THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC. 1)

MINBTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

DIRECTORATE GENERAL OF ANTI DUMPING AND ALLIED DUTIES

NOTIFICATION

New Delhi, the 31st December, 2001

PRELIMINARY FINDINGS

Subject:-

Anti-dumping investigation concerning imports of D (-) Para

Hydroxy Phenyl Glycine Base originating in or exported from

the China PR and Singapore- Preliminary Findings,

No. 51/1/2001-DGAD— Having regard to the Customs Tariff Act,

1975 as amenaed in 1995 and the Customs Tariff (Identification,

Assessment and Collection of Anti Dumping Duty on Dumped Articles and

for Determination of Injury) Rules, 1995, thereof;

PROCEDURE:

The procedure described below has been followed:-

(i)

The Designated Authority (hereinafter referred to as Authority), under

the above Rules, received a written petition from M/s Daurala

Organics Limited, Daurala, Meerut, U.P. on behalf of the domestic

industry, alleging dumping of D (-) Para Hydroxy Phenyl Glycine Base

also known as PHPG Base (hereinafter referred to as subject goods)

originating in and exported from China PR and Singapore (hereinafter

referred to as subject countries)

(ii)

The Authority notified the Embassy of China PR and High

Commission of

Singapore in India about the receipt of dumping

application made by the petitioner before proceeding to initiate the

investigation in accordance with sub-rule (5) of Rule 5 Supra;

(iii)

The Authority issued a Public Notice dated 1st October, 2001

published in the Gazette of India, Extraordinary, initiating anti dumping

proceedings concerning imports of D (-) Para Hydroxy Phenyl Glycine

Base falling under Chapter heading 2942 of Schedule I of the

Customs Tariff Act.

(iv)

The Authority forwarded copy of the said public notice to the known

exporters, importers, industry associations and to the complainant and

gave them an opportunity to make their views known in writing.

(v)

According to sub-rule (3) of Rule 6 supra, the Authority provided a

copy of the petition to all the known exporters and Diplomatic

Missions of subject countries in India

(vi)

The Authority sent questionnaires, to elicit relevant information, to the

following known exporters from China PR and Singapore:

CHINA PR:

• M/s Tianjin Xiquing Guanghui Chemical Plant, Tianjin, China.

• M/s Wujin Niutang Chemical Plant, Jiangsu, China.

• M/s Hengdian Group Organic Chemical Co. Ltd., Zhejiang, China

• M/s Taixing Yangtzi Pharmaceutical & Chemical Plant, Jiangsu.China.

SINGAPORE:

• M/s. Kaneka Singapore Co. (PTE) Ltd., Singapore.

M/s. Kaneka Singapore Co. (PTE) Ltd., Singapore and M/s Hengdian

Group Organic Chemical Co. Ltd., Zhejiang, China, have responded to

the questionnaire.

(vii)

The Embassy of China PR and High Commission of Singapore in

New Delhi was also informed about the initiation of investigation and

requested to advise the exporters/producers from their countries to

respond to the questionnaire within the prescribed time;

(viii) The questionnaire was sent to the following known users/importers of

subject goods: -

•

M/s. Aurbindo Pharma Ltd, Hyderabad.

•

M/s. Lupin Laboratories Ltd., Mumbai.

•

M/s. Kopran Drugs Ltd., Raigad.

•

M/s. Sueya Pharmaceutical Ltd., Chandigarh.

•

M/s. Torrent Gujarat Biotech Ltd, Ahamedabad.

•

M/s. Ranbaxy Laboratories Ltd, New Delhi.

•

M/s. Tini Pharma Limited, Mumbai.

None of the users/importers except for M/s. KDL Biotech Ltd., Raigad

have responded to the questionnaire.

(ix)

Additional information regarding injury was sought from the petitioner,

which was also furnished;

(x)

The Authority kept available non-confidential version of the evidence

presented by various interested parties in the form of a public file

maintained by the Authority and kept open for inspection by the

interested parties;

(xi)

**** in this notification represents information furnished by the

interested parties on confidential basis and so considered by the

Authority under the Rules;

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. 1]

(xii)

The investigation covered the period from 1* April 2001 to 30

September 2001;

(xiii)

Copies of initiation notice were also sent to FICCI, CM, ASSOCHAM

etc., for wider circulation

PETITIONER'S VIEWS:

The petitioner, M/s Daurala Organics Ltd, has made the following

points in their submissions: -

(i)

PHPG Base has started coming into India from China PR from

end 1999. First consignment of very small quantity has landed

into India in Feb, 99. But since Feb, 2001 almost at the time

when domestic industry was planning to start its commercial

production China has started dumping the subject goods at

very low prices which still continues just to kill domestic

industry at its nascent stage. From Singapore imports have

been coming for last many years. They have also started

reducing prices after the entry of China resulting into dumping.

(ii)

The month wise imports statistics shows that exporters from

China PR are reducing prices sharply basically during period of

investigation, which in their opinion can not recover even

variable cost on international prices. The target of the exporters

is just to kill the domestic industry at its nascent stage because

as per their information China PR has created additional

capacities of the product which has resulted into surplus

capacities in China PR. Exporter from China PR has given

offers to the Indian customers in the month of July and August

which is as 12.5 US$ per kg. It has been further claimed by the

petitioner that exporters are also offering discounts ranging

1.00 to 1.50 US$ as quality discount which is not reflected in

CIF value but it is adjusted later on by raising Credit Note.

(iii)

To retain their market in India, Singapore exporters are also

reducing their prices resulting into dumping. Though the

volumes from Singapore have come down (basically taken over

by China PR), exporters from Singapore also started dumping

in India, resulting injury to domestic industry.

(iv)

The petitioner has submitted that in the recent amendment

made under Customs Notification No.28/2001 (NT.) dated 31^st

May 2001 China has been declared as non-market economy.

Accordingly they have submitted constructed normal value as

an indicator of normal value in China PR.

(v)

The petitioner has stated that they have tried to get the Normal

Value information from Singapore Trade Development Board

and accordingly written a letter to them for home price of the

subject goods in Singapore. They have also written to them to

provide third country exports in case there is no domestic

sales. As per reply separate exports data for the subject goods

to third country was not available and as per petitioner sources

there is no domestic sales of subject goods, Accordingly the

petitioner has claimed that the only option left for the Normal

Value is Constructed Normal Value

(vi) The exporters from China PR and Singapore are dumping the

subject goods in India. Annexure II (iii) to the Anti Dumping

Rules provide that in case imports of a product from more than

one country are being simultaneously subjected to anti dumping

investigations, the Designated Authority will cumulatively assess

the effect of such imports, in case it determines that

(a)

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 countries less than three

percent, the imports cumulatively accounts for more than

seven percent of the imports of like article, and;

(b)

Cumulative assessment of the effect of imports is appropriate

in light of the conditions of competition between the imported

article and the like domestic articles.

(c)

The margins of dumping from each of the subject countries are

more than the limits prescribed above.

(d)

The quantum of imports from each of the subject country is

more than the de-minimus limit. Cumulative assessment of the

effects of imports is appropriate since the export from the

subject countries directly compete with the goods offered by

the domestic industry in the Indian market Accordingly, the

petitioner has requested that injury to the domestic industry

should be assessed cumulatively from the subject countries

(vii) The present petition is against material retardation of the

establishment of the industry. Since the petitioner is attempting to

settle its commercial production in the Indian market and the

imports

from

the

subject

countries

are

preventing

commercialisation of the production by the domestic industry, the

imports are causing material retardation to the establishment of

the industry. Though, the."nascent industry" i.e. M/s DOL has

started commercial production the industry has yet to find its

place" in the market. Domestic Industry is unable to achieve a

satisfactory level of capacity utilisation and find its place in the

market.

Further, at nascent stage of production, it is being

threatened with material injury by the exports from the subject

countries.

&•?*&;.s^

_ y

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. 1]

(viii) The petitioner has claimed that the technology employed by it is

comparable to the technology being used by the other producers in

the world. Factors such as trade restrictive practices and

competition

between the foreign and domestic

producers,

developments in technology, the export performance or the

productivity of the domestic industry have not caused injury to the

domestic industry.

(ix)

Sharp increase in imports of subject goods at dumped prices has

prevented the domestic industry not only to get its normal selling

price but also prevented the domestic industry to remain in the

market. The domestic industry has suffered huge losses at its

nascent stage itself, in spite of a growing demand. Dumped imports

from subject countries is the only reason causing material

retardation of the establishment of the industry. Further, at nascent

stage of production, the Domestic Industry is being threatened with

material injury by the exports at dumped prices from the subject

countries.

C.

EXPORTERS. IMPORTERS' AND USERS' VIEWS:

4

EXPORTERS:

As stated above only M/s Kaneka Singapore Co. (PTE) Ltd , Singapore

and M/s Hengdian Group Organic Chemical Co. Ltd., Zhejiang, China

have responded to the questionnaire. M/s Keneka expressed the

following views in their submissions:-

(a) They produced the product by unique enzymatic method that is

different from all other Chinese and Indian producers mentioned in

the petition. Their method is conventional chemical method and

production cost of enzymatic method is much lower than chemical

method.

(b) Regarding the product in concern, as stated by M/s DOL in the

petition, both antibiotics of Amoxycillin and Cefadoroxyl can not be

produced directly from PHPG Base but it needs to be converted to

more advanced intermediates such as to PHPG DS and our overall

sales is actually in the form of PHPG DS. Therefore we include the

information of PHPG DS.

India is relatively less than those to India, we would presume that

the assessment could be more accurate by referring to the data of

PHPG DS.

(d) Whether it is legitimate for M/s DOL to be as petitioner on this

subject. We are wondering because, according to DOL's petition,

when the dumping from China started, which is February 2001,

DOL had not started production yet.

(e) As per the petition M/s. DOL produces only less than 20MT/month.

Accordingly it could be said that DOL's sales quantity is immaterial

comparing to quantity of imports and so that so called 'volume

effect' factor of casual link is not satisfied.

IMPORTERS' AND USERS':

M/S. KDL BIOTECH LIMITED. RAIGARH:

M/s. KDL, one of the importers of the subject goods, has made the

following

submissions.

However

they

have not

submitted

information as per the prescribed questionnaire.

a. Consumption of PHPG Base is approx. 200 MT per month.

Th present capacity of M/s Daurala Organics is less than 25

MT per month. Consumption of PHPG Base for sale of

AMTH in the local market is higher than what can be locally

supplied by the local manufacturer.

b. This will lead to a monopolistic situation in the future since

Daurala is the only manufacturer in India.

c. The price offered by China is equivalent to what they are

offering to other consumers worldwide.

d. Chinese are supplying PHPG Base into India at prices

which are not below their manufacturing costs.

e. Prima facie this action will adversely affect the Indian Bulk

Drug Manufacturing Industries associated with the use of D

(-) Para Hydroxy Phenyl Glycine Base and the Methyl

Potassium Dane Salt

EXAMINATION AND FINDING BY AUTHORITY:

The submission made by the domestic industry, exporters and other

interested parties have been examined and considered while arriving

at these findings and wherever appropriate have been dealt

hereinafter.

PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE:

D (-) Para Hydroxy Phenyl Glycine Base is also known as :

D (-) ALPHA PARA HYDROXY PHENYL GLYCINE, D (-) ALPHA

PARA HYDROXY PHENYL GLYCINE BASE, D (-) PARA HYDROXY

PHENYL GLYCINE, PARA HYDROXY PHENYL GLYCINE BASE

PARA HYDROXY PHENYL GLYCINE, D (-) P - HYDROXY PHENYL

GLYCINE BASE, D (-) P - HYDROXY PHENYL GLYCINE.

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. 1]

Petitioner has claimed that predominantly 'D (-) Para Hydroxy Phenyl

Glycine Base' (also to be read as per above mentioned synonyms) i.e.

the "subject goods' (herein after also referred as 'PHPG) is imported

into India which is converted in-situ to " D (-) Para Hydroxy Phenyl

Glycine Methyl Potassium Dane Salt " (herein after referred as

'PHPGDS') by the various importers / manufacturers and used for the

production of Amoxycillin and Cefadroxyl. (i.e. bulk drugs).

In other .words PHPG cannot be used directly for the production of

Amoxycillin etc. It is only when PHPG is converted to PHPGDS,

the same is used for the production of Amoxycillin etc. This

conversion may either be done at the PHPG

/ PHPGDS

manufacturers' end, or at the users end, i.e. producers of

Amoxycillin etc.

All types of PHPG are classified in chapter heading 29.42. As per ITC

eight digit classification PHPG Base is classified in others category

i.e., in 2942.0029. The investigation is against the product under

consideration irrespective of the classification under which it is

imported. Customs classification is indicative only and is in no way

binding on the scope of the present investigation.

The petitioner has claimed that the goods produced by them is like

articles to the goods originating in or exported from subject country.

No dispuln has been raised on the definition of the product under

consideration and like article by any interested party in the

investigation. The Authority, therefore, has determined that the goods

being imported is like article to the product under consideration.

Regarding exporter submission that assessment could be more

accurate on PHPGDS instead of PHPG as exporter's overall sales is

actually in the form of PHPGDS and sales of PHPG to countries other

than India is relatively less than those in India, the Authority found that

PHPG sales of M/s Keneka to the third country during the period of

investigation is about 15% of their total sales and moreover PHPGDS

is not at all Like Article to PHPG as it is second stage product and can

no^f commercially and technically substitute the subject goods. Hence

Authority has considered PHPG information only for the purpose of all

comparisons.

DOMESTIC INDUSTRY:

The petition has been filed by M/s Daurala Organics Limited, Daurala,

Meerut, U.P. The petitioner is the sole producer of the subject goods

in India. Accordingly, the petitioner satisfies the criteria of standing to

file the petition on behalf of the Domestic Industry in terms of Rule

5(3) (a) of the Rules supra.

NORMAL VALUE. EXPORT PRICE AND DUMPING MARGIN:

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

(ii)

When there are no sales of the like article in the ordinary course of

trade in the 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:-

(a)

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);

(b)

The cost of production of the said 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.

CHINA PR:

The Authority sent questionnaires to all the known exporters for the

purpose of determination of normal value in accordance with Section

9A(1)(c). Only one of the exporters from China PR i.e. M/s Hengdian

Group Organic Chemical Co. Ltd., China P.R. responded to the

Authority. It has been observed that M/s. Hengdian Group Organic

Chemical Co. Ltd., China PR has not furnished the complete

information in the prescribed format. The information submitted is

without any covering letter, only on plain paper with unsigned rubber

stamp. The Authority found that information furnished is grossly

inadequate and unreliable in absence of proper signature, hence

rejected for the purpose of preliminary findings.

The Authority,

therefore, holds that none of the exporters from China have

cooperated with the Authority as envisaged under the Rules. The

domestic industry has furnished information with regard to the normal

value in China based on the constructed cost of production. In view of

non-cooperation from the exporters from China, the Authority has

determined normal value in China on the basis Rule 6(8), i.e. best

information available.

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SbC. 1]

EXPORT PRICE:

As explained above there is no dedicated customs classification for

the subject goods as the same is classified in others category.

Accordingly weighted average export price has been arrived at based

on the statistics compiled from Customs Daily Lists. Adjustments on

account of freight, marine insurance, commission, port handling etc.,

to arrive at net export price has been considered as per the claims

of the domestic industry.

DUMPING MARGIN:

11.

The principles governing the determination of normal value, export

price and the dumping margin as laid down in the Custom Tariff Act

and the Anti Dumping Rules are elaborated in Annexure I to the

Rules. The normal value for China PR. based on the best information

available works out to US$ *** per MT.

The net ex factory export

price worked out on the basis of similar parameters and allowing

adjustments works out to US$ *** per MT. The dumping margin for

exports of the subject goods from China PR is assessed by the

Authority at US$ **** per Kg. or 97.20% of the export price.

SINGAPORE

M/S KANEKA SINGAPORE CO. (PTE) LTD.

(a)

NORMAL VALUE:

The exporter has claimed that they have not sold the subject goods in

the home

market. However they have furnished the month wise

details of the sales of the subject goods to third countries. The

average sales realisation in the third countries claimed is US$**** per

kg. It has been observed that the volume of exports to third countries

is about 15 % of the total sales The Authority has examined the cost

of production as claimed by M/s Kaneka in its reply to the

questionnaire so as to determine whether the sales are in the ordinary

course of trade or not. It has been observed that the Company has

not provided the details of Cost of Production in the manner and

formate prescribed in the questionnaire. Further the cost details does

not give break-up of various elements of cost including the cost of raw

materials.

The Authority has found that exports to countries other than India is

not in significant quantities and exports to an appropriate third country

will not be representative. The Authority has already, in para relating

to Like Article, has clarified that exporter submission for comparison

on the basis of PHPG DS can not be done , because they are not Like

Article.

In this scenario Authority has no option except to go by the cost of

production of the subject goods in subject country. While determining

cost of production for the exporter based on the data submitted by the

exporter Authority observes that the exporter has not provided the

detailed cost of production of the subject goods as required in the

prescribed Performa. The information relating to cost of production

needs further information / clarification. Moreover the exporter has also

not provided the Balance Sheet and Profit & Loss Account for the

period of investigation. The exporter has provided un-audited Balance

Sheet and Profit & Loss Account for the year ending June 2001. The

Profit & Loss provided by the exporter in not giving the details of the

various expenses account heads and accordingly provided consolidated

figure in the Appendix 8 and 10.

The exporter has not provided the complete information required as per

Appendix 7 and more over the information submitted in Appendix 8 and

10 for the subject goods is also not as per the prescribed Performa.

The exporter has mentioned that costing information submitted is for

period of investigation but in absence of back-up final accounts for

period of investigation it appears the information submitted is based on

the unaudited financial accounts for the period year ending June,2001.

It has been further observed that the exporter has not provided the non

confidential summary of the response to questionnaire in the prescribed

manner.

In absence of any domestic sales of the subject goods, representative

exports to appropriate third country and insufficient and unreliable

costing information, the Authority has, therefore, proceeded on the

basis of Rule 6(8), i.e. best information available and has assessed the

normal value based on the claim of the Domestic Industry.

Accordingly, the normal value assessed by the Authority is US$**** per

Kg.

(b)

EXPORT PRICE:

The exporter has exported **** Kg. of PHPG to India for a total value of

US$****. Accordingly, the average export price of PHPG during the

period of investigation works out to US$**** per kg. The exporter has

claimed adjustments on account of discount, inland freight, insurance,

overseas freight, overseas insurance etc. to arrive at the Ex-factory

export price to India. After considering the same the Ex-factory price for

export sales to India works out as US $ ***7Kg. subject to further

verification/investigation.

Contd....14/-

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. 1]

The dumping margin in case of M/s KSC from Singapore is assessed

by Authority at US$**** per Kg or 54.32% of the export price.

OTHER EXPORTERS FROM SINGAPORE:

The Authority provided opportunity to the known exporters from

Singapore to furnish information relevant to the investigations and

offer comments, if any, in accordance with the Section cited above.

The Authority wrote to the High Commission of Singapore in India

also. However, no other exporters from Singapore have responded to

the Authority's request for information.

The claim made by the

petitioner with the regard to the determination of normal value has

also not been disputed by the other interested party(ies). The

Authority has, therefore, proceeded on the basis of Rule 6(8), i.e. best

information available.

The Authority has determined the normal value in respect of other

exporters from Singapore on the basis of best information available

i.e. information furnished by the domestic industry The export price in

case of other exporters has been considered on the basis of the

lowest export price of the co-operative exporter from Singapore,

Thus, the dumping margin in case of Non-co-operative/other

exporters of PHPG from Singapore is assessed by Authority at

US$**** per Kg. or 67.78%.

INJURY:

14.

Under Rule 11 supra, Annexure -II, 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.

Contd....15/-

CUMULATIVE ASSESSMENT OF INJURY

15.

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

China P.R. and Singapore is 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,

16.

For the examination of the impact of the imports on the domestic

industry in India, the Authority considered such 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. in accordance with Annexure II (iv) of the

Rules supra."

17.

The various parameters indicating injury to the domostic industry are

as follows: -

(a) Quantum of imports and export price

The information with regard to ih«: quantum of imports of the

subject goods has been based on the statistics compiled from

Customs Daily Lists, The Authority notes thnt thoie has been an

increase of

36.77% in the volume of imports ot UK- suhiort

goods

from the subject countries <i;.;i:)fj ihe Period r\

Investigation over 1999-00 Further il!t*

•• oxpon pneo from

the subject countries ha?. .?'• -• i . . •

; - tha Penci of

Investigation against 1999-00.

(b) Changes in market share held by Indian producers and

imports from the subject country(ies):

The Authority observes that M/s DOL is the new entrant in

manufacture of the subject goods in India and the exporters from

subject countries have intensified dumping ot the subject ::ocd?

•/•--•'£ oiV"/A-rv -- .-

THE GAZETTE OF INDIA ; EXTRAORDINARY

[PART I—SEC, 1]

into India so as to ensure that domestic industry does not get any

market share and also materially retard the establishment of the

industry at its nascent stage itself.

(c) Production and Capacity utilisation of the petitioner:

During period of investigation petitioner has only achieved a

utilization of 32% of its existing installed capacity. Keeping in

view the demand in the country the same is far below than what

could have been achieved by the Domestic Industry.

(d) Insignificant gain of market share:

Domestic industry is at nascent stage, hence no past trends are

available but domestic industry is unable to increase its sales

volume, inspite of huge demand of the subject goods in the

country, because of dumped imports from subject countries .

(e) Reduction In selling price, price erosion, price undercutting,

price suppression or price depression;

In order to analyse the effect of dumped imports on the selling

price of the Domestic Industry an analysis of the monthly.sales

realisation of the subject goods has been made as under:

Period

April-2001

May-2001

June-2001

July-2001

August-2001

Sepetember-2001

Qty Sold/Kg

Net

Sales

Realization

(Rs/Kg)

The table above indicates that the monthly average sales

realisation during the Period of Investigation has declined from

**** Rs/ Kg. during April 2001 to **** Rs/ Kg. during September

2001 showing a decrease within the Period of Investigation itself

This is mainly due to decrease in the average import price by the

exporters after the starting of the commercial production by the

Domestic Industry .

(f) Evidence of lost contracts or declining sales:

It has been observed that because of the sharp decrease in the

export prices by the exporters, the Domestic Industry could not

gain contracts/orders at the prices which could recover the cost of

production leave aside a fair return on capital employed. The

petitioner could sell the subject goods at substantial losses only,

JJ5

(g) Employment:

The domestic industry has submitted that as the industry is at its

nascent stage, protection from unfair trade practice is vital and

urgent otherwise the manpower deployed will loose their jobs.

(h) Profitability :

It has been observed that the Domestic Industry could sell the

subject goods at prices so as to match the same being offered by

the exporters resulting in huge losses.

18.

In considering the effect of 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 product in India, or whether the effect of such

imports is otherwise to depress prices to a significant degree. For the

examination of the impact on the domestic industry in India, the

Authority considered such further indices having a bearing on the

state of industry as production, sales, stock, profitability, net sales

realisation etc. On examination of the evidence, it has been found

there has been a sharp price undercutting just after the domestic

industry has started its trial run and further intensified during period of

investigation. Also there is an increase in the closing stocks with the

domestic industry and domestic industry is prevented to utilise its

present capacity and capacity utilisation is very low. However, the

most significant parameter evidencing injury and threat of further

injury, is the price undercutting as per the evidence available with the

Authority, The rate of increase of imports during the period of

investigation especially from China PR and the corresponding fall in

the

sales realization of the domestic industry are the parameters

clearly showing'the injury being suffered by the domestic industry. On

the basis of the evidence available before the Authority, it is

determined that the domestic industry has suffered injury and is

suffering further threat of injury during the period of investigation.

19.

The present petition is basically regarding impact of dumped imports

causing material retardation of the establishment of the industry.

Since the petitioner is attempting to settle its production in the Indian

market and the imports from the subject countries are preventing

commercialisation of the production by the domestic industry, the

imports are causing material retardation to the establishment of the

industry. Though, at the "nascent industry" i.e. M/s Daurala Organics

Ltd. has recently started production, the industry is yet to find its place

in the market. Domestic Industry is unable to achieve a satisfactory

level of capacity utilisation and to find its place in the market,

because, at the nascent stage itself the domestic industries is being

threatened with material retardation, by imports at dumped prices

from the subject countries.

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. 11

CAUSAL LINK:

20.

In determining whether injury (material/threat/material retardation) to

the domestic industry was caused by the dumped imports, the

Authority took into account the following facts: -

(I)

Substantial imports of subject goods from China PR and Singapore at

dumped prices forced the domestic industry to reduce its selling

prices to un-remunerative level, which has resulted in a situation of

price undercutting in the Indian market

(ii)

The imports from China PR and Singapore suppressed the prices of

the product in the Indian market to such an extent that the domestic

industry was prevented from recovering its full cost of production and

earn a reasonable profit from the sale of subject goods in India.

21.

The Authority, therefore, notes from the above that the imports from

the subject countries have been at a price below the selling price of

the domestic industry. Further, the imports into India have been at a

price lower than the non-injurious price for the domestic industry. As a

consequence thereof the domestic industry is suffering financial

losses. The petitioner was also prevented from increasing the level of

capacity utilisation. These parameters collectively and cumulatively

indicate ;hat the petitioner has suffered material injury due to the

dumped mports.

INDIAN INDUSTRY'S INTEREST:

22.

The purpose of anti dumping dutiea^vin general is to eliminate dumping

which is causing injury to the ddrnestic industry and to re-establish a

situation of open and fair competition in the Indian market, which is in

the general interest of the country.

23.

The Authority recognizes that the imposition^ anti dumping duties

might affect the price levels of the products manufactured using

bubject goods and consequently might have some influence on

relative competitiveness of these products, However, fdir competition

on the Indian market will not be reduced by the anti dumping

measures. On the contrary, imposition of anti dumping measures

would remove the unfair advantages gained by dumping practices,

would prevent the decline of the domestic industry and help maintain

availability

of wider

choice to the consumers of subject goods.

Contd....207-

__37

The Authority notes that the imposition of anti dumping measures

would not restrict imports from China PR and Singapore in any way,

and therefore, would not affect the availability of the product to the

consumers. The consumers could still maintain two or even more

sources of supply.

CONCLUSIONS:

24.

The Authority has, after considering the foregoing, come to the

conclusion that:

(I)

D (-) Para Hydroxy Phenyl Glycine Base has been exported to

India from China PR and Singapore below its normal value;

• (ii)

The Indian industry has suffered material injury and facing

threat of further injury;

(iii)

The Domestic Industry, on account of the injury being suffered,

is suffering material retardation in the establishment of new

industry to manufacture D (-) Para Hydroxy Phenyl Glycine

Base.

(iv)

The injury has been caused cumulatively by the imports from

the subject countries.

25.

The Authority considers it necessary to impose an anti dumping duty

provisionally, pending final determination, on all imports of D (-) Para

Hydroxy Phenyl Glycine Base from subject countries in order to

remove the injury to the domestic industry. The margin of dumping

determined by the Authority is indicated in the paragraphs above. The

Authority proposes to recommend the amount of anti dumping duty

equal to the margin of dumping or less, which If levied, would remove

the injury to the domestic industry. For the purpose of determining

injury, the landed value of imports is proposed to be compared with

the non-injurious price of the petitioner company determined for the

period of investigation.

26.

Accordingly, the Authority recommends that the provisional anti

dumping duties be imposed from the date of notification to be issued

in this regard by the Central Government on all imports of D (-) Para

Hydroxy Phenyl Glycine Base also

known as D (-) Alpha

Para

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. I]

Hydroxy Phenyl Glycine, D (-) Alpha Para Hyclroxy Phenyl Glycine

Base, D (-) Para Hydroxy Phenyl Glycine, Para Hydroxy Phenyl

Glycine Base, Para Hydroxy Phenyl Glycine, D (-) P - Hydroxy Phenyl

Glycine Base, D (-) P - Hydroxy Phenyl Glycine falling under Custom

Heading 2942 originating in or exported from Peoples Republic of

China and Singapore pending final determination. The Anti-Dumping

duty shall be the difference between the amount mentioned in column

3 of the following table and the landed value of imports per Kg. to be

imposed from the date of Notification to be issued in this regard by the

Central Govt, on all the imports of subject goods falling under Chapter

29 of the Customs Tariff, originating in or exported from the countries

mentioned below: -

S. No.

Exporter/Country

China P.R.

All Exporters

Sinaapore

M/s

Kaneka

Singapore Co. (Pte)

Ltd.

Other

exporters

from Singapore

Amount(US$ Per Kg.)

24.83

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 duties under sections 3, 3A, 8B, 9 and 9A of

the Customs Tariff Act, 1975.

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 findings;

(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 preliminary findings.

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 provide opportunity to all the interested

parties for making oral submissions which have to be rendered

thereafter in writing;

(d)

The Authority would conduct further verification to the extent

deemed necessary;

(e)

The Authority would disclose essential facts before announcing

final findings.

L. V. SAPTHARISHI. Designated Authority

Printed by the Manager, Govt, of India Press, Ring Road, Mayapurl, New Delhi-110064

and Published by the Controller ot Publications, Delhi-110054 — 2001