has set up new production facilities and
supporting company has also commenced the production of the product under
consideration. The performance of the domestic industry has remained
substantially below the expected level. Even when the domestic industry did not
produce to the extent it could have, it has not been able to sell the product
to the extent of production and inventories have piled up. The domestic
industry has been forced to sell the product at significant financial losses,
resulting in negative return on investments and cash flow. The level of price
undercutting is very significant. It is seen that the domestic industry is
suffering from significant price suppression, as it has not been able to even
realise its costs of sales.
26. In view of the above, the domestic industry has apparently suffered
material retardation of its establishment. Besides, the domestic industry has
also apparently suffered material injury to the extent of its existence. The
product under consideration is being exported from the subject countries below
associated normal value, resulting in dumping of the product. The domestic
industry has suffered ‘Injury’,
which has apparently been apparently caused by the dumped imports.
27. There is sufficient evidence of the ‘injury’ being suffered by the
domestic industry caused by the dumped imports from the subject countries to
justify initiation of an antidumping investigation in terms of the AD Rules.
Initiation of Anti Dumping
Investigation
28. In view of the foregoing, the Authority finds that sufficient
evidence of dumping of the subject goods from the subject countries, ‘injury’
to the domestic industry and causal link between the dumping and ‘injury’
exists to justify initiation of an anti-dumping investigation. Accordingly, 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 AD
Rules, to determine the existence, degree and effect of alleged dumping and to
recommend the amount of anti-dumping measure, which, if levied, would be
adequate to remove the injury to the domestic industry.
Period of investigation
29. The
period of investigation for the purpose of present investigation is 1st
April 2010 to 30th June 2011. The injury investigation period
will, however, cover the periods April 2007-March 2008, April 2008-March 2009,
April 2009-March 2010 and the Period of Investigation (POI) viz. 1st April
2010 to 30th June
2011.
Submission of information
30. The known exporters in the subject countries and their Governments
through their Embassies/High Commissions in India, importers and users in India
known to be concerned and the domestic industry are being informed separately
to enable them to file all information relevant in the form and manner
prescribed. Any other interested party may also make its submissions relevant
to the investigation within the time-limit set out below and write to:
The Designated Authority,
Directorate General of Anti-Dumping &
Allied Duties,
Ministry of Commerce & Industry,
Department of Commerce
Room No.240, Udyog Bhawan,
New Delhi -110107
31. 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.
Time limit
32. Any information relating to this investigation and any request for
hearing should be sent in writing so as to reach the Authority at the above
mentioned address, 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.
Submission of information on Confidential
basis.
33. In case confidentiality is claimed on any part of the
questionnaire’s response/ submissions, the same must be submitted in two
separate sets (a) marked as Confidential (with title, index, number of pages,
etc. ) and (b) other set marked as Non-Confidential (with title, index, number
of pages, etc.). All the information supplied must be clearly marked as either
“confidential” or “non-confidential” at the top of each page.
34. Information supplied without any mark shall be treated as
non-confidential and the Authority shall be at liberty to allow the other
interested parties to inspect any such non-confidential information. Two (2)
copies each of the confidential version and the non-confidential version must
be submitted.
35. For information claimed as confidential; 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 and/or why
summarization of such information is not possible.
36. The non-confidential version is required to be a replica of the
confidential version with the confidential information preferably indexed or
blanked out / 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
of summary, a statement of reasons why summarization is not possible, must be
provided to the satisfaction of the Designated Authority.
37. The Authority may accept or reject the request for confidentiality
on examination of the nature of the information submitted. If the Designated
Authority is satisfied that the request for confidentiality is not warranted or
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.
38. Any submission made without a meaningful non-confidential version
thereof or without a good cause statement on the confidentiality claim may not be
taken on record by the Designated Authority. The Designated 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
39. In terms of rule 6(7) any interested party may inspect the public
file containing non-confidential versions of the evidence submitted by other
interested parties.
Use of ‘facts available’
40. 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.