G/SG/N/8/IDN/16/Suppl.2  
G/SG/N/10/IDN/16/Suppl.2  
 
23 June 2017 
(17-3355) Page: 1/7 
Committee on S afeguards  Original: English  
 
 NOTIFICATION UNDER A RTICLE 12.1(B) OF TH E AGREEMENT ON  
SAFEGUARDS ON FINDIN G A SERIOUS INJURY O R THREAT  
THEREOF CAUSED BY IN CREASED IMPORTS  
 
NOTIFICATION OF A PROPOSAL TO EXT END A ME ASURE  
INDONESIA  
Supplement  
(Flat-Rolled Product of Iron or Non -Alloy Ste el) 
The following communication dated 20 June 2017, is being circulated at the request of the 
Delegation of Indonesia.  
 
_______________  
 
 
Pursuant to Article 7.2 and Article 12.1(b) of the WTO Agreement on Safeguards, the Government 
of the Republic of Indo nesia hereinafter referred as " GOI", hereby notifies the Committee on 
Safeguards on the investigation findings concerning the extension of safeguard measure against 
the importation of Flat -Rolled Product of Iron or Non -Alloy Steel under HS. Code 
ex. 7210.6 1.11.00.  
 
A. GENERAL BACKGROUND  
 
1. The KPPI hereinafter referred as the "Investigating Authority ", received an application from  
PT. NS BlueScope Indonesia and PT. Sunrise Steel , hereinafter referred as the "Applicant ", to 
conduct an investigation for the extension of the imposition of safeguard measure on imports of 
Subject Good s product based on the claim that the imposition of the safeguard measure is still 
necessary for the domestic industries to do further required structural adjustment in order to 
compete with the imported products.  
  
The Investigating Authority initiated a  safeguard  investigation against importation of Subject 
Goods on 18 January  2017 (as announced in "Bisnis Indonesia " daily newspaper ), and was notified 
to the WTO which had been  circulated on 20 January 201 7 (G/SG/N/6/IDN/22/Suppl.2 –
G/SG/N/14/IDN/2).  
 
2. Major Proportion  
 
The total production of the Applicant is 88% from total domestic production, representing a major 
proportion of the total domestic production of the Subject Goods in  Indonesia.  
 
3. Evidence and Views  by Interested Parties  
 
Pursuant to Article 3.1 WTO Agreement on Safeguards, The Investigating Authority  has held a 
hearing on 20 February 2017 where the interested parties may directly submit evidences and 
views related to the investigation.  
 G/SG/N/8/IDN/16/Suppl.2 • G/SG/N/10/IDN/16/Suppl.2  
 
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  4. The WTO document referring to the notification of initial application of the measure  
 
G/SG/N/8/IDN/16/Suppl.1 -G/SG/N/10/IDN/16/Suppl.1 -G/SG/N/11/IDN/14  
5. Precise description of the product involved . 
The Product Under Investigatio n is flat -rolled product of iron or non -alloy steel, of a width of 
600mm or more, clad, plated to coated with aluminium -zinc alloys, containing by weight less 
than 0.6% of carbon, with a thickness up to 0.7mm, which under Indonesia Tariff Classification 
Code (BTKI) 2012 is under HS code of ex. 7210.61.11.00 and based on BTKI 2017, changes to HS 
code of ex. 7210.61.11  
 
6. Period of Investigation  
The period of investigation is 2013 – 2016. 
 
B. NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT ON SAFEGUARDS ON 
FINDING A SERIOUS INJURY OR THREAT THEREOF CAUSED BY INCREASED 
IMPORTS  
 
1. Information on absolute increase in imports  
Table 1: Volume of Imports  
Description  Year 
2013  2014  2015  2016  
Quantity  (Ton)  303.501  201.934  56.988  92.583  
Changes (%)   (33) (72) 62 
Source: Indonesian Statistic . 
As shown in Table 1, it is verified that:  
The volume of imports  decreased by 33% in 2014 compared to the preceding year, and in  2015, 
the volume of imports  was again decreased by 72%. However, in 2016, there is signific ant 
increase by 62% compared to the preceding year . 
2. Information on relative to domestic production  
Table 2: Volume of Imports  and Total Production  
 Unit Year 
2013 2014 2015 2016 
Import volume  Ton 303.501  201.934  56.988  92.583  
Total Domestic  Product ion Index  100 101 116 125 
Import to Total Domestic 
Production  Index  
117 77 19 28 
Changes  %  (34) (76) 50 
 
Source: Indonesian Statistic , Questionnaires, Verification Result and processed . 
 
As seen in Table 2, the volume of imports relative to domestic pr oduction was decreased in 2014 
after the imposition of Safeguard duty by 34% and in 2015, it was decreased by 76%. However, 
in 2016, there is significant increased on imports in relative terms by 50% and therefore import to 
total domestic production became  28%.  
 
3. Evidence of serious injury or threat thereof caused by increased imports  
The Investigating Authority examined all data and information available based on the actual 
condition of the domestic industry. In addition, the Investigating Authority also  conducted on -site 
verifications to the domestic industry. The following table 3, 4,5,6 and table 7, contained data and 
information of the situation of the domestic industry, which is provided in indices.  G/SG/ N/8/IDN/16/Suppl.2 • G/SG/N/10/IDN/16/Suppl.2  
 
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  Table 3. Domestic Sales, Market Share of Applicant 's, and Market Share of Imports  
No. Description  Unit Year Changes  
2013 2014 2015 2016 13-14 14-15 15-16 
1. Domestic Sales  Index  100 102 111 121 2 9 8 
2. Market Share  of 
Applicant 's  Index  100 124 191 185 8 23 (2) 
3. Market Share of Imports  Index  100 81 33 47 (11) (28) 8 
Source: Questionnaires, Verification result and processed . 
 
In the first year of the imposition of the Safeguard measure, the domestic sales increased in 
absolute terms, the increase also occurred in the second and third year. In addit ion, the 
applicant 's market share  was also increased in 2014 and 2015. However, in 2016, the applicant 's 
market share  decreased. Meanwhile in 2014 and 2015, the market share of the imports  was 
decreased, however in 2016, market share of the imports  was inc reased . 
Table 4. Production, Installed Capacity, Capacity Utilization, labour and Productivity  
No. Description  Unit Year Changes  
2013 2014 2015 2016 13-14 14-15 15-16 
1. Production  Index  119 122 139 162 2 14 17 
2. Installed 
Capacity  Index  223 223 301 301 - 35 - 
3. Capacity 
Utilization  Index  100 102 86 100 1 (9) 8 
4. Labour  Index  100 108 110 114 8 2 4 
5. Productivity  Index  100 95 106 119 (5) 11 13 
Source: Questionnaires, Verification result and processed . 
 
In 2015, installed capacity was increased by 35%, which has been planned since the previous 
investigation with the purpose to increase the efficiency in order to reduce the production cost. 
However, in the same year, the capacity utilization decreased due to the increase of production 
only by 14% in 2015 compared to previous year, and again increased by 1 7% in 2016 compared 
to 2015 , whereas this increase was smaller than the increase in installed capacity . 
Nevertheless,  there was increase on Applicant 's productivity  during 2015 and 2016 , due to gre ater 
increase in production compared to increase in labour . 
Table 5. Production, Installed Capacity, Capacity Utilization, labour and Productivity  
Description  Unit Year Changes  
2013 2014 2015 2016 13-14 14-15 15-16 
Inventory  Index  6 6.5 6.2 7 8 (4) 13 
Source: Questionnaires, Verification result and processed . 
 
During the investigation process, the Applicant 's inventory data tends to increase, however, there 
was a decline in inventories in 2015 by 4% compared to the previous year, but in 2016 it 
increas ed again by 13% . 
Table 6. Production, Installed Capacity, Capacity Utilization, labour and Productivity  
Description  Unit Year Changes  
2013 2014 2015 2016 13-14 14-15 15-16 
Profit and loss  Index  (100)  435 1076 828 535 147 (23) 
Source: Questionnaires, V erification result and processed . 
 
In the beginning of the safeguard duty imposition, economic indicators of the applicant 's, including 
profit and loss has improved until 2015. However, in 2016, there is a decrease in profits by 23% . 
 G/SG/N/8/IDN/16/Suppl.2 • G/SG/N/10/IDN/16/Suppl.2  
 
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  Table 7. The Applican t's Indicators of Injury  
No. Description  Unit Year Trend  
13-16 
(%) 2013 2014 2015 2016 
1. Market Share of the Imports  Index  100 81 33 47 (27) 
2. Market Share of the Applicant  Index  100 124 191 185 26 
3. Capacity Utilization  Index  100 102 86 100 (2) 
4. Labour  Index  100 108 110 114 4 
5. Productivity  Index  100 95 106 119 7 
6. Profit and loss  Index  (100)  435 1076 828 116 
7. Domestic Sales  Index  100 102 111 121 7 
8. Production  Index  119 122 139 162 11 
9. Inventory  Index  6 6.5 6.2 7 8 
10. National  Consumption  Index  295 243 172 192 (15) 
Source: Questionnaires, Verification result and processed . 
 
4.  Evidence that the Applicant 's is adjusting  
 
During the imposition of the initial safeguard measure the Applicant 's has undertaken the following 
adjustm ent program:  
 
1) Efficiency of cost and production  
In order to increase the efficiency of production cost, the production line has been optimized so 
that the production output will be more and/or faster with purchasing/updating the equipment and 
machines w hich directly related to production activities. Therefore, it has the effect of the 
decreasing the highest production cost by 13.6% and increasing production volume up to 16.6% 
in 2016. 
2) Training and development of Labour Skills  
Provide training and deve lopment to labour, in order to minimize errors in every production 
activity, to produce a good quality production and also reducing production cost, especially for 
labour in operations and engineering. It results in the increase of productivity of labour b y 19% 
(2016) compared with prior of the imposition (2013) . 
3) Development of new products   
Create new products i.e. zincalum  product which aimed for middle market segment with less thick 
coating mass, making the price is also less. The purpose is to reach every segment of the market, 
ranging from premium to the lower segment . 
4) Expansion of marketing area  
The expansion of marketing area to outside Java Island, in order to expand the coverage of 
national market and distribution, to include Singkawang, Ponti anak, Makassar, Banjarmasin, 
Balikpapan, Luwuk, Kendari, Palu, Bali, and Lombok. This expansion has increased the sales 
by 21% in 2016 compared to prior to the imposition of the safeguard measure (2013) . 
5.  Evidence That Safeguard Measure is Still Necessa ry to Prevent or Remedy Serious Injury or 
Threat of Serious Injury Caused By Imports  
1) Production Capacity of Exporting Countries  G/SG/ N/8/IDN/16/Suppl.2 • G/SG/N/10/IDN/16/Suppl.2  
 
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  Table 8. Capacity and Consumption  
Unit: Ton  
No. Country  Description  Year Year 
2015  2016  
1. China  Production capacity  - 90.280.000  
Production  - 59.585.000  
Consumption  - 58.289.000  
2. Korea Production capacity  15.635.000  - 
Production  15.630.082  - 
Consumption  10.749.515  - 
3. Chinese Taipei  Production capacity  3.950.000  - 
Production  2.790.631  - 
Consumption  1.301.124  - 
4. Vietnam  Production capacity  3.490.000   
Production  3.279.000  - 
Consumption  3.449.000  - 
Source: SEAISI, Mysteel/CISA . 
 
On table 8 above, it is seen that in 2015 the production capacity of major supplying countries such 
as Chinese Taipei , Vietnam and South Korea is greater than the consumption of those countries. 
Moreover, the production capacity in China is also greater than its consumption. Based on the 
news from Hoa Sen Group 's website (May 2015), Hoa Sen has a steel production capacit y 
of 400.000 tons/year and based on Nam Kim Group Website, Nam Kim Steel has a production 
capacity of 500.000 tons/year. Based on Hoa Sen Group (HSG) website, HSG aims to increase its 
sales of galvalume to 700.000 tons and by 2016 to 1.000.000 tons. Likewi se, Nam Kim Steel, 
based on the news on its website, will increase the galvalume capacity by building a third factory . 
 
2) Imposition of Antidumping and Safeguard Duties in Another Countries  
Table 9. Imposition of Antidumping and Safeguard Duties in Anothe r Countries  
No. Exporting  
Country  Imposing  
Country  Measure  Year Margin  
1. China, India,  
Italia, Korea,  
Chinese Taipei  United States  Antidumping  Initiation:  
30/06/15  
Imposition:  
25/07/16  3.05% -209.97  
2. China, India,  
Italia, Korea  United States  Countervai ling Initiation:  
30/06/15  
Imposition:  
25/07/16  8%-241.07%  
3. China, Korea  Australia  Antidumping  Initiation : 
05/09/2012  
Imposition : 
05/08/2013  0-7.9%  
4. China, EU  India Antidumping  Initiation : 
29/06/2016   
5.  Vietnam  Safeguard  Initiation : 
06/07/2016   
Source: WTO.  
 
China, Chinese Taipei and Korea have been imposed with Antidumping and Countervailing  Measure 
by the United States for imports of galvalume from their countries. Besides, for the same product, 
China and Korea have also been imposed with Antidum ping Duty by Australia. Moreover, India and 
Vietnam have initiated Antidumping and Safeguard investigation against imports of coated steel, 
which are now in the investigation stage.  
The existence of overcapacity in China, Chinese Taipei, Vietnam and Korea,  and the imposition of 
trade remedies by the United States and Australia against China, Taiwan and Korea on their 
galvalume products could cause those countries to shift their exports to other countries. Therefore, 
if the imposition of Safeguard measure is  not extended, Indonesia will be a target market for those 
shifts of exports . G/SG/N/8/IDN/16/Suppl.2 • G/SG/N/10/IDN/16/Suppl.2  
 
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  3) Import of galvalume with the same function and use, through other tariff post since the 
imposition of PMK No. 137.1/PMK.011/2014.  
Table 1 0. Tariff Post Deviation  
HS Codes  Description  2013 2014 2015 2016 Trend  
7210701000  Flat-rolled products of iron or non -alloy 
steel, of a width of 600mm or more, 
clad, plated or coated with paint ed, 
varnish ed or coated with plastics, 
containing by weight less than 0.6% of 
carbon and of a thick ness of 1.5mm or 
less. 139.860  141.784  218.153  241.756  23 
7212502100  Flat-rolled products of iron or non -alloy 
steel, of a width less than 600mm , 
clad, plated or coated with aluminium -
zinc alloys in hoop and strip, of a width 
not exceeding 400mm  512 39.80 5 139.745  207.455  587 
7212502200  Flat-rolled products of iron or non -alloy 
steel, of a width less than 600mm, 
plated or coated with aluminium -zinc 
alloys, other than in hoop and strip, of 
a width not exceeding 400mm, 
containing by weight less than 0.6% of  
carbon and of a thickness of 1.5mm or 
less. 0 18.440  71.494  65.975  89 
Source: BPS . 
The circumvention of galvalume imports to Indonesia with a slightly different specification with the 
investigated products under different tariff posts  (HS 7210701000, 721 2502100, 
and 7212502200) with the same function and usage, where the differences are only in the 
size/shape of the final products, for example slitted or sheared galvalume, which, based on 
Indonesian Statistic, shows significant increase in the period of 2 013 – 2016 with a trend of 23%, 
587% and 89% respectively. Therefore, if the imposition of the Safeguard measure is not 
extended, it is expected that imports of galvalume will increase again and cause recurrence of 
threat of serious injury to the Domestic Industries . 
C. CONCLUSION  
Based on the investigation result, it can be concluded that:  
1) The applicant 's have conducted the required structural adjustment pursuant to the plan, 
however the applicant 's still need more time  to implement further structural a djustments  to 
compete with imports, therefore Safeguard duty is still necessary to prevent or remedy recurrence 
of threat of serious injury suffered by the applicant 's. 
2) In the period of 2013 -2014 and 2014 -2015, volume of galvalume imports decreased in a bsolute 
and relative terms compared to the total production. However, in 2016, imports of galvalume 
products increased 62% in absolute terms and 50% in relative terms compared to total 
production. Increased of imports in 2016 caused the increase of import market share to 27% 
from 19% in 2015. The increase of such import volume caused decrease of applicant 's market 
share, profit/loss and increase of inventory.  
3) Overcapacity in China, Vietnam, Chinese Taipei and South Korea, the tendency of the increased 
of exports due to the imposition of Antidumping and Countervailing Duty by the United States and 
Australia caused galvalume exporting countries need to seek for another countries to balance their 
production. Besides, India and Vietnam have initiated Antidump ing and Safeguard investigation 
against galvalume products, therefore, if the imposition of Safeguard duty is not extended, those 
countries will potentially shift their exports to Indonesia.  
4) There is a circumvention of imports of galvalume products unde r different tariff posts during the 
period of the imposition of the Safeguard duty that based on statistic data from Indonesian 
Statistic, there is a significant increase of imports for those products (HS 7210.70.10.00, 
7212.50.21.00, 7212.50.22.00) as exp lained under table 1 0. Therefore, if the imposition of the G/SG/ N/8/IDN/16/Suppl.2 • G/SG/N/10/IDN/16/Suppl.2  
 
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  safeguard duty is not extended, imports of galvalume would be likely to increase again and caused 
recurrence of threat of serious injury to the Domestic Industries . 
D. RECOMMENDATION OF THE AMOUNT AND PERIOD OF THE IMPOSITION OF 
SAFEGUARD MEASURE  
Based on point C above, and referring to the previous imposition, the investigating authority 
proposed to extend the imposition of the Safeguard Measure to imports of Product Under 
Investigation with the re commendation of the Safeguard Duty as follows:  
Table 1 1. Recommendation of the Safeguard Duty  
Period  Safeguard Duty  
Year 1  Rp. 2.891.858/ton  
Year 2  Rp. 2.186.030/ton  
Year 3  Rp. 1.480.202/ton  
 
E. CONSULTATION  
Referring to Article 12.3 WTO AoS, the Gover nment of Indonesia provides the opportunity for 
consultation to Members with substantial interest i.e. the exporting country of Product Under 
Investigation. Consultation will be held within 21 days after the circulation of this notification. 
Members having  substantial interest, in requesting for consultation shall notify Investigating 
Authority  at the latest 7 days after the circulation of this notification . 
 
THE INDONESIAN SAFEGUARDS COMMITTEE  
(KomitePengamananPerdagangan Indonesia /KPPI)  
Jl. M.I. RidwanRai s No. 5, Building I, 5th floor, Jakarta 10110  
Telephone / Facsimile: (62 -21) 385 7758  
E-mail: kppi@kemendag.go.id  
 
 
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