G/SG/N/6/MDG/7  
G/SG/N/7/MDG/7  
G/SG/N/11/MDG/7  
 
28 August 2019  
(19-5560) Page: 1/7 
Committee on Safeguards  Original: French  
 
  
NOTIFICATION UNDER A RTICLE 12.1(A) OF TH E AGREEMENT ON  
SAFEGUARDS ON INITIA TION OF AN INVESTIGA TION  
AND THE REASONS FOR IT 
NOTIFICATION UNDER ARTICLE 12.4 O F THE AGREEMENT ON S AFEGUARDS  
BEFORE TAKING A PROV ISIONAL SAFEGUARD ME ASURE  
REFERRED TO IN ARTIC LE 6 
NOTIFICATION UNDER A RTICLE 9, FOOTNOTE 2 , 
OF THE AGREEMENT ON SAFEGUARDS  
MADAGASCAR  
(Edible Vegetable Oils and Margarines ) 
The following communication, dated 2 7 August  2019, is being circulated at the request of the 
delegation of M adagascar . 
 
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In accordance with Articles 12.1 (a) and 12.4 of the Agreement on Safeguards, Madagascar is 
notifying the Committee on Safeguards of the initiation of an investigation and before taking a 
provisional safeguard measure referred to in Article 6 of the Agreement, in respect of imports of  
edible vegetable oils and margarines.  Madagascar also wishes to notify the Committee, under 
Article  9, footnote 2, of the Agreement, of its decision not to apply the proposed safeguard measure 
to imports from developing country Members of the WTO . 
 
A. NOTIFICATION UNDER ARTICLE 12.1(A ) OF THE AGREEMENT O N SAFEGUARDS ON 
INITIATION OF AN INV ESTIGATION AND THE R EASONS FOR IT  
1. Date of initiation  
 
The investigation was initiated on 14 August 2019, the date on which the notice of initiation was 
published in two national newspapers authorized to receive legal notices . 
 
2. Product under consideration  
 
Edible vegetable oils and margarines classified under Madagascar customs tariff codes 15071010, 
15079000, 15089000, 15091010, 15099000, 15100000, 15111011, 15111091, 15119000, 
15121110, 15121900, 15122110, 15122900, 15141100, 15141110, 15141900, 15149110, 
15149900, 15171000, 15179010, 15179090 and 15180000 . 
 
3. Exporting countries  
 
The main co untries exporting edible vegetable oils and margarines  to Madagascar  are Egypt, 
Indon esia and Malaysia . 
 
4. Reasons justifying the initiation of the investigation  
 
The information in the petition shows  that, as a result of unforeseen developments, edible vegetable 
oils and margarines  have been imported in such increased quantities that the increase has caused G/SG/N/6/MDG/7 • G/SG/N/7/MDG/7 • G/SG/N/11/MDG/7  
 
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  or threatens to cause serious injury to the domestic industry producing the product like , or directly 
competitive with , the product under investigation . 
 
5. Duration of the investigation  
 
The investigation will be conducted over a period of nine months  and will last no longer than 
12 months . 
 
6. Further information  
 
Interested parties must make themselves known to the ANMCC, the investigating authority, within 
a period of 30 days following the initiation of the investigation . 
 
Replies to questionnaires, comments and any relevant information to be relayed to the ANMCC must 
be sent by 30 September  2019 at the latest . 
 
If information requested from interested parties in connection with the investigation is not provided 
within the specified time  frame, decisions will be based on the best information available.  This will 
also be the case if information is erroneous or incomplete . 
 
7. Public hearings  
 
The ANMCC may organize public hearings, either at the request of interested parties or ex officio , 
so as to enable interested parties to defend their interests . 
 
B. NOTIFICATION UNDER A RTICLE 12.4 OF THE A GREEMENT ON SAFEGUAR DS BEFORE 
TAKING A PROVISIONAL  SAFEGUARD MEASURE R EFERRED TO IN ARTICL E 6 
1. Specify the product subject to the proposed provisional safeguard measure  
 
Edible vegetable oils and margarines classif ied under Madagascar customs tariff codes  15071010, 
15079000, 15089000, 15091010, 15099000, 15100000, 15111011, 15111091, 15119000, 
15121110, 15121900, 15122110, 15122900, 15141100, 15141110, 15141900, 15149110, 
15149900, 15171000, 15179010, 15179090 and 15180000.  
 
2. Specify the proposed provisional safeguard measure  
 
The provisional safeguard measure will take the form of an additional duty to the ad valorem  customs 
duty, charged at a rate of 21% (twenty -one per cent) of the c.i.f. value . 
 
3. Specify the proposed date of introduction of the proposed provisional safeguard 
measure  
 
The provisional safeguard measure will enter into force on 1 September 2019.  
 
4. Specify the expected duration of the provisional safeguard measure  
 
The provisional safeguard measure will be applied for 200 days from the date of its entry into force . 
 
5. Provide the basis for : 
5.1 Making a preliminary determination, as provided for in Article 6 of the 
Agreement on Safeguards, that increased imports have caused or are 
threatening to cause serious injury . 
I. INCREASE IN IMPORTS  
I.1- Evolution of imports in absolute terms  
Year 2015  2016  2017  2018  Jan-June  
2018  Jan-June 
2019  
Imports (tonne s) 30,215 62,883 88,039 76,145 22,932 33,501 
Evolution (Ind ex) 100 208 291 252 100 146 G/SG/N/6/MDG/7 • G/SG/N/7/MDG/7 • G/SG/N/11/MDG/7  
 
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  Imports of the products  subject to the investigation increased globally by 152 index points between 
2015 and 2018. While the most significant increase, 108 index points, occurred  in 2016, the volume 
of imports reached its peak in 2017. In 2017, we noted an increase of 83 index points in relation to 
2016. In 2018, a slight reduction o f 39 index points was recorded in relation to the pre vious year; 
however, the volume imported during this period still exceeded that of 2016 . 
 
Furthermore, the increase in imports of these products  regained momentum in the most recent 
period analysed.  A sharp and sudden increase of  46 index points was recorded  in the first six months 
of 2019 compared to the same period in 2018.  
 
I.2- Evolution of imports in relative terms  
 
Imports of the products su bject to the investigation have increased significantly in relative terms  in 
relation to domestic production . The table below shows  that in comparison to domestic production, 
imports recorded very high rates during the period covered by the  investigation . 
 
Year 2015  2016  2017  2018  
Import s/Production  
(Index) 100 187 282 260 
 
Imports of the products subject to the investigation increased in relation to domestic production 
throughout the review period. The share held by  imports  increased significantly over the first 
three  years in relation to domestic production. A relative increase of 182  index points was recorded  
between 2015 and 2017 . Over the entire review period, the relative increase in imports amounted 
to 160 index points . 
 
II. SERIOUS INJURY  
 
The determination of the existence of serious injury to the domestic industry producing lik e or 
directly competitive products was made following an evaluation  of all relevant factors of an objective 
and quantifiable nature having a bearing on the situation of the domestic industry . The information 
in the  petition concerning the injury suffered by the domestic industry ha s revealed the following : 
 
i. Sales  
 
Year 2015  2016  2017  2018  
Sales  (Index) 100 108 101 94 
 
Having risen by  8 index points in  2016 in relation to  2015, the level of sales deteriorated over the 
last 3 years, falling from  108 to 94 index points between  2016 and 2018, i.e. a drop of 14 index 
points. The lowest level was reached in 2018 , i.e. six index points lower than in 2015 . 
 
ii. Production  
 
Year 2015  2016  2017  2018  
Production (Ind ex) 100 111 103 97 
 
The domestic industry's production rose by 11 index points between 2015 and 2016. In 2017 and 
2018, production decreased. This reflected  a drop in the level of sales  and the gradual loss of the 
product's market share . Production fell by 8 index points  in 2017 and by 6 points in 2018 . 
 
iii. Turnover  
 
Year 2015  2016  2017  2018  
Turnover  (Index) 100 109 102 99 
 
The table above shows that in 2016, turnover rose by 9 index points in relation to 2015. From  2017 
onwards, turnover decreased on yearly basis. Between 2016 and 2018, the drop in turnover 
amounted to 10 index points . 
 G/SG/N/6/MDG/7 • G/SG/N/7/MDG/7 • G/SG/N/11/MDG/7  
 
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  iv. Inventory   
 
Year 2015  2016  2017  2018  
Inventory volumes  (Index) 100 114 118 82 
 
The rise in inventory volumes over the first three years shows that while the company has the means 
to increase its production volume, it has problems finding a market for its output . The fall in the 
inventory level at the end of the period coincides with the lowest level of production . 
 
v. Market share  
 
Year 2015  2016  2017  2018  
Market share  
(Index) 100 70 53 56 
 
Since 2015, the domestic industry's market share  has progressively been captured by imported 
products. In 2016, we see a significant reduction of 30 index points. The slight upturn noted in 2018 
in relation to 2017 was caused by a marginal  slowdown in  imports . By the end of the period under 
review , the domestic industry had lost almost half of its market . 
 
vi. Empl oyment  
 
Year 2015  2016  2017  2018  
Workforce  
(Index) 100 100 98 98 
 
In the first two years of the review period , the domestic industry tried to maintain the size of its 
workforce , but was unable to continue its efforts  due to the drop in production . The employment 
level fell by two index points in 2017 in relation to 2016, and remained at this level in 2018.  
 
vii. Productivit y 
 
Year 2015  2016  2017  2018  
Productivit y  
(Index) 100 111 105 99 
 
Productivity rose by 11 index points between 2015 and 2016, before beginning a steady annual 
decline. Between 2016 and 2018, the company's productivity fell by 6 index points each year , i.e. 
from 111 to 99 index points overall . This decline is related to t he drop in production and the effort 
made by the domestic industry in respect of the level of employment . 
 
viii. Production capacity utilization  
 
Year 2015  2016  2017  2018  
Production capacity  (Index)  100 100 100 129 
Production capacity utilization rate (Index) 100 111 103  75  
 
The company's production capacity utilization rate is consistent with the production trend examined 
in the section above. Despite an increase of 11 index points in 2016 in relation to 2015, th e rate 
decreased by 8 index points in 2017 and 28 index points in 2018. The production capacity utilization 
rate reached its lowest level in 2018, as the company was un able to exploit that year's additional 
capacity due to difficulties  selling its products . A drop of 25 index points was recorded for the review 
period as a whole . 
 
ix. Production cost s and sales price  
 
Year 2015  2016  2017  2018  
Production cost s (Index) 100 98 99 103 
Sales price  (Index) 100 101 102 105 
 G/SG/N/6/MDG/7 • G/SG/N/7/MDG/7 • G/SG/N/11/MDG/7  
 
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  Between 2015 and 2018 , the per unit cost of production rose by three index points after a slight fall 
of two index points and one index point  in 2016 and 2017 respectively . 
 
The industry's sales price increased from 2015 onwards, although not significantly; in 2016, for 
instance, a very slight rise of one index point was recorded in relation to 2015, followed, in 2017, 
by a further rise of one index point and, in 2018, three index points . This trend was not, however, 
enough to make the company's activity profitable, since  the increase  was neutralized by the rise in 
costs, and the company still recorded financial losses . 
 
x. Profitability  
 
Year 2015  2016  2017  2018  
Overall results  100 148 61 33 
Product -specific results (Index) -100 -103 -111 -108 
 
The domestic industry's activity remained unprofitable throughout the entire review period. The 
industry  has accrued financial losses on a yearly basis since 2015. The highest losses were incurred 
in 2017. The company only survive s by selling auxiliary pro ducts while waiting for market conditions 
to improve . These sales have also followed a downward trend during the last three years . 
 
III. CAUSAL LINK  
 
1. Effect s of increased imports  
 
Imports of e dible vegetable oils and margarines increased dramatically during the investigation 
period , thereby capturing  a much larger  market share . The market share held by  imports grew from 
100 index points in 2015 to 134 index points in 2016. It rose steadily  throughout the review period , 
reaching  149 index points in 2018 . At the same time , the domestic industry's market share declined 
considerably from year to year over the review period . In 2018, the domestic industry only held 
56 index points of its market in 2015.  
 
This increase also led to a decline in the domestic industry's sales, production and turnover . It is 
therefore concluded that the increased imports cannot be seen as a response to changes in domestic 
consumption, but rather occurred at the expense of domestic production . 
 
2. Effects of other factors  
 
- Contraction in demand  
 
Domestic consumption of the products referred to in the petition almost doubled over the four years 
between 2015 and 2018 . In the first three years, domestic consumption rose by 90 index points . A 
slight slowdown in the growth of domestic consumption was recorded  in 2018, but i t remained very 
high, 68 index points away from its 2015 level .  
 
Year 2015  2016  2017  2018  
Domestic consumption  (Index) 100 155 190 168 
HITA market share (Index) 100 70 53 56 
 
As shown in the table above , the analysis of the data  in the petition has revealed that the injury to 
the domestic industry is not caused by a reduction in internal  demand or domestic consumption.  It 
is instead caused by the choices of its customers being redirected to imported products.  During the 
period  covered by the investigation , consumption of edible vegetable oils and margarines increased 
steadily, but the industry was unable to take advantage of this favourable situation.  It is therefore 
certain  that the decline in sales and production was caused by increased  imports . 
 G/SG/N/6/MDG/7 • G/SG/N/7/MDG/7 • G/SG/N/11/MDG/7  
 
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  - Competition between domestic producers  
 
Competition between domestic producers cannot be considered a cause of the injury  suffered by the 
domestic industry, since other dome stic producers have halted their production due to the massive 
volume of imports. HITA is now the sole domestic producer . This confirms  that the serious injury 
suffered by the industry cannot be attributed to competition between domestic producers . 
 
- Techno logy used  
 
A visit to the production site confirmed  that the domestic industry's manufacturing process is 
consistent with international standards. Moreover, HITA invested further  in this area in 2018 , 
increasing its production capacity with a view to catering to the growing market .  
 
The injury suffered by  the domestic industry cannot therefore be attributed to a  disconnect between 
the techniques applied by the domestic industry and the highly developed techniques used at the 
international level . 
 
- Export performance  
 
All HITA's production is destined for the domestic market; export activity cannot therefore be 
considered the cause of the injury suffered by the domestic industry . 
 
In light of the foregoing, none of these additional  factors can be recognised as a principal  cause of 
the injury suffered by  the domestic industry  that produces  products like, and directly competitive 
with, the product referred to in the petition . There is, however , a correlation between the injury 
suffere d by the domestic industry and the massive increase in  imports . 
 
5.2 Determining that there are critical circumstances where delay would cause 
damage which it would be difficult to repair  
 
According to the analysis of the indicators of injury to the domestic industry, any delay in taking 
action could lead to the cessation of the industry's activity . Furthermore, a  preliminary determination 
has been made that critical circumstances exist in w hich delay would cause damage which it would 
be difficult to repair . The increase in imports of the products subject to the investigation has led to 
the closure of several domestic producers  in the sector, including SOMAPLM, SIB , BIDCO and TIKO 
OIL PRODUCT . 
 
6. Offer of consultations under Article 12.4  
 
In accordance with Article 12.4 of the Agreement on Safeguards, Madagascar is prepared to hold 
consultations on the provisional safeguard measure with those Members having a substantial interest 
as exporters of the products concerned . 
 
7. Further information  
 
Requests for further information and correspondence regarding the investigation must be sent to : 
 
 Monsieur Le Directeur Général de l'ANMCC  
Enceinte Ex -Conquête Antanimena, Antananarivo 101 - Madagascar  
Email :dg.anmcc@gmail.com  
 
C. NOTIFICATION UNDER ARTICLE 9, FOO TNOTE 2, OF THE AGRE EMENT ON 
SAFEGUARDS OF THE DE CISION NOT TO APPLY THE SAFEGUARD  
Below is the list of developing countries to which the prov isional measure will not apply, as their 
exports represent less than 3% of Madagascar's total imports of edible vegetable oils and margarines 
and collectively account for not more than  9%: 
 
Afghanistan;  Albania;  Angola ; Antigua and Barbuda ; Armenia; Bahre in; Bangladesh ; Barbad os; 
Belize ; Benin; Bolivia,  Plurinational State of;  Botswana ; Brazil; Brunei Darussalam ; Burkina Faso ; 
Burundi ; Cabo Verde ; Cambod ia; Camero on; Central African Republic; Chad;  Chile; Colombi a; 
Congo ; Costa Rica ; Côte d'Ivoire ; Cuba; Democratic Republic of the Congo; Djibouti ; Domini ca; G/SG/N/6/MDG/7 • G/SG/N/7/MDG/7 • G/SG/N/11/MDG/7  
 
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  Dominican Republic; Ecuador;  El Salvador ; Eswatini ; Fiji; Gabon ; Gambi a; Georgia;  Ghana ; 
Grenad a; Guatemala ; Guinea; Guinea-Bissau ; Guyana ; Haiti; Honduras ; India; Israel; Jamaica; 
Jordan ; Kazakhstan ; Kenya ; Kuwait;  Kyrgyz Republic; Lao People's Democratic Republic; Lesotho ; 
Liberia; Malawi ; Maldives ; Mali; Mauritania; Mauri tius; Mexico; Moldova ; Mongoli a; Montenegro; 
Morocco; Mozambique ; Myanmar ; Namibi a; Nepal; Nicaragua ; Niger ; Oman ; Pakistan ; Panama ; 
Papua New Guinea;  Peru; Philippines ; Qatar ; Rwanda ; Saint Kitts and Nevis; Saint Lucia ; 
Saint Vincent and the Grenadines; Samoa ; Saudi Arabia; Senegal; Seychelles ; Sierra Leone ; 
Solomon Islands; South Africa; Sri Lanka ; Suriname ; Tajikistan ; Tanzani a; Thailand; 
The former  Yugoslav Republic of Macedonia;  Togo; Tonga ; Trinidad and Tobago ; Tunisi a; Turkey; 
Uganda;  Ukraine ; United Arab Emirates; Uruguay ; Vanuatu ; Venezuela,  Bolivarian Republic of ; 
Viet Nam; Yemen; Zambi a; Zimbabwe.  
 
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