Anti-Dumping Duties concern in g imports into India by Poly-Iso-Butylene originating in or exported from European Union, Brazil, Japan, Korea RP, Singapore and Thailand-Preliminary Findings

REGD. NO. D. L-33004/99 The Gazette of India

EXTRAORDINARY

PART I—Section 1

PUBLISHED BY AUTHORITY

No. 330] NEW DELHI, WEDNESDAY, DECEMBER 12, 2001/AGRAHAYANA 21,1923

3813 GI/2001

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T HE G A Z E T TE OF I N D IA • E X T R A O R D I N A RY

[ P A R T T — S H\ 1] 29 MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

NOTIFICATION

New Delhi, the 12th December, 2001

Subject:—Anti-Dumping Duties concern in g imports into India by Poly-Iso-Butylene originating in or exported from European Union, Brazil, Japan, Korea RP, Singapore and Thailand—Preliminary Findings

No. 47/1/2001-DGAD.—Having regard to the Customs Tariff Act 1975 as amended in 1995 ana the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, thereof

A. PROCEDURE:

1. The procedure described below has been followed with regard to the investigations:-

(i) The Designated Authority (hereinafter referred to as Authority), under Rules, received written application from M/s. Kothari Sugars & Chemicals Limited, Manali, Chennai alleging dumping of Poly-Iso-Butylene (hereinafter referred to as subject goods), originating in or exported from European Union, Brazil, Japan, Korea RP, Singapore and Thailand (hereinafter referred to as subject countries).

(ii) The Authority, on the basis of sufficient evidence submitted by the petitioner, decided to initiate investigations against imports of Poly-Iso- Butylene from the subject countries. The Authority notified the Embassies/High Commissions of subject countries about the receipt of dumping allegation before proceeding to initiate investigations in accordance with sub-rule 5(5) of the Rules;

(iii) The Authority issued a Public Notice dated the 12th September, 2001, published in the Gazette of India, Extraordinary, initiating Anti-Dumping investigations concerning imports of Poly-Iso-Butylene originating in or exported from the subject countrlies, classified under Custom sub-headings 3902.20 under Chapter 39 of the Customs Tariff Act, 1975.

(iv) The Authority forwarded a'copy of the Public Notice to the known exporters (whose details were made available by the petitioners) and industry associations and gave them an opportunity to make their views known in writing in accordance with Rule 6(2);

(v) The Authority forwarded a copy of the Public Notice to the known importers of subject goods in India (whose details were made available by the petitioners) and advised them to make their views known in writing within forty days from the date of the letter;

(vi) Request was made to the Central Board of Excise and Customs (CBEC) to arrange details of imports of subject goods for the past three years, including the period of investigations;

(vii) The Authority provided a copy of the petition to known exporters and the Embassies/High Commissions of the subject countries in accordance with Rules 6(3) supra.

(viii) The Authority sent questionnaire, to elicit relevant information, to the known exporters from subject countries as mentioned below in accordance with the rule 6(4):-

• M/s BP Chemicals Ltd., Scotland. • M/s DAELIM Corporation, Seoul, Korea. • M/s Exxon Chemical Companies, New Jersey, USA • M/s Idemitsu Petrochemicals Corporation Limited, Japan. • M/s BP Chemicals SNC, Paris La Defense. • M/s Exxon Chemical, Singapore. • M/s BASF, Germany. • M/s Exxon Mobil Singapore Pte. Ltd., Singapore.

The response was, however,, filed by the following exporters of subject goods:

• M/s BASF, Germany. • M/s DAELIM Corporation, Seoul, Korea.

(ix) The Embassies/High Commissions of the subject countries in New Delhi were informed about the initiation of the investigations in accordance with Rule 6(2) with a request to advise the exporters/producers from their country to respond to the questionnaire within the prescribed time A copy of the letter, petition and questionnaire sent to the exporter was also sent to the Embassies/High Commissions of subject countries along with a list of known exporters/ producers.

P.nntd 3/_ (x) A questionnaire was sent to the following known importers and Consumers of subject goods in India calling for necessary information in accordance with Rule 6(4):-

• M/s. Bharat Sheet Limited, Maharashtra. • M/s. Gulf Oil India Limited Dadara Nagar Haveli. • M/s. Bharat Petroleum Corporation Limited, Mumbai. • M/s. IBP Company Limited, Calcutta. • M/s. Indian Additives Limited, Manali, Chennai. • M/s. Lubrizol India Limited, Thane • M/s. Hindustan Petroleum Corporation Limited, West Bengal. • M/s. Castrol India Limited, Mumbai • M/s. Pennzoil Quaker State India Limited, Navi Mumbai. • M/s. Maharashtra Polybutenes Limited, Navi Mumbai. • M/s. Gujarat Polysynthese Limited, Vadodara. • M/s. Cochin Refinery Balmer Lawrie Limited, Kerala. • M/s. Indian Oil Corporation Limited, Mumbai.

31 The response was, however, filed by the following importers / consumers of subject goods:

• M/s. Lubrizol India Limited, Thane. • M/s. Indian Additives Limited, Manali, Chennai.

(xi) Additional information regarding injury parameters including cost of production was sought from the petitioner, which was also received;

(xii) The Authority made available non-confidential version of the evidence presented by various interested parties in the form of a public file kept open for inspection by the interested parties;

(xiii) Optimum cost of production and cost to make and sell the subject goods in India based on the information furnished by the petitioner on the basis of Generally Accepted Accounting Principles(GAAP) was worked out so as to ascertain if Anti-Dumping duty lower than the dumping margin would be sufficient to remove injury to Domestic Industry;

(xiv) **** in this Notification represents information furnished by the petitioner on confidential basis and so considered by Authoritv under the Rules;

(xvi) Investigation was carried out for the period starting from 1st April, 2000 to 31st August, 2001.

B PETITIONER'S VIEWS:

2. The petitioners have raised the following issues:-

(a) The imports of Poly-lso-Butylene from the subject countries have increased significantly in absolute terms. The volume of imports in the current year by Indian Oil Corporation Ltd. alone would be 2700 MTs considering the prices quoted by the exporters;

(b) The export price from the subject countries have declined significantly. Further decline in export price in US$(which is more relevant for the exporters) is much more significant than Indian Rupees. M/s. Indian Oil Corporation Ltd. has recently floated International tender for procurement of the product at three places in India, viz. Trombay, Chennai and Calcutta The prices quoted by these exporters in these tenders are at significantly reduced levels which cannot permit recovery of cost of production for any producer of the product in these countries.

(c) The selling price of the Domestic Industry which was increasing till 2000- 01 reduced significantly in 2001-02. Moreover increase in the selling price in 2000-01 over 1999-2000 was much lower than increase in the cost of production resulting in significant financial losses to the Domestic Industry .

(d) The dumped imports are causing severe price undercutting to the Domestic Industry in the market. The price which exporter have quoted recently in the tender do not permit recovery of even cost of production, leave alone profit. The quotations by the exporters have resulted in severe price suppression/ depression in the Indian market. The Domestic Industry would loss substantial sales given the price quoted by the exporters in the recently floated tenders.

(e) The Domestic Industry has been forced to reduce the prices below the cost of production as a result of significant dumping in the country The financial situation of the Domestic Industry has deteriorated significantly. The Domestic Industry has been forced to a situation of significant financial losses from a situation of profit.

C VIEWS OF EXPORTERS. IMPORTERS AND OTHER INTERESTED

PARTIES:

3 EXPORTERS' VIEWS

(I) M/S. BASF AKTIENGESELLSCHAFT. GERMANY:

M/s. BASF Aktiengesellschaft, Germany has submitted that the product produced by the complainant is not a like product in sense of the GATT Anti Dumping Codex. The quality of the BASF product is different and the imported product can not be substituted by the locally produced. This fact will be demonstrated by their customer M/s Indian Additives Limited (ILA), who imports exclusively the BASF product into India. There is a contract between Chevron Oronite and BASF, which makes no price differentiation concerning the final destination. By such a contract dumping is not possible because Chevron Oronite buys for the EU market as well.

(ii) M/S. DAELIM INDUSTRIAL CO.. LTD.. KOREA.

M/s. DAELIM has made the following submissions :-

(a) ON STANDING OF THE PETITIONER:

There are four Poly-lso-Butylene plants in India and the petitioner M/s. Kothari Chemical Ltd. alone does not represent more that 25% of the production of the subject goods and does not have the standing to file the petition.

(b) ON INJURY:

(i) The imports have increased dramatically since the beginning of 2000 even though the import tax is high at the range of 35%. They have the competitive advantage, the economic of scale, and the quality of product and there own Poly-lso-Butylene technology over the producers of India. The production cost of their Poly-lso-Butylene is lower than Indian producers so they could get awarding of tender business.

*n (ii) Although the petitioner claims tnat imported goods has caused injury to the domestic industry, Daelim Poly-lso-Butylene makes a contribution to the protection of Indian Air Pollution and Indian lubricants oil manufacturers including main importers

(iii) Although NAPTHA price has dramatically increased between 1999 and 2000 fiscal year, Indian domestic and international Poly-lso- Butylene price has not increased because of supply surplus around the world. Loss of the petitioner was not caused by imported goods as they also suffered from the same situation in the market.

(c) TARIFF CLASSIFICATION:

Poly-lso-Butylene, is classified as 3902.20 and as 3902.90 as well under the Customs Tariff Act., which is the same as Korean HS Code. We always export Poly-lso-Butylene to foreign country by using 3902.90. Generally the price of Poly-lso-Butylene is lower than average price of all products of 3902.20 because the price of HRPIB and Semi-Solid PI B is more expensive. Poly-lso-Butylene under 3902.20 can be divided into three kinds of P IB as follows:

PRODUCTS PIB HRPIB Semi-Sold PIB

Properties Liquid, Low Mw High Reactive P IB Rubbery Phase, High Mw.

The petitioner's claim needs to be confirmed including volume, price and normal value based on imports into European Union in the petition. Our data indicates that export volume to India is 2,267 MT, whereas the petitioner claims just 1,377 MT in the investigation period.

VIEWS OF OTHER INTERESTED PARTIES

M/S INDIAN PETROCHEMICALS CORPORATION LIMITED (IPCL).

GUJARAT.

M/s IPCL one of the manufacturers of the subject goods, while supporting the petition have stated that imports of Poly-lso-Butylene have increased significantly in the past few years. The imports are so low price that at indigenous price of feedstock and conversion cost their margins are at great stress. In the recent tenders floated by Indian Oil Corporation , exporters have quoted significantly lower price, which if they are forced to match, their margins will be eroded to such extent that viability of business will be questionable. The dumping is resulting in significant injury to the Indian industry. The situation demands immediate imposition of anti dumping duty on dumped imports from subject countries.

(ii) M/S. KOCHI REFINERIES LIMITED:

M/s. Kochi Refineries Limited , one of the manufacturers of the subject goods in the country, has supported the anti dumping petition filed by M/s. Kothari Sugar and Chemicals Limited. In response to the questionnaire they have submitted the cost details and has made the following submissions:-

(a) Due to dumping of the product by the foreign agencies on the Indian market they had to reduce their prices, far below the cost of production so as to match the landed price of the imported product to sustain operation of the plant. They had to drastically cut down the price to match with the prices offered by the foreign venders in the tenders floated by major marketing company in India.

(b) In the financial year 2000-2001 they made a net loss of about Rs.**** crores against a total turn over of approximately Rs. **** crores. They are selling the subject goods below the total cost of production due to severe market pressures.

5 VIEWS OF IMPORTERS:

(i) M/S. INDIAN ADDITIVES LIMITED. CHENNAI:

M/s. Indian Additives Limited has submitted that they were using conventional Poly-lso-Butylene (P IB) until the end of the year 1999. Now they have substituted it with another product HRPIB (highly reactive Poly-lso-Butylene) due to better economy and quality of manufacture products. Although HRPIB is entirely different in terms of technology, physio chemical property and uses, the customs tariff classification is same as of conventional Poly-lso-Butylene manufactured by the petitioner company. HRPIB is neither manufactured in India nor/any one has the technology. Therefore, they have requested for excluding HRPIB from the purview of the current anti dumping investigation as it is a different product and any way does not affect the indigenous manufacturers including the petitioner company. However the importer has not submitted complete details as per the prescribed Questionnaire.

35 (ii) M/S LUBRI20L INDIA PVT.. LTD:

M/s Lubrizol has intimated that they have not imported the subject goods during the Period of Investigation. However they have stated that they do not support the case of levy of Anti Dumping Duty on Poly-lso-Butylene for the following reasons

(a) There is a surplus capacity available in the international market and the prices internationally are extremely competitive, The present import price of Polybutenes by local consumers is the right competitive international price. Due to large petroleum feed stock becoming surplus due to the shift in the product made/market internationally, the feed stock import to Polybutenes will be further cheaper which will lower the prices over a period.

(b) One of the largest suppliers of Polybutenes i.e. M/s. Indian Petrochemicals Corporation Ltd. (Govt, of India undertaking) has not come up which such case for anti dumping. When any anti dumping duty is considered by the Government it is voice of the industry that is being looked into but with the overriding fact kept in mind that such actions should not put the consumer/public at disadvantage.

D. EXAMINATION OF THE ISSUES RAISED:

6 The submissions made by the exporters, importers, petitioner and other interested parties have been examined, considered and have been dealt with at appropriate places hereinafter.

E PRODUCT UNDER CONSIDERATION:

7. (a) The product involved in the present petition is Poly-lso-Butylene also known as PIB or Poly-lso- Butene (also referred as subject goods hereinafter) originating in or exported from European Union, Brazil, Japan, Korea RP, Singapore and Thailand. Poly-lso-Butylene is a Synthetic Hydrocarbon Polymer manufactured by polymerisation of C4 Olefins stream consisting mainly Isobutene. Poly-lso-Butylene finds application in various fields like Lube Oil additives, Cable Filling Compounds, Rubber Modifiers, Leather Chemicals, 2T Oil Formulations, Oil Insulators Adhesives etc, Present investigation covers all forms of Poly-lso- Butylene.

(b) Poly-lso-Butylene is classified under Customs sub heading No. 3902.20 under Chapter 39 of the Customs Tariff Act, 1975.

(c) The classification is, however, indicative only and is in no way binding on the scope of the present investigation.

F LIKE ARTICLES:

8. Rule 2(d) of the Anti-Dumping Rules specifies that "Like Articles" means an Article which is identical or alike in all respects to the product under investigation or in the absence of such an Article, another article, having characteristics closely resembling those of the articles under examination.

In response to M/s. BASF, Germany's claim that the product exported by them is different from the product produced by the petitioner the Authority holds that HRPIB is nothing but Poly Iso Butylene as the product has similar physical and chemical characteristics, product specification , functions and uses. HR Poly-lso-Butylene and Poly-lso- Butylene are being used interchangeably. HR Poly-lso-Butylene is only a type of Poly-lso-Butylene and thus like article to the product under investigation and the product being manufactured by the Domestic Industry.

In view of the same, the Authority holds that Poly-lso-Butylene being produced by the domestic industry and those being imported from the subject countries can be used interchangeably and thus are commercially and technically substitutable and therefore, are like articles within the meaning of the Rules.

G. DOMESTIC INDUSTRY:

9 The petition has been filed by M/s. Kothari Sugars & Chemicals Limited, Manali, Chennai. The petitioner accounts for more than 25% of the Domestic production during the Period of Investigation of the subject goods in India . Further after initiation of the investigation two Indian manufacturers of the subject goods namely M/s Kochi Refineries Ltd., and M/s Indian Petrochemicals Corporation Ltd., (IPCL) have submitted their support to the petition for imposition of the Anti Dumping Duty on the import of the subject goods from the subject countries . Accordingly, the Authority holds that the petitioner fulfils the requisite criteria to represent the domestic industry, as required under Rule 5(a) and (b) and Rule 2(b).

H. NORMAL VALUE, EXPORT PRICE AND DUMPING MARGIN

10. Under Section 9A(1)( c), normal value in relation to an article means:-

(i) The comparable price, in the ordinary course of trade, for the like article when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section(6); or 37 (ii) When there are no sales of the like article in the ordinary course of trade in domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either-

fiii) Comparable representative price of the like article when exported from the exporting country or territory or an appropriate third country as determined in accordance with the rules made under sub-section (6); or

(iv) The cost of production of the same article in the country of origin along with reasonable addition for administrative, selling and general costs and for profits, as determined in accordance with the rules made under sub- Section(6);

Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transshipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin.

(vi) The Authority provided opportunity to the exporters from subject countries to furnish information relevant to the investigations and offer comments, if any, in accordance with the Section cited above. The Authority wrote to the Embassies/High Commissions of subject countries in India also.

11. TERRITORY OF EUROPEAN UNION

(a) NORMAL VALUE

The Authority notes that the none of the exporters/producers from the Territory of European Union have provided the information as per the prescribed questionnaire. M/s. Bayer, Germany has however offered comments which have been considered above.

The Normal Value was determined at the time of initiation of the investigations on the basis of the constructed cost of production of Poly- Iso-Butylene as provided by the petitioner. The Authority adopts the same for preliminary determination Accordingly, the Normal Value of Poly-lso-Butylene for all exporters from Territory of European Union has been taken at US$ **** per MT.

(b) EXPORT PRICE:

None of the exporters from Territory of European Union has submitted details of export price in reply to the Questionnaire. The Authority has . adopted the export price based on DGCI&S, Calcutta statistics. Ocean freight, insurance, inland freight, port charges and commission to an extent of ****, ************ and **** $/MT respectively based on the claim of the petitioner has been considered. The Ex-factory export price in the Period of Investigation thus works out to **** $/MT.

12. BRAZIL:

(a) NORMAL VALUE:

The" Authority notes that the none of the exporters/producers from Brazil has provided the information as per the prescribed questionnaire.

The Normal Value was determined at the time of initiation of the investigations on the basis of the constructed cost of production of Poly- Iso-Butylene as provided by the petitioner. The Authority adopts the same for preliminary determination. Accordingly, the Normal Value of Poly-lso-Butylene for all exporters from Brazil has been taken at US$ **•* per MT.

(b) EXPORT PRICE:

None of the exporters from Brazil has submitted details of export price in reply to the Questionnaire. The Authority has adopted the export price based on DGCI&S, Calcutta statistics. Ocean freight, insurance, inland freight, port charges and commission to an extent of **** ************ and **** $/MT respectively based on the claim of the petitioner has been adopted. The Ex-factory export price in the Period of Investigation thus works out to **** $/MT,

13. JAPAN

(a) NORMAL VALUE

The Authority notes that the none of the exporters/producers from Japan has provided the information as per the prescribed questionnaire.

J39 The Normal Value was determined at "the time of initiation of the investigations on the basis of the constructed cost of production of Poly- Iso-Butylene as provided by the petitioner. The Authority adopts the same for preliminary determination. Accordingly, the Normal Value of Poly-lso-Butylene for all exporters from Japan has been taken at US$ **** per MT.

(b) EXPORT PRICE:

None of the exporters from Japan has submitted details of export price in reply to the Questionnaire. Based on the claim of the Petitioner the Authority has determined the weighted average export price on the basis of the prices offered by the exporters from Japan to M/s Indian Oil Corporation and the export statistics based on DGCI&S, Calcutta for the Period of Investigation . The Authority has adopted ocean freight, insurance, inland freight, port charges and commission to an extent of ****, ************ and **** $/MT respectively based on the claim of the petitioner. The Ex-factory export price in the Period of Investigation thus works out to **** $/MT.

14 KOREA R.P;

M/S. DAELIM CORPORATION . SEOUL .KOREA

(a) NORMAL VALUE

The Authority notes that the exporter/producer has provided the requisite information as per the prescribed questionnaire. The exporter has provided invoice wise details of sales of the subject goods in Korea R.P.; during the Period of Investigation. On the basis of the cost of production details claimed by the exporters, sales in the Domestic markets are above the cost of production and are therefore considered to be in the ordinary course of trade for the purpose of preliminary findings. Subject to verification the Authority has also considered the adjustment as indicated by exporter/producer. The weighted average Ex-factory domestic selling prices comes to **** USS/MT in Period of Investigation.

(b) EXPORT PRICE:

The Authority notes that the exporter/producer has provided the transaction wise details of export sales to India of the subject goods during the Period of Investigation. The exporter/producer has indicated in the sales price structure for export to India various adjustment of export price viz. discounts/commission, packing, inland freight, ocean freight, shipping charges etc. The Authority for the purpose of preliminary findings considers the adjustments as indicated by the exporter/producer.

The weighted average ex-factory export price for the subject goods to India comes to **** $/MT.

15. OTHER EXPORTERS/PRODUCERS OF KOREA R.P.:

(a) NORMAL VALUE

As no other exporter/producer from Korea R.P. has provided the information, the Authority has adopted the weighted average domestic sales price as indicated by other cooperating exporter for assessing the normal value. The normal value in case of other exporter/producers of Korea R.P. for the subject during the POI comes to **** $/MT.

(b) EXPORT PRICE

The Authority has adopted the least of the export price to India as provided by the cooperative exporter from Korea R.P. without any adjustment on ocean freight, insurance, commission etc. The ex- factory export price in the Period of Investigation comes to **** US$/MT 16. SINGAPORE

(a) NORMAL VALUE

The Authority notes that the none of the exporters/producers from Singapore has provided the information as per the prescribed questionnaire

The Normal Value was determined at the time of initiation of the investigations on the basis of the constructed cost of production of Poly- Iso-Butylene as provided by the petitioner. The Authority adopts the same for preliminary determination Accordingly, the Normal Value of Poly-lso-Butylene for all exporters from Singapore has been taken at U S $— per MT.

41 (b) EXPORT PRICE:

None of the exporters from Singapore has submitted details of export price in reply to the Questionnaire. Based on the claim of the Petitioner the Authority has determined the weighted average export price on the basis of the prices offered by the exporters from Singapore to M/s Indian Oil Corporation and the export statistics based on DGCI&S, Calcutta for the Period of Investigation . The Authority has adopted ocean freight, insurance, inland freight, port charges and commission to an extent of ****, ************ and **** $/MT respectively based on the claim of the petitioner. The Ex-factory export price in the Period of Investigation thus works out to **** $/MT.

17. THAILAND

(a) NORMAL VALUE

The Authority notes that the none of the exporters/producers from Thailand has provided the information as per the prescribed questionnaire.' The Normal Value was determined at the time of initiation of the investigations on the basis of the constructed cost of production of Poly- Iso-Butylene as provided by the petitioner. The Authority adopts the same for preliminary determination. Accordingly, the Normal Value of Poly-lso-Butylene for all exporters from Thailand has been taken at US$ **** per MT.

(b) EXPORT PRICE:

None of the exporters from Thailand has submitted details of export price in reply to the Questionnaire. The Authority has adopted the export price based on DGCI&S, Calcutta statistics. Ocean freight, insurance, inland freight, port charges and commission to an extent of ****, ************ a n (j ****

DUMPING-COMPARISON OF NORMAL VALUE AND EXPORT PRICE

18. The rules relating to comparison provides as follows>

"While arriving at margin of dumping, the Designated Authority shall make a fair comparison between the export price and the normal value. The comparison shall be made at the same level of trade, normally at ex-works level, and in respect of sales made at as nearly possible the same time.

3 3:S^S''-r^,'- ^

Due allowance shall be made in each case, on its merits, for differences which affect price comparability, including differences in conditions and terms of sales, taxation, levels of trade, quantities, physical characteristics, and any other differences which are demonstrated to affect price comparability"

The authority has carried out comparison of weighted average normal value with the weighted average ex-factory export price for evaluation of dumping margin.

The dumping margins for the producers/exporters of the subject goods in the subject countries are as under:-

•K The above dumping margins are above the deminimus limits.

J INJURY:

19. Under Rule 11 supra, Annexure - I I, when a finding of injury is arrived at, such finding shall involve determination of the injury to the domestic industry, ".... taking into account all relevant facts, including the volume of dumped imports, their effect on prices in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles.,.." In considering the effect the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the price of the like article in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree.

For the examination of the impact of the dumped imports on the domestic industry in India, indices having a bearing on the state of the industry as production, capacity utilisation, sales quantum, stock, profitability, net sales realisation, the magnitude and margin of dumping, etc. have been considered in accordance with Annexure ll(iv) of the rules supra.

K. CUMULATIVE ASSESSMENT OF INJURY

20. Annexure II (iii) under Rule 11 supra further provides that "in.case where imports of a product from more than one country are being simultaneously subjected to Anti Dumping investigation , the Designated Authority will cumulatively assess the effect of such imports , only when it determines that the margin of dumping established in relation to the imports from each country is more than two percent expressed as percentage of export price and the volume of the imports from each country is three percent of the imports of the like article or where the export of the individual country is less than three percent ,the imports cumulatively accounts for more than seven percent of the imports of like article, and cumulative assessment of the imports is appropriate in light of the conditions of competition between the imported article and the like domestic articles"

The Authority notes that the margin of dumping and quantum of imports from subject countries are more than the limit prescribed above. Cumulative assessment of the effect of the imports from Territory of European Union, Brazil, Japan, Korea R.P., Singapore and Thailand are appropriate since the export prices from these countries were directly competing with the prices offered by the Domestic Industry in the Indian market and displacing domestic producers here.

21. All economic parameters affecting the Domestic Industry as indicated above such as production capacity utilisation, sales volume etc. have been examined as under:-

(a) QUANTUM OF IMPORTS AND MARKET:

The information with regards to quantum of imports of Poly-lso-Butylene has been based on information published by DGCI&S, Calcutta. The Authority notes that the market share of imports of the subject goods from the subject countries cumulatively was 73.60% during 1999-2000. The same has increased to 86.62% during the Period of Investigation. The total imports have increased by about 13% during the Period of Investigation over 1999-00.

(b) PRODUCTION:

The total production of petitioner company of subject goods during 1999- 00 was 6111 MT decreased to 5648 MT (Annualised basis) during the Period of Investigation representing a decrease of about 7.58%.

(c) SALES VOLUME:

Total sales volumes of petitioner company during 1999-00 was 6392 MT, which decreased to 5217 MT (annualised basis) during the Period of Investigation showing a decrease of about 18.38%.

(d) CAPACITY UTILIZATION:

The petitioner attained an average capacity utilisation of 81.48% in the year 1999-00, which decreased to 75.31% during the POI.

(e) SALES REALISATION:

The average sales realisation of petitioner companies from sale of subject goods in domestic market during the year 1999-00 was Rs. **** per MT, which increased to Rs. **** per MT in 2000-01 representing an increase of 5.26%. However the average sales realisation during the last five months of the period of investigation decreased to ****. This shows a steep decline of domestic sales realisation with in the Period of Investigation itself. However it has further been observed that the average Cost of Production of the subject goods has increased during the Period of Investigation over 1999-00 by Rs. **** per Mt . Accordingly the increase in sales realisation during the Period of Investigation has not compensated the increase in cost of production during the same period over the last year.

45 (f) PROFITABILITY:

It has been observed that the petitioner was earning a net profit of Rs.**** per MT of subject goods during 1999-00. However during the Period of Investigation, the petitioner incurred a loss of Rs.**** per MT from the subject goods.

(g) EVIDENCE OF LOST CONTRACT

The Domestic Industry would loose contracts due to significantly lower prices quoted by the exporters in the tender floated by M/s Indian Oil Corporation. Even the sole tender wherein the petitioner is lowest priced would result in significant loss to the Domestic Industry .

(h) CLOSING STOCK

Closing stock of the Domestic Industry during the Period of Investigation over 1999-2000 has increased substantially from **** Mt to **** Mt. showing an increase of 351 %.

L CAUSAL LINK:

22.(a) The Authority after careful examination of the cost of production of the Domestic Industry and the landed value of the exports from subjec¹ countries notes that in case of Territory of European Union (EU), and Thailand the average landed value of exports during the Period of Investigation is more than the Non Injurious Price worked out for the Domestic Industry Accordingly no causal link is established between the exports from these countries and the material injury caused to the Domestic Industry. The Authority notes that Poly-lso-Butylene has been exported to India from remaining countries namely; Brazil, Japan, Korea R.P. and Singapore at a price below its Normal Value.

(b) The Authority holds that the weighted average export price in US$ terms from the subject countries as reported by the DGCI&S and as quoted in the tender floated by the Indian Oil Corporation has significantly declined. The petitioner company suffered a decline in sales price during the Period of Investigation itself inspite of increase in cost of production. The petitioner company was selling the subject goods at a profit earlier were able to sell the same in domestic market during the period of investigation only at substantial losses. All these parameters cumulatively indicate that the petitioner company has suffered material injury and the injury to petitioner companies has been caused due to dumped imports of subject goods.

M INDIAN INDUSTRY'S INTEREST & OTHER ISSUES:

23. (a)The purpose of Anti Dumping Duties, in general, is to eliminate dumping which is causing injury to the petitioner company and to re-establish a situation of open and fair competition in the Indian market, which is in the general interest of the country.

(b)The Authority recognizes that the imposition of Anti Dumping Duties might affect the price levels of the products manufactured using the subject goods and consequently might have some influence on relative competitiveness of these products, However, fair competition on the Indian market will not be reduced by the Anti Dumping measures, particularly if the levy of the Anti Dumping Duty is restricted to an amount necessary to redress the injury to the petitioner company. On the contrary, imposition of Anti Dumping measures would remove the unfair advantages gained by dumping practices, would prevent the decline of the petitioner companies and help maintain availability of wider choice to the consumers of Poly-lso-Butylene imposition of Anti Dumping measures would not restrict imports from the subject countries in any way, and, therefore, would not affect the availability of the product to the consumers.

N CONCLUSIONS:

24. It would be seen, after considering the foregoing, that:

(a) Poly-lso-Butylene originating in or exported from subject countries have been exported to India below Normal Value, resulting in dumping;

(b) The Indian industry has suffered material injury only from exports of subject goods from Brazil, Japan, Korea R.P. and Singapore;

(c) The injury has been caused cumulatively by the imports from Brazil, " Japan, Korea R.P. and Singapore;

25. It is considered necessary to impose Anti-Dumping Duty, provisionally, pending final determination, on all imports of Poly-lso-Butylene originating in or exported from Brazil, Japan, Korea RP and Singapore pending final determination.

47 26. It was considered whether a duty lower than the dumping margin would be sufficient to remove the injury. The average landed price of the imports, for the purpose, was compared with the Non-injurious price of the petitioner company, determined for the period of investigations. Wherever the difference was less than the dumping margin, a duty lower than the dumping margin is recommended. Accordingly, it is proposed that provisional Anti Dumping Duty equal to the difference between the amount indicated in column (2) below and the landed value of imports be imposed from the date of notification to be issued in this regard by the Central Government, on all grades of subject goods originating in or exported from Brazil, Japan, Korea RP and Singapore falling under Chapter 39 or any other Chapter of the Customs Tariff Act, 1975, pending final determination.

27. Landed value of imports for the purpose shall be the assessable value as determined by the customs under the Customs Act, 1962 and all duties of customs except Additional duty of Customs levied under Section 3, 3A, 8B, 9 and 9A of the Customs Tariff Act, 1975.

0 FURTHER PROCEDURE:

28. The following procedure would be followed subsequent to notifying the preliminary findings:-

(a) The Authority invites comments on these findings from all interested parties and the same would be considered in the final finding;

(b) Exporters, importers, petitioner and other interested parties known to be concerned are being addressed separately by the Authority, who may make known their views, within forty days from the date of the dispatch of the letter. Any other interested party may also make known its views within forty days from the date of publication of these findings;

(c) The Authority would conduct further verification to the extent deemed necessary;

(d) The Authority would disclose essential facts before announcing final findings.

L. V SAPTHAR1SHI, Designated Authority

Printed by the Manager. Govl. ol India Press, Ring Road, Mayapurl, New Delhi-110064 and Published by th" Controller ot Publications, Dalhl-110054 — 2001