G/SG/N/8/MDG/7  
20 July 2020 
(20-4992) Page: 1/4 
Committee on Safeguards  Original:  French  
 
  
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT ON SAFEGUARDS  
OF A FINDING OF SERIOUS INJURY OR THREAT THEREOF  
CAUSED BY INCREASED IMPORTS  
MADAGASCAR  
Lubricating oils  
The following communication, dated 17 July 2 020, is being circulated at the request of the delegation 
of Madagascar . 
 
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In accordance with Article 12.1(b) of the Agreement on Safeguards, Madagascar hereby notifies the 
Committee on Safeguards of a finding of serious injury or threat thereof caused by increased imports.  
The investigation was initiated on 1 4 August 2 019. 
The period covered by the investigation is 1 January 2 014 to 3 1 December 2 018. 
1  PROVIDE EVIDENCE, CITING RELEVANT DATA AND THE APPLICABLE PERIOD OF 
INVESTIGATION, OF SER IOUS INJURY OR THREAT THEREOF CAUSED BY INCREASED 
IMPORTS  
The examination of all relevant factors as set out below concluded that there was a general and 
significant decline  in the economic indicat ors for the domestic industry caused by increased imports . 
i. Market share   
 2014  2015  2016  2017  2018  
Market share of imports  (index ) 100 107 110 114 117 
Market share of the domestic industry  
(index ) 100 76 63 50 37 
The market share taken by imports increased during the period under investigation, unlike the 
market share of the domestic  industry . The market share of imports grew by 17% between  2014 
and 2018, whereas that of the domestic industry declined by 63% during this period . 
ii. Sales and turnover   
 2014  2015  2016  2017  2018  
Sales  (index ) 100 86 73 63 61 
Turnover  (index ) 100 87 74 61 64 
In terms of sales , the domestic industry experienced a decline in the indicators of both volume and 
turnover . Sales volume shrank from year to year during the investigation period , with a reduction 
of 39%. Turnover decreased by 36% between 2014 and  2018. A slight increase in turnover was 
recorded in 2018 relative to 2017 but it was still below the level of the years preceding 2017.  G/SG/N/8/MDG/7  
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  iii. Production  
 2014  2015  2016  2017  2018  
Production  (index ) 100 93 75 60 70 
Domestic production displayed a downward trend during the period under analysis , dropping by 30% 
during the 2014-2018 period . Even though a slight improvement can be seen between 2017 and 
2018, it remains at a lower level than for the first three years of the investigation period . 
iv. Inventory   
 2014  2015  2016  2017  2018  
Final inventory  (index ) 100 181 189 117 259 
The volume of the company 's annual inventory increased each year except in 2017. The highest 
level was in 2018, when there was a boost in prod uction but without a subsequent rise in sales. 
v. Productivit y  
 2014  2015  2016  2017  2018  
Productivit y (index ) 100 103 102 77 88 
A drop in productivit y of 12 index points  was recorded during the investigation period . 
vi. Production capacity u tilization  
 2014  2015  2016  2017  2018  
Production capacity u tilization ( index ) 100 93 75 60 70 
With regard to production  capacity utilization , the domestic industry has been unable to utilize a 
quarter of its capacity . In addition , the above table shows a purely downward trend, reaching 
30 points after four years . 
vii. Profitability   
 2014  2015  2016  2017  2018  
Results  (index ) 100 56 42 14 21 
The results of the domestic industry display a downward trend during the period under review . A 
decline of around 79% was recorded  during the 2014-2018 period . In 2018, the applicant company 
did not even achieve a quarter of its performance level of 2014.  
viii. Emplo yment   
 2014  2015  2016  2017  2018  
Emplo yment  (index ) 100 90 73 78 80 
The level of employment in the domestic  industry dropped substantially by around 27% in the 
first three years of the investigation period . Despite the slight upturn, it was far from returning to 
its 2014 level. The drop amounted to 20% over the whole period under review . G/SG/N/8/MDG/7  
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  ix. Update of domestic industry data  
The table below gives an overview of the trends  in indicators for the domestic industry  in the recent 
past:  
 2014  2018  2019  
Market share  (index ) 100 36 36 
Production ( index ) 100 70 65 
Sales  (index ) 100 61 71 
Inventory  (index ) 100 259 118 
It can be seen that : 
- there was no improvement in market share;  
- production volume  continued  to fall;  
- sales volume improved slightly but remains at a lower level than at the start of the investigation 
period ; and 
- inventory volume dropped but remains higher than in 2014.  
2   PROVIDE INFORMATION ON WHETHER THERE IS AN ABSOLUTE INCREASE IN IMPORTS 
OR AN INCREASE IN IMPORTS RELATIVE TO DOMESTIC PRODUCTION  
During the investigation period , following unforeseen  developments , imports of lubricant oils in 
absolute terms and relative to domestic production were continu ous, significant , sharp , sudden  and 
recent, according  to the data shown below : 
i. Evolution in imports in absolu te terms   
 2014  2015  2016  2017  2018  2019  
Imports (tonne s) 5,178 6,310 6,650 7,453 9,998 11,134 
Evolution  100 122 128 144 193 215 
Imports of lubricant oils increased continu ously during the whole period under review . The most 
significant increase was between 2014 and 2018, when the volume of imports rose by 93 points . In 
five years , the volume of imports doubled . It rose from 5,178 tonnes to 9,998 tonnes between  2014 
and 2018. Recent data show an increase in imports of about 115% in 2019 by comparison with  
2014, or an increase of 11% from 2018 to 2019 . 
ii. Evolution in imports relati ve to domestic production  
 2014  2015  2016  2017  2018  2019  
Volume of imports / 
Domestic p roduction  (index )  100 131 171 240 277 328 
Relative to domestic production, the increase in imports was a constant  feature of the period under 
investigation , amounting to 177% between  2014 and 2018 and of a continu ous nature . With recent 
data, the increase in relative terms stood at 228% in 2019 by comparison with 2014.  
3  UNFORESEEN DEVELOPMENTS  
It has been determined that the sudden, recent, significant  and sharp  increase in imports of lubricant 
oils that are the subject of the investigation is due to unforeseen  developments, in particular the 
energy transition of developed countries, including some countries  or economic unions that have 
adopted  energy  transition policies and strategies since 2015 . The aim of t his transition is to reduce 
environmental pollution and promote the use of renewable energy sources, encouraging the use of 
biodegradable oils known as biolubricants . Consequently , developing countries have become  the 
main destinations for mineral oil lubricants on account of the absence of energy transition policies  
or delays in their adoption . G/SG/N/8/MDG/7  
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  4  PRECISE DESCRIPTION OF THE PRODUCT INVOLVED  
Lubricating oils classified under Madagascar customs tariff code  27101933.  
5  PRECISE DESCRIPTION OF THE PROPOSED MEASURE  
The National Trade Remedies Authority (ANMCC) has not yet proposed any measure to follow up on 
the finding of serious injury or threat thereof . It is currently studying the recommendations to be 
made regarding the appropriate measures to be notifie d subsequently.  
6  PROPOSED DATE OF INTRODUCTION OF THE MEASURE  
See reply to point 5 above.  
7  EXPECTED DURATION OF THE MEASURE  
See reply to point 5 above.  
8  IF THE EXPECTED DURATION IS OVER ONE YEAR, PROVIDE THE EXPECTED TIMETABLE 
FOR PROGRESSIVE LIBERALIZATION O F THE MEASURE  
See reply to point 5 above.  
9  IF THE NOTIFICATION RELATES ONLY TO A FINDING OF SERIOUS INJURY OR THREAT 
THEREOF, AND DOES NOT RELATE TO A DECISION TO APPLY OR EXTEND A SAFEGUARD 
MEASURE:  
i. provide the deadlines for interested parties to comment o r any other procedures 
relevant to the decision to apply the measures ; and 
ii. provide information regarding procedures for prior consultation with those 
Members  having a substantial interest as exporters of the product concerned.  
Details of the procedures and deadlines relating to the investigation are contained in the notice of 
initiation.  
In accordance with Article 12.3 of the WTO Agreement on Safeguards, Madag ascar is prepared to 
hold consultations with Members having a substantial interest as exporters of the product concerned 
no later than 24 July 2 020. 
Requests for consultations should be sent to the Director -General of the ANMCC at the following 
email addre ss: dg.anmcc@gmail.com . 
Comments and requests for additional information should be sent to the following address:  
Monsieur Le Directeur Général de l'ANMCC  
Enceinte Ex conquête Antanimena - BP: 7653 
Tel: +261 34 05 441 41  
Email: dg.anmcc@gmail.com ; dg@anmcc.mg  
101- ANTANANARIVO - MADAGASCAR  
 
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