MINISTRY OF COMMERCE
NOTIFICATION
Subject:-
Anti-dumping investigation concerning imports of NBR originating in or exported
from
No. 9/1/95-ADD-having regard to the Customs
Tariff Act, 1975 as amended in 1995 and the Customs Tariff (Identification, Assessment and
Collection of Anti Dumping Duty, on Dumped Article and for Determination of Injury), Rules
1995, thereof:
A.
PROCEDURE
2.
The procedure described below has been followed:
(i)
The Designated Authority (hereinafter referred to Authority), under the above
Rules, received written request from M/s. Gujarat Apar Polymers Ltd., Mumbai on behalf of
the domestic industry, alleging dumping of NBR originating in or exported from the Federal
republic of Germany and the Republic of Korea (referred to a Germany and Korea
respectively).
(ii) The Authority notified
the Embassy of Germany and Korea about the receipt of dumping allegations made by the
petitioner before proceeding to initiate an investigation in accordance with sub-rule 5)
of Rule 5 supra.
(iii)
The Authority a Public Notice dated 15th March, 1995 published in the
Gazette of India, Extraordinary, initiating anti dumping proceedings concerning imports of
NBR classified under heading 4002.59 of Schedule I of the Customs Tariff Act, 1975 and
No.4002.59.00 under Indian Trade Classification (based on Harmonized Commodity description
and Coding System) originating in or exported from the Germany and Korea.
(iv)
The Authority forwarded copy of the public notice to the known exporters, importers
industry association and to the complainant and gave them an opportunity to make their
views known in writing and to request for an oral hearing.
(v)
According to sub-rule (3) of Rules 6 supra, the Authority provided a copy of the
petition to all known exporters and the Embassy of Germany and
(vi) The Embassy of
(vii) Response to the questionnaire was filed by the
following:
M/s.
§
Korea Kumho Petrochemical Company,
§
Bayer AG,
§
Bayer India Ltd., Mumbai,
§
Rishiroop Polymers Pvt. Ltd, Mumbai,
§
Golden Rolls Pvt. Ltd.,
§
Vako Seal, Mumbai,
§
Puneet Resin Pvt ]M, Mumhai,
§
Lathia Industrial Supplies Company Pvt.
Ltd., Ahmedabad
§
Inraco Ltd., Mumbai
§
Zenith Rubber & Plastic Works,
Mumbai,
§
Precision Rubber Industries Pvt. Ltd,
Mumbai.
§
Markwel Hose Industries Pvt. Ltd., Mumbai
(viii) A
Public hearing was held by the Authority on l2th June, 1996 in order lo provide opportunity to
importers, exporters, petitioner, other interested parties and the Embassy of Germany and
M/s.
·
Gujarat Apar Polymers Ltd., Mumbai,
·
Bayer AG,
·
Korea Kumho Petrochemical Company Ltd.,
through their authorised representatives M/s.
Rishiroop Polymers Pvt. Ltd., Mumbai
·
Puneet Resins Ltd.,
·
Inarco Ltd.,
·
Precision Rubber Industries Ltd.,
·
K K Rubber Co (I) Pvt. Ltd..
·
Parkman Polymer Industries,
·
Shree Venkateshwaria Industries,
·
CAPEXIL
·
Lathia Industrial Supply Company,
·
All Indian Rubber Industries Association,
·
Anil Rubber,
·
Golden Rolls Pvt. Ltd.,
·
Auto Seals A Rubber Industries Pvt.
Ltd.,
·
Federation of Rubber Footwear Manufacturers,
·
·
·
ERC Air Ltd.
·
Synthetics & Chemicals Ltd.,
·
Flexo Industries.
·
Vinko
·
Kohinoor India Ltd.,
(ix ) All the parties who attended the said
public hearing were advised to present their submissions made in the public hearing in
writing for obtaining counter comments from the other party(ies) to the
investigation and the written submissions made by the party(ies) were made available to
the other party(ies) for their counter comments;
(x)
The Authority sought and verified information deemed necessary for the
investigation, and to this end investigations were carried out at the premises of the
petitioner’s head office and works;
(xi)
The Authority conducted cost
investigation and worked out optimum cost of production and cost of make and sell NBR in
India on the basis of Generally Accepted Accounting Principle so as to ascertain as to
whether anti dumping duty lower than the dumping margin would be enough to remove the
injury,
(xii) The
investigation covered the period from
B.
PETITIONER’S VIEWS
The petitioner has made the following submission:-
1. The
investigation by the Authority confirmed massive dumping of NBR from
2. Imports of NBR have
been got cleared under various custom codes under Chapter 40:
3. Normal
value of NBR in the domestic market in
4. Exporters from
5. The various factors such as
increase in imports, reduction in import prices, and factors affecting the petitioner such
as production, capacity utilisation, sales volume, selling prices, financial losses etc.
evidence the injury suffered by the petitioner, which was caused by the imports from Germany and Korea.
6. Dual commission was
paid for exports from
7.
The customs duties should not be considered for working out landed cost of exports
from
C.
VIEWS 0F EXPORTERS, IMPORTERS ANTD OTHER INTRESTED PARTIES
The exporters, importers, and a number of other
interested parties haw responded to the Authority and have raised a number of issues on
like articles, Normal Value, Export Price, injury to the petitioner apart from other
issues. The issues in brief are as under.
a. On Like Article:
1.
NBR is not an article but is a generic term for a group of articles. The term Acrylonitrile Butadiene Rubber or
Nitrile Rubber is used in the rubber industry to define a class or type of NBR elastomers.
2. Technology and manufacturing
process of Bayer and Apar are different. Product
composition in the NBR exported by Bayer neither compares with its old product nor
with the petitioners product range. Finishing differences in Bayer NBR and Apar NBR are
also of significance.
3. Both Korean NBR and Bayer
NBR are neither the same product as petitioner’s NBR nor Apar NBR is substitutable
with German or Korean NBR.
4. NBR imported from
5. In the light of above
arguments, NBR produced by the petitioner and NBR imported from
b.
On
The petitioner has not furnished evidence in support of normal value in
c.
On Export Price:
The petitioner has furnished incorrect Export Price; from
d.
On Injury:
1. Imports of NBR do not
cause a threat of material retardation to the establishment of an industry nor does it
cause a threat of material injury in future.
2. Quantum of imports
from
3. There is sharp
increase in demand of NBR in the country, and the same cannot be met with by the
petitioner.
4.
Production, sales quantum, stocks and selling prices of the petitioner have
continuously shown improvement. The petitioner has shown turnaround and registered
profits.
5. Landed value of individual
imports from
6.
Part of the material imported was for re-export, where the Indian consume of NBR have to be competitive in all respects.
7. The petitioners claim
of price erosion is not supported in the balance sheet which suggests significantly higher
selling price in the period of investigation.
8. The Authority
had worked out, in the investigation relating to
9.
Exports from
10. The petitioner suffers from
inherent deficiencies such as inadequate installed capacity wrong plant location,
non-availability of raw material and high cost of critical raw materials adjacent to site,
inadequate range of grades, inadequate control on quality and poor raw material
consumption norms, resulting in injury to the petitioner.
11.
A comparison of prices of various synthetic rubbers produced in
e.
Other Issues:
1.
There is no evidence of written complaint against
2. The Authority has clubbed
two petitions (from
3. The Authority has not verified the accuracy of the information furnished by the petitioner
before proceeding to initiate.
4. Governments of
the exporting countries were not informed prior to the commencement of initiation of the
investigation.
5. The period of
investigation considered by the Authority is arbitrarily fixed and is inappropriate.
6.
The Authority has not allowed extension of tune limit by way of public notice to
the interested parties.
D. EXAMINATION
& FINDINGS BY THE AUTHORITY
1. The submissions made
by the exporter, importers, petitioner and other interested parties have been examined and
considered while arriving at these findings and have been dealt at appropriate places in
these finding.
2.
On the issue of clubbing of the investigation of the two countries, Rule 19 of the
rules supra requires the Authority to investigate into all cases from where the article
appears to be have been dumped. It is, therefore, proper to investigate
imports from all such sources in a single investigation. Moreover, cumulative assessment
of material injury to the Domestic Industry is appropriate under the facts and
circumstances of the case, and therefore the Authority is justified in clubbing the two
countries.
3. The Authority is
required to prime facie verify the adequacy and accuracy of the information furnished by
the petitioner and detailed verification is a part of the investigation. The very purpose of initiation of an investigation
is to verify the correctness of the allegation levelled by the petitioner.
4. As brought out
above, Government’s of both the countries were notified before proceeding to initiate
the investigation and the contention on this account is factually incorrect.
5.
The period of investigation considered by the Authority is in accordance with the
rules and most appropriate as the petitioner had alleged dumping of NBR by the exporters
from these countries during this period. The Authority is required to investigate the
period for which the dumping allegation is made by the petitioner.
6.
The rules do not prescribe extension of lime by way of public notice, nor extension
of time limit is obligatory on the part of the Authority. The Authority had allowed the
time limits prescribed under the rules for responding to the Authority.
E.
PRODUCT UNDER CONSIDERATION
1.
The product considered in the present investigation is Acrylonitrile Butadiene
Rubber, also known as Nitrile Rubber and NBR. NBR is mainly used for manufacturing various
rubber articles, such as Oil Seals, Hoses, Automotive products, Gaskets, Rice Dehusking
Rolls, Printers fabrics, Oil field products, etc. Major raw materials required for
manufacturing NBR are Acrylonitrile and Butadiene.
2. The importers and exporters
have contended that a number of Nitrile Rubber grades are not being produced by the
petitioner. The importers and exporters have cited Hydrogenated NBR and Carboxylated NBR
as examples. The petitioner has argued that in so far as imports from
3. The Authority notes
that it would not be appropriate to exclude a product from the scope of the present
investigation in case it has not been exported to
4.
NBR is classified under Chapter 40 of Schedule I of the Customs Tariff Act, 1975. The petitioner had alleged that imports of NBR have
been cleared under Customs Codes other than that meant for Nitrile Rubber also. It is also
found that Bayer has confirmed exports of 1396 MT Nitrile Rubber during the period of
investigation whereas the DGCIS statistics reveal imports of 219 MT only.
F.
LIKE ART1CLES
1.
Definition of like article states as under:
“Like Article means an article which is identical or alike in all
respect to the article under investigation for being dumped in India or in the absence of
such an article another article which although not alike in all aspects, has
characteristics closely resembling those of the articles under investigation.”
2.
Major argument of the importers/exporters, as brought out in detail above that the
product composition of Apar NBR and NBR imported from
3.
The argument advanced by the exporters and importers that German and Korean NBR are
not substitutable with Apar NBR is not backed with sufficient evidence. Contrary to the
argument on substitutability advanced by the exporters and importers, the Authority notes
that various users have switched their requirement between domestic produce and overseas
supplies, which clearly establish that the NBR produced by the petitioner was substituted
by the NBR imported from
4. It is also
observed that all Nitrile Rubber are copolymers of Acrylonitrile and Butadiene and serve
the same general purpose of providing resistance to petroleum chemicals, though the same
have different specific end applications. The Authority finds that the manufacturing
process, equipments, and other facilities needed for producing different grades of NBR are
common, and does not involve any special equipment to produce different grades of NBR.
5.
In the light of the foregoings, the Authority concludes that NBR produced by the
petitioner is a like article to the NBR imported from
G.
DOMESTIC INDUSTRY
The petition was filed by M/s. Gujarat Apar Polymers Ltd., Maker
Chamber III, 1st Floor, Nariman Point, Mumbai-400 021. M/s. Synthetics &
Chemicals Ltd. has also created capacity to produce Nitrile Rubber. Production of the
petitioner, however, accounted for the majority of the production in
H. NORMAL
VALUE:
1.
Both the exporters, Bayer and Korea Kumho furnished information containing
inter-alia, the following for the period of investigation for their sales in home market,
export to Indian and exports to other countries:
·
Sales quantity and sales realisation;
·
Selling Price, Commission/discounts,
Packaging, Freight & Insurance, FOB prices, charges before FOB and after ex-works and
ex-works export price per unit of sales and for the quantities sold;
·
Selling price, variable cost, packaging,
marginal profit per unit of sales and for the quantities sold have also been furnished by
Bayer, though the exporter has not furnished details leading to cost of production and
profit made from sales in each market, as requested by the Authority.
2. Since both the
exporters have furnished ex-works price, for sales in the domestic market, the Authority
has relied upon the same and considered normal value on the basis of weighted average
ex-works selling prices in the domestic market for both the exporters have furnished
ex-works selling prices, no further adjustment is required to be made in the same.
3. Rishiroop Polymers Pvt. Ltd.
(Rishiroop), on behalf of Korea Kumho has claimed difference in the sales in the domestic
market and exports to
I. EXPORT PRICE
1.
The export price has been determined on the basis of weighted averse ex-works
export price claimed by Bayer and Korea Kumho. Since the exporters have furnished the
relevant details for working out the ex-works export price, the details furnished by the
importers have not been relied upon.
2.
The petitioner has contended that the exporter from
J. COMPARISON
1. For the purpose of
fair comparison between the normal value and the export price, the Authority took into the
information furnished by the exporters and the best information available. The Authority
has compared weighted average normal value with weighted average export price for
individual exporter, which indicate the following Normal Value, Export Price and dumping
margins:
US$ per MT
Dumping Margin
Bayer AG, Germany
1367.00
Koreas Kumho Petrochemical
Company Ltd., Korea RP
284.30
2.
The Authority notes that the normal value and export price during the investigation
period only are relevant for deciding dumping, and the current export price to India or international prices are not relevant for the
purpose,
K. INJURY
1.
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
of the dumped import” 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 or prevent price increases, which
otherwise would have occurred, to a significant degree.
2.
Annexure- II (iii) under rule 11 supra further provides that in case where imports
of 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 (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.
3.
The Authority notes that the margin of dumping and quantum of imports from
4.
For the examination of the impact of imports on the domestic industry in India, the
Authority considered such further 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.
a.
Volume and Market Share of Dumped Imports
Total imports of Nitrile Rubber in
Market share of
b.
Production and Capacity Utilisation
Production of NBR of the Domestic Industry increased from 2178 MT
(1992-93) to 2380 MT (1993-94) and was 1573.210 MT during the period of investigation. The authority, however, notes that the petitioner
has been forced to produce non NBR items (which otherwise does not require such plant
& machinery as are available with the petitioner) and the utilisation of capacity in
so far as NBR is concerned is still far lower than the capacities created.
c.
Sales in Absolute Quantity
Sales of the Domestic Industry in absolute terms increased from 1916 MT
(1992-93) to 2271 MT (l993-94) and were 1427.670 MT during the period of investigation.
The market share of the petitioner declined by 6% during the period of investigation as
compared to 1993-94.
d.
Selling Price Trend
Average net realisation per MT of sales (after excluding duty and
discounts) were Rs. 61793 (1992-93), Rs. 58592 (1993-94) and Rs. 65406 (during the period
of investigation). The reduction in custom duty coupled with decline in the CIF import
price from both the countries forced the Demestic Industry to sell NBR at unremunerative
prices significantly below the Cost of Production.
e. Stock
Stock of the petitioners during the period of investigation ranged
between 199 MT to 461 MT.
f.
Profit/Loss
The petitioner has suffered financial losses from sale of NBR at price
lower than the cost of production. The Authority notes that even though the petitioner has
reported profits in its published annual
account, the same is because of sale of non-NBR
items and transfer of business of M/s. Apar Ltd. In so far as its NBR operations are
concerned, the same are in losses.
g.
Conclusion on Injury:
The Authority concludes that:
·
The circumstances warrant consideration of
injury on cumulative basis for imports from, both the countries;
·
The imports of NBR have increased in
absolute terms from the two countries during the period of investigation;
·
The share of Germany and Korea in the total
demand in the country increased significantly during the investigation period.
·
Exports from
·
Various indicators relating to domestic
industry such is production, capacity utilisation, sales quantities, average sales
realisation, stock, losses collectively and cumulatively establish that the domestic
industry has suffered material injury, even though some of the parameter have shown
improvement.
The Authority is thus led to the inescapable conclusion that the
domestic industry has suffered material injury.
L.
INDIAN INDUSTRY’S INTEREST & OTHER ISSUES
1.
The purpose of anti dumping duties, in general, is to eliminate dumping
which is causing injury to the domestic 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.
2.
It is recognized that the imposition of anti dumping duties might affect the price
levels of the products manufactured using NBR 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 measurer particularly if the levy of
the anti dumping duty is limited, to the amount necessary to redress the injury to the
domestic industry. 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 NBR. The
Authority notes that the imposition of anti dumping measures would not restrict imports
from