G/SG/N/8/IDN/16  
G/SG/N/10/IDN/16  
 
27 May 2014  
(14-3133)  Page: 1/6  
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 IMPOSE A MEASURE 
INDONESIA  
(Flat-Rolled Product of Iron or Non-Alloy Steel Under HS code 7210.61.11.00) 
The following communication dated 26 May 2014, is being circulated at the request of the 
Delegation of Indonesia.  
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A. GENERAL BACKGROUND 
 1. On 12 December 2012, the KPPI hereinafter referred as the "Investigating Authority", 
received an application from PT. NS BlueScope Indonesia
1 and PT. Sunrise Steel, hereinafter 
referred as the "Applicant", requesting for the im position of a safeguard measure on the such 
increased importation of flat-rolled product of iron or non-alloy steel, of a width of 600 mm or 
more, clad, plated or coated with aluminium-zinc alloys, containing by weight less than 0,6% of 
carbon, with a thickness not exceeding 1,2 mm, under HS code 7210.61.11.00, claimed to be the 
cause of injury as incurred by the Applicant.  
Based on the examination of the above mentioned application, the Investigating Authority initiated 
an investigation on 19 December 2012, which was announced in the Ministry of Trade website. The said initiation was notified in the WTO document G/SG/N/6/IDN/22, circulated on 
08 January 2013. 
 2. Subject Good 
 
Flat-rolled product of iron or non-alloy steel, of a width of 600 mm or more, clad, plated or coated 
with aluminium-zinc alloys, containing by weight less than 0,6% of carbon, with a thickness not exceeding 1,2 mm, under HS code 7210.61.11.00. 
 
3. Period of Investigation 
 
The period of investigation covers 2008-2012. 
 4. Major Proportion 
 
The Applicant constitutes a major proportion of the total domestic production, which is 77%. 
 5. Views and Comments by Interested Parties 
                                               
1 On notification under Article 12.1(a) of the WT O Agreement on Safeguards on Initiation of an 
Investigation and the reasons for it through docu ment G/SG/N/6/IDN/22, the company name was PT. 
BlueScope Steel Indonesia. It changed to PT. NS BlueScope Indonesia due to the settlement of joint venture between PT. BlueScope Steel Indonesia and Nippon Stee l & Sumitomo Metals Corporation on 28 March 2013. G/SG/N/8/IDN/16 • G/SG/N/10/IDN/16 
 
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  In accordance with the Article 3.1 WTO Agreement on Safeguards, during the said process of 
investigation, the Investigating Authority has provided opportunities to interested parties to submit 
their views, evidences, comments, and responses concerning the investigation. In light of the 
aforementioned, a public hearing was also cond ucted on 23 April 2013, 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. INCREASED IN IMPORTS 
 1. Absolute Increased of Imports 
Table 1: Volume of Imports 
Description Unit 2008 2009 2010 2011 2012 
Volume of 
Imports Ton 79,279 50,482 123,794 161,756 251,315 
Growth %  (36) 145 31 55 
Trend % 42 
Source: Indonesian Statistics/ Badan Pusat Statistik  (BPS). 
 As shown in table 1, there was a significant incr eased of the volume of imports of the Subject 
Good in absolute terms, where the imports increase in trend by 42%. There was a decline of the 
volume of imports by 36% from 2008 to 2009, however it was followed immediately by surge of imports in 2010 by 145%, and in the following year by 31% and 55% consecutively. 
 
2. Market Share 
Table 2: Market Share 
No. Subject Unit Year Trend 
(%) 2008 2009 2010 2011 2012 
1. Market Share of 
Imported Subject Good Indices 100 78 100 102 115 6 
2. Market Share of  
the Applicant Indices 100 92 56 76 91 (4) 
Source: Indonesian Statistics/ Badan Pusat Statistik  (BPS), Applicant, and processed. 
 
As affirmed in table 2, the market share of import ed Subject Good showed an increase in trend by 
6%, whereas the market share of the Applic ant showed a decrease in trend by 4%. 
 
3. Share of Main Exporters 
Table 3: Share of Main Exporters 
Countries Share of Import 2008 (%) Share of Import 2012 (%) 
Vietnam 48,59 60,04 
Taiwan 6,66 21,00 
Republic of Korea 11,67 15,22 
Total 66,92 96,26 
Source: Indonesian Statistics/ Badan Pusat Statistik  (BPS), and processed. 
 
The market share of imported Subject Good originated from the main exporters in 2012 
experienced a rapidly increase, compared to thei r market share in 2008. Its increase was shown 
by Vietnam, Taiwan, and Republic of Korea by 11,45%, 14,34%, and 3,55% respectively.  
C. EVIDENCE OF THREAT OF SERIOUS INJURY 
 The Investigating Authority examined all data and information available having a bearing on the 
actual condition of the domestic industry. The Investigating Authority also conducted on-site 
verifications to the domestic industry.  G/SG/N/8/IDN/16 • G/SG/N/10/IDN/16 
 
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  Table 4: Applicant Performance Indicator: Na tional Consumption, Volume of Imports, 
Market Share of Imported Subject Good, and Market Share of the Applicant 
No. Subject Unit Year Trend 
(%) 2008 2009 2010 2011 2012 
1. National Consumption Indices 100 82 157 201 257 34 
2. Volume of Imports Ton 79.279 50.482 123.794 161.756 251.315 42 
3. Market Share of 
Imported Subject Good Indices 100 78 100 102 115 6 
4. Market Share of  
the Applicant Indices 100 92 56 76 91 (4) 
Source: Indonesian Statistics/ Badan Pusat Statistik  (BPS), Applicant, and processed. 
 1. During the investigation period, the national consumption of the Subject Good showed an 
increase in trend by 34%. The increase of nation al consumption occurred significantly in 2010 by 
75 indexed points, and it continued to increase by 44 indexed points in 2011 and by 56 indexed points in 2012. On the other hand, during the period  of investigation, the volume of import showed 
an increase in trend by 42%. However, the increa se of import during the periode of investigation 
has eroded the increase of national consumption during the same period. At the same period, the 
market share of imported Subject Good showed an increase in trend by 6%, while the market 
share of the Applicant showed a decrease in trend by 4%. 
Table 5: Applicant Performance Indicator: Domestic Sales, National Consumption, 
Volume of Imports, Market Share of Imported Subject Good, and Market Share of the Applicant. 
No. Subject Unit Year Trend 
(%) 2008 2009 2010 2011 2012 
1. Domestic Sales Indices 100 75 88 153 251 29 
2. National Consumption Indices 100 82 157 201 275 34 
3. Volume of Imports Ton 79.279 50.482 123.794 161.756 251.315 42 
4. Market Share of 
Imported Subject Good Indices 100 78 100 102 115 6 
5. Market Share of  
the Applicant Indices 100 92 56 76 91 (4) 
Source: Indonesian Statistics/ Badan Pusat Statistik  (BPS), Applicant, and processed. 
 
2. The Applicant's domestic sales showed an increase in trend during the investigation period 
by 29%. However, the said increased are less compared to the increased in trend of the national consumption, which is 34%. The increase in the national consumption was mostly benefited by the imports of the Subject Good. The same condition al so appeared in the market share of imported 
Subject Good, where it increased by 6%, while the market share of the Applicant decreased 
by 4%. 
Table 6: Applicant Performance Indicator: Pr oduction, Target of Production, Installed 
Capacity, National Consumption, Domestic Sales, and Market Share of the Applicant 
No. Subject Unit Year Trend 
(%) 2008 2009 2010 2011 2012 
1. Production Indices 89 66 86 151 237 32 
2. Target of Production Indices 100 90 86 247 304 38 
3. Installed Capacity Indices 100 100 100 270 360 43 
4. National Consumption Indices 100 82 157 201 275 34 
5. Domestic Sales Indices 100 75 88 153 251 29 
6. Market Share of the 
Applicant Indices 100 92 56 76 91 (4) 
Source: Indonesian Statistics/ Badan Pusat Statistik  (BPS), Applicant, and processed. 
 3. The Applicant's production showed an increase in trend during the investigation period 
by 32%. However, it was not able to meet the target of production and unable to utilize the 
Applicant's installed capacity. The increased of pr oduction done by the Applicant was with the aim G/SG/N/8/IDN/16 • G/SG/N/10/IDN/16 
 
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  to increase the domestic sales and simultaneously the market share in order to have a benefit 
from the increase of the national consumptio n. During 2011 and 2012, the Applicant's installed 
capacity increased significantly, due to the instal lation of new machinery from one of the Applicant 
and the initiation of production from the other Ap plicant with respect to the said increase of the 
national consumption 
Table 7: Applicant Performance Indicator: Productivity, Expected Productivity, 
Production, Target of Production, and Employment 
No. Subject Unit Year Trend 
(%) 2008 2009 2010 2011 2012 
1. Productivity Indices 89 64 79 88 144 14 
2. Expected Productivity Indices 100 87 80 145 184 19 
3. Production Indices 89 66 86 151 237 32 
4. Target of Production Indices 100 90 86 247 304 38 
5. Employment Indices 100 104 108 171 165 16 
Source: Applicant, and processed.  
4. The Applicant has installed new machineries and increase skilled labors in order to reach the 
target of production. The trend of employme nt increased by 16% during the period of 
investigation, however their productivi ty was still below the expected one. 
Table 8: Applicant Performance Indicator: Inventories 
Subject Unit Year Trend 
(%) 2008 2009 2010 2011 2012 
Inventories Indices 100 28 118 356 460 75 
Source: Applicant, and processed. 
 5. The Applicant's inventories showed an increa se in trend by 75% during the period of 
investigation. The said increased was as a result of the inability to sell the Subject Goods. 
Table 9: Applicant Performance Indicator: Pr ofit/Loss, Domestic Sales, Selling Price, and 
Cost of Production 
No. Subject Unit Year 
2008 2009 2010 2011 2012 
1. Profit/loss Indices (100) (33) 301 115 (30) 
2. Domestic Sales Indices 100 75 88 153 251 
3. Selling Price Indices 97 90 92 83 80 
4. Cost of Production Indices 100 91 83 81 81 
Source: Applicant, and processed.  6. The Applicant suffers an injury (loss) in 2008, 2009 and 2012, due to the selling price was 
below the cost of production. In 2009, the Applicant's domestic sales decreased and suffered a loss 
at the same period. Even though the Applican t's domestic sales increased in 2010-2012, the 
Applicant experienced reduce in profit in 2011, and suffered injury in 2012.  
D. UNFORESEEN DEVELOPMENT 
 Global financial crisis in 2008 caused a slowdown in the world economic growth, hence the 
purchasing power parity in general is decreasing. th is decrease resulted a decline in demand of all 
products in general, including the demand of the Subject Good.   However, the decline didn't occur in Indonesia considering its economic growth which is higher 
than the average of world economic growth. Theref ore, Indonesia became an attractive market for 
exporters of the Subject Good.  
Furthermore, the increase in the establishment of roll forming industry, producing the final product 
of the Subject Good as a result of preferential  changes from using wood to using steel in the 
property construction caused an increase in the demand of the Subject Good. 
 G/SG/N/8/IDN/16 • G/SG/N/10/IDN/16 
 
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  E. OTHER FACTORS THAT MAY CONTRIBUTE TO INJURY 
Table 10: Domestic Industry Installe d Capacity, and National Consumption 
No. Subject Unit Year 
2008 2009 2010 2011 2012 
1. Applicant's Installed Capacity Indices 100 100 100 270 360 
2. Supporter Installed Capaci ty Indices - - 150 150 150 
 Domestic Industry Installed Capacity Indices 100 100 250 420 510 
3. National Consumption Indices 176 143 275 353 483 
Source: Applicant, and processed. 
 
1. National consumption of the subject goods sh owed an increase during the period of 
investigation. It encouraged the domestic industry to increase the production capacity, to realize the demand for flat-rolled products of iron or non-alloy steel in Indonesia. Based on the table 10, 
the increasing capacity of domestic production in the period 2010-2012 was sufficient for national 
consumption. Improvement in the production capacity of the domestic industry is in line with increasing of the national consumption. Therefore the production capacity of the domestic industry 
is not causing injury to The Applicant. The imports surge is not caused by a lack of domestic 
production to fulfill the national consumption. 
 
Table 11: Sales Volume 
No. Applicant Unit Year 
2008 2009 2010 2011 2012 
1. PT. BlueScope Steel Indonesia Indices 100 75 88 123 170 
2. PT. Sunrise Steel Indices - - - 100 269 
Source: Applicant, and processed. 
 
2. In 2012, each Applicant's sales volume has increased compared to the previous year. It 
shows that there is no competition among the Applicant. In this case, each Applicant had the same condition in terms of sales volume. Thus, it can be concluded that there is no competition among 
each Applicant. 
 3. The Subject Good produced by The Applicant has fulfilled Indonesian National Standard 
(SNI), and International Standardization for Orga nization (ISO). Therefore, the quality of the 
domestic Subject Good can compete with the imported Subject Goods.  
4. The Investigating Authority is of the opinion that there are no other factors contributing to 
the threat of serious injury as suffered by the App licant, other than increased volume of imports of 
the Subject Goods.  
F. STRUCTURAL ADJUSMENT 
 The Applicant's structural adjustments are as follows: 
 
a. Increasing production efficiency through the optimization of production lines to reduce 
production cost.  
b. Conduct training and development of skill of workforces to minimize errors in the production 
activities, in order to reduce the cost of production.  
c. Product development aiming for the middle market segment. 
d. Developing market distribution channel outside Java island in order to increase sales of 
production, especially in Sumatera, Kalimantan and Sulawesi. 
 G. CAUSAL LINK 
 
In accordance with the findings as duly elaborated  in Sections C and E, the Investigating Authority 
concluded that there is a strong evidence of a ca usal link between the increased volume of imports 
of the Subject Good and threat of seriou s injury as suffered by the Applicant. 
 1. Trend of national consumption has increased during the period of investigation, but it could 
not be optimized by the Applicant. In fact, the tr end of the Applicant's market share was declining 
due to the Applicant's market share eroded by imports. G/SG/N/8/IDN/16 • G/SG/N/10/IDN/16 
 
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2. The declining of the Applicants market share causes an increase in inventory and losses. 
 3. As affirmed in table 12, during the period of 2009-2012 the average of imports price is 
constantly below the Applicant Selling Price except  in 2008. Therefore, in the said period, Price 
Undercutting is existed, along with the Applicant Selling Price decrease in trend by 4,5% in the 
period of 2008-2012. 
 
Table 12: Price Undercutting 
No. Subject Unit Year Trend 
(%) 2008 2009 2010 2011 2012 
1. Average of Imports 
Price Indices 100 58 60 66 66 (7) 
2. Applicant Selling 
Price Indices 82 76 77 70 68 (4,5) 
3. Price Undercutting Indices 18 (18) (17) (4) (2) - 
Source: Indonesian Statistics/ Badan Pusat Statistik  (BPS), Applicant, and processed. 
 
4. As shown in table 13, during the period of 2009-2012 the Applicant Selling Price was 
continuously under the pressure of imports price,  resulted decrease in trend by 4,5% on the 
Applicant Selling Price. Thus, it can be inferred that the Applicant experienced Price Depression 
during the period of investigation. 
 
Table 13: Price Depression 
No. Subject Unit Year Trend 
(%) 2008 2009 2010 2011 2012 
1. Applicant Selling 
Price Indices 100 93 94 86 83 (4,5) 
2. Price Depression Indices  (7) 1 (8) (3) - 
Source: Applicant, and processed. 
 H. PROPOSED MEASURE 
 
1. In view of the aforementioned conclusion of the Causal Link, the Investigating Authority has 
proposed to the Government of the Republic of Indonesia a Safeguard Measure to be imposed on 
the importation of the Subject Good for a period of three years. 
 2. The imposition of the Safeguard Measure will be carried out in accordance with the 
Article 2.2 and Article 9 of the WTO Agreement on Safeguards. 
3. Pursuant to Article 12.3 of the WTO Agreement on Safeguards, Indonesia is prepared to 
consult with those Members having a substantial interest as exporters of the products concerned.  
THE INDONESIAN SAFEGUARD 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 
Email: kppi@kemendag.go.id  
 
 
 
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