MINISTRY OF COMMERCE AND INDUSTRY
New Delhi, the 3rd November, 2000
Final Finding Notification
Subject: Anti-Dumping Investigation concerning imports of Sodium Nitrite from China PR - Final Findings.
No. 39/1/99-DGAD - The Government of India 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 Articles and for Determination of Injury) Rules, 1995, thereof:
The procedure described below has been followed with regard to the investigations:
party on confidential basis and so considered by the Authority under the rules.
B VIEWS OF THE PETITIONERS
2.0 VIEWS OF DOMESTIC INDUSTRY ON PRELIMINARY FINDINGS:
They have submitted that the cost of production of Sodium Nitrite has increased significantly after the investigation period, which has resulted in intensify injury to the domestic industry.
2.2 Exports from China PR have been increasing and are causing severe injury to domestic industry.
2.3 In response to the Preliminary Findings two other producers, namely, M/s.Punjab Chemical and Pharmaceuticals ( PCPL) and M/s. Rashtriya Chemicals & Fertilizers (RCF) have extended their support to the petition filed by Deepak Nitrite and have conveyed their willingness to provide all information considered relevant and necessary by the Designated Authority for the investigation.
2.4 It has been claimed by some interested parties that there are two more producers of Sodium Nitrite, namely, Omega Chemicals and M/s. Punjab Nitrate. It has been submitted that to best of their knowledge there are no manufacturers of Sodium Nitrite by these names. It is understood that Ws. Omega Chemicals is a trader, who earlier tried to make Sodium Nitrite through direct neutr4ajation of Soda Ash and Nitric Acid.
2.5 With regard to information provided by the trader on normal value, the petitioners has submitted that mere E-mail information with regard to prices in the 3rd market does not constitute evidence of normal value. The information in this regard required to be provided by those producers who are holding the relevant information. The petitioners have submitted that the export price from China has declined continuously and has resulted in intensify dumping. They have submitted that the final duties may be recommended in Variable form in terms of US Dollars so that erosion of the quantum of protection does not take place on account of changes in the exchange rate.
2.6 Drawing attention to the amendments to the anti-dumping rules, the petitioners have requested that the Designated Authority may consider recommending anti-dumping duties up to the dumping margin.
C. VIEWS EXPRESSED BY THE EXPORTERS, IMPORTERS AND INTERESTED PARTIES
The importers have stated that due to certain commitments they could not attend the public hearing on 18'" July, 2000. They have submitted that they have not imported Sodium Nitrite till date and have purchased only from domestic manufacturers, namely, M/s. Deepak Nitrite and M/s. RCF. Effective from 15th May, 2000 Deepak Nitrite have already increased the prices of Sodium Nitrite by Rs.1500/-PMT due to increase in price of Ammonia.
The domestic manufacturers by increasing. the price of Sodium Nitrite is only making it difficult for domestic pigment manufacturers to operate their plant and have submitted that if anti-dumping duty- is levied on imports of Sodium Nitrite similar protection should be given to the consumer industries, namely, Dyes and Pigments in which Sodium Nitrite is consumed.
E. PRODUCT UNDER CONSIDERATION:
5.1 The product under consideration in the present investigation is Sodium Nitrite originating in or exported from China. The product is classified under Customs Tariff heading, 2834.10. The classification is, however, indicative only and in no way binding on the present investigations. The petitioner has stated that the product is under ęGL category as per the import policy and is an oxidizing as also a reducing agent. It is a white crystal powder mostly used in pharmaceutical industries, dye industry, lubricants, construction chemicals, meat processing, textiles etc.
5.2 The Authority notes that none of the interested parties have raised any contrary arguments with regard to product under consideration. Para E, of the Preliminary findings is confirmed.
F. LIKE ARTICLE:
G DOMESTIC INDUSTRY.
EXAMINATION BY THE AUTHORITY:
7 4 Authority notes that apart from M/s. Deepak Nitrite, the petitioners, two other producers namely, M/s. PCPL and M/s. RCF have supported the anti-dumping petition and conveyed their willingness to provide all relevant information necessary for the investigation. Authority called for relevant information and conducted verification to the extent deemed necessary.
7.5 As regards to additional production facilities like Punjab Nitrite Ltd. (5000 MT/Per year) and M/s. Omega Chemicals (200 MT/Year) the Authority notes that importer has just alleged about the production facilities and have not substantiated with any evidence. The concerned administrative ministry has also not confirmed about the above mentioned production facilities of Sodium Nitrite. In the circumstances. Authority rejects the contention of the importer.
The Rules relating to comparison provides comparison of normal value and export price provides as follows:
"While arriving at margin of dumping Designated Authority shall make a fair comparison between the export price and the normal value. A comparison shall be made at the same level of trade, normally at ex-works level and in respect of sales made and as nearly possible the same time. Due allowance shall be made in each case on its merits, for differences which occur price comparability including differences in conditions and terms and sales, taxation, levels of trade quantities, physical characteristics and any other differences which are demonstrated to affect price comparability".
INJURY AND CAUSAL LINK
9.1 Volume of Imports:
The volume of imports have been as under:
1996-97 1997-98 1998-99
Imports from China (MT) 611 3095 2024
Share of China in total imports (%) 76.7 78.9 79.7
imports from Other countries (MT) 186 830 517
Total Imports (MT) 797 3925 254
Sale of Indian Producers 21586 23399 23464
Total Demand in the Country(MT) 23170 27324 26005
Market Share in Demand
China 2.7 11.41 7.8
Other Countries 0.8 3.0 2.0
Domestic Industry 96.5 85.6 90.2
It is evident from the table above that the imports have increased from China in absolute terms. It increased from 611 MT (1996-97) to 2024 MT in 1998-99. The market share of import from China in the total demand in India, which was as low as 2.7% in 1996-97 registered manifold increase and stood at 7.8 % in 1998-99. The market share of domestic industry, which was 96.5% in 1996-97 declined to 90.2 % in 1998-99.
9.2 Value of Imports from subject country:
The CIF value of imports from China has been as under:
Qty Value (Rs) CIF Value Rs/MT
1996-97 611.0 8934948 14623
1997-98 3095.3 41619120 13446
1998-99 2024.49 26384470 13033
Source: DGCI &S
As seen from the above the CIF rate per MT has declined from Rs. 14623/MT to Rs. 13033/MT.
9.3 Production : As per the petitioners, there are four producers of Sodium Nitrite in India including Deepak Nitrite Ltd. The Ministry of Chemicals & Petrochemicals has indicated production and capacity details for period of investigation and past years. They have indicated production figures only for DNL , NFL & RCFL as shown below. The production figures for PCPL as given by the company are also shown below.
PRODUCERS 1996-97 1997-98 1998
Volume/MT Volume/MT VolurneIMT
DEEPAK NITRATE LTD 14622 17533 16718
SHARE % 62.33 65.43 63.98
PCFL 3955 4620 4913
NFL 2411 3160 2975
RCFL 2470 1485 1526
TOTAL 8836 9265 9414
SHARE % 37.67 34.57 36.02
GRAND TOTAL 23458 26798 26132
As it is evident from the above the petitioner M/s. DNL represents 63.98% production of total domestic production in 1998-99. Further, the production of petitioner has declined in 1998-99 as compared to 1997-98, though the production increased in 1997-98 compared to 1996-97. The increase in production has been attributed to investment of 7crores in 1996-97 for upgradation and modernisation of the plant by the petitioners i.e. DNL.
Sodium Nitrite 1996-97 1997-98 1998-99
Capacity Achievable 27580 27580 27580
Production 23458 26798 26132
Capacity Utilisation % 85.05 97.16 94.74
As it is evident from the above that the capacity utilisation which was 97.16% in 1997-98 declined toi94.74% in 1998-99. The production and capacity utilisation have increased in 1697-98 as a result of additional investments during 1996-97.
Sales volume in respect M/s DNL, M/s PCPL and M/s RCF is as under:-
1996-97 1997-98 1998-99
Sales (MT) 21586 23399 23464
The sales volume has marginally increased during 1998-99 compared to 1997-98 by 65MT in absolute terms.
The net sales realisation for one of the largest producers in the domestic ic4dustry i.e.M/s. DNL for three years is as under:-
Period Selling price
1998-99 1st QTR 18787
1998-99 2nd QTR 19564
1998-99 3rd QTR 19115
1998-99 4thQTR 18546
9.6.1 The material injury suffered by the petitioner is noticed from the steep reduction in the selling price of Sodium Nitrite in the domestic market. The average Sales Realisation of DNL, which was 19180 MT in 1996-97, declined to 18648 PMT in 1997-98. The petitioner was able to increase the price marginally in the beginning of second quarter of 1998-99 but was forced again to reduce the prices during the fourth quarter due to alleged dumped imports.
9.6.2 The Authority notes that imports were undercutting the prices of the Indian Industry to a significant degree. This has prevented the industry from increasing their selling price. The cost of production of the industry increased, in spite of which the industry could not increase its selling prices proportionate to the extent of the increase in the cost of production.
9.6.3 The profitablility of the domestic industry has remained sub-optimal . One of the companies has been forced to significant losses while the others were also prevented from recovering their fair non-injurious price during the period of investigation.
10.0 Conclusion on Iniury:
The Authority thus observe that:
11.0 Causal Link:
11.1 Imports of Sodium Nitrite from other countries was around 21% to 23% in the past three years. Further more, the exporters from other countries are exporting Sodium Nitrite into India at a significantly higher price. The imports from other countries are, therefore, not causing any injury to domestic industry. The petitioner is producing Sodium Nitrite for past three decades. The technology adopted by the company is comparable to the technology adopted by other players world over- There is no significant difference in manufacturing process. Imports volume from China PR has increased in absolute terms from 611 MT (95-96) to 2024 MT (98-99).
11.2 Market share of China; in the total demand of Sodium Nitrite increased from around 3% (96-97) to 8% (98-99). , As a direct consequence, share of domestic industry defined from around 96% (96-97) to 90% (98-99).
11.3 The landed value of imports from China is lower than the selling prices of domestic industry indicating price under cutting. As a direct consequence, the net sales realisation of domestic industry in 1998-99 has remained more or less stagnant and the industry is finding difficult to hold its prices.
11.4 In view of the above, Authority notes that the injury to domestic industry has been caused by the dumped imports.
12.1 The purpose of anti dumping duties, in general; is to eliminate dumping, which is in general interest of the country. It is recognised that the imposition of anti dumping duties might affect the price levels of the products manufactured using the subject goods and consequently might Gave 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 domestic industry. On the contrary, imposition of anti dumping measures would remove the unfair advantages gainer! by dumping practices, would prevent the decline of the domestic industry and help maintain availability of wider choice to the consumers of sodium nitrite. 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.
12.2 To ascertain the extent of anti-dumping duty necessary to remove the injury to the domestic industry, the Authority relied upon reasonable selling prices of Sodium Nitrite in India for the domestic industry, by considering the optimum cost of production at optimum level of capacity utilisation for the domestic industry.
The Authority, after considering the foregoing, concludes that:
14.0 Authority considered 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, and the date of commencement of such duty (clause (d) Rule & supra as amended).
15.0 Accordingly, the Authority recommends definitive Anti-dumping Duty. The Anti dumping Duty shall be the difference between US$524.63 per MT and the landed price of imports per MT on all imports of Sodium Nitrite originating in or exported from China PR falling under Chapter 28 of the Customs Tariff Act.
16.0 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 levied under Section 3, 3A, 8B, 9 and 9A of the Customs Tariff Act, 1975.
17.0 Subject to above , the Authority confirms the preliminary findings dated 6.4.2000.
18.0 An appeal against this order shall lie to the Customs, Excise and Gold (Control) Appellate Tribunal in accordance with the Act Supra.
L. V SAPTHARISHI...