G/SG/N/8/IDN/2/Suppl.1  
G/SG/N/10/IDN/2/Suppl.1  
 
9 April 2013  
(13-1817)  Page: 1/5  
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT ON  
SAFEGUARDS ON FINDING A SERIOUS INJURY OR THREAT  
THEREOF CAUSED BY INCREASED IMPORTS 
 
NOTIFICATION OF A PROPOSAL TO EXTEND A MEASURE 
INDONESIA  
(Dextrose Monohydrate) 
Supplement 
The following communication, dated 3 April 2013, is being circulated at the request of the 
Delegation of Indonesia. 
 
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Pursuant to Article 7.2 and Article 12.1(b) of the WTO Agreement on Safeguards, the Government 
of the Republic of Indonesia, hereinafter referre d as "GOI", hereby notifies the Committee on 
Safeguards on the investigative findings concerning the extension of safeguard measure on the 
importation of the Subject Goods.  A. GENERAL BACKGROUND 
 
1. The KPPI hereinafter referred as the "Investi gating Authority", received a submission from 
PT. Sorini Agro Asia Corporindo Tbk., hereinafte r referred as the "Applicant", requesting for the 
extension of safeguard measure imposed on the importation of the Subject Goods, claiming that 
the imposition of such a safeguard measure conti nues to be necessary to prevent serious injury 
and that the domestic industry is still adjusting. 
 
Based on the examination of the submission, the Investigating Authority initiated an investigation on the extension of safeguard measure on 22 Oc tober 2012 (as announced in "Bisnis Indonesia", 
19 October 2012), and was notified with the WTO and circulated on 30 October 2012 
(G/SG/N/6/IDN/4/Suppl.1). 
 2. WTO document containing notificati on of initial application of measure 
 
G/SG/N/8/IDN/2-G/SG/N/10/IDN/2-G/SG/N/11/IDN/2 (9 October 2009).  
3. Subject Goods 
 Referring to the notification made in accordance to Article 7.2 and Article 12.1(a) as circulated in document number G/SG/N/6/IDN/4/Suppl.1, and in li ght of the notification made in accordance 
Article 12.1(b) and Article 12.1(c) as circulated in document G/SG/N/8/IDN/2-G/SG/N/10/IDN/2-
G/SG/N/11/IDN/2, the Subject Goods under investigation is:  
"Dextrose Monohydrate or Glucose under HS Codes 1702.30.10.00 and 1702.40.00.00". 
 G/SG/N/8/IDN/2/Suppl.1 • G/SG/N/10/IDN/2/Suppl.1 
 
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  4. Period of Investigation 
 The period of investigation covers 24 August 2009 to 23 August 2012.   
5. Major Proportion 
 Based on data and information submitted by the A pplicant, the total production of the Applicant 
representing a major proportion of the total domestic production of the Subject Goods in 
Indonesia.  6. Views and Comments by Interested Parties  
 
In accordance with Article 3.1 WTO Agreement on Safeguards, during the said investigatory proceeding, the Investigating Authority has provid ed sufficient opportunities to the Applicant and 
other Interested Parties to submit their views,  evidences, and responses. In light of the 
aforementioned, a public hearing was also conduc ted on 17 December 2012, in order to meet the 
requirement of transparency and procedural due proc ess. During the public hearing, the Interested 
Parties as invited were given the same opportunities to address their evidences and views. 
 B. DATA OF IMPORTS 
Table 1. Volume of Imports 
Description Year 
2008 2009 2010 2011 2012 
(Jan-Ags) 2012 
(Full Year) 
Imports (Kg)  
23,821,975  22,127,618 22,526,787 19,079,792 20,641,143 32,605,365 
Source: Statistic of Indonesia 
 
As shown in Table 1, it is verified that:  
1. While there is a decline witnessed in im port volume during the period 2009 and 2011, 
resulting from the imposition of safeguard measure on the importation of the Subject 
Goods since August 2009, there is significant increase in volume noted in 2012, based 
on 10 months actual 
2. On the contrary, during 24 August 2009 to 23 August 2012, there was generally an 
increasing trend of import volume of the Subject Goods by 5.67%. 
C. EVIDENCE OF CONDITION 
Based on the Investigating Authority evaluation, including the result from on-site verification, the 
condition of the Applicant as elaborated in Table 2 reflects the actual condition of the domestic industry as follows:  
 
Table 2. Quantitative Data 
No. Description Unit Year 
2008 2009 2010 2011 2012 
1 Production Index 100 83 93 96 96 
2 Domestic Sales Index 100 132 125 160 152 
3 Productivity Index 100 83 92 96 96 
4 Production 
Capacity Index 100 100 100 100 106 
5 Capacity 
Utilization Index 100 84 94 96 91 G/SG/N/8/IDN/2/Suppl.1 • G/SG/N/10/IDN/2/Suppl.1 
 
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  No. Description Unit Year 
2008 2009 2010 2011 2012 
6 Inventories Index 100 39 58 35 43 
7 Profit and Losses  Index (100) 5.562 7.239 (1.579) 5.269 
8 Employment Index 100 100 102 100 100 
9 Market Share of 
Imports % 70 64 64 56 71 
10 Market Share of 
the Applicant % 21 27 25 33 23 
Source: As verified by the Investigating Authority 
 
1. During the investigation period, the Applic ant's volume of production increased from 
83 indexed points to 96 indexed points, and yet the said volume of production is still 
lower than the volume level of production in 2008.  
2. While the Applicant's volume of production increased during the investigation period, 
the domestic sales had been declined in relative term. In fact, in 2010 and at the end 
of the investigation period in 2012, the domestic sales of the Applicant is lower than 
the previous years respectively.  
3. In line with the decrease of domestic sales of the Applicant during the investigation 
period, the amount of the Applicant's inventory remained high. This would incure 
additional cost to the Applicant.  
4. During the imposition of initial safeguard measure from 24 August 2009 to 
23 August 2012, the Applicant's domestic share remained relatively low and seemed 
unable to benefit from the imposition of safeguard measure, and the said market 
share was actually declining in 2012. 
5. In 2011 the Applicant had suffered a significan t loss, particularly if compared with the 
financial condition in 2009 and 2010. Moreover, in 2012 the Applicant's market share 
dropped below the level in 2009 and 2010.  
In light of the aforementioned, the Investigating Authority reached the following conclusion: 
 
1. While the safeguard measure on the impo rtation of the Subject Goods was imposed 
during the investigation period, in reality the import volume of imported like products showed an increasing trend, and the domestic industry has yet to recover from the 
condition of serious injury as incurred before the imposition of the said safeguard 
measure.  
2. The increasing trend of import volume of the Subject Goods during the investigation 
period was triggered by the much lower pric e of imported like product than the price 
of the Applicant's product.  
 
a. In line with the increasing trend of import  volume of the Subject Goods during the 
investigation period, the market share of import remained high and the Applicant's market share had not increased as expected. 
b. In its effort to regain market share, the Applicant had been forced to sell its 
product at prices below the reasonable cost of production, which cause significant 
financial losses in 2011.  
c. Even though the Applicant was able to re gain some of the market share in 2011, 
resulting in higher market share as compar ed to the level of market share in 2008, 
but this increase in market share proven to be temporary because in 2012 the Applicant's market share stumbled back below the level of market share in 2010.  G/SG/N/8/IDN/2/Suppl.1 • G/SG/N/10/IDN/2/Suppl.1 
 
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  3. Meanwhile the Applicant's performance during the investigation period has not 
recovered from the serious injury as was suffered before. The Applicant was unable to optimize its' capacity utilization due to difficulties in selling its product. As a result, the Applicant's inventory remained high, both because the inability to compete with 
imported like products admit the increasing trend of the national consumption of the 
Subject Goods. 
 
4. Based on the aforementioned, during the in vestigation period there has been clearly a 
strong negative correlation between the in c r e a s i n g  t r e n d  o f  i m p o r t  v o l u m e  o f  t h e  
Subject Goods and the Applicant's failed effort  to recover from serious injury. For this 
reason, the Investigating Authority concludes that the expiry of the safeguard 
measure would likely result in further increases in import volume of the Subject 
Goods, which in turn would impede altogeth er the recovery progress of the domestic 
industry from serious injury.  
 
5. The failure of the Applicant to recover from serious injury, due to the surge of import 
volume of the Subject Goods following the ex piry of the relevant Safeguard measure, 
would affect the Applicant's operation negati vely and disallow the progress of on-going 
adjustment as commenced since 2009. 
 D. ADJUSTMENT PROGRAM 
Based on the report submitted by the Applicant as verified by the Investigating Authority, during 
the imposition of the initial safeguard measure the Applicant has undertaken the following adjustment program: 
 
a. Reduction of production cost: 
 Efficient use of electricity; 
 Use of cheaper alternate source of energy; 
 Faster production process; 
 More energy saving appliances; 
 Develop alternative source of cheaper raw material. 
 
b. Cassava cultivation for maximum output  
 Intensify cooperation with local farmers on cassava cultivation; 
 Develop technology to produce more efficient and higher output of cassava per 
hectare. 
 
c. Increase production utilization 
 Revamp production machinery; 
 Procure new machineries. 
 
d. Improve distribution chain 
 Develop new distribution channel outside Java Island; 
 Improve costumer relation at all levels; 
 Enhance logistic capacity; 
 Improve delivery time. 
 
e. Increase labour productivity 
 Conduct training on quality control; 
 Improve skill for better production process and maintenance.  
 
E. URGENCY FOR THE EXTENSION OF SAFEGUARD MEASURE 
a. Albeit the relevant safeguard measure on the importation of the Subject Goods has had 
been imposed from 24 August 2009 to 23 August 2012, the Applicant has not fully G/SG/N/8/IDN/2/Suppl.1 • G/SG/N/10/IDN/2/Suppl.1 
 
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  recovered from serious injury. Therefore, if the safeguard measure were not to be 
extended, it would have triggered a sudden and sharp increase in import volume of the Subject Goods, which in turn would brin g the Applicant back to the unfavorable 
condition like before the imposition of safeguard measure in 2009. Consequently, the 
on-going adjustment undertaking by the Applicant would be disturbed and all of the 
relevant achievements so far to strengthen the Applicant's competitiveness would be also affected negatively. 
b. In light of the above, the Investigating Authority is of the opinion that the relevant 
safeguard measure needs to be extended, in  particular to prevent the recurrence of 
serious injury as has been suffered by the Applicant, and to further remedy such serious injury accordingly. The extension of such Safeguard measure will also give the 
Applicant opportunity to continue and to complete the ongoing adjustment program in 
order to improve the competitiveness of domestic industry vis-à-vis cheaper imported 
like products. 
F. PROPOSED MEASURE  
1. In view of the aforementioned and taking into account the initial measure as 
previously imposed, the Investigating Authority has proposed to the GOI to extent the 
imposition of the safeguard measure on the importation of the Subject Goods for 
additional period of three years. 
 
2. The proposed safeguard measure to be im posed is now being circulated for inputs 
from relevant government agencies, and will be elaborated in the notification under 
the Article 7.2 and Article 12.1(c) of the WTO Agreement on Safeguards.  
 
3. The imposition of the safeguard measure w ill be carried out in accordance with the 
Article 2.2 and Article 9 of the WTO Agreement on Safeguards. 
 
G. CONSULTATIONS 
In light of the Article 12.3 of the WTO Agreement on  Safeguards, it is hereby informed that prior 
consultation as may be required by those Members having a substantial interest as exporters of the product concerned is scheduled to be carried out on 15 April 2013, with a view to, inter alia, 
review the information upon which it is proposed to apply measure on the Subject Goods, to 
exchange views on the nature of the measures, an d to reach an understanding on ways to achieve 
the objective set out in paragraph 1 of Arti cle 8 of the WTO Agreement on Safeguards. 
 
Members with a substantial interest as such are required to register with the Indonesian Safeguards Committee as to their intention to undertake consultation at no later than 7 (seven) 
days after the date of the relevant WTO communication regarding this notification being circulated, 
to the following address:  
THE INDONESIAN SAFEGUARDS COMMITTEE 
(Komite Pengamanan Perdagangan Indonesia /KPPI) 
Jl. M.I. Ridwan Rais No. 5, Building I, 5
th floor, Jakarta 10110 
Telephone / Facsimile: (62-21) 385 7758 
E-mail: kppi@kemendag.go.id 
  
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