By: ICN Bureau
Last updated : March 06, 2018 8:18 pm
The Dyestuffs Manufacturers Association of India (DMAI) has sought the intervention of the finance ministry on the final findings issues by the Designated Authority of Directorate General of Anti Dumping & Allied Duties (DGAD) in the matter concernin
The Dyestuffs Manufacturers Association of India (DMAI) has sought the intervention of the finance ministry on the final findings issues by the Designated Authority of Directorate General of Anti Dumping & Allied Duties (DGAD) in the matter concerning imports of Aniline originating from European Union. In A missive to the finance ministry, DMAI has requested the ministry not to accept the final findings of DGAD. The DMAI argues that some the recommendation made by the association was not considered before taking the final decision.
Points raised by DMAI:
1. Domestic industry: Gujarat Narmada Valley Fertiliser Co ltd (GNFC) filed the petition on behalf of the domestic industry Hindustan Organics Chemicals Ltd (HOC) joined them later and the required financial data were not submitted within the prescribed time limit by HOC.
2. Period of investigation (April 2009 to June 2010): POI includes a period of 6 months in which according to the petitioner itself (GNFC), the performance in respect of Aniline deteriorated due to global economic recession. This very fact has been admitted by the petitioner and disclosed in its Annual Report of 2009-10; extract of the same is reproduced below:
“Due to economic slowdown, lower realization and high stock after annual shutdown in May, 2009, Methanol-I and Methanol-II, and Aniline plants could not be operated at its full capacity in the first of half of the year …”
3. Effects of economic-recession have been built-in POI: In the first instance, this period being an exceptional period, should not have formed part of POI. In the remaining period of 9 months, domestic industry has not suffered any injury as already had bee n established by the Authority vide its recent final finding in the Sunset Review investigation for the same product. This clearly demonstrates that injury to the domestic industry, if any accrues is caused on account of the economic recession.
4. Capacity Utilisation of domestic industry: The capacity utilization of domestic industry is conflicting. GNFC is using almost 100% of its capacity whereas HOC is only about 25%. If dumping is the cause of the injury then its effect should be on lower capacity utilization of both industries. DGAD has not considered the same in the final findings. Further HOC’s losses included in the domestic industries which have vitiated the analysis. HOC’s losses are attributed to their serious over-manning at their Rasayani Site when most of the plants are closed. HOC’s Aniline as we understand is manufactured out of Naphtha/Gas based Hydrogen which in comparison to GNFC’s Aniline is far more expensive.
5. Export Price of Aniline from EU to the world markets: The petitioners in their own submissions in the Non-Confidential Version enclosed statement of Exports of Aniline from EU. They said Anile exported out of EU to other countries was 875 Euro per MT and for India, it was 936 Euro per MT which means the export price to India is higher at least 7% as compared to other markets. The same has been ignored by DGAD under the pretext of monthly pricing trend and instead has adopted the constructed normal value (CNV) approach. Even if any customer sources Aniline from any location in the world, the prices are common to all market subject to minor adjustments for freight. The very basis of dumping is that there should be price differentiation in India as compared to other markets. Unless this established, we do not find any merit in this case and clearly establishes that there is no dumping.
6. Losses by domestic industry despite negative price-undercutting: During the first 3 years of the injury period, there has been negative price undercutting meaning that the landed prices of imports were always higher than the net sale realization of the domestic industry. In this backdrop of factual position, alleged dumped imports cannot, by any stretch of imagination, bring any pressure on the prices of domestic industry rather would act as a stimulant for rise in prices of domestic industry. This price behavior between landed price being higher vis-í -vis net sales realization in contrary to all perceptions of the market as much as normally imported prices are lower than domestic prices. This call for review of NSR during the POI as it is clearly seems to be flawed.
Moreover, there has been negative price undercutting during first three years of injury but domestic industry has incurred loses during these years. It is strange to believe that losses in all these 3 years are to be attributed to alleged dumped imports without correct appreciation of these facts and due examination of certain inherent factors causing losses for the petitioner.
7. Post POI Performance and market situation:
Since POI selected is skewed having impact of exceptional circumstances, it is but natural to observe the performance of domestic industry POI period particularly when POI has a period of 6 months affected by economic slowdown.
8. Duty Levied by DGAD: The Authority in April 2012 recommended fixed duty of US$110.72 per MT.
We would further like to draw your kind attention that we being the downstream user industries strongly oppose the anti dumping duty because this additional cost would render us uncompetitive and unviable to survive. The total turnover of the producers of Aniline in India is around Rs 300 crore, whereas the total cumulative turnover of our members consuming Aniline are around Rs 2500 crore and generates direct and indirect employment of 8,000 persons.