U.S. International Trade Commission

Publication 4192 November 2010

Washington, DC 20436

Certain Coated Paper Suitable for HighQuality Print Graphics Using Sheet-Fed 

Presses from China and Indonesia

Investigation Nos. 701-TA-470-471 and 731-TA-1169-1170 (Final)
U.S. International Trade Commission

COMMISSIONERS 

 

Deanna Tanner Okun, Chairman 

Irving A. Williamson, Vice Chairman 

Charlotte R. Lane 

Daniel R. Pearson 

Shara L. Aranoff 

Dean A. Pinkert

Karen Laney

Staff assigned

Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

Acting Director of Operations

Christopher Cassise, Senior Investigator 

Vincent Honnold, Industry Analyst 

Nancy Bryan, Economist 

David Boyland, Accountant 

Gracemary Roth-Roffy, Attorney 

Marc Bernstein, Attorney 

David Fishberg, Attorney 

Steve Hudgens, Senior Statistician 

Jim McClure, Supervisory Investigator
U.S. International Trade Commission

Washington, DC 20436 

www.usitc.gov

Publication 4192 November 2010

Certain Coated Paper Suitable for HighQuality Print Graphics Using Sheet-Fed 

Presses from China and Indonesia

Investigation Nos. 701-TA-470-471 and 731-TA-1169-1170 (Final)

C O N T E N T S

Page

Determinations ................................................................. 1

Views of the Commission ......................................................... 3

Separate Views of Commissioner Charlotte R. Lane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Part I: Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Organization of report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

U.S. market summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Summary data and data sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Previous and related investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

Nature and extent of sales at LTFV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Nature of countervailable subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9

The subject product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10

Tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11

Scope issues at Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13

Physical characteristics and uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-15

Categories of certain coated paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-17

Manufacturing processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-19

Intermediate products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-22

Sheeter rolls vs. Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-22

Domestic like product issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24

Certain coated paper vs. web rolls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24

Certain coated paper other than certain coated paperboard vs. certain coated paperboard . . . I-25

Part II: Conditions of competition in the U.S. market ................................ II-1

U.S. market characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-2

Supply and demand considerations ................................................ II-6

U.S. supply ............................................................... II-6

U.S. demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-11

Substitutability issues .......................................................... II-14

Factors affecting purchasing decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-14

Comparison of domestic product and subject imports ............................... II-17

Other country comparisons ................................................... II-19

Elasticity estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-20

U.S. supply elasticity ........................................................ II-20

U.S. demand elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-21

Substitution elasticity ....................................................... II-21

i
C O N T E N T S

Page

Part III: U.S. producers’ production, shipments, and employment ...................... III-1

U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1

U.S. producers of certain coated paper other than coated packaging paperboard . . . . . . . . . . III-1

U.S. producers of coated packaging paperboard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-2

U.S. converters ............................................................ III-2

U.S. capacity, production, and capacity utilization ................................... III-5

Overall U.S. capacity of all U.S. integrated producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-5

U.S. integrated producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-7

U.S. converters ............................................................ III-10

U.S. producers’ U.S. shipments and export shipments ................................. III-11

U.S. integrated producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-11

U.S. converters ............................................................ III-15

U.S. producers’ imports and purchases of imports .................................... III-15

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-16

U.S. employment, wages, and productivity ......................................... III-17

Part IV: U.S. imports, apparent consumption, and market shares . . . . . . . . . . . . . . . . . . . . . . IV-1

U.S. importers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

U.S. imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3

Cumulation considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-5

Negligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-5

Apparent U.S. consumption and market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-7

Certain coated paper other than coated packaging paperboard . . . . . . . . . . . . . . . . . . . . . . . . IV-7

Total U.S. integrated production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-10

Ratio of imports to U.S. production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-13

Part V: Pricing and related information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Factors affecting prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Raw material costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

U.S. inland transportation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Pricing methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Sales terms and discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3

Price trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-4

Price comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-9

Lost sales and lost revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-12

ii
C O N T E N T S

Page

Part VI: Financial condition of U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Operations on certain coated paper other than coated packaging paperboard . . . . . . . . . . . . . . . VI-1

Operations on coated packaging paperboard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-2

Combined operations on certain coated paper other than coated packaging

paperboard and coated packaging paperboard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-11

Capital expenditures, research and development expenses, assets, and return on investment . . . VI-20

Capital and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-21

Part VII: Threat considerations .................................................. VII-1

The industry in China .......................................................... VII-2

The industry in Indonesia ....................................................... VII-10

Combined industry data for both subject countries ................................... VII-11

 U.S. importers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-11

U.S. importers’ current orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-11

Antidumping and countervailing duty orders in third-country markets .................... VII-11

Information on producers in nonsubject countries .................................... VII-12

Appendixes

A. Federal Register notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

B. List of conference witnesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

C. Summary data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1

D. Nonsubject pricing data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1

Note.--Information that would reveal confidential operations of individual concerns may not be published

and therefore has been deleted from this report. Such deletions are indicated by asterisks.

iii

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 701-TA-470-471 and 731-TA-1169-1170 (Final)

CERTAIN COATED PAPER SUITABLE FOR HIGH-QUALITY PRINT GRAPHICS USING SHEETFED PRESSES FROM CHINA AND INDONESIA

DETERMINATIONS

On the basis of the record1

 developed in the subject investigations, the United States International

Trade Commission (Commission) determines, pursuant to sections 705(b) and 735(b) of the Tariff Act of

1930 (19 U.S.C. § 1671d(b)) and (19 U.S.C. § 1673d(b)) (the Act), that an industry in the United States is

threatened with material injury2 3

 by reason of imports of certain coated paper suitable for high-quality

print graphics using sheet-fed presses (“certain coated paper”) from China and Indonesia, provided for in

subheadings 4810.14.11, 4810.14.19, 4810.14.20, 4810.14.50, 4810.14.60, 4810.14.70, 4810.19.11,

4810.19.19, 4810.19.20, 4810.22.10, 4810.22.50, 4810.22.60, 4810.22.70, 4810.29.10, 4810.29.50,

4810.29.60, 4810.29.70, 4810.32, 4810.39, and 4810.92, of the Harmonized Tariff Schedule of the United

States, that the U.S. Department of Commerce has determined are subsidized by the Governments of

China and Indonesia and sold in the United States at less than fair value (“LTFV”).

BACKGROUND

The Commission instituted these investigations effective September 23, 2009, following receipt

of a petition filed with the Commission and Commerce by Appleton Coated, LLC, Kimberly, WI;

NewPage Corp., Miamisburg, OH; Sappi Fine Paper North America, Boston, MA; and the United Steel,

Paper and Forestry, Rubber Manufacturing, Energy, Allied Industrial and Service Workers International

Union (“USW”). The final phase of the investigations was scheduled by the Commission following

notification of preliminary determinations by Commerce that imports of certain coated paper from China

and Indonesia were subsidized by the Governments of China and Indonesia within the meaning of section

703(b) of the Act (19 U.S.C. § 1671b(b)) and dumped within the meaning of 733(b) of the Act (19 U.S.C.

§ 1673b(b)). Notice of the scheduling of the final phase of the Commission’s investigations and of a

public hearing to be held in connection therewith was given by posting copies of the notice in the Office

of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in

the Federal Register on May 25, 2010 (75 FR 29364). The hearing was held in Washington, DC, on

September 16, 2010, and all persons who requested the opportunity were permitted to appear in person or

by counsel.

 1 The record is defined in sec. 207.2(f) of the Commission’s Rules of Practice and Procedure (19 CFR § 207.2(f)).

 2

 Commissioner Charlotte R. Lane determines that the domestic certain coated paper industry is materially injured

by reason of imports of the subject merchandise from China and Indonesia.

 3

 Chairman Deanna Tanner Okun, Commissioner Daniel R. Pearson, Commissioner Shara L. Aranoff,

Commissioner Irving A. Williamson, and Commissioner Dean A. Pinkert determine that they would not have found

material injury but for the suspension of liquidation.

1

 VIEWS OF THE COMMISSION

Based on the record in the final phase of these investigations, we find that an industry in the

United States is threatened with material injury by reason of imports of certain coated paper suitable for

high-quality print graphics using sheet-fed presses (“coated paper”) from China and Indonesia that are

sold in the United States at less than fair value (“LTFV”) and subsidized by the Governments of China

and Indonesia.1

I. BACKGROUND

Domestic producers Appleton Coated, LLC (“Appleton”), NewPage Corporation (“NewPage”),

S.D. Warren Company d/b/a Sappi Fine Paper North America (“Sappi”), and a workers union, United

Steel, Paper and Forestry, Rubber Manufacturing, Energy, Allied Industrial and Service Workers

International Union (collectively “Petitioners”) filed the petition in these investigations on September 23,

2009. Petitioners appeared at the hearing and filed joint prehearing and posthearing briefs. 

Respondents encompass a group of producers of subject merchandise that participated in these

proceedings through their corporate affiliates Asia Pulp and Paper, Ltd. (China) and Asia Pulp and Paper,

Ltd. (Indonesia) (collectively “APP”). The specific producers represented by APP include Chinese

producers Gold East Paper (Jiangsu) Co. Ltd., Gold Huasheng Paper Co., Ltd., Ningbo Zhonghua Paper

Co., Ltd., Ningbo Asia Pulp & Paper Co., Ltd., and Indonesian producers PT Pindo Deli Pulp and Paper

Mills, PT, Pabrik Kertas Tjiwa Kimia, Tbk, and PT Indah Kiat Pulp and Paper Tbk.

The Commission received questionnaire responses from 11 integrated U.S. producers of coated

paper and coated paperboard products and four U.S. converters of such products.2

 It also received

questionnaire responses from 11 importers which accounted for a majority of U.S. imports from China

and Indonesia,3

 35 U.S. purchasers,4 ten Chinese producers accounting for approximately *** percent of

2009 production of subject merchandise from that country,5

 and three Indonesian producers accounting

for approximately *** percent of 2009 production of subject merchandise from that country.6

II. DOMESTIC LIKE PRODUCT

A. In General

In determining whether an industry in the United States is materially injured or threatened with

material injury by reason of imports of the subject merchandise, the Commission first defines the

 1 Commissioner Charlotte R. Lane finds an industry in the United States is materially injured by reason of imports

of certain coated paper suitable for high-quality print graphics using sheet-fed presses from China and Indonesia that

are sold in the United States at less than fair value and subsidized by the Governments of China and Indonesia. See

Separate Views of Commissioner Charlotte R. Lane. She joins sections I-VI of these Views.

 2

 Confidential Report (CR) at I-4, Public Report (PR) at I-4. The questionnaire data are believed to account for

the vast majority of production of the domestic like product that the Commission has defined in section II below. 

See CR/PR at I-4 n.8, III-1 n.4.

 3

 CR at IV-1, PR at IV-1.

 4

 CR at II-2, PR at II-1.

 5

 CR at VII-2, PR at VII-2.

 6

 CR at VII-13, PR at VII-10.

3
“domestic like product” and the “industry.”7

 Section 771(4)(A) of the Tariff Act of 1930, as amended

(“the Tariff Act”), defines the relevant domestic industry as the “producers as a whole of a domestic like

product, or those producers whose collective output of a domestic like product constitutes a major

proportion of the total domestic production of the product.”8

 In turn, the Tariff Act defines “domestic like

product” as “a product which is like, or in the absence of like, most similar in characteristics and uses

with, the article subject to an investigation ... .”9

The decision regarding the appropriate domestic like product(s) in an investigation is a factual

determination, and the Commission has applied the statutory standard of “like” or “most similar in

characteristics and uses” on a case-by-case basis.10 No single factor is dispositive, and the Commission

may consider other factors it deems relevant based on the facts of a particular investigation.11 The

Commission looks for clear dividing lines among possible like products and disregards minor variations.12

Although the Commission must accept the determination of the U.S. Department of Commerce

(“Commerce”) as to the scope of the imported merchandise subsidized or sold at LTFV,13 the Commission

determines what domestic product is like the imported articles Commerce has identified.14

B. Imported Merchandise within Scope

In its final determinations, Commerce defined the imported merchandise within the scope of these

investigations as follows:

certain coated paper and paperboard in sheets suitable for high quality print graphics

using sheet-fed presses; coated on one or both sides with kaolin (China or other clay),

 7 19 U.S.C. § 1677(4)(A).

 8 19 U.S.C. § 1677(4)(A).

 9

 19 U.S.C. § 1677(10).

 10 See, e.g., Cleo, Inc. v. United States, 501 F.3d 1291, 1299 (Fed. Cir. 2007); NEC Corp. v. Department of

Commerce, 36 F. Supp.2d 380, 383 (Ct. Int’l Trade 1998); Nippon Steel Corp. v. United States, 19 CIT 450, 455

(1995); Torrington Co. v. United States, 747 F. Supp. 744, 749 n.3 (Ct. Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed.

Cir. 1991) (“every like product determination ‘must be made on the particular record at issue’ and the ‘unique facts

of each case’”). The Commission generally considers a number of factors including the following: (1) physical

characteristics and uses; (2) interchangeability; (3) channels of distribution; (4) customer and producer perceptions

of the products; (5) common manufacturing facilities, production processes, and production employees; and, where

appropriate, (6) price. See Nippon, 19 CIT at 455 n.4; Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l

Trade 1996).

 11 See, e.g., S. Rep. No. 96-249 at 90-91 (1979).

 12 Nippon, 19 CIT at 455; Torrington, 747 F. Supp. at 748-49; see also S. Rep. No. 96-249 at 90-91 (1979)

(Congress has indicated that the like product standard should not be interpreted in “such a narrow fashion as to

permit minor differences in physical characteristics or uses to lead to the conclusion that the product and article are

not ‘like’ each other, nor should the definition of ‘like product’ be interpreted in such a fashion as to prevent

consideration of an industry adversely affected by the imports under consideration.”).

 13 See, e.g., USEC, Inc. v. United States, 34 Fed. Appx. 725, 730 (Fed. Cir. 2002) (“The ITC may not modify the

class or kind of imported merchandise examined by Commerce.”); Algoma Steel Corp. v. United States, 688 F.

Supp. 639, 644 (Ct. Int’l Trade 1988), aff’d, 865 F.3d 240 (Fed. Cir.), cert. denied, 492 U.S. 919 (1989).

 14 Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (Commission may find a single

like product corresponding to several different classes or kinds defined by Commerce); Cleo, 501 F.3d at 1298 n.1

(“Commerce’s {scope} finding does not control the Commission’s {like product} determination.”); Torrington, 747

F. Supp. at 748-52 (affirming Commission determination of six like products in investigations where Commerce

found five classes or kinds).

4
calcium carbonate, titanium dioxide, and/or other inorganic substances; with or without a

binder; having a GE brightness level of 80 or higher; weighing not more than 340 grams

per square meter; whether gloss grade, satin grade, matte grade, dull grade, or any other

grade of finish; whether or not surface-colored, surface-decorated, printed (except as

described below), embossed, or perforated; and irrespective of dimensions (“certain

coated paper”).

Certain coated paper includes: (a) coated free sheet paper and paperboard that meets this

scope definition; (b) coated groundwood paper and paperboard produced from bleached

chemi-thermo-mechanical pulp (“BCTMP”) that meets this scope definition; and (c) any

other coated paper and paperboard that meets this scope definition.15

There is no dispute that the scope covers coated paper in sheets meeting the brightness, basis

weight, and other physical limitations stated in the scope definition. There is also no dispute that the

scope covers coated paperboard in sheets meeting the brightness, basis weight, and other physical

limitations stated in the scope definition that is used in commercial printing applications. There is,

however, a dispute concerning the extent to which the language stating that in-scope merchandise must be

“suitable for high quality print graphics” serves to limit in-scope paperboard to commercial printing

applications and does not include paperboard used for packaging. As explained below, Commerce has

not squarely resolved this issue.

Neither party has made a consistent argument on this issue throughout the various Commerce and

Commission proceedings. Before Commerce, Petitioners argued that the “suitable for high quality print

graphics” language was “surplusage and its removal from the description would not result in any

alteration or expansion of the scope.”16 Before the Commission, by contrast, Petitioners maintain that

“the phrase . . . is essential to define subject merchandise.”17 For their part, Respondents argued before

Commerce that the “suitable for high quality print graphics” language was an “important limiting physical

characteristic” that was an essential part of the scope.18 By contrast, Respondents submitted an affidavit

to the Commission contending that this phrase has no real meaning in the industry and contend that the

language, taken by itself, does not currently exclude any merchandise otherwise covered by the scope.19

We rely on Commerce’s own explanation for why it has retained this phrase in the scope

definition. Commerce addressed the issue in an August 3, 2010 memorandum concerning scope issues in

the investigations.20 We find several statements in the Commerce memorandum of particular

significance. Most importantly, Commerce found that “no one has put forward an objective definition of

 15 75 Fed. Reg. 59209, 59210 (Sept. 27, 2010) (Indonesia CVD); 75 Fed. Reg. 59212, 59213 (Sept. 27, 2010)

(China CVD); 75 Fed. Reg. 59217, 59219 (Sept. 27, 2010) (China AD); 75 Fed. Reg. 59223, 59224 (Sept. 27, 2010)

(Indonesia AD). 

 16 Letter from Petitioners to Gary Locke at 4 (Apr. 9, 2010); see also Petitioners’ Rebuttal Brief Regarding Scope

at 15 (Aug. 24, 2010). Both submissions appear in ex. 6 to Petitioners’ Response to October 12 Commission Letter

(Oct. 14, 2010) (“Petitioners’ October Scope Submission”).

 17 Petitioners’ Final Comments at 8.

 18 Respondents’ Additional Scope Comments at 18 (Mar. 29, 2010); Respondents’ Case Brief Concerning Scope

Issues at 21 (Aug. 20, 2010). Both submissions appear at ex. 6 to Petitioners’ October Scope Submission.

 19 Respondents’ Response to October 12 Commission Letter (Oct. 14, 2010) (“Respondents’ October Scope

Submission”), attachment 13, Aff. of Mark Dragoo, ¶¶ 2-3; Respondents’ Final Comments at 8.

 20 Memorandum from Susan Kuhbach to Ronald K. Lorentzen (Aug. 3, 2010) (“Commerce Scope

Memorandum”). Commerce relied on the analysis in this memorandum in making its final scope determinations. 

See Commerce Issues and Decision Memorandum at 57 (Sept. 20, 2010).

5
the phrase ‘suitable for high quality print graphics.’”21 Because Commerce found that the phrase does not

have a particular meaning in the industry and provided no clarification, and because the parties have not

construed it consistently, we look to its plain and ordinary meaning. In this respect, we do not find the

phrase “suitable for high quality print graphics” is limited to use for commercial printing applications. 

Products may be suitable for high quality print graphics without actually being used in printing

applications.22 For this reason, we cannot accept Petitioners’ current argument that only products “used

for printing” are within the scope.23 Additionally, Commerce does not provide any description of the

types of otherwise in-scope merchandise that the phrase “suitable for high quality print graphics” would

serve to exclude. To the contrary, it states that “it may be difficult to determine whether there are any

products that meet the physical description of the scope that would somehow not be suitable for high

quality print graphics such that they should not be included in these investigations.”24 Although

Commerce retained the language in the scope because its deletion could potentially expand the scope of

the investigation, Commerce did not describe the merchandise that the phrase excludes from the scope. 

Instead, it merely states that the language will permit specific products to be excluded from the scope if

such action is warranted after a case-specific analysis.25 We therefore find that the “suitable for high

quality print graphics” phrase in the scope definition does not distinguish any particular types of products

as being outside the scope definition. Consequently, we find that paperboard otherwise meeting the

physical specifications set forth in the scope is included in the scope, even if such paperboard is used for

packaging, rather than only for commercial printing.

C. Domestic Like Product

1. Whether Coated Paper and Paperboard are Separate Domestic Like Products

During the investigations, the Commission requested that the parties address whether coated

paper and paperboard are separate domestic like products. Each party contends that the Commission

should not divide the domestically produced merchandise meeting the specifications of the scope

definition into multiple domestic like products.26

We find that there is no clear dividing line between coated paper and paperboard that we have

determined is within the scope definition. Both coated paper and paperboard are used in commercial

printing applications.27 They overlap on such physical characteristics as brightness, basis weight, and

caliper.28 To the extent that the products overlap in these physical characteristics, they are considered

 21 Commerce Scope Memorandum at 9. This is also an accurate characterization of the record before the

Commission.

 22 Some paperboard products are used in packaging for consumer goods such as frozen foods and cereal boxes

typically characterized by the use of print graphics. See CR at I-22, PR at I-19. See also Respondents’ October

Scope Submission, attachment 5 (domestically produced paperboard packaging product promoted as being suitable

for “high end printing applications”).

 23 See Petitioners’ Posthearing Brief, Response to Commissioners’ Questions, tab 1 at 4.

 24 Commerce Scope Memorandum at 10 (emphasis in original).

 25 Commerce Scope Memorandum at 9-10.

 26 Petitioners’ Posthearing Brief, Response to Commissioners’ Questions, tab 4 at 1; Respondents’ Posthearing

Brief, ex. 3 at 4.

 27 CR at I-21-22, PR at I-17-18.

 28 CR at I-21-23, PR at I-17-19.

6
broadly interchangeable in the marketplace,29 and are sold in similar channels of distribution.30 Coated

paper and paperboard are usually made by different producers, although they are typically produced using

similar processes and equipment.31 The record does not indicate that market participants perceive coated

paper and paperboard as distinct products.32 Accordingly, we do not define multiple domestic like

products corresponding to those articles within the scope definition.

2. Whether Sheeter Rolls Should be Included in the Domestic Like Product

Sheeter rolls are a semi-finished form of coated paper products. Integrated producers or

independent converters cut a sheeter roll into individual sheets.33 Because the scope definition includes

only merchandise “in sheets,” sheeter rolls are not included within the scope. In the preliminary

determinations, the Commission included sheeter rolls within the domestic like product after applying its

“semifinished product” like product analysis. It found that virtually all sheeter rolls are used in the

production of coated paper, and there is at most a small market for sheeter rolls. Moreover, sheeter rolls

represent a substantial proportion of the cost and value of the finished product and undergo only one other

production step before transformation into coated paper.34

We find that the record concerning sheeter rolls has not changed since the preliminary phase

investigations. The parties also do not dispute the inclusion of sheeter rolls in the domestic like product.35

Accordingly, for the reasons stated in the preliminary determinations, we include sheeter rolls within the

domestic like product.

3. Whether Web Rolls Should be Included in the Domestic Like Product

Web rolls are rolls of coated free sheet paper intended for use in web presses, which are large

printing machines designed to handle high volume printing runs at high speeds. Unlike sheeter rolls, web

rolls undergo no further processing prior to use in web presses.36 Because these products are not in sheet

form, they are not included within the scope. Respondents contend that web rolls should be included

within the domestic like product.37 Petitioners disagree.38

 29 CR at I-22, PR at I-18.

 30 Respondents’ Posthearing Brief, ex. 36, Aff. of Mark Dragoo, ¶ 22.

 31 Respondents’ Posthearing Brief, ex. 36, Aff. of Mark Dragoo, ¶¶ 20-21.

 32 CR at I-20 n.48, PR at I-17 n.48 (no common or objective definition of “paperboard” within the U.S. paper

industry); Respondents’ Posthearing Brief, ex. 36, Aff. of Mark Dragoo, ¶ 12.

 33 See CR at I-26, 29-30, PR at I-21, 23.

 34 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from China and

Indonesia, Inv. Nos. 701-TA-470-471 and 731-TA-1169-1170 (Preliminary), USITC Pub. 4108 at 8 (Nov. 2009)

(“Preliminary Determinations”).

 35 See Petitioners’ Posthearing Brief, Response to Commission Questions, tab 3 at 1; Respondents’ Prehearing

Brief at 16.

 36 See Preliminary Determinations, USITC Pub. 4108 at I-10-11.

 37 Respondents’ Prehearing Brief at 16-20. Respondents’ contention that the Commission acted unfairly by

declining to collect trade and financial data concerning web rolls in the final phase questionnaires, id. at 12-15,

overlooks several important facts. First, in the preliminary determinations the Commission undertook a detailed

analysis of Respondents’ argument that web rolls should be included in the domestic like product. Preliminary

Determinations, USITC Pub. 4108 at 9-10. The Commission found Respondents’ contentions to be without merit. 

Significantly, the preliminary determinations did not contain any statement that the issue was particularly close or

warranted further consideration in the final phase investigations. Consequently, the final phase draft questionnaires

(continued...)

7
 We analyze below whether web rolls should be included in the domestic like product. Much of

our discussion is devoted to addressing Respondents’ contentions that the findings in the preliminary

determinations of clear distinctions between web rolls and the other products within the Commission’s

domestic like product were irrelevant or incorrect.

Physical Characteristics and End Uses. In its preliminary determinations, the Commission

determined that, although web rolls and coated paper are both used in printing applications, the products

differ physically from one another because of the requirements of the presses on which they are used. 

Specifically, the Commission found that coated paper has a high moisture level to prevent the paper from

curling and to eliminate the build-up of static charges that cause paper jams in sheet-fed presses. 

Additionally, it noted that coated paper is less porous than web rolls to accommodate high tack inks used

in sheet-fed presses. The Commission also observed that coated paper also must have certain mechanical

properties, such as flatness (meaning waves in the paper) and stability.39 In contrast, the Commission

found that web rolls have a lower moisture content and a higher porosity than coated paper which permit

the web roll to withstand the heat setting of the web press and not blister and fail. Finally, the

Commission found that web rolls hold a substantial amount of paper, and may weigh one to five tons,

permitting web press printers to run high volume print jobs at high speeds.40

In the final phase investigations, Respondents contend that the only possible physical distinctions

between web rolls and coated paper concern moisture content and porosity.41 Respondents introduced

testimony from Robert Hanscom, a sales executive for Eagle Ridge Paper, maintaining that significant

changes in the paper production process and printing technology have minimized the importance of these

distinctions.42 Mr. Hanscom’s testimony is contradicted by other evidence in the record.43 Specifically,

Petitioners’ witnesses testified that although they use state of the art equipment, moisture content and

 37 (...continued)

staff circulated to the parties for comment pursuant to Commission rule 207.20(b) did not seek information

concerning web rolls. Respondents, in their comments on the draft questionnaires, argued that the Commission

should seek such information. These comments essentially involved the same arguments that Respondents asserted

during the preliminary phase. See Respondents’ Comments on Draft Questionnaires at 9-15 (June 2, 2010). 

We considered Respondents’ renewed arguments before approving issuance of the questionnaires, but did

not direct that the questionnaires seek additional trade and financial data on web rolls. We emphasize that we do not

simply grant as a matter of course parties’ requests that questionnaires in final phase investigations seek information

about different like product breakouts. To militate against undue burden to the parties, and to best utilize the

Commission’s own staff resources, in determining whether to request such information in this case we considered,

among other factors, the likely burden entailed by such requests and the fact that the issue had been considered and

decided in the preliminary determinations on the basis of essentially the same arguments.

Nevertheless, the Commission continued to collect information bearing on the like product issue in the

briefs and hearing testimony of Petitioners and Respondents. As discussed below, this additional information

supports our conclusion not to define the domestic like product to include web rolls.

 38 Petitioners’ Posthearing Brief at 6-8.

 39 Preliminary Determinations, USITC Pub. 4108 at 9.

 40 Preliminary Determinations, USITC Pub. 4108 at 9.

 41 Respondents’ Prehearing Brief at 18.

 42 Respondents’ Prehearing Brief, ex. 2 at 2. 

 43 We observe that Mr. Hanscom’s personal knowledge concerning the matters about which he testified appears to

be limited. Mr. Hanscom admitted in his Commission hearing testimony that “we’re not selling web rolls,” and

suggested his assertions were based on observations of his customers’ (as opposed to his own) operations. Hearing

Tr. at 318-19 (Hanscom).

8
porosity of paper still have a significant bearing on what type of press can be used to print the paper.44

Additionally, a recent article indicates that static build-up continues to be an issue with respect to sheetfed presses; static build-up requires that “[t]he skids of paper must be stored and be climate adjusted and

transported by the press at the right time to run the job, along with printing plates, special inks, UV

coatings and other chemistry.”45 As such, the record supports the conclusion that coated paper’s high

moisture and porosity levels continue to be important for its use in sheet-fed presses.

Interchangeability. In the preliminary determinations, the Commission found that there was at

best limited interchangeability between web rolls and coated paper as both were produced to meet the

requirements of the different presses on which they are printed. As such, it found that web rolls are not

used in sheet-fed presses, and coated paper (in finished sheet form) cannot be used in web presses. The

Commission noted that while coated paper in sheeter rolls may be used in web presses, according to

witness testimony, web rolls’ lower moisture content and more porous surface make them more suitable

for web-fed presses. Additionally, the Commission found that because sheeter rolls do not share these

physical characteristics, producers will not warrant their use for web presses. It further stated that

although Respondents’ witness testified that sheeter rolls may be substituted for web rolls in web presses,

such substitution was infrequent. Indeed, the Commission further observed that the same witness also

testified that, for printers with dual printing capability (sheet-fed and web presses), coated paper is used in

the sheet press while web rolls are used in web presses.46

 Respondents contend that the Commission’s finding in the preliminary determinations that web

rolls cannot be used in sheet-fed presses was incorrect.47 Respondents maintain that the use of web rolls

in sheet-fed presses is “quite common” and that the addition of just one piece of equipment, an in-line roll

sheeter, enables printers to use web rolls in sheet-fed presses.48 Respondents indicate that in-line roll

sheeters are produced by Mabeg and Heilderberg and provided brochures from both vendors. They

maintain that a major printer has stated that “[p]utting the roll sheeter on it adds to economic advantage

we have in buying rolls; U.S. manufactured paper instead of Asian paper.”49

We find that the additional material Respondents submitted in the final phase investigations does

not support the proposition that the use of web rolls in sheet-fed presses is common. Indeed, the

proposition that in-line sheeters are typically sold for the purpose of enabling use of web rolls in sheet-fed

presses is directly contradicted by an affidavit prepared by the U.S. representative of ***. ***, submitted

an affidavit indicating that only about 3.5 percent of the sheet-fed presses his firm has sold during the last

five years were sold with in-line sheeters.50 Indeed, materials submitted by both parties indicate that the

number of in-line sheeters in the United States is very low in comparison to the number of sheet-fed

presses.51 Because the record indicates that use of in-line roll sheeters to convert web rolls into sheet is at

 44 Hearing Tr. at 167 (Schoedinger), 170 (Gardner). This is consistent with testimony offered during the

preliminary phase investigations. See Conference Tr. at 81-84 (Graff). See also Petitioners’ Posthearing Brief,

Responses to Staff Questions, tab 7, ex.1, ex. 6 at 3.

 45 Respondents’ Posthearing Brief, ex. 24, Graftech Printing Engineering, “Squeezing More Profit out of Every

Job Run on a Sheetfed Press (“Graftech article”) at 2-3. 

 46 Preliminary Determinations, USITC Pub. 4108 at 10 at 9-10.

 47 Respondents’ Prehearing Brief at 19-20.

 48 Respondents’ Prehearing Brief at 20; Respondents’ Posthearing Brief at 54.

 49 Respondents’ Posthearing Brief, ex. 24.

 50 Petitioners’ Posthearing Brief, Response to Staff Questions, tab 7, ex. 5, ¶ 5.

 51 Petitioners’ Posthearing Brief, Response to Staff Questions, tab 7, ex. 6 at 5 (100 roll sheet feeders in North

America compared to over 100,000 sheet-fed presses in operation within the printing market); Respondents’

Posthearing Brief, ex. 24, Graftech article at 5 (about 100 roll sheeters in North America as compared to “at least

(continued...)

9
best highly infrequent, we accord little weight to Respondents’ listing of major individual printers that

have in-line sheeters. In any event, this listing does not purport to establish that these printers use web

rolls in sheet-fed presses.52 The assertion Mr. Hanscom made on Respondents’ behalf that “it is common

knowledge” that petitioner NewPage ships large quantities of web rolls to Pro Con, a converter, which

then converts the web rolls into sheets for sheet-fed presses,53 was directly rebutted by officials from both

Pro Con and NewPage.54

Other information in the record further rebuts Respondents’ contention that in-line sheeters are

commonly used to convert web rolls into sheets for sheet-fed presses. ***, the official of in-line sheeter

producer ***, further testified that use of an in-line sheeter is economical only if a printer consistently has

large-volume jobs requiring the same stock and application and that conversion of web rolls into sheets

“would affect the quality and appearance of the printed product because of the differences between web

stock and sheet stock.”55 Additionally, warranties for web rolls do not cover use in sheet-fed presses.56

This suggests that if converters use sheeted web rolls in sheet-fed presses, this activity would be limited,

because the use of the converted product would pose a risk for both the converter and the printer.

The record indicates that, while there may be some instances in which web rolls are run in sheetfed presses, this appears to be infrequent and is hardly the “quite common” occurrence claimed by

Respondents. Only a very small number of U.S. printers are equipped with in-line sheeters which

purportedly can be used for adapting web rolls for sheet-fed presses. It is by no means clear that the

preponderance of these in-line sheeters are used to sheet web rolls, as opposed to sheeter rolls. Web roll

producers do not provide warranty coverage for web rolls used in sheet-fed presses. Thus, any

interchangeability between coated paper and web rolls is greatly limited. 

Producer and Customer Perceptions. The record indicates that six out of nine reporting U.S.

producers (integrated producers and converters) and five of 12 of the reporting importers indicated that

they perceived web rolls and coated paper to be distinct products.57 Additionally, in the final phase

investigations only a minority of reporting importers (three of nine) and none of the 32 responding

purchasers identified web rolls as a substitute for coated paper.58 Although the importers’ responses are

to some extent mixed, the record does not support the proposition that market participants commonly

perceive web rolls and coated paper to be similar products.

Channels of Distribution. As the Commission found in the preliminary determinations, a

majority of market participants report that web rolls and coated paper use the same channels of

 51 (...continued)

10,000 active printing presses”).

 52 At least some companies that have purchased in-line sheeters use such equipment for only sheeter rolls and not

web rolls. Petitioners’ Posthearing Brief, Response to Staff Questions, tab 7, ex. 6 at 4, ex. 8 at 1-2. Respondents

also presented statements from three other printers that they use converted web rolls in a sheet-fed press. 

Respondents’ Posthearing Brief, ex. 24, attachment A. Each of these statements is conclusory. Moreover, a far

greater number of printers submitted statements that they did not use coated sheets made from web rolls on their

sheet-fed presses. Petitioners’ Posthearing Brief, Response to Staff Questions, tab 7, ex. 7 (13 statements).

 53 Respondents’ Prehearing Brief, ex. 2.

 54 Hearing Tr. at 135 (Nelson); Petitioners’ Posthearing Brief, Response to Staff Questions, tab 7, exs. 2, 3. 

 55 Petitioners’ Posthearing Brief, Answers to Staff Questions, tab 7, ex. 5, ¶¶ 6-7.

 56 Preliminary Determinations, USITC Pub. 4108 at 10; Hearing Tr. at 135 (Nelson), 169 (Salonen).

 57 INV-GG-104 at I-23-24 (Nov. 2, 2009).

 58 CR at II-21-22, PR at II-13-14.

10
distribution, although producers’ responses to this question were mixed.59 Whether sales to printers are in

the form of web rolls or coated paper depends on the type of equipment printers use.60

Common Manufacturing, Processes and Employees. Both coated paper and web rolls generally

are manufactured on the same equipment, by the same processes, and with some of the same employees. 

However, certain coated paper requires an additional production step of sheeting before it is a finished

product.61

Price. Respondents contend that coated paper and web rolls are priced similarly, based on a

comparison of quarterly pricing data collected by the Commission for coated paper and data provided by

RISI, a private monitoring service, for web rolls.62 The use of two different data sets by Respondents

precludes an accurate comparison. Available RISI pricing data for both coated paper and web rolls

covering the period of investigation indicate that coated paper in sheets was priced consistently and

markedly higher than coated paper in web rolls.63

Conclusion. The record in these final investigations indicates that there is a clear dividing line

distinguishing web rolls from coated paper.64 There are admittedly some similarities between the

products: they have similar channels of distribution, are produced using the same processes and

equipment, and are used in similar printing applications. Nevertheless, there are clear distinctions

between them. Each is produced to meet distinct requirements of particular printing presses. Thus, they

differ in moisture content, porosity, and mechanical characteristics such as flatness. The evidence does

not indicate that they are broadly interchangeable; to the contrary, in-line sheeters are infrequently used to

sheet web rolls in sheet-fed presses. Moreover, we find that coated paper and web rolls are priced

differently, and the record does not indicate that market participants, producers in particular, perceive the

products to be broadly similar. 

Taking all of these considerations into account, we do not include web rolls within the definition

of the domestic like product. This is the same conclusion we reached in our preliminary determinations. 

In this respect, we emphasize that Respondents’ contentions that the factual conclusions the Commission

reached in the preliminary determinations were incorrect are based primarily on the testimony of a single

witness, Mr. Hanscom, whose assertions were repeatedly contradicted by credible and informed

testimony of other industry participants.

Accordingly, we define the domestic like product in these investigations as coated paper meeting

the physical specifications of Commerce’s scope definition (as we construed that definition above) and

sheeter rolls. We will henceforth refer to the domestic like product as “CCP.”

 59 Preliminary Determinations, USITC Pub. 4108 at 10.

 60 This follows from our conclusion above that coated paper and web rolls cannot generally be used

interchangeably on the same equipment. See also Preliminary Determinations, USITC Pub. 4108 at 9.

 61 Preliminary Determinations, USITC Pub. 4108 at 10.

 62 Respondents’ Prehearing Brief at 21.

 63 See RISI January 2010 Paper Trader Monitoring Report, tables 6, 9 (EDIS Doc. 435233). Respondents’

witness in the preliminary phase conference also testified that, for products of comparable quality, basis weight, and

brightness, web rolls are typically priced lower than coated paper in sheets. Conference Tr. at 135 (Hunley).

 64 Respondents emphasize that the Commission found web rolls and coated paper to be in the same domestic like

product in Coated Free Sheet Paper from China, Indonesia, and Korea, Inv. Nos. 701-TA-444-446, 731-TA-1107-

1109 (Final), USITC Pub. 3965 (Dec. 2007). In the prior investigations, both web rolls and coated paper were

included in the scope definition and no party argued that the Commission should find multiple domestic like

products. See id. at 4-5. Compare id. at 12 (finding limited competition between web rolls and sheet products). 

These investigations feature a significantly different factual record, which contains information not before the

Commission in the prior investigations about the purported similarities and differences of coated paper and web

rolls.

11
III. DOMESTIC INDUSTRY

The domestic industry is defined as the domestic “producers as a whole of a domestic like

product, or those producers whose collective output of a domestic like product constitutes a major

proportion of the total domestic production of the product.”65 In defining the domestic industry, the

Commission’s general practice has been to include in the industry producers of all domestic production of

the like product, whether toll-produced, captively consumed, or sold in the domestic merchant market.

There are two sets of domestic industry issues in these final phase investigations. The first

concerns whether converters engage in sufficient production-related activities to be considered domestic

producers. The second concerns whether appropriate circumstances exist pursuant to the statutory related

parties provision to exclude from the domestic industry two converters that also purchased subject

merchandise.

A. Sufficient Production-Related Activities

We first consider whether converters of sheeter rolls engage in sufficient production-related

activities to be considered domestic producers.66 Converters perform the final finishing operation on

sheeter rolls purchased from integrated producers. Specifically, converters cut sheeter rolls into the

finished sheet product.67 

In the preliminary determinations, the Commission determined that converters engage in

sufficient production-related activities to be included in the domestic industry. It emphasized converters’

substantial capital investments and employment.68 The record concerning converters’ production-related

activities has not changed since the preliminary determinations. In light of this, and the absence of any

contrary argument, we again include converters in the domestic industry producing CCP.

B. Related Parties

We must determine whether any producer of the domestic like product should be excluded from

the domestic industry pursuant to section 771(4)(B) of the Tariff Act. This provision allows the

Commission, if appropriate circumstances exist, to exclude from the domestic industry producers that are

related to an exporter or importer of subject merchandise or which are themselves importers.69 Exclusion

of such a producer is within the Commission’s discretion based upon the facts presented in each

investigation.70 The Commission has also concluded that a domestic producer that does not itself import

 65 19 U.S.C. § 1677(4)(A).

 66 To determine whether a firm is engaged in sufficient production-related activities to be considered a domestic

producer of the like product, the Commission generally considers six factors: (1) source and extent of the firm's

capital investment; (2) technical expertise involved in U.S. production activities; (3) value added to the product in

the United States; (4) employment levels; (5) quantity and type of parts sourced in the United States; and (6) any

other costs and activities in the United States directly leading to production of the like product. No single factor is

determinative and the Commission may consider any other factors it deems relevant in light of the specific facts of

any investigation. See, e.g., Diamond Sawblades and Parts Thereof from China and Korea, Inv. Nos. 731-TA-1092-

1093 (Final), USITC Pub. 3862 at 11 (July 2006); Outboard Engines from Japan, Inv. No. 731-TA-1069

(Preliminary), USITC Pub. 3673 at 10-12 (Mar. 2004).

 67 See CR at I-26, PR at I-21.

 68 Preliminary Determinations, USITC Pub. 4108 at 11-12.

 69 19 U.S.C. § 1677(4)(B).

 70 The primary factors the Commission has examined in deciding whether appropriate circumstances exist to

(continued...)

12
subject merchandise, or does not share a corporate affiliation with an importer, may nonetheless be

deemed a related party if it controls large volumes of subject imports.71

Converters *** and *** purchased subject merchandise during the period of investigation.72

Because the quantity of each firm’s purchases of subject imports was small, we do not find that

appropriate circumstances exist to exclude either converter from the domestic industry pursuant to the

related party provision.73

Accordingly, we define a single domestic industry consisting of U.S. producers and converters of

CCP.

 70 (...continued)

exclude a related party are as follows: (1) the percentage of domestic production attributable to the importing

producer; (2) the reason the U.S. producer has decided to import the product subject to investigation, i.e., whether

the firm benefits from the LTFV sales or subsidies or whether the firm must import in order to enable it to continue

production and compete in the U.S. market, and (3) the position of the related producer vis-a-vis the rest of the

industry, i.e., whether inclusion or exclusion of the related party will skew the data for the rest of the industry. See,

e.g., Torrington Co. v. United States, 790 F. Supp. 1161 (Ct. Int’l Trade 1992), aff’d mem., 991 F.2d 809 (Fed. Cir.

1993). The Commission has also considered the ratio of import shipments to U.S. production for related producers

and whether the primary interest of the related producer lies in domestic production or importation. These latter two

considerations were cited as appropriate factors in Allied Mineral Products, Inc. v. United States, 28 CIT 1861, 1864

(2004) (“The most significant factor considered by the Commission in making the ‘appropriate circumstances’

determination is whether the domestic producer accrued a substantial benefit from its importation of the subject

merchandise.”); USEC, Inc. v. United States, 132 F. Supp. 2d 1, 12 (Ct. Int’l Trade 2001) (“the provision’s purpose

is to exclude from the industry headcount domestic producers substantially benefitting from their relationships with

foreign exporters.”), aff’d, 34 Fed. Appx. 725 (Fed. Cir. April 22, 2002); S. Rep. No. 249, 96th Cong. 1st Sess. at 83

(1979) (“where a U.S. producer is related to a foreign exporter and the foreign exporter directs his exports to the

United States so as not to compete with his related U.S. producer, this should be a case where the ITC would not

consider the related U.S. producer to be a part of the domestic industry”).

 71 Such control will occur only if the domestic producer was responsible for a predominant portion of an

importer’s purchases and the importer’s purchases were substantial. See, e.g., Certain Cut-to-Length Steel Plate

from the Czech Republic, France, India, Indonesia, Italy, Japan, Korea, and Macedonia, Inv. Nos. 701-TA-387-392

and 731-TA-815-822 (Preliminary), USITC Pub. 3181 at 12 (April 1999); Certain Brake Drums and Rotors from

China, Inv. No. 731-TA-744 (Final), USITC Pub. 3035 at 10 n.50 (April 1997).

 72 CR/PR, Table III-16.

 73 *** purchases never exceeded *** percent of subject imports from China or *** percent of subject imports

from Indonesia in any calendar year. *** purchases never exceeded *** percent of subject imports from China in

any calendar year. CR/PR, Tables III-16, IV-2.

13
IV. CUMULATION74

A. Legal Framework

For purposes of evaluating the volume and price effects for a determination of material injury by

reason of the subject imports, section 771(7)(G)(i) of the Tariff Act requires the Commission to cumulate

subject imports from all countries as to which petitions were filed and/or investigations self-initiated by

Commerce on the same day, if such imports compete with each other and with domestic like products in

the U.S. market and no statutory exceptions apply.75 The statutory threshold for cumulation is satisfied in

these investigations because the petition with respect to both China and Indonesia was filed on the same

day: September 23, 2009.76

In assessing whether subject imports compete with each other and with the domestic like product,

the Commission has generally considered four factors:

(1) the degree of fungibility between the subject imports from different countries and

between imports and the domestic like product, including consideration of specific

customer requirements and other quality related questions;

(2) the presence of sales or offers to sell in the same geographic markets of subject

imports from different countries and the domestic like product;

(3) the existence of common or similar channels of distribution for subject imports

from different countries and the domestic like product; and

(4) whether the subject imports are simultaneously present in the market.77 78

While no single factor is necessarily determinative, and the list of factors is not exclusive, these factors

are intended to provide the Commission with a framework for determining whether the subject imports

 74 We find that subject imports from China and Indonesia are not negligible under 19 U.S.C. § 1677(24). For

September 2008 through August 2009, which is the 12-month period preceding filing of the petition, subject imports

from China accounted for 43.9 percent of total U.S. imports. CR at IV-7, PR at IV-5. During the same period,

subject imports from Indonesia accounted for 6.4 percent of total U.S. imports. CR at IV-8, PR at IV-6. Each figure

surpasses the applicable negligibility threshold in 19 U.S.C. § 1677(24).

In their prehearing submission, Respondents claimed that the Commission should find subject imports from

Indonesia to be negligible. This argument was premised on the assumption that Commerce would grant

Respondents’ request to exclude multi-ply products from the scope definition. Respondents’ Prehearing Brief at 22-

23. Commerce denied Respondents’ request and retained multi-ply products within the scope. Commerce Issues

and Decision Memorandum at 59. Respondents did not contest the Commission report’s negligibility calculations,

or otherwise address this issue, in their posthearing submissions.

 75 19 U.S.C. § 1677(7)(G)(i).

 76 CR at I-1; PR at I-1. None of the statutory exceptions to cumulation is applicable.

 77 See Certain Cast-Iron Pipe Fittings from Brazil, the Republic of Korea, and Taiwan, Inv. Nos. 731-TA-278-280

(Final), USITC Pub. 1845 (May 1986), aff'd, Fundicao Tupy, S.A. v. United States, 678 F. Supp. 898 (Ct. Int'l

Trade), aff'd, 859 F.2d 915 (Fed. Cir. 1988).

 78 Commissioner Lane notes with respect to the first factor that her analysis does not require such similarity of

products that a perfectly symmetrical fungibility is required. See Separate Views of Commissioner Charlotte R.

Lane, Certain Lightweight Thermal Paper from China, Germany, and Korea, Inv. Nos. 701-TA-451 and 731-TA1126-1128 (Preliminary), USITC Pub. 3964 (Nov. 2007).

14
compete with each other and with the domestic like product.79 Only a “reasonable overlap” of

competition is required.80

In the preliminary determinations, the Commission found a reasonable overlap of competition

between subject imports from China and Indonesia and the domestic like product, and among the imports

themselves.81 The Commission thus analyzed subject imports on a cumulated basis.82

In the final phase investigations, Petitioners contend that the Commission should cumulate

subject imports from China and Indonesia as there is a reasonable overlap of competition.83 Respondents

did not address the issue of cumulation at the hearing or in their briefs.

B. Analysis

Based on the four traditional factors which the Commission considers in analyzing cumulation,

we find that there is a reasonable overlap of competition. 

Fungibility. There appears to be a reasonable degree of fungibility among the subject imports

from each country and the domestic like product. The questionnaire responses indicate that market

participants perceive domestically produced CCP and the subject imports to be interchangeable. Six of

nine U.S. integrated producers, all four responding converters, seven of eight importers, and 19 of 24

purchasers reported that the domestic like product and subject imports from China are always or

frequently interchangeable.84 Six of nine U.S. integrated producers, three of four converters, six of seven

importers, and 14 of 15 purchasers reported that the domestic like product and subject imports from

Indonesia are always or frequently interchangeable.85 All eight integrated producers, three of four

converters, six of eight importers, and 14 of 15 purchasers found subject imports from China and subject

imports from Indonesia always or frequently interchangeable.86

Geographic Overlap. *** of the integrated producers and *** reporting converters reported that

they serve a nationwide market.87 *** importers of coated paper from China reported selling nationwide,

while *** importers of coated paper from Indonesia reported selling nationwide.88 Official Commerce

statistics show that U.S. imports from the China and Indonesia entered the United States through

geographically dispersed U.S. ports of entry.89

 79 See, e.g., Wieland Werke, AG v. United States, 718 F. Supp. 50 (Ct. Int'l Trade 1989).

 80 The Uruguay Round Agreements Act, Statement of Administrative Action, H.R. Doc. No. 103-316, Vol. 1 at

848 (1994) (“SAA”) expressly states that “the new section will not affect current Commission practice under which

the statutory requirement is satisfied if there is a reasonable overlap of competition.” SAA at 848 (citing Fundicao

Tupy, S.A. v. United States, 678 F. Supp. 898, 902 (Ct. Int'l Trade 1988)), aff’d, 859 F.2d 915 (Fed. Cir. 1988). See

Goss Graphic Sys., Inc. v. United States, 33 F. Supp. 2d 1082,1087 (Ct. Int’l Trade 1998) (“cumulation does not

require two products to be highly fungible”); Wieland Werke, AG, 718 F. Supp. at 52 (“Completely overlapping

markets are not required.”).

 81 Preliminary Determinations, USITC Pub. 4108 at 16.

 82 Preliminary Determinations, USITC Pub. 4108 at 16-17.

 83 Petitioners’ Prehearing Brief at 10-16; Petitioners’ Posthearing Brief at 7-8.

 84 CR/PR, Table II-4.

 85 CR/PR, Table II-4. 

 86 CR/PR, Table II-4.

 87 CR at II-3, PR at II-2.

 88 CR at II-3, PR at II-2.

 89 CR at IV-6, PR at IV-5.

15
Channels of Distribution. The vast majority of U.S. producers’ shipments of CCP and the vast

majority of subject imports from each subject country were to merchants/distributors.90

Simultaneous Presence. The record indicates that domestic producers’ U.S. shipments, along

with imports from China and Indonesia, have been simultaneously present in the U.S. market throughout

the entire period of investigation.91

Conclusion. The record indicates that the four cumulation criteria are satisfied in these

investigations. We therefore conclude that there is a reasonable overlap of competition between imports

from each subject country and the domestic like product and between subject imports from China and

Indonesia. Consequently, we cumulatively assess the volume and effects of subject imports for

determining material injury by reason of the subject imports.

C. Cumulation for Threat Analysis

Because our determinations address the issue of threat of material injury by reason of subject

imports, we must also consider whether to cumulate subject imports from China and Indonesia for

purposes of a threat analysis.92 In contrast to cumulation for material injury, cumulation for threat

analysis is discretionary. Under section 771(7)(H) of the Tariff Act, the Commission may “to the extent

practicable” cumulatively assess the volume and price effects of subject imports from all countries as to

which petitions were filed on the same day if the requirements for cumulation in the material injury

context are satisfied.93

In the preceding section, we found that the requirements for cumulating subject imports for

purposes of our material injury analysis are satisfied. We further find that subject imports from China and

Indonesia are likely to compete under similar conditions of competition in the U.S. market in the

imminent future, based on the following considerations.94

First, the imports from each subject country showed similar volume trends. As a share of the

quantity of U.S. apparent consumption, subject imports from China and Indonesia each rose slightly from

2007 to 2008, increased at a greater rate from 2008 to 2009, and was lower in January-June (“interim”)

2010 than in interim 2009.95

Second, with respect to pricing, subject imports from China and Indonesia each undersold the

domestic like product in the majority of quarterly comparisons. Underselling margins were in

overlapping ranges, varying from 1.5 to 25.2 percent for subject imports from China and from 2.6 to 14.4

percent for subject imports from Indonesia.96

Furthermore, we observe that subject producers in China and Indonesia affiliated with a single

firm – APP – are responsible for a *** of production and a *** of exports to the Untied States from each

 90 CR/PR, Table II-1.

 91 CR/PR, Tables IV-2, C-3.

 92 Commissioner Lane does not reach the issue of threat of material injury and does not join this section. 

 93 19 U.S.C. § 1677(7)(H).

 94 Commissioner Pinkert does not join in this sentence. In determining whether to cumulate subject imports for

purposes of a threat analysis, he focuses primarily on volume and price trends for the subject imports. Here, he joins

his colleagues in finding the volume and pricing trends for the subject imports from China and Indonesia to be

similar as well as in their observations concerning APP’s ability to shift exports between affiliated facilities in the

two subject countries. He thus concludes that cumulation of the subject imports from China and Indonesia is

warranted for purposes of a threat analysis.

 95 CR/PR, Table C-3. On an absolute basis, the quantity of subject imports from China and Indonesia each

increased from 2007 to 2009 and each was lower in interim 2010 than in interim 2009. Id.

 96 CR/PR, Table V-7.

16
of the subject countries.97 APP has the ability to shift exports to the United States from its affiliated

facilities in one subject country to its facilities in the other.98

Accordingly, for our analysis of threat of material injury by reason of subject imports, we

cumulate subject imports from China and Indonesia.

V. LEGAL STANDARDS

A. In General

In the final phase of antidumping and countervailing duty investigations, the Commission

determines whether an industry in the United States is materially injured or threatened with material

injury by reason of the imports under investigation.99 In making this determination, the Commission must

consider the volume of subject imports, their effect on prices for the domestic like product, and their

impact on domestic producers of the domestic like product, but only in the context of U.S. production

operations.100 The statute defines “material injury” as “harm which is not inconsequential, immaterial, or

unimportant.”101 In assessing whether the domestic industry is materially injured by reason of subject

imports, we consider all relevant economic factors that bear on the state of the industry in the United

States.102 No single factor is dispositive, and all relevant factors are considered “within the context of the

business cycle and conditions of competition that are distinctive to the affected industry.”103

Although the statute requires the Commission to determine whether the domestic industry is

“materially injured or threatened with material injury by reason of” unfairly traded imports,104 it does not

define the phrase “by reason of,” indicating that this aspect of the injury analysis is left to the

Commission’s reasonable exercise of its discretion.105 In identifying a causal link, if any, between subject

imports and material injury to the domestic industry, the Commission examines the facts of record that

relate to the significance of the volume and price effects of the subject imports and any impact of those

imports on the condition of the domestic industry. This evaluation under the “by reason of” standard

must ensure that subject imports are more than a minimal or tangential cause of injury and that there is a

sufficient causal, not merely a temporal, nexus between subject imports and material injury.106

 97 CR at VII-2, VII-13, PR at VII-2, VII-10; CR/PR, Table VII-1.

 98 See Respondents’ Prehearing Brief at 126; Gold East Paper (Jiangsu) Co. Ltd. Foreign Producers’

Questionnaire, response to question II-7 (EDIS Doc. 430824).

 99 19 U.S.C. §§ 1671d(b), 1673d(b).

 100 19 U.S.C. § 1677(7)(B)( i). The Commission “may consider such other economic factors as are relevant to the

determination” but shall “identify each {such} factor ... and explain in full its relevance to the determination.” 

19 U.S.C. § 1677(7)(B).

 101 19 U.S.C. § 1677(7)(A).

 102 19 U.S.C. § 1677(7)(C)(iii).

 103 19 U.S.C. § 1677(7)(C)(iii).

 104 19 U.S.C. §§ 1671d(a), 1673d(a).

 105 Angus Chemical Co. v. United States, 140 F.3d 1478, 1484-85 (Fed. Cir. 1998) (“{T}he statute does not

‘compel the commissioners’ to employ {a particular methodology}.”), aff’d, 944 F. Supp. 943, 951 (Ct. Int’l Trade

1996).

 106 The Federal Circuit, in addressing the causation standard of the statute, observed that “{a}s long as its effects

are not merely incidental, tangential, or trivial, the foreign product sold at less than fair value meets the causation

requirement.” Nippon Steel Corp. v. USITC, 345 F.3d 1379, 1384 (Fed. Cir. 2003). This was further ratified in

Mittal Steel Point Lisas Ltd. v. United States, 542 F.3d 867, 873 (Fed. Cir. 2008), where the Federal Circuit, quoting

(continued...)

17
In many investigations, there are other economic factors at work, some or all of which may also

be having adverse effects on the domestic industry. Such economic factors might include nonsubject

imports; changes in technology, demand, or consumer tastes; competition among domestic producers; or

management decisions by domestic producers. The legislative history explains that the Commission must

examine factors other than subject imports to ensure that it is not attributing injury from other factors to

the subject imports, thereby inflating an otherwise tangential cause of injury into one that satisfies the

statutory material injury threshold.107 In performing its examination, however, the Commission need not

isolate the injury caused by other factors from injury caused by unfairly traded imports.108 Nor does the

“by reason of” standard require that unfairly traded imports be the “principal” cause of injury or

contemplate that injury from unfairly traded imports be weighed against other factors, such as nonsubject

imports, which may be contributing to overall injury to an industry.109 It is clear that the existence of

injury caused by other factors does not compel a negative determination.110

Assessment of whether material injury to the domestic industry is “by reason of” subject imports

“does not require the Commission to address the causation issue in any particular way” as long as “the

injury to the domestic industry can reasonably be attributed to the subject imports” and the Commission

 106 (...continued)

Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed. Cir. 1997), stated that “this court requires evidence in

the record ‘to show that the harm occurred “by reason of” the LTFV imports, not by reason of a minimal or

tangential contribution to material harm caused by LTFV goods.’” See also Nippon Steel Corp. v. United States,

458 F.3d 1345, 1357 (Fed. Cir. 2006); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed.

Cir. 2001).

 107 SAA at 851-52 (“{T}he Commission must examine other factors to ensure that it is not attributing injury from

other sources to the subject imports.”); S. Rep. 96-249 at 75 (1979) (the Commission “will consider information

which indicates that harm is caused by factors other than less-than-fair-value imports.”); H.R. Rep. 96-317 at 47

(1979) (“in examining the overall injury being experienced by a domestic industry, the ITC will take into account

evidence presented to it which demonstrates that the harm attributed by the petitioner to the subsidized or dumped

imports is attributable to such other factors;” those factors include “the volume and prices of nonsubsidized imports

or imports sold at fair value, contraction in demand or changes in patterns of consumption, trade restrictive practices

of and competition between the foreign and domestic producers, developments in technology and the export

performance and productivity of the domestic industry”); accord Mittal Steel, 542 F.3d at 877.

 108 SAA at 851-52 (“{T}he Commission need not isolate the injury caused by other factors from injury caused by

unfair imports.”); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed. Cir. 2001) (“{T}he

Commission need not isolate the injury caused by other factors from injury caused by unfair imports ... . Rather, the

Commission must examine other factors to ensure that it is not attributing injury from other sources to the subject

imports.” (emphasis in original)); Asociacion de Productores de Salmon y Trucha de Chile AG v. United States, 180

F. Supp. 2d 1360, 1375 (Ct. Int’l Trade 2002) (“{t}he Commission is not required to isolate the effects of subject

imports from other factors contributing to injury” or make “bright-line distinctions” between the effects of subject

imports and other causes.); see also Softwood Lumber from Canada, Invs. Nos. 701-TA-414 and 731-TA-928

(Remand), USITC Pub. 3658 at 100-01 (Dec. 2003) (Commission recognized that “{i}f an alleged other factor is

found not to have or threaten to have injurious effects to the domestic industry, i.e., it is not an ‘other causal factor,’

then there is nothing to further examine regarding attribution to injury”), citing Gerald Metals, Inc. v. United States,

132 F.3d 716, 722 (Fed. Cir. 1997) (the statute “does not suggest that an importer of LTFV goods can escape

countervailing duties by finding some tangential or minor cause unrelated to the LTFV goods that contributed to the

harmful effects on domestic market prices.”).

 109 S. Rep. 96-249 at 74-75; H.R. Rep. 96-317 at 47.

 110 See Nippon Steel Corp., 345 F.3d at 1381 (“an affirmative material-injury determination under the statute

requires no more than a substantial-factor showing. That is, the ‘dumping’ need not be the sole or principal cause of

injury.”).

18
“ensure{s} that it is not attributing injury from other sources to the subject imports.”111 112 Indeed, the

Federal Circuit has examined and affirmed various Commission methodologies and has disavowed “rigid

adherence to a specific formula.”113

The Federal Circuit’s decisions in Gerald Metals, Bratsk, and Mittal Steel all involved cases

where the relevant “other factor” was the presence in the market of significant volumes of pricecompetitive nonsubject imports. The Commission interpreted the Federal Circuit’s guidance in Bratsk as

requiring it to apply a particular additional methodology following its finding of material injury in cases

involving commodity products and a significant market presence of price-competitive nonsubject

imports.114 The additional “replacement/benefit” test looked at whether nonsubject imports might have

replaced subject imports without any benefit to the U.S. industry. The Commission applied that specific

additional test in subsequent cases, including the Carbon and Certain Alloy Steel Wire Rod from Trinidad

and Tobago determination that underlies the Mittal Steel litigation.

Mittal Steel clarifies that the Commission’s interpretation of Bratsk was too rigid and makes clear

that the Federal Circuit does not require the Commission to apply an additional test nor any one specific

methodology; instead, the court requires the Commission to have “evidence in the record” to “show that

the harm occurred ‘by reason of’ the LTFV imports,” and requires that the Commission not attribute

injury from nonsubject imports or other factors to subject imports.115 Accordingly, we do not consider

ourselves required to apply the replacement/benefit test that was included in Commission opinions

subsequent to Bratsk.

The progression of Gerald Metals, Bratsk, and Mittal Steel clarifies that, in cases involving

commodity products where price-competitive nonsubject imports are a significant factor in the U.S.

 111 Mittal Steel, 542 F.3d at 877-78; see also id. at 873 (“While the Commission may not enter an affirmative

determination unless it finds that a domestic industry is materially injured ‘by reason of’ subject imports, the

Commission is not required to follow a single methodology for making that determination ... {and has} broad

discretion with respect to its choice of methodology.”) citing United States Steel Group v. United States, 96 F.3d

1352, 1362 (Fed. Cir. 1996) and S. Rep. 96-249 at 75.

 112 Commissioner Pinkert does not join this paragraph or the following four paragraphs. He points out that the

Federal Circuit, in Bratsk, 444 F.3d 1369, and Mittal, held that the Commission is required, in certain circumstances

when considering present material injury, to undertake a particular kind of analysis of nonsubject imports, albeit

without reliance upon presumptions or rigid formulas. Mittal explains as follows:

What Bratsk held is that “where commodity products are at issue and fairly traded, price-competitive,

nonsubject imports are in the market,” the Commission would not fulfill its obligation to consider an

important aspect of the problem if it failed to consider whether nonsubject or non-LTFV imports would

have replaced LTFV subject imports during the period of investigation without a continuing benefit to the

domestic industry. 444 F.3d at 1369. Under those circumstances, Bratsk requires the Commission to

consider whether replacement of the LTFV subject imports might have occurred during the period of

investigation, and it requires the Commission to provide an explanation of its conclusion with respect to

that factor.

542 F.3d at 878.

 113 Nucor Corp. v. United States, 414 F.3d 1331, 1336, 1341 (Fed. Cir. 2005); see also Mittal Steel, 542 F.3d at

879 (“Bratsk did not read into the antidumping statute a Procrustean formula for determining whether a domestic

injury was ‘by reason’ of subject imports.”).

 114 Mittal Steel, 542 F.3d at 875-79.

 115 Mittal Steel, 542 F.3d at 873 (quoting from Gerald Metals, 132 F.3d at 722), 875-79 & n.2 (recognizing the

Commission’s alternative interpretation of Bratsk as a reminder to conduct a non-attribution analysis).

19
market, the Court will require the Commission to give full consideration, with adequate explanation, to

non-attribution issues when it performs its causation analysis.116 117

The question of whether the material injury threshold for subject imports is satisfied,

notwithstanding any injury from other factors, is factual and subject to review under the substantial

evidence standard.118 Congress has delegated this factual finding to the Commission because of the

agency’s institutional expertise in resolving injury issues.119

B. Material Injury by Reason of Subject Imports

In evaluating the volume of subject imports, section 771(7)(c) of the Tariff Act provides that the

“Commission shall consider whether the volume of imports of the merchandise, or any increase in that

volume, either in absolute terms or relative to production or consumption in the United States, is

significant.”120

In evaluating the price effects of the subject imports, section 771(7)(C)(ii) of the Tariff Act

provides that the Commission shall consider whether –

(I) there has been significant price underselling by the imported merchandise as

compared with the price of domestic like products of the United States, and

(II) the effect of imports of such merchandise otherwise depresses prices to a significant

degree or prevents price increases, which otherwise would have occurred, to a significant

degree.121

In examining the impact of subject imports, section 771(7)(C)(iii) of the Tariff Act provides that

the Commission “shall evaluate all relevant economic factors which have a bearing on the state of the

industry.”122 These factors include output, sales, inventories, ability to raise capital, research and

development, and factors affecting domestic prices. No single factor is dispositive and all relevant factors

 116 Commissioner Lane also refers to her dissenting views in Polyethylene Terephthalate Film, Sheet, and Strip

from Brazil, China, Thailand, and the United Arab Emirates, Invs. Nos. 731-TA-1131 to 1134 (Final), USITC Pub.

4040 (Oct. 2008), for further discussion of Mittal Steel.

 117 To that end, after the Federal Circuit issued its decision in Bratsk, the Commission began to present published

information or send out information requests in final phase investigations to producers in nonsubject countries that

accounted for substantial shares of U.S. imports of subject merchandise (if, in fact, there were large nonsubject

import suppliers). In order to provide a more complete record for the Commission’s causation analysis, these

requests typically seek information on capacity, production, and shipments of the product under investigation in the

major source countries that export to the United States. The Commission plans to continue utilizing published or

requested information in final phase investigations in which there are substantial levels of nonsubject imports.

 118 We provide in our respective discussions of volume, price effects, and impact a full analysis of other factors

alleged to have caused any material injury or threat thereof experienced by the domestic industry.

 119 Mittal Steel, 542 F.3d at 873; Nippon Steel Corp., 458 F.3d at 1350, citing U.S. Steel Group, 96 F.3d at 1357;

S. Rep. 96-249 at 75 (“The determination of the ITC with respect to causation is ... complex and difficult, and is a

matter for the judgment of the ITC.”).

 120 19 U.S.C. § 1677(7)(C)(i).

 121 19 U.S.C. § 1677(7)(C)(ii).

 122 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851 and 885 (“In material injury determinations, the Commission

considers, in addition to imports, other factors that may be contributing to overall injury. While these factors, in

some cases, may account for the injury to the domestic industry, they also may demonstrate that an industry is facing

difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.”). 

20
are considered “within the context of the business cycle and conditions of competition that are distinctive

to the affected industry.”123

C. Threat of Material Injury by Reason of Subject Imports

Section 771(7)(F) of the Tariff Act directs the Commission to determine whether the U.S.

industry is threatened with material injury by reason of the subject imports by analyzing whether “further

dumped or subsidized imports are imminent and whether material injury by reason of imports would

occur unless an order is issued or a suspension agreement is accepted.”124 The Commission may not make

such a determination “on the basis of mere conjecture or supposition,” and considers the threat factors “as

a whole” in making its determination whether dumped or subsidized imports are imminent and whether

material injury by reason of subject imports would occur unless an order is issued.125 In making our

determination, we consider all statutory threat factors that are relevant to this investigation.126

 123 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 885; Live Cattle from Canada and Mexico, Inv. Nos. 701-

TA-386, 731-TA-812-813 (Preliminary), USITC Pub. 3155 at 25 n.148 (Feb. 1999).

 124 19 U.S.C. § 1677(7)(F)(ii).

 125 19 U.S.C. § 1677(7)(F)(ii).

 126 These factors are as follows:

(I) if a countervailable subsidy is involved, such information as may be presented to it by the administering

authority as to the nature of the subsidy (particularly as to whether the countervailable subsidy is a subsidy

described in Article 3 or 6.1 of the Subsidies Agreement) and whether imports of the subject merchandise

are likely to increase,

(II) any existing unused production capacity or imminent, substantial increase in production capacity in the

exporting country indicating the likelihood of substantially increased imports of the subject merchandise

into the United States, taking into account the availability of other export markets to absorb any additional

exports,

(III) a significant rate of increase of the volume or market penetration of imports of the subject merchandise

indicating the likelihood of substantially increased imports,

(IV) whether imports of the subject merchandise are entering at prices that are likely to have a significant

depressing or suppressing effect on domestic prices and are likely to increase demand for further imports,

(V) inventories of the subject merchandise,

(VI) the potential for product-shifting if production facilities in the foreign country, which can be used to

produce the subject merchandise, are currently being used to produce other products.

* * *

(IX) any other demonstrable adverse trends that indicate the probability that there is likely to be material

injury by reason of imports (or sale for importation) of the subject merchandise (whether or not it is actually

being imported at the time).

19 U.S.C. § 1677(7)(F)(i). To organize our analysis, we discuss the applicable statutory threat factors using the

same volume/price/impact framework that applies to our material injury analysis. Statutory threat factors (I), (II),

(III), (V), and (VI) are discussed in the analysis of subject import volume. Statutory threat factor (IV) is discussed in

the price effects analysis, and statutory threat factor (IX) is discussed in the impact analysis. Statutory threat factor

(continued...)

21
VI. CONDITIONS OF COMPETITION AND THE BUSINESS CYCLE

The following conditions of competition inform our analysis of whether there is material injury or

threat of material injury by reason of subject imports.

A. Demand Conditions

CCP is used in printed material requiring high-gloss sheets, including annual company reports,

high end brochures, catalogues, magazines, direct mail advertisements, labels, and certain packaging

applications.127 As such, the demand for CCP is largely determined by the overall economy and demand

for high-end commercially printed advertisements, reports, and brochures.128

Apparent U.S. consumption of CCP by quantity decreased by 21.3 percent from 2007 to 2009

overall, before improving in the first half of 2010.129 Market participants noted that demand for CCP

decreased or fluctuated over the period of investigation. When asked how demand for CCP had changed

since January 2007, 10 of 11 responding U.S. integrated producers, all nine responding importers, and 18

of 22 responding purchasers reported that demand had decreased or fluctuated.130 Four out of five

converters reported that demand had decreased.131 Market participants cited the recession in the U.S.

economy, which began in late 2008 and continued throughout 2009, and the decline in the use of paper

due to competing forms of advertising and online retail sales, as reasons for the decline in demand.132

Commercial printing activity, as measured by RISI, began to decline in *** and decreased overall by ***

percent from the first quarter of 2007 to the second quarter of 2010.133

B. Supply Conditions

During the period of investigation, the domestic industry accounted for the largest share of

apparent U.S. consumption. From 2007 to 2009, U.S. producers’ market share based on quantity

increased steadily from 60.7 percent in 2007, to 62.4 percent in 2008 and 65.5 percent in 2009. U.S.

producers’ market share was 61.9 percent in interim 2009 and 68.7 percent in interim 2010.134 Subject

imports’ market share increased steadily from 13.9 percent in 2007 to 14.5 percent in 2008, and to 18.3

percent in 2009.135 It was noticeably higher in interim 2009 at 19.7 percent than in interim 2010 (6.8

 126 (...continued)

(VII) is inapplicable, as no imports of agricultural products are involved in this investigation. No argument was

made that the domestic industry is currently engaging or will imminently engage in any efforts to develop a

derivative or more advanced version of the domestic like product, which would implicate statutory threat factor

(VIII).

 127 CR/PR at II-1, CR/PR at Table C-3. 

 128 CR at II-17, PR at II-11.

 129 CR/PR at Table C-3. Apparent U.S. consumption declined from 2.86 million short tons in 2007 to 2.64

million short tons in 2008, and to 2.25 million short tons in 2009. Apparent U.S. consumption was 1.07 million

short tons in interim 2009 and 1.25 million short tons in interim 2010.

 130 CR at II-19, PR at II-12.

 131 CR at II-19, PR at II-12.

 132 CR at II-19, PR at II-12.

 133 CR/PR at Figure II-4; CR at II-17, PR at II-11-12.

 134 CR/PR at Table C-3

 135 CR/PR at Table C-3.

22
percent).136 Nonsubject imports’ market share decreased from 25.4 percent in 2007 to 23.1 percent in

2008, and to 16.1 percent in 2009.137 Nonsubject imports’ market share was lower at 18.4 percent in

interim 2009 than in interim 2010 (24.5 percent).138 

In 2009, eleven integrated producers accounted for most of U.S. production. U.S. converters,

who convert sheeter rolls purchased from integrated producers into CCP, account for the remainder of

U.S. production of CCP.139 The *** integrated producers, ***, accounted for over *** of U.S. production

of CCP.140

During the period of investigation, there were a number of changes in the domestic industry’s

organization and production operations, including a significant amount of restructuring. This included

NewPage’s acquisition of Stora Enso North America and the shutdown of several plants.141 Petitioners

maintain that subject imports are the major cause of the reported mill closures.142 Respondents aver that

the plant shutdowns are the result of the continuing efforts of the domestic industry to consolidate and

rationalize inefficient capacity, and that the closures were presented when they occurred as positive

events by the U.S. producers in question.143 

During the period of investigation, the large majority of U.S. integrated producers’ U.S.

shipments of CCP were to merchant/distributors.144 From 2007 to 2009, *** of importers’ shipments of

subject imports were to merchant/distributors.145 *** percent, of U.S. converters’ U.S. shipments were

made to end users (typically printers) in 2009.146

 136 CR/PR at Table C-3.

 137 CR/PR at Table C-3.

 138 CR/PR at Table C-3.

 139 CR/PR at Table III-1. In the final phase of these investigations, the Commission did not request that U.S.

producers break out their U.S. shipments of sheeter rolls. In the preliminary phase of these investigations, U.S.

integrated producers reported *** short tons of U.S. commercial shipments to converters in 2008. U.S. converters

who submitted responses in the preliminary phase reported production of *** short tons in 2008, or *** percent of

total U.S. commercial shipments of sheeter rolls. CR/PR at III-1, n.2.

 140 CR/PR at Table III-1. Many of the production facilities of U.S. integrated producers produce CCP in one

continuous operation from the harvested log to the intermediate product (pulp) to the final product. CR at I-23, PR

at I-19, CR at VI-34-35, PR at VI-17-18. NewPage, Sappi, Clearwater, and MeadWestvaco are fully integrated

producers. CR at VI-1, PR at VI-1. A few of the smaller integrated producers purchase the pulp input from other

sources. CR at VI-35, PR at VI-17-18.

 141 CR/PR at Table III-4.

 142 Petitioners’ Posthearing Brief, Questions from Commissioner Williamson, ex. 2, p. 1.

 143 Respondents’ Prehearing Brief at 78-79. 

 144 CR/PR at Table II-1. During the period of investigation, the share of U.S. integrated producers’ U.S.

shipments of CCP to merchants/distributors ranged from 69.4 percent to 76.7 percent. CR/PR at Table II-1. In

2009, *** percent, and in interim 2010 *** percent of integrated producers’ U.S. shipments of CCP were sales

through “paper directed buy” (PDB) programs. CR/PR at Table II-1. There were *** reported sales of imports

through PDB programs. PDB programs are defined as sales of certain coated paper where the ultimate end-use

customer (i.e., the purchaser of printed materials from the printer) negotiates the paper source, specifications, and/or

price directly with the paper distributor or the paper mill. In these transactions, the printer for the ultimate end user

must use the specified paper at the specific price.

 145 CR/PR at Table II-1. In interim 2010, *** of U.S. importers’ U.S. shipments of certain coated paper from

China were to merchants/distributors, with the *** of shipments going to end users. CR/PR at Table II-1.

 146 CR/PR at Table II-1

23
In 2009, the large majority of subject merchandise was produced and exported by Chinese and

Indonesian producers under the corporate umbrella of Asia Pulp & Paper Co., Ltd (“APP”).147 In the

second half of 2009, APP began to establish an e-commerce U.S. distribution network for its products,

called Eagle Ridge Paper (“Eagle Ridge”).148 Eagle Ridge ***.149 Respondents claim that Eagle Ridge

was established only in response to APP’s loss of business with U.S. distributor Unisource, is in the early

stages of development, and that it will take years before Eagle Ridge is able to supply large volumes of

subject merchandise.150 Petitioners claim that this distributorship is fully operational and that it can

quickly move increased volumes of subject imports into the U.S. market.151 

C. Substitutability

The record indicates moderately high interchangeability between the domestic like product and

subject imports. The large majority of U.S. integrated producers, U.S. converters, U.S. importers, and

U.S. purchasers reported that the domestic like product, subject imports and nonsubject imports were

“always” or “frequently” interchangeable.152 

According to market participants, price is a “very important” consideration, although not

necessarily the most important consideration, in purchasing decisions.153 Non-price factors cited by

market participants as important to purchasing decisions included quality, reliability of supply, delivery

time, and availability.154 

U.S. producers typically sell CCP in one of three grades, with Grade No. 1 having the highest

brightness levels, Grade No. 2 having the next highest brightness levels, and Grade No. 3 having the

lowest brightness levels.155 The brightness levels of CCP and its classification into particular grades can

 147 CR at VII-2-VII-7, VII-13, PR at VII-2-VII-4, VII-10.

 148 CR at IV-2, PR at IV-2.

 149 CR at IV-2, PR at IV-2. *** CR at IV-2, PR at IV-2.

 150 Hearing Tr. at 363-364 (Hunley).

 151 Hearing Tr. at 120-121 (Van Ert).

 152 CR/PR at Table II-4.

 153 CR/PR at Table II-2. Price was named by eight purchasers as the number one factor generally considered in

deciding from whom to purchase certain coated paper, while 12 purchasers indicated it was the number two factor,

and eight purchasers responded that it was the number three factor. CR at II-23. Quality was named by 15 of 27

purchasers as the number one factor generally considered in deciding from whom to purchase certain coated paper,

while eight purchasers indicated that it was the number two factor, and four reported that it was the number three

factor. CR at II-23, PR at II-14-15. Twenty-nine of 32 responding purchasers indicated that price was a “very

important” factor in their purchasing decisions. CR/PR at Table II-3.

 154 CR at II-23-25, PR at II-14-15. Responses were mixed on the issue of whether differences other than price

were a significant factor in sales of certain coated paper. The majority of responding integrated producers and

converters reported that differences other than price were “sometimes” or “never” a significant factor in their sales,

while a majority of importers reported that differences other than price were “always” or “frequently” a significant

factor in their sales. CR/PR at Table II-5.

 155 CR at I-18, PR at I-15-16.

24
vary by producer.156 According to Respondents, the large majority of subject imports are in Grade No. 3

“economy grades.”157

D. Other Conditions of Competition

Contracts vs. Spot Sales. *** U.S. integrated producers, the majority of U.S. converters, and the

majority of importers of certain coated paper from China and Indonesia reported that *** of their sales are

on a spot basis.158 The remaining seven integrated producers reported either long-term and/or short-term

contracts as well as spot sales.159

Raw Material Costs. U.S. integrated producers of CCP reported that pulp, chemicals and dyes,

coating additives, and packaging are the principal raw materials used in producing CCP.160 Responding

U.S. integrated producers reported that pulp accounts for between *** percent and *** percent of the total

cost of production and that chemicals and dyes account for between *** percent and *** percent.161

Responses by the U.S. integrated producers were mixed regarding whether the cost of pulp had increased

or decreased since 2007, while nearly all of them reported that the costs of chemicals and dyes have

increased by *** to *** percent since 2007.162

“Black liquor” tax credit. In 2009, certain U.S. paper mills applied for and received an

alternative fuel tax credit pursuant to Section 642 of the Internal Revenue Code.163 This tax credit went

into effect in late 2007 and expired at the end of 2009. The tax credit allowed producers to receive $0.50

per gallon of kraft pulp by-product (or “black liquor”) that they produced. Such kraft pulp by-product

results from the production of certain coated paper and other papers, including other coated free sheet

papers and coated groundwood paper.164 Respondents claimed that this tax credit allowed U.S. integrated

producers to lower prices on its CCP in 2009,165 whereas Petitioners argue that these credits were not a

factor in domestic producers’ pricing decisions in 2009.166

 156 CR at I-18, PR at I-15-16. According to the Paperboard Packaging Alliance, there are also three major grades

of coated packaging paperboard: (1) solid bleached sulfate; (2) coated unbleached kraft paperboard; and (3) coated

recycled paperboard. CR at I-22, PR at I-18-19.

 157 Hearing Tr. at 311 (Hunley).

 158 CR at V-3-V-4, PR at V-2. 

 159 CR at V-3, PR at V-2.

 160 CR at V-1, PR at V-1.

 161 CR/PR at V-1.

 162 CR/PR at V-1. Six of the integrated producers reported that the cost of pulp had decreased by *** to ***

percent since 2007, and five reported that the cost of pulp had increased by *** to *** percent. CR at V-1, PR at V1.

 163 CR at V-2, PR at V-2.

 164 CR/PR at V-1 n.1. In 2009, NewPage reported $317 million and MeadWestvaco reported $375 million as

“other income” from the black-liquor tax credit. CR at VI-39, n.33, PR at VI-19, n.33. Sappi classified the $132

million from the tax credit as a separate line item that was part of its operating income, and Clearwater classified the

$170.6 million from the credit as a component of its Pulp and Paperboard segment operating income. CR at VI-39

n.33, PR at VI-19, n.33. International Paper made the largest overall claim, i.e., not specific to CCP, of $2.1 billion. 

CR at VI-39, n.33, PR at VI-18, n.33.

 165 Respondents’ Prehearing Brief at 49-53.

 166 Petitioners’ Posthearing Brief at 11.

25
VII. MATERIAL INJURY AND THREAT OF MATERIAL INJURY BY REASON OF

SUBJECT IMPORTS

Based on the record in the final phase of these investigations, we find that an industry in the

United States is threatened with material injury by reason of imports of certain coated paper from China

that have been found to be sold in the United States at less than fair value and that have been found to be

subsidized by the Government of China and by reason of imports of certain coated paper from Indonesia

that have been found to be sold in the United States at less than fair value and that have been found to be

subsidized by the Government of Indonesia. We do not find present material injury by reason of subject

imports. 

A. Volume of the Subject Imports167

1. Analysis of Material Injury by Reason of Subject Imports

Subject imports were already present in substantial volumes and market share at the beginning of

the period and increased their presence in the U.S. market from 2007 to 2009. In absolute terms, subject

imports from China and Indonesia, by quantity, declined from 398,309 short tons in 2007 to 382,245

short tons in 2008, before increasing sharply to 413,593 short tons in 2009, for an overall increase of 3.8

percent.168

As apparent U.S. consumption declined from 2007 to 2009, subject import market share increased

notably. Apparent U.S. consumption declined by 21.3 percent from 2007 to 2009, while U.S. shipments

of subject imports increased by 3.8 percent during this same period.169 Consequently, subject import

market share increased from 13.9 percent in 2007 to 18.3 percent in 2009, an increase of 4.4 percentage

points.170 The ratio of subject imports to U.S. production increased from 20.5 percent in 2007 to 24.8

percent in 2009, an increase of 4.3 percentage points.171 Notably, subject imports were the only source of

 167 We note that Commerce in its final determinations added three additional HTS subheadings to its scope

description (HTS 4810.32, 4810.39, and 4810.92). The parties appear to agree that product within the scope of these

investigations would not properly be classified under two of these subheadings (HTS 4810.32 and 4810.39) as they

cover “kraft paper or paperboard other than the kind used for writing, printing, or other graphic purposes.” 

Petitioners stated that Commerce added these HTS subheadings in order to prevent circumvention of any issued

order. Petitioners’ Posthearing Brief, Questions from Commissioner Lane, ex. 1 at 2. Therefore, the Commission

did not use these HTS subheadings for its computation of U.S. import volumes and values. In their submissions to

Commerce, Respondents stated that two of Gold East’s paper mills exported in-scope multi-ply paperboard products

under a tariff item within the third subheading (HTS 4810.92.12). Respondents’ Posthearing Brief, ex. 2 at 1-2 and

ex. 3 at 8. Therefore, the Commission has used U.S. imports from China entering under HTS 4810.92.12, using

adjustment assumptions supplied by Respondents, to compile U.S. imports from China throughout the period of

investigation. 

As no producer in Indonesia or nonsubject countries reported to Commerce or the Commission that it

exported subject product under any of the additional HTS subheadings, the Commission did not in its computation of

U.S. imports from Indonesia and nonsubject countries use imports entering under any of the additional three HTS

subheadings. Finally, we also note that all the HTS subheadings listed in Commerce’s scope description do not

identify product on the basis of whether it is “suitable for high quality print graphics.”

 168 CR/PR at Table IV-2, Table C-3.

 169 CR/PR at Table C-3.

 170 CR/PR at Table C-3.

 171 CR/PR at Table IV-8.

26
increased volume into the U.S. market from 2007 to 2009, as both the volumes of the domestic industry’s

U.S. shipments and that of nonsubject imports declined over this period.172

Subject imports declined sharply in interim 2010, both in absolute terms and relative to

production and consumption, relative to interim 2009. Subject imports were 210,506 short tons in interim

2009 and 85,033 short tons in interim 2010.173 On a monthly basis, subject imports continued at elevated

levels in January and February 2010 and then dropped precipitously in March 2010, the month in which

Commerce issued affirmative preliminary countervailing duty determinations.174 Respondents

acknowledge that the steep declines in subject import volume were due to the pending trade cases.175

Based on the record evidence, we find that the decline in subject import volumes at the end of the period

examined is attributable to the pendency of these investigations. Absent these investigations, the absolute

and relative volumes of subject imports would likely have been greater in interim 2010. 

Based on the above information, we find the increase in subject imports, both on an absolute basis

and relative to apparent U.S. consumption and production, to be significant.176 We also find that the

increase in subject import shipments and market share over the period examined was significant.

2. Analysis of Threat of Material Injury by Reason of Subject Imports

As explained below, we find that imports of the subject merchandise into the United States, in the

absence of antidumping and countervailing duty orders, will continue to increase their penetration of the

U.S. market despite sluggish apparent U.S. consumption. From 2007 to 2009, subject imports showed

their ability to increase their market presence at a time of falling U.S. demand for CCP. Apparent U.S.

consumption declined by 21.3 percent from 2007 to 2009, whereas the volume of subject imports

increased by 3.8 percent and subject import market share increased by 4.4 percentage points.177 In

particular, from 2008 to 2009, subject imports gained market share when U.S. demand for CCP

plummeted. Apparent U.S. consumption declined by 14.7 percent from 2008 to 2009 as subject import

 172 CR/PR at Table C-3. In particular, subject imports increased sharply in late 2008 through January 2009 based

on monthly subject import volumes. Subject import volumes were 30,883 short tons in September 2008, 37,935

short tons in October 2008, 44,680 short tons in November 2008, 39,974 short tons in December 2008, and 46,964

short tons in January 2009. Monthly Import Statistics, EDIS Doc. 434051.

 173 CR/PR at Table C-3.

 174 CR/PR at I-1. The petition was filed on September 23, 2009. Commerce’s preliminary countervailing duty

determinations regarding CCP from China and Indonesia were issued on March 9, 2010, and Commerce’s

preliminary antidumping duty determinations regarding CCP from China and Indonesia were issued on May 6, 2010. 

The statutory provision governing the Commission’s treatment of post-petition information, 19 U.S.C. § 1677(7)(I),

states as follows:

{T}he Commission shall consider whether any change in the volume, price effects, or impact of

imports of the subject merchandise since the filing of the petition in an investigation ... is related

to the pendency of the investigation and, if so, the Commission may reduce the weight accorded to

the data for the period after the filing of the petition in making its determination of material injury,

threat of material injury, or material retardation of the establishment of an industry in the United

States. 

 175 See, e.g., Respondents’ Prehearing Brief at 72 (stating that in 2010, “subject imports left because of the

pending trade cases.”); Respondents’ Prehearing Brief at 30 (stating that the pending trade cases explain why subject

imports declined in the second quarter of 2010).

 176 Commissioner Pearson finds the increase in subject imports to be significant only on a relative basis.

 177 CR/PR at Table C-3.

27
volumes increased by 8.2 percent, and subject import market share increased by 3.9 percentage points to

18.3 percent of the U.S. market.178

The parties disagree about the amount of new capacity coming on line in China within the next

year. Petitioners contend that data sources, such as EMGE & Co., a paper industry consultancy, project

capacity to produce coated woodfree paper in China to increase by 2.9 million short tons by 2011, and

that this increased capacity will not be absorbed in the Chinese home market or by other markets in

Asia.179 Respondents claim, based on questionnaire responses, that the new capacity in China in 2010 and

2011 will be lower at *** short tons and that increases in capacity to produce certain coated paper in

China are necessary to keep up with increased demand in its home and regional markets and are not

intended for export to the U.S. market.180 

We find that even an increase in capacity of *** short tons between 2009 and 2011 is substantial,

given that it is equivalent to approximately 75 percent of total 2009 U.S. consumption of just over 2

million tons. Even assuming that the additional Chinese capacity is being brought on with the intention

of supplying the growing Chinese home market, projected consumption growth in China over the next

several years will not be sufficient to absorb the new capacity. RISI, an information provider for the

global forest products industry, and a resource cited by both Petitioners and Respondents, projects that

growth in Chinese coated paper production capacity from 2009 to 2011 will be approximately double the

growth of Chinese consumption.181

Projections on Indonesian capacity are mixed. Questionnaire respondents project flat capacity in

2011 while RISI data project an increase in coated woodfree capacity in 2011. Despite mixed

projections, Indonesian producers remain export oriented with exports accounting for *** percent of their

shipments of certain coated paper in 2009.182 Reported production of certain coated paper in Indonesia

increased overall from 2007 to 2009 and is projected to increase in the imminent future.183

The record indicates not only that subject producers of certain coated paper have the ability to

increase shipments to the United States but that they also have a strong interest in increasing such

shipments, even in a declining market. Chinese producers have been motivated to increase subject

 178 CR/PR at Table C-3. Comparing half-year subject import volume data from January 2008 to June 2010,

subject import volume peaked in the second half of 2008. Monthly Import Statistics, EDIS Doc. 434051.

 179 Petitioners’ Final Comments at 17-20.

 180 Respondents’ Final Comments at 20. Three producers of certain coated paper in China reported projections to

increase their capacity in 2010 and 2011 of approximately *** short tons, and another firm in China, Huatai, is

projected to begin producing certain coated paper in 2010 or 2011 with a facility with approximately *** short tons

of capacity. CR at VII-9, n.10, PR at VII-6, n.10. The sum of the reported projected capacity increases and the new

capacity of Huatai is approximately *** short tons.

 181 RISI projects that capacity to produce coated woodfree and coated mechanical paper in China will grow from

7.2 million metric tons in 2009 to 9.0 million metric tons in 2011, or by 1.8 million metric tons. RISI projects that

Chinese consumption of these products will grow from 5.4 million metric tons in 2009 to 6.3 million metric tons in

2011, or by 900,000 metric tons. The excess of capacity growth over consumption growth is 900,000 metric tons.

Respondents’ Prehearing Brief at Ex. 28.

Although the combination of the RISI categories of coated woodfree and coated mechanical paper is likely

to be somewhat broader than the paper defined by Commerce’s scope, we consider the data to be probative of the

likely relative growth of China’s capacity and consumption of in-scope products.

Consumption growth in the rest of Asia is not projected to absorb the excess of Chinese capacity over

consumption. Excluding Japan (which is projected to shed some capacity but increase its production), RISI projects

consumption growth from 2009 to 2011 to exceed capacity growth in the rest of Asia by 160,000 tons, well below

the excess of projected Chinese capacity growth over projected Chinese consumption growth of 900,000 metric tons. 

Respondents’ Prehearing Brief at Ex. 28.

 182 CR/PR at Table VII-5.

 183 CR/PR at Table VII-5.

28
exports for quite some time. In particular, we note the behavior of APP, whose affiliated companies

accounted for *** of reported subject imports in 2009.184 ***.185 ***.186 Moreover, soon after APP lost

the Unisource account in 2009, it made an investment to establish Eagle Ridge, an e-commerce U.S.

distribution network for APP’s products to retain and grow its U.S. market presence.187

In addition, the United States represents a highly attractive market for several reasons. Prices are

generally higher in the United States than in China or other markets in Asia.188 The U.S. market is large

and well understood by certain coated paper producers in China and Indonesia, who increased their

overall shipments to the United States from 2007 to 2009. Subject producers’ knowledge of the U.S.

market will only increase with APP’s investment to establish Eagle Ridge.189 Moreover, the fact that a

large share of CCP is supplied on a spot sales basis allows purchasers to switch between CCP suppliers

with relative ease. In addition, the prevalence of private label products, in which merchants or retailers

offer coated paper products under their own brands, provides a ready avenue for subject imports to

expand their presence in the U.S. market even without an advertising or distribution infrastructure.190

There is no indication in the record that subject producers, in the absence of countervailing or

antidumping duty orders, would find the U.S. market any less attractive in the imminent future than they

did from 2007 to 2009 when they increased their exports to the United States and their U.S. market

share.191 Although demand in the United States is expected to remain depressed in the near future, subject

producers would likely target orders for CCP that arise, consistent with their behavior in aggressively

seeking sales and market share gains in the United States during the period examined. Given the

importance of price in purchasing decisions, aggressively priced subject imports would be able to quickly

gain market share, or, alternatively, force domestic producers to lower their prices substantially in order to

retain volume. 

Respondents cite APP’s and Sun Paper’s loss of business in 2009 with major U.S. distributors

Unisource and xpedx to either domestic or nonsubject product as an indication that its sales to the United

States are unlikely to increase.192 These developments in isolation may tend to weigh against a finding of

imminent increased import volumes. The evidence demonstrates, however, that APP’s and Sun Paper’s

loss of business with Unisource and xpedx did not result in a substantial reduction in the volume of

 184 CR/PR at Table IV-1.

 185 Petitioners’ Posthearing Brief at ex. 1, p. 1 (“Unisource Affidavit”).

 186 Unisource Affidavit, pp. 1-2. ***.

Unisource Affidavit, p. 2. 

 187 Respondents’ Posthearing Brief, ex. 1, at 62-64; Hearing Tr. at 363-64 (Hunley).

 188 CR/PR at Table VII-2 (showing that unit values of China’s export shipments to the United States were over

$100 higher than China’s shipments to its home market or other markets in Asia.). We also note that the European

Union initiated antidumping and countervailing duty investigations on coated paper from China on February 18,

2010 and April 17, 2010, respectively. CR at VII-20, PR at VII-11. The resulting uncertainty from the initiation of

these investigations by the European Union may make it a less attractive market for Chinese exports in the imminent

future. 

 189 CR at IV-2, PR at IV-2.

 190 CR at II-9, PR at II-6.

 191 As discussed above, official Commerce statistics indicate that subject imports have declined in interim 2010. 

CR/PR at Table C-3. As noted above, we find that the decline in subject import volumes is attributable to the

pendency of these investigations. See 19 U.S.C. § 1677(7)(I)). 

 192 Respondents’ Prehearing Brief at 114-116.

29
overall subject imports in 2009 or the first two months of 2010.193 Subject import volume dropped

substantially only starting in March 2010, when Commerce issued its preliminary countervailing duty

determinations and CVD deposits were required. Continued high import levels indicate that subject

producers compensated for the loss of the distributors’ business by increasing sales to their other existing

customers or commencing sales to new customers. Subject producers’ ability to maintain an elevated

level of sales in the U.S. market is not surprising given the prevalence of spot sales, the openness of the

U.S. market, and the willingness of purchasers to source imported products, as questionnaire responses

from purchasers accounting for the majority of coated paper sold in the U.S. market show. Apart from

relatively small firms such as printers, nearly all purchasers obtained some coated paper from either

subject or nonsubject countries during the period 2007 to 2009.194

Respondents argue that the growing value of Forest Stewardship Council (FSC) certification in

selling CCP limits the ability of subject imports to increase significantly because APP is not able to offer

certified paper.195 The record shows that a lack of FSC certification has not stopped subject imports from

increasing to their highest levels in 2009, and there is no record evidence that a lack of certification will

prevent increases in the imminent future. Specifically, after APP lost its FSC certification in November 

2007, APP ***.196 Also, other Chinese and Indonesian producers of certain coated paper have maintained

their FSC certifications.197

Respondents also claim that competition is attenuated between the domestic like product and

subject imports because of the existence of PDB programs from which Respondents claim subject imports

are largely excluded.198 In 2009, only *** percent of integrated U.S. producers’ U.S. shipments of CCP

and in interim 2010 only *** percent of such shipments were sales through PDB programs.199 Moreover,

a majority of purchasers reported that domestic and subject suppliers of CCP were comparable in terms of

“willingness or ability ... to engage in {P}DB programs,” and several purchasers specifically confirmed

participating in such programs with subject merchandise.200 Thus, PDB programs are not a distribution

avenue that excludes subject imports.

Based on the above, we conclude that subject producers of certain coated paper have both the

ability and the incentive to increase exports of subject merchandise. We also conclude that the United

States is a highly attractive market for subject certain coated paper producers, given its large size,

relatively high prices, and the Chinese producers’ familiarity with it. Additionally, we note that the

absolute volumes and market share of subject imports in the United States have increased from 2007 to

2009 despite a substantial decline in apparent U.S. consumption. Thus, we conclude that subject import

volume is likely to be significant within the imminent future, both in absolute terms and relative to

 193 Average monthly cumulated subject import volume averaged between 30,000 and 35,000 tons in 2008, 2009,

and Jan-Feb 2010. Monthly Import Statistics, EDIS Doc. 434051. We note that monthly subject import volume was

particularly high at the end of 2008 and in January 2009.

 194 See generally responses to purchaser questionnaires. The major exception is ***, a large purchaser that

purchased only domestic product.

 195 Respondents’ Prehearing Brief at 143-155.

 196 Petitioners’ Posthearing Brief, Response to Commissioner Aranoff, at ex. 4, p. 6 and Foreign Producers’

Questionnaire Responses cited on p. 6, nn.19 & 20.

 197 Petitioners’ Posthearing Brief, Response to Commissioner Aranoff, at ex. 4, pp. 5-6 and Exhibit 3.

 198 Respondents’ Prehearing Brief at 106-107.

 199 CR/PR at Table II-1. 

 200 CR/PR at Table II-6; Hearing Tr. at 138 (McGehee); Unisource Affidavit at 3.

30
consumption and production in the United States, and that the increase in subject imports’ market share

will likely be significant.201

B. Price Effects of the Subject Imports

1. Analysis of Material Injury by Reason of Subject Imports

As explained above in the discussion of conditions of competition, the domestic like product and

subject imports have moderately high interchangeability, and price is an important consideration in

purchasing decisions.202 Moreover, most sales of both the domestic like product and subject imports are

made to merchants/distributors.203

In these investigations, the Commission collected pricing data for five products. The pricing data

accounted for *** percent of U.S. producers’ U.S. shipments of certain coated paper, *** percent of the

quantity of U.S. imports from China, and *** percent of the quantity of U.S. imports from Indonesia

during January 2007-June 2010.204 The data show that prices of cumulated imports undersold the

domestic like product in 48 out of 58 quarterly comparisons by margins ranging from 1.5 percent to 25.2

percent.205 

Respondents argue that U.S. product sells at a “natural premium” to subject imports due to

shorter lead times, more secure supply chains, and purchasers’ preference to buy U.S. product.206 U.S.

producer NewPage reported that historically it was able to receive a premium of $40 to $60 per ton, but

that this premium has eroded over time as it has lowered its prices to compete with subject imports.207 A

premium of $40 to $60 per ton is approximately equivalent to a premium of four to six percent for pricing

products 1 and 4 and three to five percent for pricing product 3.208 We note that the average margins of

underselling for products 1 and 4 were 7.2 to 7.6 percent and for product 3 was 19.1 percent, both above

any alleged natural premium.209 Moreover, the average margins of underselling for all products was 12.3

percent in 2009 when subject imports increased their volumes to period highs.210 

Given the degree of substitutability between the subject and domestic product, the importance of

price in purchasing decisions, and the prevalence of underselling in quarterly price comparisons, we find

that there has been significant price underselling by the subject imports. 

 201 We note that the majority of responding subject producers reported that they produce products other than

certain coated paper using the same manufacturing equipment and/or production-related employees, and therefore

have the ability to product shift. CR at VII-12, VII-16, PR at VII-9, VII-10. We also note that China and

Indonesia’s cumulated reported end-of-period inventories were *** short tons in 2009, and are projected to *** to

*** in 2010 and to *** in 2011. CR/PR at Table VII-8. While we have considered both of these statutory threat

factors, and find that they generally support our finding of threat of material injury, neither factor played a

substantial role in our threat determination. 

 202 CR/PR at Tables II-5 & II-7. 

 203 CR/PR at Table II-1. 

 204 CR/PR at Tables V-1-V-5, Table C-3, and CR at V-6, PR at V-4.

 205 CR/PR at Table V-7. The large majority of purchasers reported that subject imports were generally lower

priced than the domestic like product. CR/PR at Table II-6. 

 206 Respondents’ Prehearing Brief at 65.

 207 CR at V-20-21, PR at V-9-10.

 208 CR at V-21, n.15, PR at V-10, n.15.

 209 CR/PR at Table V-7; CR at V-21, n.15, PR at V-10, n.15. 

 210 CR/PR at Table V-7.

31
We have considered movements in the prices of certain coated paper over the period of

investigation. Product 1 is a lower-brightness product that accounts for the majority of the sales of

Chinese subject imports for which prices were reported; Product 1 also accounts for a significant quantity

of sales of domestic product. Both domestic and subject import prices of Product 1 rose irregularly from

2007 and much of 2008 with underselling fluctuating generally between four and 10 percent. In fourthquarter 2008, however, prices of Chinese Product 1 declined sharply while domestic prices showed a

modest increase.211 As a result of this divergence, the margin of underselling of the Chinese product 1

grew substantially in fourth-quarter 2008, reaching 14.9 percent. Domestic prices of product 1 began to

drop in first-quarter 2009, but because subject Chinese import prices continued to fall, the underselling

margin grew to 15.7 percent in that quarter. In second-quarter 2009, the underselling margin declined

somewhat to 9.0 percent as domestic prices continued to fall and prices of Chinese product leveled off.

Price movements were similar for Product 4, another lower-brightness product for which reported

prices represented a significant quantity volume of subject imports from China. As with Product 1,

Chinese product prices began to fall in fourth-quarter 2008, when domestic prices were still rising,

resulting in greater underselling. Domestic prices began to fall in first-quarter 2009 and further in the

following two quarters, as subject import prices continued to decline.212

There is an indication that the drop in domestic prices starting in first-quarter 2009 was not only

subsequent to, but was in response to, the decline in subject import prices. Domestic producers testified

that they lowered prices to compete with falling prices of Chinese product.213 Numerous purchasers

confirmed that domestic producers lowered prices over the period of investigation to meet the prices of

subject imports.214 215

 211 A representative of Global Paper Solutions, the main importer from Chinese producer and exporter APP,

confirmed the company’s decision to reduce the price of its exports to the U.S. market in fourth-quarter 2008. 

Hearing Tr. at 275-276 (Hunley).

 212 The shipment quantities represented by pricing data on imports from Indonesia was much smaller than for

imports from China for Product 1; data for Indonesia were virtually non-existent for Product 4. For Product 1, prices

of Indonesian product began to fall in fourth-quarter 2008, like Chinese product, but only dropped sharply in firstquarter 2009. CR/PR at Table V-1.

 213 Domestic producers testified that they were forced to lower prices on their economy grades of CCP to compete

with the bulk of the imports, and the resulting depressed pricing structure on economy CCP dragged down the prices

on the higher brightness grades as well. Hearing Tr. at 56 (Stewart), at 119 (Van Ert), at 131 (Miller), at 134

(Nelson). 

 214 CR at V-24-30; PR at V-12-14. The Commission collected data on three other products. Products 2 and 5 are

higher-brightness and therefore higher-grade products than Products 1 and 4. There were *** reported sales of

Products 2 or 5 from China or Indonesia during the period. CR at V-6, PR at V-4. Prices for domestically produced

Products 2 and 5 rose irregularly during 2007 and most of 2008, then declined sharply starting in third-quarter 2009,

two quarters later than the declines in Products 1 and 4. Domestic producers testified that prices for Products 2 and

5 fell when the spread between the higher-grade products and depressed lower-grade products became unsustainable,

even in the absence of direct competition from subject imports of the higher-grade products. Hearing Tr. at 118-120

(Van Ert). We find this explanation to be reasonable, and thus reject respondents’ argument that the decreases in

prices of Products 2 and 5 in the absence of subject imports of these products is evidence that subject imports did not

affect domestic prices. Respondents’ Prehearing Brief at 67-69.

Product 3 is paper coated on one side only and represents a very small volume of domestic and subject

imported product. Both domestic and subject import prices of Product 3 fluctuated with no clear pattern. CR/PR at

Table V-3.

 215 There is evidence that domestic producers lost some sales and revenues to subject imports during the period of

investigation. *** confirmed lost sales allegations totaling $*** and *** purchasers confirmed lost revenues

allegations totaling $***. CR at V-24, PR at V-12-V-13. We note that the lower prices for subject imports in fourth

(continued...)

32
We find that these pricing trends together with the significant underselling by subject imports

show that subject imports depressed domestic prices at least to some extent for part of the period under

examination.

We do not make a finding of significant price depression, however, because other factors that

were occurring in the U.S. market likely also contributed importantly to lower prices and we are unable to

gauge whether there are significant effects attributable to subject imports.216 As discussed above, demand

for certain coated paper was significantly depressed, with apparent U.S. consumption dropping by 14.7

percent from 2008 to 2009.217 The black liquor tax credit spurred greater pulp production by domestic

producers in 2009, contributing to lower prices for fiber/pulp which is a key input to production of coated

paper.218 We find that the failure of domestic prices to rebound significantly in interim 2010 even after

subject imports largely ceased in March 2010 indicates the important role that factors other than subject

imports played in the market.219 Accordingly, although we find some evidence of price depression by

subject imports, we do not find that cumulated subject imports from China and Indonesia significantly

depressed prices of the domestic like product in the U.S. market. 

Nor do we find evidence that subject imports prevented price increases which otherwise would

have occurred to a significant degree. Although the domestic industry’s COGS/net sales ratio rose from

2007 to 2009, other factors, including the effects of the black liquor tax credits, undermine the ratio as a

reliable indicator that the industry was experiencing a growing cost/price squeeze in these

investigations.220 Although domestic producers did not treat the tax credits as an offset to COGS in their

financial results,221 the benefits did affect domestic producers’ costs and production-related activities,

according to a NewPage executive.222 Even if the industry did experience a cost/price squeeze, factors

other than subject imports may have prevented domestic producers from raising prices, including the

accelerating fall in demand from 2007 to 2009. Finally, the fact that the domestic industry’s COGS/net

sales ratio was higher in interim 2010 than interim 2009, even though subject import market share was

approximately two-thirds lower in interim 2010 than in interim 2009, casts doubt on the significance of

the effects of subject imports on the domestic industry’s COGS/net sales ratio during the period

examined.

 215 (...continued)

quarter 2008, and the higher margins of underselling in that quarter, coincided with a sharp increase in monthly

subject import volumes, which continued into January 2009.

 216 In Commissioner Pinkert's view, the difficulty with a finding of significant price depression in connection with

present material injury centers on the relatively limited period of time in which price depressing effects are evident

on the record. In particular, he finds an indication of price depression only in the first half of 2009. CR/PR at

Figures V-1 and V-4 (Products 1 and 4).

 217 CR/PR at Table C-3.

 218 CR/PR at Table VI-8. Fiber/pulp costs dropped from $197 per short ton in 2008 to $170 per short ton in 2009. 

The average unit value of total raw material costs fell from $435 per short ton in 2008 to $411 per short ton in 2009. 

Integrated producer ***. CR at V-3, PR at V-2.

 219 Despite the fact that subject imports were 59.6 percent lower at 85,033 short tons in interim 2010 than in

interim 2009 (210,506 short tons) , domestic prices were relatively flat in interim 2010. CR/PR at Tables V-1 to V5.

 220 CR/PR at Table C-3 (rising COGS/net sales ratios). 

 221 CR/PR at Table VI-7.

 222 CR at VI-40 to VI-41 nn.37 & 41; PR at VI-20, nn.37 & 41. But see CR at VI-40 and PR at VI-19-VI-20

(***). 

33
2. Analysis of Threat of Material Injury by Reason of Subject Imports

We next consider the likely price effects of subject imports in the imminent future. As they

attempt to increase exports to the United States, the Chinese and Indonesian industries are likely to

continue to use underselling and aggressive pricing as a means to increase market share, given that

subject certain coated paper from China and Indonesia and the United States are generally substitutable. 

Because subject imports undersold domestically produced certain coated paper to a significant degree

throughout the period, and particularly in 2009 when demand was depressed, we find that underselling is

likely to be significant in the imminent future. We find that underselling by subject imports is likely to

increase the attractiveness of those imports to domestic purchasers compared with domestic production,

and that the underselling is likely to increase demand for further subject imports.

With respect to adverse effects on U.S. prices, we consider whether price depression and/or price

suppression is likely as a result of subject imports. In performing that analysis, we note first that domestic

producers’ U.S. prices for certain coated paper were relatively flat in interim 2010.223 Moreover, demand

for certain coated paper, as measured by apparent U.S. consumption,224 was higher in interim 2010 than in

interim 2009, although demand was nonetheless relatively depressed compared to its earlier levels by

these measures, and U.S. demand for certain coated paper is projected to decline moderately over the next

two years.225 Therefore, any increases in subject import volume will not be absorbed by increased

demand in the U.S. market.

We identified above several factors other than subject imports that likely placed negative pressure

on domestic prices during the period of investigation, including falling consumption and increased pulp

production due to black liquor subsidies. We find that these factors will not play the same role in the

imminent future. Domestic consumption is likely to decline only modestly from 2010 to 2011. Although

sluggish demand will likely restrain price recovery to some degree, there are no projections of a sharp

falloff in consumption similar to the one in 2009. In addition, the “black liquor” tax credit expired in

2009 and is not likely to be renewed. 

Without the prominence of these other market forces, we anticipate that a key driver of domestic

market prices will be the significant volumes of subject imports. We have described above how the

subject imports led domestic prices downward in late 2008 and early 2009. 

Absent antidumping or countervailing duty orders, the likely increasing and significant volumes

of subject imports will need to enter the U.S. market priced aggressively in an effort to regain market

share lost in interim 2010 due to the pendency of these investigations. As stated above, subject producers

have substantial new capacity coming on line in the imminent future that cannot be absorbed by growing

home market demand. Subject producers are likely to find the United States an attractive market given

their knowledge of the market, as well as the higher prices in the U.S. market compared to China and

Asia.

Chinese producers have already shown a willingness ***226 With the establishment of Eagle

Ridge in 2009, subject producers will have added ability and incentive to increase shipments to the U.S.

market quickly. Given that many of the sales in this industry are on a spot basis, and purchasers have a

history of quickly switching suppliers,227 subject imports will put pressure on domestic producers to lower

prices in a market with depressed demand in order to compete for sales and prevent an accelerated erosion

 223 CR/PR at Tables V-2 to V-5.

 224 Demand for certain coated paper in the U.S. market was higher in interim 2010, at 1.25 million short tons, than

in interim 2009, at 1.07 million short tons. CR/PR at Table C-3.

 225 CR at II-19, PR at II-12.

 226 Unisource Affidavit at 2.

 227 For example, ***. CR at V-29-V-30, PR at V-13-V-14.

34
of their market share. Accordingly, subject imports are likely to enter the U.S. market imminently at

prices that will have a significant depressing effect on domestic prices for certain coated paper. 

We conclude that, in the imminent future, the aggressive price competition and underselling by

subject imports during the bulk of the period examined will continue, and the introduction of increased

quantities of subject imports, priced aggressively in an effort to gain market share, will put pressure on

domestic producers to lower prices in a market recovering from severely depressed demand. As subject

imports cause domestic sales volumes and prices to deteriorate, the domestic industry will likely

experience significant price depression or suppression.

In sum, we conclude that subject imports are likely to have significant adverse effects on

domestic producers’ prices in the imminent future.228

C. Impact of the Subject Imports on the Domestic Industry229

1. Analysis of Material Injury by Reason of Subject Imports

Over the period examined, the domestic industry was faced with price-based competition from

subject imports in a severely declining market. Many of the domestic industry’s performance based

indicators declined from 2007 to 2009. In interim 2010, when subject imports largely exited the market

and apparent consumption stabilized, the domestic industry’s performance indicators were mixed in

comparison to 2009. We now summarize key indicia of domestic industry performance that illustrate

these basic trends; these indicia provide the foundation for our findings regarding the current and

imminent impact of subject imports.

As apparent U.S. consumption fell by 21.3 percent from 2007 to 2009,230 most indicators of

domestic industry performance declined. The domestic industry’s average capacity fluctuated but

decreased by 2.3 percent from 2007 to 2009, declining from 2.06 million short tons in 2007 to 1.94

 228 Commissioner Pearson finds that the domestic industry will likely experience price depression or suppression

and that subject imports are likely to have adverse effects on domestic producers' prices in the imminent future. 

 229 In its final affirmative dumping determination on sales of certain coated paper from China, Commerce found

weighted average dumping margins of 7.6 percent for Gold East Paper (Jiangsu) Co., Ltd (“Jiangsu”); Gold

Huasheng Paper Co., Ltd (“Huasheng”), Ningbo Zhonghua Paper Co., Ltd. (“Ningbo Zhonghua”), Ningbo Asia Pulp

& Paper Co., Ltd. (“Ningbo Asia”), Gold East (Hong Kong) Trading Co., Ltd. (“Hong Kong”), and Shandong

Chenming Paper Holdings, Ltd. (“Shandong”), and 135.83 percent for all others. CR at I-7, PT at I-6. With respect

to Indonesia, Commerce found weighted average dumping margins of 20.13 percent for PT Pabrik Kertas Tjiwi

Tbk., PT Pindo Deli Pulp & Paper, and PT Indah Kiat Pulp & Paper Tbk., and for all others. CR at I-7, PR at I-6.

In its final affirmative countervailing duty investigation of imports from China, Commerce found the

following twelve programs to be countervailable: (A) one preferential lending program; (B) four income tax

programs; (C) four indirect tax and import tariff programs; and (D) three provisions of goods or services for less than

adequate remuneration. It found a subsidy rate of 178.03 percent ad valorem for Shandong Sun Paper Industry Joint

Stock Co., Ltd., and Yanzou Tianzhang Paper Industry Co., Ltd., and 17.64 percent for Jiangsu, Huasheng, Hong

Kong, Ningbo Zhonghua, Ningbo Asia, and all others. CR at I-8-I-9, PR at I-7-I-8..

In its final affirmative countervailing duty investigation of imports from Indonesia, Commerce found the

following four programs to be countervailable: (A) provision of standing timber for less than adequate

remuneration program; (B) government prohibition of log exports; and (C) two debt forgiveness programs. CR at I10-I-11, PR at I-9.

 230 Apparent U.S. consumption declined from 2.86 million short tons in 2007 to 2.64 million short tons in 2008,

and to 2.25 millions short tons in 2009. CR/ PR at Table C-3

35
million short tons in 2008, and then increasing to 2.02 million short tons in 2009.231 232 The domestic

industry’s production declined by 14.4 percent from 2007 to 2009, from 1.95 million short tons in 2007 to

1.86 million short tons in 2008 and 1.67 million short tons in 2009.233 The domestic industry’s capacity

utilization rate fell irregularly from 94.2 percent in 2007 to 82.5 percent in 2009.234 The domestic

industry’s U.S. shipment quantity declined by 15.0 percent from 2007 to 2009, from 1.74 million short

tons in 2007 to 1.65 million short tons in 2008 and 1.48 million short tons in 2009.235

Despite the overall declines in production and shipments from 2007 to 2009, the domestic

industry increased its market share during this period by 4.8 percentage points and the market share of

subject imports increased by 4.4 percentage points. The increases in market share by the domestic

industry and subject imports from 2007 to 2009 came at the expense of nonsubject imports whose market

share fell by 9.3 percentage points from 2007 to 2009.236

As the domestic industry’s production and shipments decreased, so did the number of production

related workers (“PRWs”), hours worked, and wages paid. Between 2007 and 2009, the number of

PRWs declined by *** percent, from *** PRWs in 2007 to *** PRWs in 2009, while hours worked

declined by *** percent, and wages paid declined by *** percent.237 Productivity fell irregularly from

*** short tons per 1,000 hours in 2007 to *** short tons per 1,000 hours in 2009.238

Parallel to the falling shipments and declining prices described in the section on Price Effects, the

domestic industry experienced declines in many financial indicators from 2007 to 2009.239 The quantity

and value of the domestic industry’s net sales declined by 15.3 percent and 15.8 percent from 2007 to

 231 CR/PR at Table C-3. Petitioners noted that the domestic industry was forced to shut down two mills that

produced CCP during the period of investigation, one in Kimberly, Wisconsin in July 2008, and one in Muskegon,

Michigan in August 2009, and argued that these closures were caused largely by unfairly traded subject imports. 

Petitioners’ Posthearing Brief, Questions from Commissioner Williamson, ex. 2, p.1. Respondents claimed that

these closures were the result of the continuing efforts of the domestic industry to consolidate and rationalize

inefficient capacity, and that domestic producers’ relatively stable capacity during the period of investigation is

evidence of this fact. Respondents’ Prehearing Brief at 78-79. We do not find that subject imports were a

significant cause of these closures. Some reductions in capacity are consistent with the declines in apparent U.S.

consumption over the period. In fact, the industry maintained close to its overall capacity level from 2007 to 2009.

While the industry was subjected to aggressive subject import pricing for the period (2008-2009) that coincided with

these closures, in nearly all cases, at the time of the closures the affected companies cited reasons other than subject

imports for the closures.

 232 Commissioner Pinkert is unable to make a definitive determination, on this record, as to whether these plant

closures were caused in whole or in part by subject imports. Nevertheless, he notes that the Kimberly closure

occurred before the late 2008/early 2009 increase in subject imports, and Petitioners did not provide corroborative

evidence to support their assertion that the Muskegon closure was caused by subject imports. 

 233 CR/PR at Table C-3. 

 234 CR/PR at Table C-3. 

 235 CR/PR at Table C-3. 

 236 CR/PR at Table C-3.

 237 CR/PR at Table C-3. Hours worked (1,000) declined from *** in 2007 to *** in 2008 and *** in 2009. 

Wages paid decreased from $*** in 2007 to $*** in 2008 and $*** in 2009. CR/PR at Table C-3. 

 238 CR/PR at Table C-3. Productivity was *** short tons per 1,000 hours in interim 2009 as compared to ***

short tons per 1,000 hours in interim 2010. 

 239 We considered the combined financial results on CCP other than coated packaging paperboard and coated

packaging paperboard to be the most relevant data set for purposes of our threat decision. CR/PR at Tables VI-7 &

Table C-3. While we relied on this information without modification, we did take note of certain company-specific

reporting issues which we determined did not materially impact the underlying data. CR at VI-12, n.8, PR at VI-11,

n.8.

36
2009, respectively.240 The domestic industry experienced positive but declining operating income in each

year of the period examined, falling from $144.0 million in 2007 to $95.1 million in 2008 and $61.8

million in 2009.241 Its operating income as a ratio of net sales declined from 7.4 percent in 2007 to 4.9

percent in 2008, and to 3.8 percent in 2009.242 Capital expenditures decreased irregularly, from $51.2

million in 2007 to $33.8 million in 2009.243

As described above, subject imports generally departed the market in March 2010 as Commerce

issued its preliminary CVD determinations. As a result of this, and a stabilizing CCP market,244 many

domestic industry indicators were higher in interim 2010 than in interim 2009. Domestic production was

24.9 percent higher, and shipment quantity was 30.3 percent higher, in interim 2010 than in interim

2009.245 Because the industry’s capacity was only slightly higher in interim 2010 than interim 2009, the

higher production in interim 2010 meant that the industry’s capacity utilization was significantly higher in

interim 2010 (94.8 percent) than in interim 2009 (80.3 percent).246

With respect to interim period financial indicators, the industry earned an absolute operating

income that was 6.6 percent higher in interim 2010 than in interim 2009.247 Because of its higher net sales

in interim 2010 than in interim 2009, however, the industry posted a slightly lower operating ratio in

interim 2010 (2.5 percent) than in interim 2009 (2.9 percent).248

We have considered whether there is a link between the worsening condition of the domestic

industry from 2007 to 2009 and the effects of subject imports. As described in earlier sections, subject

imports reached peaks in volume and market share in 2009, there is some evidence that the imports

depressed domestic prices, but the record does not establish that the effects of subject imports on

domestic prices were significant. The deterioration in almost all of the domestic industry’s performance

indicators between 2007 and 2009 coincided with the economic downturn and a sharp decline in demand

for CCP. Despite this decline in demand, the domestic industry remained profitable and steadily

increased its market share.249 Moreover, even when subject imports largely left the market in interim

 240 CR/PR at Table C-3. 

 241 CR/PR at Table C-3.

 242 CR/PR at Table C-3. COGS as a ratio of net sales increased from 86.4 percent in 2007 to 89.7 percent in

2009. The domestic industry’s average unit sales values declined overall from 2007 to 2009 but remained higher

than combined unit COGS and SG&A expenses. Average unit sales values were $947 in 2007, $977 in 2008, and

$942 in 2009. Unit COGS were $818 in 2007, $864 in 2008, and $845 in 2009, and unit SG&A expenses were $59

in 2007, $64 in 2008, and $62 in 2009. CR/PR at Table C-3. 

 243 CR/PR at Table C-3.

 244 Apparent U.S. consumption was 1.07 million short tons in interim 2009 and 1.25 million short tons in interim

2010. CR/PR at Table C-3.

 245 The domestic industry’s production was 795,320 short tons in interim 2009 and 993,354 short tons in interim

2010. The domestic industry’s U.S. shipments were 660,769 short tons in interim 2009 and 861,105 short tons in

interim 2010. CR/PR at Table C-3.

 246 The domestic industry’s capacity was 990,138 short tons in interim 2009 as compared to 1.05 million short

tons in interim 2010 . CR/PR at Table C-3. The number of PRWs and hours worked were both slightly lower in

interim 2010 than in interim 2009, while wages paid were higher in interim 2010 as compared to interim 2009. 

CR/PR at Table C-3. PRWs were *** in interim 2009 and *** in interim 2010. Hours worked (1,000) were *** in

interim 2009 and *** in interim 2010. Wages paid were $*** in interim 2009 and $*** in interim 2010. CR/PR at

Table C-3.

 247 Operating income was $22.4 million in interim 2009 and $23.9 million in interim 2010. CR/PR at Table C-3.

 248 CR/PR at Table C-3. Capital expenditures were $15.7 million in interim 2009 and $18.8 million in interim

2010.

 249 We also note that domestic producers had a significant revenue stream from the black liquor tax credit in 2009,

(continued...)

37
2010 due to the pendency of these investigations, many of the domestic industry’s performance indicators

did not improve, including operating margins, COGS/sales ratio and number of workers.250 In light of the

foregoing, we do not find a sufficient causal nexus necessary to make a determination that the subject

imports are currently having a significant adverse impact on the domestic industry.

2. Analysis of Threat of Material Injury by Reason of Subject Imports

Even in light of an overall decline in apparent U.S. consumption during the period of

investigation, the downward trends in virtually all of the domestic industry’s performance indicators

during the period examined weigh heavily in our consideration of the impact of subject imports in the

imminent future. Specifically, from 2007 to 2009, the domestic industry suffered double-digit percentage

declines in production, shipments, capacity utilization, net sales, production workers, operating income,

and capital expenditures.251 We recognize that the domestic industry’s financial indicators may have been

worse in 2009 if not for the revenue it received from the black liquor tax credit. As discussed, this tax

credit expired in 2009, and therefore any benefit that the domestic industry received from it in 2009 will

not continue into the imminent future. Even as demand recovered somewhat in interim 2010, and a large

majority of subject imports left the market, the domestic industry’s COGS/sales ratio continued to

increase as its number of production workers and operating margins continued to decline. Accordingly,

we find that the industry is vulnerable to material injury.

As a result of the declining trends and given its vulnerable state, the domestic industry will likely

continue to experience even lower employment levels, net sales, operating income, and profitability as

increasing volumes of low-priced subject imports enter the U.S. market and compete with the domestic

like product. Subject producers have already shown the ability and willingness to lower prices for subject

merchandise that was already underselling the domestic like product in order to significantly increase

their exports to the United States, even in a contracting market.252 We believe that this behavior will

continue in the imminent future, particularly in light of the significant new capacity in China, the

establishment of Eagle Ridge in 2009, and the attractiveness of the U.S. market. 

The U.S. market cannot accommodate growth in subject imports without material injury to the

U.S. industry. Although apparent U.S. consumption recovered somewhat in interim 2010 from its lowest

levels in 2009, RISI projects a decline of *** percent in apparent U.S. consumption from 2010 to 2011

and a further reduction of *** percent in 2012.253 Accordingly, future volumes of subject imports will not

be in response to growing U.S. demand for CCP, but will take sales from current suppliers such as the

domestic industry.

Given that the industry is already in a weakened state, we conclude that, unless antidumping duty

and countervailing duty orders are issued, significant volumes of dumped and subsidized imports will

gain additional U.S. market share in the imminent future and material injury by reason of subject imports

will occur. We find that there is a likely causal relationship between the subject imports and an imminent

adverse impact on the domestic industry. 

We also considered whether there are other factors that will likely have an imminent impact on

the domestic industry, in particular, reduced levels of domestic consumption of CCP, and the role of CCP

imports from non-subject countries. As noted, U.S. consumption of CCP is projected to decline modestly

 249 (...continued)

which encouraged domestic producers to produce greater volumes of pulp, and may have insulated them to some

degree from price declines in 2009. CR at VI-40-VI-41, PR at VI-19-VI-20.

 250 CR/PR at Table C-3. 

 251 CR/PR at Table C-3.

 252 As discussed above, in late 2008 ***. Unisource Affidavit at 1-2.

 253 CR at II-19, PR at II-12.

38
from 2010 to 2011. Although a lower level of consumption is likely to limit the domestic industry’s sales

opportunities and restrain potential price increases to some degree, the decline is not of a magnitude that

would render insignificant the likely effects of subject imports that we have described above.

The same is true for CCP imports from countries other than China and Indonesia. These

nonsubject imports were sold in the U.S. market throughout the period examined, although from 2007 to

2009 their market share declined by 9.3 percentage points overall from 25.4 percent in 2007 to 16.1

percent in 2009. The market share held by nonsubject imports was 18.4 percent in interim 2009 and 24.5

percent in interim 2010. Although nonsubject imports did gain market share in interim 2010 when

subject imports left the market due to the pendency of the investigations, the domestic industry also

gained 6.8 percentage points of market share from interim 2009 to interim 2010. Moreover, the available

data reflect that non-subject imports are generally priced higher than subject imports.254 Once the

preliminary duties are lifted, subject imports will compete on price to regain the market share that they

lost both to the domestic industry and to non-subject imports in interim 2010, which will in turn result in

a more price-competitive U.S. market. 

We conclude that, given the vulnerability of the domestic industry, together with the likelihood

that cumulated subject imports will increase significantly in the imminent future at prices that will likely

undersell the domestic like product and depress or suppress domestic prices to a significant degree,

material injury by reason of subject imports will occur absent issuance of antidumping duty and

countervailing duty orders against subject imports. We therefore conclude that the domestic CCP

industry is threatened with material injury by reason of cumulated subject imports from China and

Indonesia.

We further determine, pursuant to 19 U.S.C. § 1671d(b)(4)(B), that we would not have found

material injury but for the suspension of liquidation of subject imports.

CONCLUSION

For the reasons discussed above, we find that an industry in the United States is threatened with

material injury by reason of imports of certain coated paper from China that were found to be sold in the

United States at less than fair value and that were found to be subsidized by the Government of China and

by reason of imports of certain coated paper from Indonesia that were found to be sold in the United

States at less than fair value and that were found to be subsidized by the Government of Indonesia. 

 254 The Commission gathered data on non-subject import prices which are reflected in Appendix D of the staff

report. These data reflect non-subject imports, primarily from Korea, overselling subject import prices in 41 out of

59 pricing comparisons. These data are consistent with our average unit value (“AUV”) data which show nonsubject import AUVs to be consistently higher than subject import AUVs. CR/PR at Appendix D and Table IV-2. 

Although Respondents argue that our non-subject import pricing data are “thin,” and thus unreliable, the data cover

certain coated paper from Korea, the largest source of non-subject imports, and are consistent with our AUV data on

subject and nonsubject imports. CR at IV-4, PR at IV-3. 

39

SEPARATE VIEWS OF COMMISSIONER CHARLOTTE R. LANE

MATERIAL INJURY BY REASON OF SUBJECT IMPORTS

Based on the record in the final phase of these investigations, I find that an industry in the United

States is injured by reason of imports of certain coated paper from China that have been found to be sold

in the United States at less than fair value and that have been found to be subsidized by the Government

of China and by reason of imports of certain coated paper from Indonesia that have been found to be sold

in the United States at less than fair value and that have been found to be subsidized by the Government

of Indonesia. I join with the majority views through the majority discussion of Conditions of

Competition. I do not join with the majority in Section VII of those views discussing material injury and

threat of material Injury by reason of subject imports. I write separately with regard to material injury.

Volume of the Subject Imports1

In evaluating the volume of subject imports, section 771(7)(C)(I) of the Tariff Act provides that

the “Commission shall consider whether the volume of imports of the merchandise, or any increase in that

volume, either in absolute terms or relative to production or consumption in the United States, is

significant.”2

Subject imports increased their presence in the U.S. market from 2007 to 2009. Subject imports

from China and Indonesia increased from 398,309 short tons (“tons”) in 2007 to 413,593 tons in 2009, for

an overall increase of 3.8 percent.3

 Because apparent U.S. consumption declined from 2007 to 2009,

subject import market share increased more than the 3.8 percent overall volumetric increase. Apparent

U.S. consumption declined by 21.3 percent from 2007 to 2009, while subject imports increased by 3.8

percent during this same period.4

 Consequently, subject import market share increased from 13.9 percent

in 2007 to 14.5 percent in 2008, and to 18.3 percent in 2009, an increase of 4.4 percentage points, or over

30 percent from the 2007 share.5

 The ratio of subject imports to U.S. production increased from 20.5

percent in 2007 to 20.6 percent in 2008 and then to 24.8 percent in 2009, an increase of 4.3 percentage

points, or 21 percent, during this period.6

 Notably, subject imports were the only source of increased

 1 In its final determinations Commerce added three HTS subheading (HTS 4810.32, 4810.39, and 4810.92) to its

scope description. The parties appear to agree that product within the scope of these investigations would not

properly be classified under HTS 4810.32 and 4810.39 as those subheadings cover kraft paper or paperboard other

than the kind used for writing, printing, or other graphic purposes. Therefore product imported under these HTS

subheadings are not included for computation of U.S. import volumes and values. In its submissions to Commerce,

respondents stated that two of Gold East’s paper mills exported multi-ply paperboard products under HTS

4810.92.12. Respondents’ Posthearing Brief, exh. 2,at 1-2 and exh. 3, at 8. I have included U.S. imports from

China entering under HTS 4810.92.12 to compile U.S. imports from China throughout the period of investigation. 

No producer in Indonesia or nonsubject countries reported to Commerce or the Commission that it exported subject

product under any of the additional HTS subheadings. Therefore, the computation of U.S. imports from Indonesia

and nonsubject countries does not include imports entering under any of the three additional HTS subheadings.

 2

 19 U.S.C. § 1677(7)(C)(i).

 3

 CR/PR at Table IV-2, Table C-3.

 4

 CR/PR at Table C-3.

 5

 CR/PR at Table C-3.

 6

 CR/PR at Table IV-8.

41
volumes from 2007 to 2009, as both U.S. producers U.S. shipments and nonsubject imports declined over

this period.7

Subject imports declined significantly, both in absolute terms and relative to U.S. production and

consumption, in interim 2010 as compared to interim 2009. Subject imports dropped from 210,506 tons

in interim 2009 to 85,033 tons in interim 2010. The declines in the volume and market share of subject

imports in interim 2010 occurred after the petition in these investigations was filed on September 23,

2009, and, for a large portion of the interim period, after Commerce’s affirmative preliminary

countervailing duty determinations regarding China and Indonesia on March 9, 2010. Commerce’s

affirmative antidumping duty determinations regarding China and Indonesia occurred on May 19, 2010,

closer to the end of the 2010 interim period. Even Respondents acknowledge that the large declines in

subject import volume in 2010 were due to the pendency of these cases.8

 I give reduced weight to the

decline in subject import volumes at the end of the period examined for purposes of evaluating the

magnitude of volumes of subject imports.9

 I find that the decline in the volume of subject imports in 2010

is attributable to the pendency of these investigations and that the volumes of subject imports would

likely have been greater in interim 2010 except for these investigations. 

I find that the volume of subject imports during the period examined was significant, both in

absolute terms and relative to consumption and production in the United States. I also find that the

increase in subject imports, both on an absolute basis and relative to apparent U.S. consumption and

production, was significant.

Price Effects of the Subject Imports

The domestic like product and subject imports are generally interchangeable, and price is an

important consideration in purchasing decisions.10 The interchangeability of products and the importance

of price in purchasing decisions is an important factor when considering the impact of competing

products on prices. 

In these investigations, the Commission collected pricing data for five products. The pricing data

accounted for *** percent of U.S. producers’ U.S. shipments of certain coated paper, *** percent of the

quantity of U.S. imports from China, and *** percent of the quantity of U.S. imports from Indonesia for

the period January 2007 through June 2010.11 The data show that prices of cumulated imports undersold

the domestic like product in 48 out of 58 quarterly comparisons by margins ranging from 1.5 percent to

 7 CR/PR at Table C-3.

 8

 See, e.g., Respondents’ Prehearing Brief at 72 (stating that in 2010, “subject imports left because of the pending

trade cases.”); Prehearing Brief at 30 (stating that the pending trade cases explain why subject imports declined in

the second quarter of 2010).

 9

 CR/PR at I-1. The statutory provision governing the Commission’s treatment of post-petition information,

19 U.S.C. § 1677(7)(I), states that:

{T}he Commission shall consider whether any change in the volume, price effects, or impact of

imports of the subject merchandise since the filing of the petition in an investigation ... is related

to the pendency of the investigation and, if so, the Commission may reduce the weight accorded to

the data for the period after the filing of the petition in making its determination of material injury,

threat of material injury, or material retardation of the establishment of an industry in the United

States.

 10 CR/PR at Tables II-5 & II-7. 

 11 CR/PR at Tables V-1-V-5, Table C-3, and CR at V-6, PR at V-4.

42
25.2 percent.12 I find that this pricing data shows that there has been significant price underselling by the

subject imports.13

Given that domestic prices increased from 2007 to 2008, there is no evidence that the

underselling of the domestic like product by subject imports resulted in price depression during that

period. 

I also considered whether subject imports from China and Indonesia suppressed prices of the

domestic like product to a significant degree. During the period examined, the domestic industry’s cost

of goods sold (“COGS”)-to-net sales ratio increased from *** percent in 2007 to *** percent in 2009.14 I

do not believe that the inability of the domestic industry to fully recover its COGS throughout the period

of investigation, or the inability of the domestic industry to price its product to eliminate at least some of

its decline in profits, can be attributed solely to the market conditions prevailing during the period of

investigation. I do not find any merit in the Respondents’ arguments that the Black Liquor tax credit

reduced costs of the domestic industry allowing them to reduce prices. Given the financial condition of

the domestic industry, this argument makes no sense. The domestic industry was not in a financial

position to realistically pass the Black Liquor tax credits, or any other cost savings, onto customers in the

form of lower prices. If anything, the industry should have used the Black Liquor tax credit to prop up its

declining profitability. I find that they did not, or could not, do that because of the competition that they

were facing from the unfairly traded subject imports. 

Based on the record, I find that the domestic industry did experience a cost-price squeeze which

was caused, to a significant degree, by subject imports. I find that subject imports prevented price

increases which otherwise would have occurred during the period examined to a significant degree. 

 12 CR/PR at Table V-7.

 13 Respondents argue that U.S. product sells at a “natural premium” to subject imports due to shorter lead times,

more secure supply chains, and purchasers’ preference to buy U.S. product. Respondents’ Prehearing Brief at 65. 

U.S. producer New Page reported that while it historically may have been able to receive a premium of $40 to $60

per ton, this premium has eroded over time as it has lowered its prices to compete with subject imports. Hearing Tr.

at 133 (Nelson) and 189 (DeVoe). A premium of $40 to $60 per ton is approximately equivalent to a premium of

*** to *** percent for pricing products 1 and 4 and *** to *** percent for pricing product 3. The average margins

of underselling for products 1 and 4 were *** to *** percent and for product 3 was *** percent. Thus, the

underselling margins exceeded any natural premium that purchasers may place on domestic paper. CR/PR at Table

V-7; CR at V-21, n.15, PR at V-10, n.15.

 14 CR/PR at Table C-3.

43
C. Impact of the Subject Imports on the Domestic Industry15

Over the period examined, the domestic industry was faced with significant price competition

from unfairly traded subject imports in a severely declining market. Many of the domestic industry’s

indicators of operating performance and financial performance declined from 2007 to 2009. 

Apparent U.S. consumption fell by 21.3 percent from 2007 to 2009, declining from 2.86 million

tons in 2007, to 2.64 million tons in 2008, and to 2.25 millions tons in 2009. Apparent U.S. consumption

was 1.25 million tons in interim 2010 as compared to 1.07 million tons in interim 2009.16 The domestic

industry’s average capacity fluctuated but decreased slightly from 2007 to 2009, declining from 2.06

million tons in 2007 to 1.94 million tons in 2008, and then increasing to 2.02 million tons in 2009.17 The

domestic industry’s capacity was 1.05 million tons in interim 2010 as compared to 990,138 tons in

interim 2009.18 The domestic industry’s production declined by 14.4 percent from 2007 to 2009, from

1.95 million tons in 2007 to 1.86 million tons in 2008 and to 1.67 million tons in 2009.19 The domestic

industry’s production was 993,354 tons in interim 2010 as compared to 795,320 tons in interim 2009.20

The domestic industry’s capacity utilization rates increased from 94.2 percent in 2007 to 95.6 percent in

2008, before falling to 82.5 percent in 2009.21 The domestic industry’s capacity utilization rate was 94.8

percent in interim 2010 as compared to 80.3 percent in interim 2009.22 The domestic industry’s U.S.

shipments by quantity declined by 15.0 percent from 2007 to 2009, from 1.7 million tons in 2007 to 1.65

million tons in 2008, and to 1.48 million tons in 2009.23 The domestic industry’s U.S. shipments were

 15 In its final determination of sales of certain coated paper from China, Commerce found weighted average

dumping margins of 7.6 percent for Gold East Paper (Jiangsu) Co., Ltd (“Jiangsu”); Gold Huasheng Paper Co., Ltd

(“Huasheng”), Ningbo Zhonghua Paper CO., Ltd. (“Ningbo Zhonghua”), Ningbo Asia Pulp & Paper Co., Ltd.

(“Ningbo Asia”), Gold East (Hong Kong) Trading Co., Ltd. (“Hong Kong”), and Shandong Chenming Paper

Holdings, Ltd. (“Shandong”), and 135.83 percent for all others. With respect to Indonesia, Commerce found

weighted average dumping margins of 20.13 percent for PT Pabrik Kertas Tjiwi Tbk., PT Pindo Deli Pulp & Paper,

and PT Indah Kiat Pulp & Paper Tbk., and for all others. CR at I-7.

In its final affirmative countervailing duty investigation of imports from China, Commerce found a 12

countervailable programs. In its final affirmative countervailing duty investigation of imports from Indonesia,

Commerce found 4 countervailable programs. Commerce found a subsidy rate of 178.03 percent for Shandong Sun

Paper Industry Joint Stock Co., Ltd., and Yanzou Tianzhang Paper Industry Co., Ltd., and 17.64 percent for Jiangsu,

Huasheng, Hong Kong, Ningbo Zhonghua, Ningbo Asia, and all others.

 16 CR/PR at Table C-3.

 17 CR/PR at Table C-3. Petitioners noted that it was forced to shut down two mills that produced certain coated

paper during the period of investigation, one in Kimberly, Wisconsin in July of 2008, and one in Muskegon,

Michigan in August 2009, and that these closures were caused largely by unfairly traded subject imports. 

Petitioners’ Posthearing Brief, “Questions from Commissioner Williamson,” exh. 2, p.1. Respondents argued that

these closures were the result of the continuing efforts of the domestic industry to consolidate and rationalize

inefficient capacity, and that domestic producers relatively stable capacity during the period of investigation is

evidence of this fact. Respondents’ Prehearing Brief at 78-79. 

 18 CR/PR at Table C-3.

 19 CR/PR at Table C-3. 

 20 CR/PR at Table C-3.

 21 CR/PR at Table C-3. 

 22 CR/PR at Table C-3.

 23 CR/PR at Table C-3. 

44
861,105 tons in interim 2010 as compared to 660,769 tons in interim 2009.24 Despite the overall declines

in production and shipments from 2007 to 2009, however, the domestic industry increased its market

share during this period by 4.8 percentage points while the market share of subject imports increased as

well by 4.4 percentage points, until 2010 when it declined as subject imports largely left the market due to

the pendency of the investigations.25 The increases in market share by the domestic industry and subject

imports from 2007 to 2009 came largely at the expense of nonsubject imports whose market share fell by

9.3 percentage points from 2007 to 2009.26

As the domestic industry’s production and shipments decreased, so did the number of production

related workers (“PRWs”), hours worked, and wages paid. Between 2007 and 2009, the number of

PRWs declined by *** percent, from *** PRWs in 2007 to *** PRWs in 2008 and *** PRWs in 2009,

while hours worked declined by *** percent, and wages paid declined by *** percent.27 The number of

PRWs and hours worked were both slightly lower in interim 2010 as compared to interim 2009, while

wages paid were higher in interim 2010 as compared to interim 2009.28 Productivity (tons/per hour)

increased slightly from *** tons/per 1,000 hours in 2007 to *** in 2008, before falling to *** in 2009.29

The domestic industry also experienced declines in many financial indicators during the period

examined.30 The quantity and value of the domestic industry’s net sales declined by 15.3 percent and

15.8 percent from 2007 to 2009, respectively.31 The domestic industry experienced positive but declining

operating incomes in each year of the period examined, reporting operating income of $144.0 million in

2007, $95.1 million in 2008, and $61.8 million in 2009.32 Its operating income as a ratio of net sales

declined in every year of the period from 7.4 percent in 2007, to 4.9 percent in 2008, and to 3.8 percent in

2009.33 Its operating income as a ratio of net sales was 2.5 percent in interim 2010 as compared to 2.9

percent in interim 2009.34 COGS as a ratio of net sales increased from 86.4 percent in 2007 to 88.5

percent in 2008, and to 89.7 percent in 2009. Capital expenditures decreased irregularly during the period

examined, starting at $51.1 million in 2007, increasing slightly to $52.4 million in 2008, before falling

sharply to $33.8 million in 2009.35 Capital expenditures were $18.8 million in interim 2010 as compared

to $15.7 million in interim 2009. 

 24 CR/PR at Table C-3.

 25 CR/PR at Table C-3.

 26 CR/PR at Table C-3.

 27 CR/PR at Table C-3. Hours worked (1,000) declined from *** in 2007 to *** in 2008, and to *** in 2009. 

Wages paid decreased from $*** in 2007 to $*** in 2008, and then to $*** in 2009. CR/PR at Table C-3. 

 28 CR./PR at Table C-3. PRWs were *** in interim 2010 as compared to *** in interim 2009. Hours worked

(1,000) were *** in interim 2010 as compared to *** in interim 2009. Wages paid were $*** in interim 2010 as

compared to $*** in interim 2009. 

 29 CR/PR at Table C-3. Productivity was *** short tons/per 1,000 hours in interim 2010 as compared to *** short

tons in interim 2009. 

 30 As did the majority, I considered the combined financial results on certain coated paper other than coated

packaging paperboard plus coated packaging paperboard to be the relevant data set for purposes of my decision. 

CR/PR at Tables VI-7 & Table C-3.

 31 CR/PR at Table C-3. 

 32 CR/PR at Table C-3.

 33 CR/PR at Table C-3.

 34 CR/PR at Table C-3.

 35 CR/PR at Table C-3.

45
Based on declines in various measures of operational and financial performance experienced by

the domestic industry I find that it suffered material injury during the period of investigation. However,

the mere existence of material injury is not the only thing that I must determine. It is necessary to

determine whether the injury is attributable to subject imports. 

It is clear that the significant decline in U.S. demand associated with an unprecedented economic

depression contributed to the injury experienced by the domestic industry. However, that fact does not

eliminate the reality that the domestic industry was, in the face of critical economic problems in the

United States and worldwide, faced with a substantial inflow of competing, unfairly traded subject

imports. I cannot conclude from the record that simply because there were multiple causes of injury to

the domestic industry that there is not material injury be reason of subject imports. To the contrary, I

believe there are clear indications that there was significant material injury to the domestic industry by

reason of the subject imports. 

I have analyzed the data and the likely impacts that would have occurred if subject imports had

been fairly traded. I find, based on that analysis, that the record supports a finding of material injury by

reason of the subject imports during the period of investigation. 

I have reviewed the record data with regard to the elasticities of supply and substitution and the

price elasticity of demand for CCP. The record supports a finding that the domestic supply elasticity is

moderately high. This means that the domestic industry would have been able to increase shipments to

meet increased demand for the domestic like product that would have occurred if subject imports had

been fairly traded at a higher price. The substitution between domestic CCP and subject imports is

likewise moderately elastic. This is important for two reasons. First, it shows that purchasers would be

likely to shift to subject imports if they were offered at a better price than domestic supply. I believe that

is what happened during the period of investigation. Second, a moderately high substitution elasticity

shows that purchasers would be likely to shift back, to some extent, to domestic CCP if the prices of

subject imports had been higher than they were. I believe that subject import prices would have been

higher if they had been fairly traded, and the domestic industry would have benefitted through an increase

in orders as domestic purchasers shifted to U.S. produced CCP. Finally, the price elasticity of demand is

relatively inelastic, in the range of -0.75 to -1.25. This relatively inelastic demand in response to price

changes indicates that there would be a relatively small decline in the amount of CCP demanded by the

marketplace if both subject import and domestic CCP prices increased. All of this would contribute to the

domestic industry being able to achieve volume increases, price increases, or both if subject imports had

been fairly traded. 

The domestic industry should have been able to increase its prices to at least recover its COGS. 

Moreover, if subject imports had been fairly traded, their volumes would likely have been lower. The

domestic industry would have benefitted from increased volume, increased prices or both if subject

imports had been priced fairly. I find that the inability of the domestic industry to increase its prices to

offset the cost-price squeeze it was experiencing or to gain volume to recapture some of the lost profits

that it was experiencing was not attributable solely to the recessionary economic conditions within the

U.S. market. Instead, the industry was also faced with significant and increasing volumes of subject

imports that were trading at unfair prices, below the prices of the domestic product. This worsened the

condition of the domestic industry significantly and contributed to a significant degree to the injury

experienced by the domestic industry.

CONCLUSION

For the reasons discussed above, I find that an industry in the United States is materially injured 

by reason of imports of certain coated paper from China that were found to be sold in the United States at

less than fair value and that were found to be subsidized by the Government of China and by reason of

46
imports of certain coated paper from Indonesia that were found to be sold in the United States at less than

fair value and that were found to be subsidized by the Government of Indonesia. The record supports a

finding that subject imports were a significant contributory factor to the injury to the domestic industry

that is evident in the decline in virtually all of the domestic industry’s operating and financial indicators. 

While other factors, including the economic decline in the U.S. market and the decline in demand for

CCP, contributed to the injury to the domestic industry, I find that significant volumes of price

suppressing unfairly traded subject imports were a significant injurious factor that cannot be dismissed as

an incidental or tangential contributory factor to the injury to the domestic industry. 

47

PART I: INTRODUCTION

BACKGROUND

These investigations result from a petition filed on September 23, 2009, by Appleton Coated,

LLC (“Appleton”), NewPage Corp. (“NewPage”), Sappi Fine Paper North America (“Sappi”), and the

United Steel, Paper and Forestry, Rubber Manufacturing, Energy, Allied Industrial and Service Workers

International Union (“USW”), alleging that an industry in the United States is materially injured or is

threatened with material injury, by reason of imports from China and Indonesia of certain coated paper

suitable for high-quality print graphics using sheet-fed presses (“certain coated paper”)1

 that are allegedly

sold in the United States at less-than-fair-value (“LTFV”) and subsidized by the governments of China

and Indonesia. Information relating to the background of these investigations is provided below.2

Effective date Action

September 23, 2009 Petition filed with Commerce and the Commission; Commission institutes investigation

October 20, 2009 Initiation of countervailing duty investigation on China by Commerce

October 20, 2009 Initiation of countervailing duty investigation on Indonesia by Commerce

October 20, 2009 Initiation of antidumping investigations by Commerce

November 17, 2009 Commission’s preliminary determinations

March 9, 2010 Commerce’s preliminary countervailing duty determinations regarding China and Indonesia

May 6, 2010 Commerce’s preliminary antidumping duty determinations regarding China and Indonesia

May 19, 2010 Commission’s scheduling of its final phase investigations (75 FR 29364, May 25, 2010)

September 16, 2010 Commission’s hearing1

September 27, 2010 Commerce’s final antidumping and countervailing duty determinations (75 FR 59209-

59226)

October 22, 2010 Commission’s vote

November 10, 2010 Commission’s determinations and views transmitted to Commerce

 1

 App. B contains a list of witnesses who appeared at the hearing.

 1 A complete description of the imported product subject to these investigations is presented in The Subject

Product section located in Part I of this report.

 2 Federal Register notices cited in the tabulation are presented in app. A.

I-1
ORGANIZATION OF REPORT

Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides that in

making its determinations of injury to an industry in the United States, the Commission–

shall consider (I) the volume of imports of the subject merchandise, (II) the effect of

imports of that merchandise on prices in the United States for domestic like products,

and (III) the impact of imports of such merchandise on domestic producers of

domestic like products, but only in the context of production operations within the

United States; and. . . may consider such other economic factors as are relevant to

the determination regarding whether there is material injury by reason of imports.

Section 771(7)(c) of the Act (19 U.S.C. § 1677(7)(c)) further provides that--

In evaluating the volume of imports of merchandise, the Commission shall consider

whether the volume of imports of the merchandise, or any increase in that volume,

either in absolute terms or relative to production or consumption in the United

States is significant.

. . . 

In evaluating the effect of imports of such merchandise on prices, the Commission

shall consider whether . . . (I) there has been significant price underselling by the

imported merchandise as compared with the price of domestic like products of the

United States, and (II) the effect of imports of such merchandise otherwise depresses

prices to a significant degree or prevents price increases, which otherwise would

have occurred, to a significant degree.

. . .

In examining the impact required to be considered under subparagraph (B)(i)(III),

the Commission shall evaluate (within the context of the business cycle and

conditions of competition that are distinctive to the affected industry) all relevant

economic factors which have a bearing on the state of the industry in the United

States, including, but not limited to

. . . 

(I) actual and potential declines in output, sales, market share, profits, productivity,

return on investments, and utilization of capacity, (II) factors affecting domestic

prices, (III) actual and potential negative effects on cash flow, inventories,

employment, wages, growth, ability to raise capital, and investment, (IV) actual and

potential negative effects on the existing development and production efforts of the

domestic industry, including efforts to develop a derivative or more advanced

version of the domestic like product, and (V) in {an antidumping investigation}, the

magnitude of the margin of dumping.

Information on the subject merchandise, margins of dumping and subsidies, and domestic like

product is presented in Part I. Information on conditions of competition and other relevant economic

factors is presented in Part II. Part III presents information on the condition of the U.S. industry,

including data on capacity, production, shipments, inventories, and employment. The volume of imports

of the subject merchandise is presented in Part IV and pricing of domestic and imported products is

presented in Part V. Part VI presents information on the financial experience of U.S. producers. 

Information obtained for use in the Commission’s consideration of the question of threat of material

injury is presented in Part VII.

I-2
U.S. MARKET SUMMARY

The U.S. market for certain coated paper3

 totaled approximately $2.15 billion and 2.25 million

short tons in 2009. Currently, eleven integrated firms4

 produce certain coated paper in the United States,

Appleton, Cascades Boxboard Group, LLC (“Cascades”), Clearwater Paper Co. (“Clearwater”),

International Paper, Georgia-Pacific, LLC (“Georgia-Pacific”), MeadWestvaco Corp. (“MeadWestvaco”),

Mohawk Fine Papers, Inc. (“Mohawk”), NewPage, Rock-Tenn Co. (“Rock-Tenn”), Sappi, and Smart

Papers, Inc. (“Smart”), which accounted for the vast majority of U.S. production of certain coated paper

in 2009. At least seven firms have reported importing certain coated paper from subject countries since

2007. One firm, Global Paper Solutions, Inc. (“GPS”), accounted for the majority of reported U.S.

imports from China. One firm, PaperMax Ltd. (“PaperMax”) accounted for the vast majority of U.S.

imports from Indonesia during the period of investigation. 

U.S. producers’ U.S. shipments of certain coated paper totaled 1,477,233 short tons valued at

$1.44 billion in 2009, and accounted for 65.5 percent of apparent U.S. consumption by quantity (66.6

percent by value). U.S. imports from China totaled 352,555 short tons in 2009, and accounted for 15.6

percent of apparent U.S. consumption by quantity (13.8 percent by value), while U.S. imports from

Indonesia totaled 61,039 short tons, and accounted for 2.7 percent of apparent consumption by quantity

(2.4 percent by value). U.S. imports from all other sources combined totaled 363,472 short tons, and

accounted for 16.1 percent of apparent consumption by quantity (17.1 percent by value). Certain coated

paper is generally used for printing multi-colored graphics for catalogues, books, magazines, envelopes,

labels and wraps, greeting cards, and other commercial printing applications requiring high-quality print

graphics. Coated packaging paperboard is used to manufacture consumer packaging. 

SUMMARY DATA AND DATA SOURCES

A summary of data collected in these investigations is presented in appendix C. Appendix C,

table C-1 presents summary data for “certain coated paper other than coated packaging paperboard.” U.S.

industry data are based on the questionnaire responses of nine U.S. integrated producers5

 of products used

in the commercial printing industry and four U.S. converters.6

 Appendix C, table C-2 presents summary

 3 The data for certain coated paper in this section of the report includes “coated packaging paperboard.” The

parties disagree as to whether this product is properly within the scope of these investigations. Petitioners claim that 

Commerce’s scope does not include coated paperboard used for packaging applications. Petitioners’ posthearing

brief, “Questions from Commissioner Aranoff” exh. 3 and “Questions from Commissioners” exh 1. Respondents

claim that coated paperboard meets the physical specifications of the scope and that Commerce did not exclude

products based on intended end use. Respondents’ posthearing brief, exh. 1, p. 14.

Section III of this report as well as the summary data tables in appendix C present data for “certain coated

paper other than coated packaging paperboard,” “coated packaging paperboard,” and “total certain coated paper.”

 4

 These “integrated” firms produce all of the domestically-produced sheeter rolls, which is an upstream product

that is converted into a sheeted product. The scope of these investigations includes only sheeted product. Although

the U.S. integrated producers convert or “sheet” the vast majority of their own sheeter rolls, there are a number of

U.S. converters in the marketplace that sheet these rolls either on a toll basis or through arms length purchases of

sheeter rolls.

 5

 The term “integrated” producers is used to distinguish those producers who produce sheeter rolls from U.S.

converters, which process sheeter rolls into sheet, and is not used to indicate the level of vertical integration of those

producers.

 6

 These firms include: Appleton, Cascades, Clearwater, International Paper, MeadWestvaco, Mohawk, NewPage,

Sappi, and Smart. The original questionnaire responses were used for Clearwater and MeadWestvaco and not their

September 22, 2010 revised questionnaire responses, which included U.S. industry data regarding coated packaging

(continued...)

I-3
data for “coated packaging paperboard.” U.S. industry data are based on the questionnaire responses of

four U.S. integrated producers of products used in the packaging industry and four U.S. converters.7

Table C-3 presents summary data for “certain coated paper other than coated packaging paperboard” and

“coated packaging paperboard” (total reported U.S. integrated production). U.S. industry data are based

on questionnaire responses of all eleven reporting U.S. integrated producers and four U.S. converters.8

Data for U.S. imports from China, Indonesia, and nonsubject countries in each of the tables are based on

adjusted Commerce statistics.9

 Foreign industry data are based on responses to the Commission’s U.S.

foreign producer’s questionnaires. Appendix C, table C-4 presents data regarding U.S. converters. 

 6 (...continued)

paperboard.

Appendix C, table C-1 corresponds to data compiled by petitioners which they contended contains only

those U.S. producers that produce products covered by the scope of these investigations. Petitioners’ posthearing

brief, exh. 3. 

 7

 These firms include: Clearwater, Georgia-Pacific, MeadWestvaco, and Rock-Tenn. 

Clearwater and MeadWestvaco submitted an original U.S. producer questionnaire response which included

their certain coated paper products sold in the U.S. commercial printing industry. In revisions received by the

Commission on September 22, 2010, these firms supplied the Commission with trade and financial data that

included products that met the physical specifications listed in the scope (GE brightness, basis weight, and in sheet

form) regardless of end use and included products that they had sold to the U.S. packaging industry. In table C-2,

Clearwater and MeadWestvaco data are presented as the difference between their September 22, 2010 revised

questionnaire responses and their original questionnaire responses. All of Georgia-Pacific’s and Rock-Tenn’s

products were reported ***.

 8

 Appendix C, table C-3 corresponds to data compiled by respondents which they contended contains all the U.S.

producers that produce products covered by the scope of these investigations. Respondents’ posthearing brief, exhs.

8 and 23. 

 9

 Adjustments to Commerce statistics are based on assumptions made by the petitioners. See Petitioners’

posthearing brief, “Questions from Commissioner Lane,” exhs. 1 and 2. Respondents claimed that petitioners’

assumption with regard to U.S. imports from nonsubject countries, specifically EU countries, may be understated. 

Petitioners’ assumption is that for a number of HTS statistical reporting numbers (those for coated groundwood

paper), U.S. imports from nonsubject countries are entirely in the form of rolls and not included within the scope of

these investigations. Respondents claimed that certain EU export statistics show that a portion of these imports are

in sheet form. Respondents’ submitted EU export statistics show that the portion claimed to be in sheet form would

be equal to between 10.3 percent in 2009 and 12.4 percent in 2008 of total U.S. imports from nonsubject countries. 

Respondents’ posthearing brief, exh. 1, pp. 11-12 and exh. 4.

Subsequent to Commerce adding three new HTS subheadings to the scope in its final determinations (HTS

4810.32, 4810.39, and 4810.92), U.S. imports from China entering under HTS 4810.92.12 have been adjusted and

increased using respondents’ assumptions. In its submissions to Commerce, respondents stated that two of Gold

East’s paper mills exported multi-ply paperboard products under HTS 4810.92.12. Respondents’ posthearing brief,

exh. 2, pp. 1-2 and exh. 3, p. 8. Although volume trends of U.S. imports from China remain similar to pre-adjusted

volumes, absolute volumes did increase by 14.2 percent in 2007, 19.5 percent in 2008, 18.8 percent in 2009, and

16.3 percent in interim 2010. 

Subsequent to Commerce adding three new HTS subheadings to the scope in its final determinations, U.S.

imports from Indonesia and nonsubject countries have not been further adjusted. In submissions to Commerce, no

producer in Indonesia reported exporting subject product under any of the additional HTS subheadings. Petitioners’

posthearing brief, “Questions from Commissioner Lane,” exhs. 5 and 6. 

The parties appear to agree that product within the scope of these investigations would not properly be

classified under HTS 4810.32 and 4810.39 as they cover “kraft paper or paperboard other than the kind used for

writing, printing, or other graphic purposes.” Petitioners posthearing brief, “Questions from Staff,” exh. 5, p. 2;

Respondents’ posthearing brief, exh. 3, pp. 6-7. Petitioners stated that Commerce added these HTS subheadings in

order to prevent circumvention of any issued order. Petitioners’ posthearing brief, “Questions from Commissioner

Lane,” exh. 1, p. 2. 

I-4
PREVIOUS AND RELATED INVESTIGATIONS

Certain coated paper, as defined in the scope of these investigations, is a subset of the paper

products investigated by the Commission in its 2007 investigations on Coated Free Sheet from China,

Indonesia, and Korea.

10 In the 2007 investigation, the scope definition included sheets, sheeter rolls, and

web rolls. In contrast, the current investigations’ scope definition includes only sheeted product. The

Commission in Coated Free Sheet determined that the U.S. industry was not materially injured or

threatened with material injury by reason of U.S. imports from China, Indonesia, and Korea.11 

In 1991, the Commission conducted antidumping duty investigations on Coated Groundwood

Paper from Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Sweden, and the United

Kingdom (Inv. Nos. 731-TA-486-494). The Commission determined that the subject imports did not

injure the domestic coated groundwood paper industry.12 13

NATURE AND EXTENT OF SALES AT LTFV

China

On September 27, 2010, Commerce published a notice in the Federal Register setting forth its

final determination with regard to its antidumping investigation on certain coated paper from China.14

Commerce determined that imports from China are being sold, or are likely to be sold, in the United

States at less than fair value. The weighted-average dumping margins (in percent ad valorem), as

reported by Commerce, are presented in the following tabulation.

 10 Coated Free Sheet Paper from China, Indonesia, and Korea, Inv. Nos. 701-TA-444-446 and 731-TA-1107-

1109 (Final), USITC Publication 3965, December 2007.

 11 Ibid. at pp. 42-43.

 12 The product subject to investigation was defined by Commerce as “paper coated on both sides with kaolin

(China clay) or other inorganic substances (e.g., calcium carbonate), of which more than ten percent by weight of the

total fiber content consists of fibers obtained by mechanical process, regardless of (1) basis weight (e.g., pounds per

ream or grams per one square meter sheet); (2) GE brightness; or (3) the form in which it is sold (e.g., reels, sheets,

or other forms).” Paperboard was excluded from the scope of investigation. See Notice of Final Determination of

Sales at Less Than Fair Value: Coated Groundwood Paper from Germany, 56 FR 56385, November 4, 1991.

 13 Coated Groundwood Paper from Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Sweden,

and the United Kingdom, Inv. Nos. 731-TA-486-494 (Preliminary), USITC Publication 2359, February 1991, p. 3;

and Coated Groundwood Paper from Belgium, Finland, France, Germany, and the United Kingdom, Inv. Nos. 731-

TA-487-490 and 494 (Final), USITC Publication 2467, December 1991, p. 3.

 14 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from the People’s

Republic of China: Final Determination of Sales at Less Than Fair Value; 75 FR 59217, September 27, 2010.

I-5
Producer/exporter

Margin

(percent ad valorem)

Gold East Paper (Jiangsu) Co., Ltd. 

Gold Huasheng Paper Co., Ltd.

Ningbo Zhonghua Paper Co., Ltd.

Ningbo Asia Pulp & Paper Co., Ltd.

Gold East (Hong Kong) Trading Co., Ltd.

7.6

Shandong Chenming Paper Holdings, Ltd. 7.6

All others 135.83

Source: Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from the People’s Republic of

China: Final Determination of Sales at Less Than Fair Value; 75 FR 59217, September, 27, 2010.

Indonesia

On September 27, 2010, Commerce published a notice in the Federal Register setting forth its

final determination with regard to its antidumping investigation on certain coated paper from Indonesia.15

Commerce determined that imports from Indonesia are being sold, or are likely to be sold, in the United

States at less than fair value. The weighted-average dumping margins (in percent ad valorem), as

reported by Commerce, are presented in the following tabulation.

Producer/exporter

Margin

(percent ad valorem)

PT Pabrik Kertas Tjiwi Tbk.

PT Pindo Deli Pulp & Paper

PT Indah Kiat Pulp & Paper Tbk.

20.13

All others 20.13

Source: Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from Indonesia: Final

Determination of Sales at Less Than Fair Value; 75 FR 59223, September 27, 2010.

NATURE OF COUNTERVAILABLE SUBSIDIES

China

On September 27, 2010, Commerce published a notice in the Federal Register setting forth its

final determination with regard to its countervailing duty investigation on certain coated paper from

China.16 Commerce determined that the Government of China is providing countervailable subsidies to

Chinese producers of certain coated paper. The countervailable subsidy rates (in percent ad valorem), as

reported by Commerce, are presented in the following tabulation.

 15 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from Indonesia:

Final Determination of Sales at Less Than Fair Value; 75 FR 59223, September 27, 2010.

 16 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from the People’s

Republic of China: Final Affirmative Countervailing Duty Determination; 75 FR 59212, September 27, 2010.

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Foreign producer/exporter

Net subsidy rate 

(percent ad valorem)

Gold East Paper (Jiangsu) Co., Ltd.

Gold Huasheng Paper Co., Ltd.

Gold East (Hong Kong) Trading Co., Ltd.

Ningbo Zhonghua Paper Co., Ltd.

Ningbo Asia Pulp & Paper Co., Ltd.

17.64

Shandong Sun Paper Industry Joint Stock Co., Ltd.

Yanzhou Tianzhang Paper Industry Co., Ltd.

178.03

All others 17.64

Source: Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from the People’s Republic of

China: Final Affirmative Countervailing Duty Determination; 75 FR 59212, September 27, 2010.

Commerce made the following final determinations regarding specific programs of the

Government of China alleged in the petition to have provided countervailable subsidies to producers of

certain coated paper in China:

1. Programs Determined to be Countervailable

A. Preferential Lending to the Coated Paper Industry 

1. Policy Loans to Coated Paper Producers and Related Pulp Producers from StateOwned Commercial Banks and Government Policy Banks 

B. Income Tax Programs 

1. Income Tax Exemption/Reduction under “Two-Free/Three Half” Program 

2. Local Income Tax Exemption and Reductions for “Productive” Foreign-Invested

Enterprises (“FIEs”) 

3. Income Tax Subsidies to FIEs Based on Geographic Location 

4. Preferential Tax Policies for Research and Development at FIEs 

C. Indirect Tax and Import Tariff Programs 

1. Value Added Tax (“VAT”) and Tariff Exemptions on Imported Equipment 

2. VAT Rebates on Domestically Produced Equipment 

3. Domestic VAT Refunds for Companies Located in the Hainan Economic Development

Zone 

4. Exemption from City Maintenance and Construction Taxes and Education Surcharges

for FIEs 

D. Government Provision of Goods or Services for Less Than Adequate Remuneration (“LTAR”) 

1. Provision of Electricity 

2. Provision of Papermaking Chemicals

3. Provision of Land in the Yangpu Economic Development Zone 

I-7
2. Programs Determined To Be Not Used or To Not Provide Benefits During the POI

A. Famous Brands Awards 

B. Sichuan Technology Renovation Program

C. Ya’an Technology Innovation Program

D. Lending Programs

1. Fast-Growth High-Yield Forestry Program Loans 

E. Income Tax Programs

1. Preferential Tax Policies for Technology or Knowledge-Intensive FIEs 

2. Tax Programs for FIEs that are High or New Technology Enterprises 

3. Income Tax Reductions for High-Technology Industries in Guangdong Province 

4. Income Tax Credits for Domestically-Owned Companies Purchasing DomesticallyProduced Equipment 

5. Income Tax Exemption Program for Export-Oriented FIEs 

6. Corporate Income Tax Refund Program for Reinvestment of FIE profits in ExportOriented Enterprises 

7. Income Tax Reduction for FIEs Purchasing Domestically-Produced Equipment 

F. Grant Programs 

1. Funds for Forestry Plantation Construction and Management 

2. The State Key Technologies Renovation Project Fund 

3. Loan Interest Subsidies for Major Industrial Technology Reform Projects in Wuhan 

4. Funds for Water Treatment Improvement Projects in the Songhuajiang Basin 

5. Special Fund for Energy Saving Technology Reform in Wuhan and Shouguang

Municipality 

6. Clean Production Technology Fund 

7. Grants to Enterprises Achieving RMB 10 Billion in Sales (Yanzhou City and Xinyan

Town) (previously “Grants to Enterprises Achieving RMB 10 Billion in Sales

Revenue and Implementing “Three Significant Projects”) 

8. Grants to Large Enterprises in Jining City 

9. Funds for Water Treatment and Pollution Control Projects for the Theree Rivers and

Three Lakes in Shandong Province 

10. Grants for Programs Under the 2007 Science and Technology Development Plan in

Shandong Province 

11. Special Funds for Encouraging Foreign Economic and Trade Development and for

Drawing Significant Foreign Investment Projects in Shandong Province 

12. Interest Subsidies for Forestry Loans 

G. Economic Development Zone (“EDZ”) Programs 

1. Subsidies in the Nanchang EDZ 

2. Subsidies in the Wuhan EDZ 

3. Subsidies in the Zhenjiang EDZ 

I-8
Indonesia

On September 27, 2010, Commerce published a notice in the Federal Register setting forth its

final determination with regard to its countervailing duty investigation on certain coated paper from

Indonesia.17 Commerce determined that the Government of Indonesia is providing countervailable

subsidies to Indonesian producers of certain coated paper. The countervailable subsidy rates (in percent

ad valorem), as reported by Commerce, are presented in the following tabulation.

Producer/exporter

Margin

(percent ad valorem)

PT Pabrik Kertas Tjiwi Tbk.

PT Pindo Deli Pulp & Paper

PT Indah Kiat Pulp & Paper Tbk.

17.94

All others 17.94

Source: Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from Indonesia: Final

Affirmative Countervailing Duty Determination; 75 FR 59209, September 27, 2010.

Commerce made the following final determinations regarding specific programs of the

Government of Indonesia alleged in the petition to have provided countervailable subsidies to producers

of certain coated paper in Indonesia:

1. Programs Determined to be Countervailable

A. Provision of Standing Timber for Less Than Adequate Remuneration

B. Government Prohibition of Log Exports

C. Debt Forgiveness through the Indonesian Government's Acceptance of Financial Instruments

with No Market Value

D. Debt Forgiveness through APP/SMG's Buyback of its Own Debt from the Indonesian

Government

2. Programs Determined To Be Not Used During the POI

A. Government Provision of Interest-Free Reforestation Loans

B. Government Forgiveness of Stumpage Obligations

C. Tax Incentives for Investment in Priority Business Lines and Designated Regions

1. Corporate Income Tax Deduction

2. Accelerated Depreciation and Amortization

3. Extension of Loss Carryforward

4. Reduced Withholding Tax on Dividends

 17 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from Indonesia:

Final Affirmative Countervailing Duty Determination; 75 FR 59209, September 27, 2010.

I-9
THE SUBJECT PRODUCT

Commerce’s Scope

Commerce has defined the scope of these investigations as follows:18

Certain coated paper and paperboard1 in sheets suitable for high quality print graphics

using sheet-fed presses; coated on one or both sides with kaolin (China or other clay),

calcium carbonate, titanium dioxide, and/or other inorganic substances; with or without

a binder; having a GE brightness level of 80 or higher;2

 weighing not more than 340

grams per square meter; whether gloss grade, satin grade, matte grade, dull grade, or any

other grade of finish; whether or not surface-colored, surface-decorated, printed (except

as described below), embossed, or perforated; and irrespective of dimensions (“certain

coated paper”).

Certain coated paper includes: (a) coated free sheet paper and paperboard that meets

this scope definition; (b) coated groundwood paper and paperboard produced from

bleached chemi-thermo-mechanical pulp (“BCTMP”) that meets this scope definition;

and (c) any other coated paper and paperboard that meets this scope definition.3

Coated Paper is typically (but not exclusively) used for printing multi-colored graphics

for catalogues, books, magazines, envelopes, labels and wraps, greeting cards, and other

commercial printing applications requiring high quality print graphics. 

Specifically excluded from the scope are imports of paper and paperboard printed with

final content printed text or graphics. 

As of 2009, imports of the subject merchandise are provided for under the following

statistical categories of the HTSUS: 4810.14.1100, 4810.14.1900, 4810.14.2010,

4810.14.2090, 4810.14.5000, 4810.14.6000, 4810.14.7000, 4810.19.1100,

4810.19.1900, 4810.19.2010, 4810.19.2090, 4810.22.1000, 4810.22.5000,

4810.22.6000, 4810.22.7000, 4810.29.1000, 4810.29.5000, 4810.29.6000,

4810.29.7000, 4810.32, 4810.39, 4810.92. 

While HTSUS subheadings are provided for convenience and customs purposes, the

written description of the scope of these investigations is dispositive.

_________________________

 1 “‘Paperboard’ refers to certain coated paper that is heavier, thicker, and more rigid than

coated paper which otherwise meets the product description. In the context of certain coated

paper, paperboard typically is referred to as ‘cover,’ to distinguish it from ‘text.’”

 2

 One of the key measurements of any grade of paper is brightness. Generally speaking, the

brighter the paper the better the contrast between paper and ink. Brightness is measured using a

GE Reflectance Scale, which measures the reflection of light off of a grade of paper. One is the

 18 The original definition of the scope of these investigations, as set forth in the petition, included sheeter rolls. 

After consultations with Commerce, petitioners removed sheeter rolls from the definition of the scope. See

Petitioners’ October 9, 2009 submission to Commerce. The altered scope language dropped references to unfinished

product and rolls as well as the corresponding HTS numbers that reference rolls.

I-10
lowest reflection, or what would be given to a totally black grade, and 100 is the brightest

measured grade.

 3

 As noted in the Scope Comments section of the Preliminary Determinations, we have

determined that the word “paperboard” was inadvertently left out of the sentence in the Initiation

Notice and we have corrected it.

Tariff Treatment

Certain coated paper is generally imported under the Harmonized Tariff Schedule of the United

States (“HTS”) statistical reporting numbers 4810.14.1100, 4810.14.1900, 4810.14.2010, 4810.14.2090,

4810.14.5000, 4810.14.6000, 4810.14.7000, 4810.19.1100, 4810.19.1900, 4810.19.2010, 4810.19.2090,

4810.22.1000, 4810.22.5000, 4810.22.6000, 4810.22.7000, 4810.29.1000, 4810.29.5000, 4810.29.6000,

4810.29.7000, 4810.32, 4810.39, 4810.9219 and is free of duty under the general duty rate.20 Table I-1

shows selected provisions of the HTS that itemize the classification of certain coated paper. 

 19 In its final determinations, Commerce added the final three HTS subheadings to its scope definition (4810.32,

4810.39, 4810.92). See section below entitled, “Scope Issues at Commerce.”

 20 Subsequent to petitioners alteration of the scope language on October 9, 2009, the following HTS statistical

reporting numbers were removed from the original scope: 4810.13.1100, 4810.13.1900, 4810.13.2010,

4810.13.2090, 4810.13.5000, 4810.13.6000, 4810.13.7000. These statistical reporting numbers reference coated

paper in roll form.

I-11
Table I-1

Certain coated paper: Tariff rates, 2010

Selected

HTS provisions Article description

Col. 1 

General1 Col. 2

Special Col. 22

Rates (percent ad valorem)

4810

4810.14 

4810.14.11

4810.14.19

4810.14.20

4810.14.2010

4810.14.2090

4810.14.50

4810.14.60

4810.14.70

Paper and paperboard, coated on one or both sides with kaolin

(China clay) or other inorganic substances, with or without a

binder, and with no other coating, whether or not surface-colored,

surface-decorated or printed, in rolls or rectangular (including square) sheets, of any size: Paper and paperboard of a kind used for writing, printing or

other graphic purposes, not containing fibers obtained by a mechanical or chemi-mechanical process or of which not more than 10 percent by weight of the total fiber content

consists of such fibers:

In sheets with one side not exceeding 435 mm and the

other side not exceeding 297 mm in the unfolded state: With one side exceeding 360 mm and the other

side exceeding 150 mm in the unfolded state: Weighing not more than 150 g/m2

:

 Basic paper to be sensitized for use 

 in photography . . . . . . . . .

 Other . . . . . . . . . . . . . . . . . .

Weighing more than 150 g/m2

Coated on one side only. . . .

Other . . . . . . . . . . . . . . . . . .

Other

Printed, embossed or perforated . . . Other:

 Basic paper to be sensitized for use 

 in photography . . . . . . . . 

 Other . . . . . . . . . . . . . . . . . .

Free

Free

Free

Free

Free

Free

Free

5%

37%

42%

30%

5%

30%

4810.19

4810.19.11

4810.19.1900

4810.19.20

4810.19.2010

4810.19.2090

Other:

Weighing not more than 150 g/m2

: Basic paper to be sensitized for use 

 in photography . . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . 

Weighing more than 150 g/m2

Coated on one side only . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . 

Free

Free

Free

Free

5%

37%

42%

4810.22

4810.22.10

4810.22.50

4810.22.60

4810.22.70

 Light-weight coated paper:

 In strips or rolls of a width exceeding 15 cm or in 

 rectangular (including square) sheets with one side 

 exceeding 36 cm and the other side exceeding 15 

 cm in the unfolded state . . . . . . . . . . 

 Other:

 Printed, embossed or perforated . . . . . . .

 Other:

 Basic paper to be sensitized for use 

 in photography . . . . . . . . .

 Other . . . . . . . . . . . . . . . . .

Free

Free

Free

Free

37%

30%

5%

30%

4810.29

4810.29.10

4810.29.50

4810.29.60

4810.29.70

 Other:

 In strips or rolls of a width exceeding 15 cm or in 

 rectangular (including square) sheets with one side 

 exceeding 36 cm and the other side exceeding 15 

 cm in the unfolded state . . . . . . . . . . 

 Other:

 Printed, embossed or perforated . . . . . . .

 Other:

 Basic paper to be sensitized for use 

 in photography . . . . . . . . .

 Other . . . . . . . . . . . . . . . 

Free

Free

Free

Free

37%

30%

5%

30%

1

 Normal trade relations.

2

 Applies to imports from a small number of countries that do not enjoy normal trade relations duty status.

Source: Harmonized Tariff Schedule of the United States (2010).

I-12
Scope Issues at Commerce

During the preliminary phase of these investigations, petitioners had proposed scope language

that included the phrase “of a kind used for high-quality writing, printing, and other graphic purposes

using sheet-fed presses,” in order to limit the scope to products used within the U.S. commercial printing

industry. Commerce disagreed with the inclusion of this phrase because of the difficulty enforcing

antidumping and countervailing duty orders containing intended end use specifications.21 This phrase

does not appear in the current scope definition.

Subsequently, respondents filed comments at Commerce seeking to clarify the scope language by

incorporating language that would specifically exclude multi-ply coated paperboard from the scope of

these investigations. Respondents claimed that multi-ply coated paperboard were dissimilar to certain

coated paper because: (1) multi-ply coated paperboard products were not used in the commercial printing

market neither as cover nor text stock, but rather in the packaging market for producing packaging for

products such as cosmetics and cigarettes, (2) the two products had different physical characteristics, and

(3) petitioners did not intend multi-ply coated paperboard in the scope of these investigations as

evidenced by the fact that they neither included the HTS subheading for multi-ply products (4810.92) nor

listed in the petition U.S. companies that manufacturer packaging paperboard.22 In its preliminary

determinations, Commerce agreed with petitioners that the language of the scope did not limit in-scope

products by the number of plies, and therefore, did not exclude multi-ply coated paperboard from the

scope. After the issuance of its preliminary determinations, Commerce requested comments from the

parties regarding the issue of whether the phrase “suitable for high-quality print graphics” could be

deleted from the scope language without expanding the scope due to its concerns of administering an

order containing that phrase, which it considered undefined by the parties and vague.23 The parties

disagreed as to the effect of this phrase in the scope. Petitioners maintained that the phrase would have no

effect on the products covered by the scope24 whereas respondents claimed that deletion of the phrase

would greatly expand the scope of these investigations to include products obviously not intended to be

covered by the petition, namely multi-ply coated paperboard for packaging applications.25 

 21 Petitioners’ Response to the Department’s Supplemental Questionnaire dated April 23, 2010, filed at

Commerce on May 10, 2010, p. 7.

 22 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from Indonesia: 

Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Countervailing Duty

Determination with Final Antidumping Duty Determination; 75 FR 10761, 10762, March 9, 2010. Respondents

requested that Commerce reconsider the issue of petitioners’ U.S. industry standing in light of potentially large U.S.

firms becoming part of the U.S. industry. Commerce declined to reconsider the issue after it had issued its notice of

initiation.

 23 Ibid; Additional Scope Comments, submitted to Commerce by respondents on March 29, 2010; Petitioners’

Rebuttal Comments on Scope, submitted to Commerce by petitioners on April 9, 2010; Antidumping and

Countervailing Duty Investigations: Certain Coated Paper Suitable for High-Quality Print Graphics Using SheetFed Presses from Indonesia and the People’s Republic of China, Memorandum to Ronald K. Lorentzen from Susan

Kuhbach, August 3, 2010.

 24 Petitioners argued at Commerce that they “were unaware of any coated paper product that meets the brightness

and other physical characteristics in the scope description that would not be suitable for high quality print graphics. 

Put another way, a coated paper product that meets the physical description is by definition ‘suitable for high quality

print graphics.’ Hence the phrase is surplusage and its removal from the description would not result in any

alteration or expansion of the scope.” Petitioners also urged Commerce to add HTS 4810.92 to the scope language

to ensure the suspension of liquidation of any U.S. imports from respondents of in-scope product entering under that

HTS subheading. Petitioners’ Rebuttal Comments on Scope, submitted to Commerce by petitioners on April 9,

2010, p. 4.

 25 Additional Scope Comments, submitted to Commerce by respondents on March 29, 2010.

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In a memorandum dated August 3, 2010,26 Commerce addressed the following three issues with

regard to the scope description of certain coated paper:

(1) Whether to exclude “multi-ply paperboard” from the scope of these investigations.

(2) Whether to delete “suitable for high-quality print graphics” from the scope description.

(3) Whether to add HTS subheadings 4810.32, 4810.39, 4810.92 to the scope description.

In its final determinations, Commerce addressed these issues and determined the following:27

(1) Not to exclude “multi-ply paperboard” from the scope of these investigations.

At Commerce, respondents requested that the scope description be clarified to exclude “multi-ply

paperboard,” on the grounds that it is generally used for industrial packaging and not “suitable for highquality print graphics.” Petitioners maintained that the number of plies is not a specification set forth in

the scope description; and therefore, if the product meet the physical specifications listed in the scope

description (GE brightness, basis weight, and sheet form) then “multi-ply paperboard” should not be

excluded from the scope description.28 In its final determinations, Commerce decided that “multi-ply

paperboard” should not be excluded from the scope description, observed that the number of plies is not a

physical specification addressed in the current scope description, and that certain “multi-ply paperboard”

products could be used in printing applications.29

(2) Not to delete “suitable for high-quality print graphics” from the scope description.

Due to the potential difficulty in administering an order that contained the phrase “suitable for

high-quality print graphics,” Commerce requested that the parties address the issue of whether that phrase

could be deleted from the scope description. Petitioners maintained that the phrase could be deleted with

no effect on the scope because any coated paper that met the physical characteristics listed in the scope

would be suitable for high-quality print graphics. Respondents argued that deleting this phrase would

impermissibly expand the scope of these investigations by including coated packaging paperboard

products that met the physical characteristics listed in the scope and were produced by U.S. companies

not mentioned in the original petition as U.S. producers, such as Georgia-Pacific, MeadWestvaco, and

Rock-Tenn.30 

In its final determinations, Commerce decided not to delete the phrase “suitable for high-quality

print graphics,” acknowledging petitioners assertion that deleting the phrase would have no effect because

products that meet the listed physical specifications in the scope are suitable for high-quality print

 26 Antidumping and Countervailing Duty Investigations: Certain Coated Paper Suitable for High-Quality Print

Graphics Using Sheet-Fed Presses from Indonesia and the People’s Republic of China, Memorandum to Ronald K.

Lorentzen from Susan Kuhbach, August 3, 2010.

 27 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from Indonesia:

Final Affirmative Countervailing Duty Determination; 75 FR 59209, September 27, 2010 and the “Issues and

Decision Memorandum,” dated September 27, 2010.

 28 Antidumping and Countervailing Duty Investigations: Certain Coated Paper Suitable for High-Quality Print

Graphics Using Sheet-Fed Presses from Indonesia and the People’s Republic of China, Memorandum to Ronald K.

Lorentzen from Susan Kuhbach, August 3, 2010, p. 3.

 29 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from Indonesia:

Final Affirmative Countervailing Duty Determination; “Issues and Decision Memorandum,” dated September 27,

2010, p. 50.

 30 Antidumping and Countervailing Duty Investigations: Certain Coated Paper Suitable for High-Quality Print

Graphics Using Sheet-Fed Presses from Indonesia and the People’s Republic of China, Memorandum to Ronald K.

Lorentzen from Susan Kuhbach, August 3, 2010, p. 8.

I-14
graphics. Commerce, however, also stated that “the phrase has definition and meaning, and we have

determined that the phrase limits the scope of the investigations beyond the physical characteristics listed

in the scope.”31 Commerce did not provide specific guidance on the extent that the phrase may limit the

current scope of these investigations. It stated that “we do not rule out the possibility that certain

merchandise (and, in particular, certain paper for packaging applications) that meets the physical

characteristics described in the scope, may nonetheless be nonsubject merchandise because it is not

suitable for high-quality print graphics.” Subsequently, Commerce set forth its intention to rely on scope

procedures described in 19 CFR 351.225 (post-order scope rulings) in order to “evaluate claims on a

product-by-product basis.”32 

(3) To add the HTS subheadings 4810.32, 4810.39, 4810.92 to the scope description.

At Commerce, petitioners requested that HTS subheadings 4810.32, 4810.39, 4810.92 be added

to the scope description to prevent possible circumvention of any issued order. Commerce observed that

two of the HTS subheadings, 4810.32 and 4810.39, cover products described as “kraft paper and

paperboard, other than that of a kind used for writing, printing, or other graphic purposes,” which appears

to contradict the scope. Therefore, subject merchandise would not properly be classified under these

subheadings. HTS subheading 4810.92 is a basket subcategory covering “other paper and paperboard:

multi-ply.” Citing a recent Customs Ruling, Commerce observed that multi-ply paperboard meeting the

scope description could enter under this subheading and decided to add all three HTS subheadings to the

scope description “to ensure that provisional and potentially final duties apply to all subject

merchandise.”33

Physical Characteristics and Uses

Certain coated paper and paperboard are coated on one or both sides with kaolin (China or other

clay), calcium carbonate, titanium dioxide, and/or other inorganic substances.34 Paper and paperboard

coated with these substances have a better printing surface than uncoated paper and paperboard. Other

important physical characteristics of certain coated paper include: (1) brightness, (2) basis weight, (3)

finish, (4) opacity, (5) smoothness, and (6) caliper. 

Brightness

Brightness is a measure of the paper’s ability to reflect light. The higher the brightness, the

greater the contrast between the paper and the colors printed upon it. Brightness ranges from 1, a totally

black grade, to 100, the brightest measured grade.35 U.S. producers typically sell certain coated paper in

one of three grades, with Grade No. 1 having the highest brightness levels, Grade No. 2 having the next

 31 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from Indonesia:

Final Affirmative Countervailing Duty Determination; “Issues and Decision Memorandum,” dated September 27,

2010, p. 50. Commerce also observed that the parties had not provided an objective definition of the phrase,

“suitable for high-quality print graphics.” Ibid.

 32 Ibid. at p. 51.

 33 Antidumping and Countervailing Duty Investigations: Certain Coated Paper Suitable for High-Quality Print

Graphics Using Sheet-Fed Presses from Indonesia and the People’s Republic of China, Memorandum to Ronald K.

Lorentzen from Susan Kuhbach, August 3, 2010, p. 12.

 34 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses From the People’s

Republic of China: Final Affirmative Countervailing Duty Determination, 75 FR 59212, September 27, 2010.

 35 Petition, p. 7. 

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highest brightness levels, and Grade No. 3 having the lowest brightness levels.36 One U.S. producer of

certain coated paper sells Premium No. 1 grades with a brightness level of 96, number 2 grades with

brightness levels of 89 or 90, and number 3 grades with brightness levels of 87.37 The brightness levels of

certain coated papers and their classification into a particular grade, however, can vary by producer.38

Basis Weight

Basis weight, a traditional unit of measurement for the paper industry in the United States, is the

weight in pounds of a ream of paper (500 sheets of paper) of a given size (the basis).39 The basis for

cover grades of certain coated paper other than coated packaging paperboard is 20" x 26", and the basis

for text grades of certain coated paper other than coated packaging paperboard is 25" x 38".40 Cover

grades typically weigh from 65 pounds to 130 pounds, while text grades weigh from 60 pounds to 100

pounds.41 Cover grades are generally used for items such as catalogue and magazine covers, postcards,

business cards, and appointment cards. Text grades are generally used as the inside pages for items such

as books, catalogues, and magazines.

Finish

The finish of a sheet of paper or paperboard refers to the characteristics of the surface of the paper

or paperboard. The most common finishes are gloss, dull, and matte. Paper or paperboard with a gloss

finish has a very hard and smooth surface, which results in a printed image that is lustrous and shiny in

appearance. Paper or paperboard with a dull finish has a smooth surface but lacks luster or gloss; paper or

paperboard with a matte finish also has a smooth surface but lacks gloss.42 

Opacity

Opacity is a measure of the ability of a sheet of paper to have a printed image on one side without

the image showing through to the other side.43 

Smoothness

Smoothness is the even and consistent continuity of the surface of the paper or paperboard. Paper

or paperboard with a gloss finish has the smoothest surface.44 

 36 Ibid., p. 25.

 37 Product brochure for coated papers, NewPage. 

 38 Petition, p. 25.

 39 On a metric basis, the weight of paper is measured in grams per square meter.

 40 Sappi Limited Web site.

http://www.sappi.com/SappiWeb/Tools+and+resources/Paper_Print+information/Standard+weights+and... 

(accessed October 7, 2009).

 41 NewPage Corporation Web site. Product specifications for coated papers found at

http://www.newpagecorp.com (accessed October 7, 2009).

 42 Product brochure for coated papers, NewPage Corporation; Smook, Gary. 2nd Edition Handbook of Pulp &

Paper Terminology. Bellingham, Washington: Angus Wilde Publications Inc., 2001.

 43 Sappi Limited Web site.

http://www.sappi.com/SappiWeb/Tools+and+resources/Paper_Print+information/Specifying+paper/Paper+checklist.

htm (accessed October 7, 2009).

 44 Ibid.; Product brochure for coated papers, NewPage Corp.

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Caliper

Caliper is the thickness of the paper or paperboard, measured in thousandths of an inch and

typically expressed as points (e.g., 10 points equals 0.010 inch, 8 points equals 0.008 inch, and so on). 

Certain coated paper other than coated packaging paperboard is generally manufactured to a certain basis

weight, while coated packaging paperboard is often produced to a specified thickness.45

End Uses 

Certain coated paper other than coated packaging paperboard is generally used for printing multicolored graphics for books, catalogues, magazines, envelopes, greeting cards, labels and wraps, and any

other commercial printing applications requiring high quality print graphics.46 It is also used for items

such as business cards, appointment cards, brochures, catalogue and magazine covers, postcards, and

tickets.47 Coated packaging paperboard is typically used for packaging for cosmetics, pharmaceuticals,

cigarettes, and other consumer goods.

Categories of Certain Coated Paper

The imported merchandise included in the scope of these investigations consists of certain coated

paper and paperboard in sheets suitable for high quality print graphics using sheet-fed presses. Certain

coated paper and paperboard48 as examined in these investigations includes the following categories of

paper products: (1) certain coated paper other than coated paperboard, (2) coated paperboard used in the

commercial printing industry as “cover” stock, and (3) coated packaging paperboard. These three

categories of paper products are described further below.

Certain Coated Paper Other than Coated Paperboard

Certain coated paper other than coated paperboard includes (1) text grades of coated free sheet

paper and (2) coated groundwood paper produced from bleached chemi-thermo-mechanical pulp. Coated

free sheet is a clay coated paper predominately composed of chemically obtained fibers (90 percent or

more by weight), used primarily for permanent and higher priced publications such as premium

magazines, gift books, and art reproductions. Coated groundwood is a clay coated paper made with

substantial proportions of mechanically derived pulp,49 generally used for multi-colored publications that

 45 Respondents’ posthearing brief, exhibit 36.

 46 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses From the People’s

Republic of China: Final Affirmative Countervailing Duty Determination, 75 FR 59212, September 27, 2010.

 47 Respondents’ posthearing brief, exhibit 36.

 48 There exists in the U.S. paper industry no common or objective definition of “paperboard.” When requested by

Commerce to provide a definition of “paperboard” using objective, physical characteristics, the petitioners provided

Commerce with the following: “‘Paperboard’ refers to certain coated paper that is heavier, thicker, and more rigid

than coated paper which otherwise meets the product description. In the context of certain coated paper, paperboard

typically is referred to as ‘cover,’ to distinguish it from ‘text.’” This definition currently appears in Commerce’s

final scope definition as footnote 1.

 49 Bleached chemi-thermo-mechanical pulp is a type of mechanical pulp produced by chemicals, heat, pressure,

and grinding techniques, after which the pulp is bleached. According to petitioners, coated paper containing more

than 10 percent bleached chemi-thermo-mechanical pulp has all the quality attributes of coated free sheet and

consequently can be sold as such in the market. Conference transcript, p. 38 (Savage). 

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remain in use from several days to a month–primarily magazines, merchandising catalogues, and better

quality newspaper inserts.

Certain coated paper other than coated paperboard generally has brightness levels well over 80

and basis weights ranging from 60 pounds to 100 pounds. The finish of this paper is typically gloss, dull,

or matte. The caliper is usually below 7 points.50

Coated Paperboard Used in the Commercial Printing Industry as “Cover” Stock

Coated paperboard used in the commercial printing industry as “cover” stock includes: (1) cover

grades of coated free sheet paper produced by the petitioners and (2) coated paperboard produced by

firms that traditionally service the packaging industry that sell coated paperboard to commercial printers

and used by them as cover stock.51 These two product categories are heavier, thicker, and more rigid than

text grades of coated free sheet paper and coated groundwood paper produced from bleached chemithermo-mechanical pulp. Although each of these two product categories is generally manufactured by

different producers, they are generally interchangeable in the marketplace.52

Cover grades of coated free sheet paper generally have brightness levels well over 80. The

weight of the paper, on a grams per square meter basis, ranges from approximately 176 to 352. The finish

of this paper is usually gloss, dull, or matte, and the caliper ranges from 7 points to 14 points.53 Coated

cover stock also has brightness levels well over 80. The weight of this paper, on a grams per square meter

basis, ranges from approximately 176 to 465. The finish of the paper can vary, and the caliper ranges

from 8 points to 26 points.54 

Coated Packaging Paperboard

According to the Paperboard Packaging Alliance, there are three major grades of coated

packaging paperboard:55

Solid bleached sulfate– a premium grade of coated paperboard that is made from

a furnish that contains at least 80 percent virgin bleached wood pulp and used for

packaging items such as medical goods, milk and juice, cosmetics and perfume,

frozen food, and candy.

 50 NewPage Corporation Web site. Product specifications for coated papers found at

http://www.newpagecorp.com (accessed October 7, 2009).

 51 According to petitioners, U.S. firms that traditionally have served the packaging market, yet still produce

paperboard products that they deem to be within the scope of these investigations include: Cascade, Clearwater,

International Paper, and MeadWestvaco. Petitioners’ posthearing brief, “Questions from the Commissioners,” exh.

3, pp. 1-2 and 6 (Scenario 2A is petitioners compilation of data for paperboard produced by these firms that they

deem within the scope).

 52 See Petitioners’ posthearing brief, Question no. 3, (Questions from Commissioners), exh. 3; Respondents’

posthearing brief, exh. 36.

 53 NewPage Corporation Web site. Product specifications for coated papers found at

http://www.newpagecorp.com (accessed October 7, 2009).

 54 Respondents’ posthearing brief, exhibit 36; Respondents’ comments on draft questionnaires, attachment 1, June

2, 2010.

 55 The Paperboard Packaging Alliance is a joint initiative of the Paperboard Packaging Council and the American

Forest & Paper Association. Information about packaging paperboard found at http://www.paperboardpackaging.org

(accessed September 24, 2010).

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Coated unbleached kraft paperboard– a superior strength grade of coated

paperboard that is made from a furnish that contains at least 80 percent virgin

unbleached wood pulp and used for packaging items such as frozen food, milk,

and pharmaceuticals.

Coated recycled paperboard– a multiply coated paperboard that is made from 100

percent recovered paperboard and used for packaging items such as soap and

laundry detergent, cookies and crackers, facial tissue and napkins, cake mix,

breakfast cereal, and other types of dry food. 

Some of the U.S. production of these three grades of coated packaging paperboard falls outside of the

scope of these investigations because some products within these three grades are in the form of web rolls

or fail to meet the brightness and/or the basis weight specifications described in the scope language.

 Table I-2 presents data for U.S. shipments of these three grades during 2007-2009.

Table I-2

Coated packaging paperboard: U.S. shipments by grade,1

 2007-09

Item 2007 2008 2009

Shipments (1,000 short tons)

Solid bleached sulfate 2,069 2,031 1,792

Coated unbleached kraft

paperboard 2,063 1,975 1,834

Coated recycled

paperboard 2,268 2,212 2,168

 1 A portion of these shipment data include coated packaging paperboard that is within the scope of these investigations, but

also coated packaging paperboard that is outside the scope of these investigations because it is in web roll form or does not

meet the GE brightness and/or basis weight specifications.

Source: 2009 Statistical Summary for Paper, Paperboard and Pulp, American Forest & Paper Association.

Coated packaging paperboard has brightness levels of 80 or higher but generally lower than the

brightness levels of certain coated paper other than coated paperboard and coated paperboard used in the

commercial printing industry as “cover” stock. The weight of coated packaging paperboard ranges from

approximately 185 grams per square meter to 545 grams per square meter. The finish of the paperboard

is generally between a gloss finish and a dull finish, and the caliper ranges from 10 points to 24 points.56

Manufacturing Processes

Many of the production facilities of U.S. producers of certain coated paper are integrated

operations, producing these products (as well as sheeter rolls and web rolls) in one continuous process

from the harvested log to the intermediate product (pulp) to the final paper product.57 This production

process is similar for all the producers. 

 56 Respondents’ comments on draft questionnaires, attachment 1, June 2, 2010.

 57 Some U.S. producers also repulp recycled paper and use this recycled pulp solely, or in combination with

virgin pulp, in the production of some of their paper and paperboard; they may also purchase chemical pulp

(described infra) or bleached chemi-thermo-mechanical pulp on the open market to supplement their own pulp

production.

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Manufacture of Pulp

The manufacturing process begins with the removal of the bark from the hardwood and softwood

logs in a debarking machine. The logs are then chipped into small uniformly sized chips in a chipper. 

The wood chips next undergo a chemical pulping process whereby they are cooked under pressure with

water and chemicals in a digester cooking vessel to separate the cellulose fibers from the lignin, the glue

that holds the fibers together, and other impurities. The resulting wood pulp is washed and bleached to

attain a level of whiteness and brightness required for the grade of paper or paperboard being produced

and then refined to enable the wood fibers to mesh together and to increase their bonding properties. (The

paper or paperboard is made from both hardwood pulp and softwood pulp. The short hardwood fibers

help to provide a good printing surface, while the longer softwood fibers provide strength to the sheet.) 

Different materials are added to the pulp, including kaolin clay and calcium carbonate for brightness,

opacity, and smoothness, dyes for shade control, optical brighteners for whiteness, and sizing agents for

moisture control. The exact proportions of these materials are determined by the specifications for the

particular type of coated paper or paperboard that is being produced. A large volume of water is also

added.58

Post-Pulp Paper Manufacturing Process 

At this stage of the manufacturing process, the pulp mixture is 99.5 percent water and it is ready

to be run continuously through a paper machine. A paper machine has three major parts–the base sheet

forming section (the wet end), the press section, and the dryer section. The mixture is pumped out onto a

continuously moving wire web that is usually oriented horizontally and which loops around rollers at both

ends. As the wire web moves along, water drains through it, the fibers begin to bond, and a sheet (web)

of paper begins to form on the wire. The web at this point has an 80 percent water content. The web of

paper leaves the moving wire and enters the press section, where a set of steel rollers squeezes more water

out of the web, reducing its water content to about 65 percent. The web then proceeds into the dryer

section and passes over and under successive steam-heated drying cylinders. This drying process

removes most of the remaining water from the web of paper.59 60

Coating Process

At this point, the web is now ready for coating and also, if need be, calendering. Coating

equipment is either integrated in line with the paper machine (on-line coating) or separate from the paper

machine (off-line coating). For on-line coating, the paper enters the coating equipment after leaving the

dryer section. If the coating is to occur off-line, the paper is wound onto large reels after the drying

process and transported over to the off-line coating equipment. In either case, the coating and calendering

processes are the same. The coating to be applied to the paper consists of a variety of chemicals and other

 58 Petition, Volume II-a, pp. 4-7; Coated Free Sheet Paper From China, Indonesia, and Korea, Inv. Nos. 701-

TA-444-446 (Final) and 731-TA-1107-1109 (Final), USITC Publication 3965, December 2007, pp. I-15-I-17; Sappi

Limited Web site. http://www.sappi.com/SappiWeb/Tools+and+resources/How+paper+is+made/Papermaking.htm

(accessed October 8, 2009); Stora Enso Paperboard Guide, Stora Enso Web site. http://www.storaenso.com

(accessed September 28, 2010).

 59 Ibid.

 60 Some coated packaging paperboard has a multiply structure, i.e., the paperboard consists of multiple layers or

plies of fiber that are formed separately at the wet end of the paper machine and subsequently bonded together to

form a single sheet during pressing and drying. Smook, Gary. 3rd Edition Handbook for Pulp & Paper

Technologists, p. 299. Bellingham, Washington: Angus Wilde Publications Inc., 2002. 

I-20
materials mixed together in certain proportions according to the requirements of the paper or paperboard

being produced. These chemicals and other materials may include kaolin clay, other types of clay,

calcium carbonate, titanium dioxide, latex, starches, dyes, lubricants, thickeners, plastic pigments, optical

brighteners, and biocides. These various items, among other things, brighten the paper, increase its

opacity and gloss, help bind the coating to the paper, and control the buildup of fungus and mold.61 

When the paper web enters the coating equipment, a thin coat is applied evenly to one side, which

is then dried, followed by the coating and drying of the other side of the web. One method of applying

the coating to the paper involves a blade coating process, whereby extra coating is applied to the paper

and then scraped off by a steel blade. The pressure of the steel blade against the surface results in a more

uniform surface. After the coating process, the paper or paperboard is rewound onto large reels, in

preparation for the calendering process. A calendar is a set of steel rolls, stacked one on top of the other,

through which the paper web is passed. The rolls apply heat and pressure to the paper, increasing the

smoothness and gloss of the surface. Paper with a gloss or dull finish is typically calendered, while paper

with a matte finish is not. After calendering, the paper is rewound again onto large reels.62

Certain coated paper in sheeter roll form

All certain coated paper is made and sold by U.S. producers in both sheet form and sheeter roll

form. These terms are generally defined as follows:

Sheets– certain coated paper other than coated packaging paperboard and coated

packaging paperboard that have been sheeted (cut) into certain sheet sizes from sheeter

rolls by paper producers or by independent converters for use in sheet-fed presses. These

presses generally print only one side of the sheet at a time and tend to have smaller print

runs. Sheets have high moisture levels and certain mechanical properties that allow them

to run through a sheet-fed press without curling or losing print and color fidelity. 

Sheeter rolls– rolls of certain coated paper other than coated packaging paperboard and

coated packaging paperboard intended to be sheeted into various sheet sizes by paper

producers or independent converters. Sheeter rolls and sheets are identical in physical

characteristics but for the sheeting process. 

The large reels of paper or paperboard (jumbo rolls) are transported to the finishing department

where a slitter/rewinder unwinds and slits them into smaller width rolls and rewinds them onto narrower

reels. The various widths of these narrower rolls are dictated by the width of the presses for which they

are intended. At this point in the production process, sheeter rolls (to be sheeted by independent

converters) are wrapped and labeled for delivery to customers. U.S. producers sell certain coated paper

other than coated packaging paperboard and coated packaging paperboard in the form of sheets. The

remaining sheeter rolls are processed on a sheeter, which cuts the rolls into sheets, performs a quality

check of the surface of the paper, removes faulty sheets, counts and packages the sheets in ream

quantities, and stacks them on pallets ready for delivery. Until the sheets and sheeter rolls actually leave

 61 Petition, Volume II-a, pp. 4-7; Coated Free Sheet Paper From China, Indonesia, and Korea, Inv. Nos. 701-

TA-444-446 (Final) and 731-TA-1107-1109 (Final), USITC Publication 3965, December 2007, pp. I-15-I-17; Sappi

Limited Web site. http://www.sappi.com/SappiWeb/Tools+and+resources/How+paper+is+made/Papermaking.htm

(accessed October 8, 2009); Stora Enso Paperboard Guide, Stora Enso Web site. http://www.storaenso.com

(accessed Sepember 28, 2010).

 62 Ibid.

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the paper mill for the customer, they are kept in climate-controlled areas and monitored carefully via

inventory control software.63 

INTERMEDIATE PRODUCTS

Sheeter Rolls vs. Sheets

When an issue arises as to whether products at different stages of production should be included

in the same domestic like product, the Commission has employed a five-factor “semifinished/finished

products” analysis. In these investigations, certain coated paper (which as defined by the scope is in sheet

form) are downstream products of sheeter rolls (sheets in roll form), which are the upstream or

intermediate product. The issue then is whether sheeter rolls, although not in the definition of the scope

of these investigations, should be included in the definition of the domestic like product.64 During the

preliminary phase of these investigations, both petitioners and respondents argued that sheeter rolls

should be included into the Commission’s definition of the domestic like product.65 The Commission

preliminarily determined that the domestic like product included sheeter rolls, stating that “virtually all

sheeter rolls are used in the production of certain coated paper, and there is at most a small market for

sheeter rolls. Sheeter rolls represent a substantial proportion of the cost and value of the finished product

and undergo only one other production step before transformation into certain coated paper.”66 

In the final phase of these investigations, petitioners asserted that the issue of whether sheeter

rolls should be included in the domestic like product is not dispositive and take no position.67

Respondents maintained their position from the preliminary phase of these investigations that sheeter rolls

are properly included in the domestic like product.68

The five factors that the Commission has considered in analyzing semifinished products include: 

(1) uses (is the upstream product dedicated to the production of the downstream product or does it have

independent uses?); (2) markets (are there separate markets for the upstream and downstream products?); 

(3) characteristics and functions (are there differences in the physical characteristics and functions of the

upstream and downstream products?); (4) value (are there differences in the production costs and/or sales

values (transfer values or market prices as appropriate) of the upstream and downstream products?); and

(5) transformation processes (what is the significance and extent of the processes used to transform the

upstream product into the downstream product?). The first three factors presented below are based on

questions asked of market participants in the preliminary phase of these investigations.69 In the final

phase of these investigations, U.S. converters were requested to provide information regarding the process

and the value added of their U.S. conversion activities. 

 63 Ibid.

 64 The original definition of the scope of these investigations, as set forth in the petition, included sheeter rolls. 

After consultations with Commerce, petitioners removed sheeter rolls from the definition of the scope. See

Petitioners’ October 9, 2009 submission to Commerce. Subsequent to the alteration of the scope language,

petitioners argued that sheeter rolls should be included in the domestic like product by way of the Commission’s

semifinished product analysis. Ibid.

 65 Petitioners’ postconference brief, “Answers to Questions from Staff,” exh. 7. Respondents’ postconference

brief, exh. 1, p. 20. Respondents did not include a specific “semifinished analysis” in their brief, however, argued

for a definition of the domestic like product that included sheets, sheeter rolls, and web rolls.

 66 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from China and

Indonesia, Inv. Nos. 701-TA-470-471 and 731-TA-1169-1170 (Final), USITC Publication 4108, November 2009, p.

8.

 67 Petitioners’ prehearing brief, pp. 7-8.

 68 Respondents’ prehearing brief, p. 16.

 69 The Commission did not request information regarding these factors in the final phase of these investigations. 

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Whether the Upstream Product is Dedicated to the Production of the Downstream Product 

In the preliminary phase of these investigations, petitioners argued that sheeter rolls are not sold

or warranted for use on web roll presses and are produced for the sole purpose of being converted into

sheet (certain coated paper).70 Market participants agreed that sheeter rolls have no use but in the

production of certain coated paper. *** reported that all sheeter rolls are dedicated to the downstream

sheeted product.71 Twelve out of 13 responding U.S. importers stated that they believed 100 percent of

imported sheeter rolls are dedicated to production of the downstream product.72 

Whether There are Separate Markets for the Upstream and Downstream Products

During the preliminary phase of these investigations, petitioners argued that the market for

sheeter rolls is limited as the vast majority of sheeter rolls are converted by the integrated producers and

only a small portion of sheeter rolls are sold in the merchant market to unrelated converters.73 Petitioners

also stated that the vast majority of U.S. imports are also in sheet form and thus competition between

domestic product and imported product occurs in the sheet market and not in a sheeter roll market.74

Eight of 10 reporting U.S. producers (integrated producers and converters) and 10 out of 12 U.S.

importers stated that they perceived the market for sheeter rolls and the market for certain coated paper to

be the same market.75

Whether There are Differences in the Physical Characteristics and Functions of the Upstream and

Downstream Products

During the preliminary phase of these investigations, petitioners argued that there are no

differences in physical characteristics between the sheeter roll and certain coated paper (sheets). They

maintained that the essential physical characteristics, such as moisture content, fiber, weight, and coating

remain unchanged from sheeter roll until finished sheet product.76 Eight out of 10 reporting U.S.

producers (integrated producers and converters) and 11 out of 12 reporting U.S. importers concurred and

stated they believed that there are no differences in the physical characteristics of the two products.77

What Is the Significance and Extent of the Processes Used to Transform the Upstream Product into

the Downstream Product?

The sheeting process entails sheeter rolls being processed on a “sheeter” or “sheeting machine”,

which cuts the rolls into sheets, performs a quality check of the surface of the paper, removes faulty

sheets, counts and packages the sheets in ream quantities, and stacks them on pallets ready for delivery. 

 70 Petitioners’ postconference brief, “Answers to Questions from Staff,” exh. 7, p. 2.

 71 U.S. producer’s questionnaire (Preliminary), responses to question II-12.

 72 U.S. importer’s questionnaire (Preliminary), responses to question II-7.

 73 Petitioners’ postconference brief, “Answers to Questions from Staff,” exh. 7, p. 2.

 74 Ibid.

 75 U.S. producer’s questionnaire (Preliminary), responses to question II-12; U.S. importer’s questionnaire

(Preliminary), responses to question II-7.

 76 Petitioners’ postconference brief, “Answers to Questions from Staff,” exh. 7, p. 2.

 77 U.S. producer’s questionnaire (Preliminary), responses to question II-12; U.S. importer’s questionnaire

(Preliminary), responses to question II-7.

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Until the sheets and sheeter rolls actually leave the paper mill for the customer, they are kept in climatecontrolled areas and monitored carefully via inventory control software.78 

Value Added by U.S. Converters

The Commission requested information from U.S. converters on the value added of their U.S.

converting operations. Data submitted in response to the questionnaire by U.S. converters indicates that

converting operations accounted for an average *** percent of the cost to produce certain coated paper

excluding selling, general, and administrative costs (see Part VI, p. VI-1 fn. 4). 

 

DOMESTIC LIKE PRODUCT ISSUES79

Certain Coated Paper vs. Web Rolls

During the preliminary phase of these investigations, respondents argued that the Commission

should find one domestic like product that included sheet (certain coated paper), sheeter rolls, and web

rolls.80 Petitioners contended that the Commission should find one domestic like product that includes the

scope of the investigations as identified by Commerce plus the addition of sheeter rolls (see Intermediate

Products section above).81 

In its preliminary views,82 the Commission determined that web rolls are not part of the domestic

like product, stating the following:

“The record supports a finding of a clear dividing line between

certain coated paper and web rolls, as there are more differences than

similarities. Although both products are considered to be coated free

sheet paper and are used in similar printing applications, each product is

produced to meet distinct requirements of particular printing presses. As

a result, there is at best limited interchangeability between the products. 

The products are reported to be sold in the same channels of distribution,

and both certain coated paper and web rolls generally are manufactured

on the same equipment, by the same processes and with some of the

same employees. However, certain coated paper requires an additional

production step of sheeting before it is a finished product. As such, the

sheeter operations are either done on a sheeter at the integrated

producers’ mill or at the facilities of independent converters. Finally,

 78 Petition, Volume II-a, pp. 4-7; Coated Free Sheet Paper From China, Indonesia, and Korea, Inv. Nos. 701-

TA-444-446 (Final) and 731-TA-1107-1109 (Final), USITC Publication 3965, December 2007, pp. I-15-I-17.

 79 The Commission’s decision regarding the appropriate domestic products that are “like” the subject imported

products is based on a number of factors including: (1) physical characteristics and uses; (2) common manufacturing

facilities, production processes, and production employees; (3) interchangeability; (4) customer and producer

perceptions; (5) channels of distribution; and (6) price. 

 80 Respondents’ postconference brief, pp. 5-10 and exh. 1. Respondents urged the Commission to define the

domestic like product in these investigations as it did in Coated Free Sheet Paper, and include sheets, sheeter rolls,

and web rolls. In that investigation, no domestic like product issues were advanced by any party and the scope

included all of those products. Coated Free Sheet Paper from China, Indonesia, and Korea, Inv. Nos. 701-TA-444-

446 and 731-TA-1107-1109 (Final), USITC Publication 3965, December 2007, pp. 3-5. Respondents argued that

because there have been no factual changes in the last two years, the Commission should use its prior domestic like

product definition in a subsequent investigation on a similar product. 

 81 Petitioners’ postconference brief, “Answers to Questions from Staff,” exh. 7.

 82 In the final phase of these investigations, the Commission did not collect data regarding web rolls.

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certain coated paper is higher priced than web rolls. Taking all of these

factors into account, we do not include web rolls in the definition of the

domestic like product.”83

In the final phase of these investigations, petitioners maintained that the Commission’s

preliminary determination regarding the issue of whether web rolls should be included into the domestic

like product was correct and stated that no additional information placed on the record in the final phase

of these investigations calls into question that determination.84 Respondents argued that web rolls should

be included into the domestic like product. They cite additional information specifically pertaining to the

domestic like product factors of physical characteristics and interchangeability. With regard to physical

characteristics, respondents observed that in the preliminary phase, the Commission considered the

“moisture level” and “porosity” between the products to be dissimilar85 and provide an affidavit from an

industry insider that states that the differences in the moisture and porosity levels between paper in sheet

and web roll form has recently been minimized due to advances in technology.86 With regard to

interchangeability, respondents claimed that web rolls are not only able to be sheeted, but are currently

being sheeted in the U.S. market. Respondents cited a brochure issued by a vendor advertising a machine

that they claim adds the requisite moisture to web rolls to be able to properly sheet them.87 Petitioners

also submitted affidavits from industry participates that claim that paper in web roll and sheet form are

not interchangeable and that the machine cited by respondents as capable of sheeting web rolls, is in fact,

for the sheeting of sheeter rolls and not web rolls.88

Certain Coated Paper Other Than Certain Coated Paperboard vs. Certain Coated Paperboard

In a posthearing request, the Commission asked the parties to address the issue of whether

“certain coated paper other than certain coated paperboard” and “certain coated paperboard”89 were

 83 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from China and

Indonesia, Inv. Nos. 701-TA-470-471 and 731-TA-1169-1170 (Final), USITC Publication 4108, November 2009, p.

10.

 84 Petitioners’ prehearing brief, p. 8.

 85 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from China and

Indonesia, Inv. Nos. 701-TA-470-471 and 731-TA-1169-1170 (Final), USITC Publication 4108, November 2009, p.

9.

 86 Respondents’ prehearing brief, p. 19, citing exh. 2 (affidavit of Mr. Hanscom).

 87 Respondents’ posthearing brief, at exh. 1, p. 54 (containing a list of new factual allegations that support

increased interchangeability) and exh. 10 (brochure).

 88 Petitioners’ posthearing brief, pp. 6-7 and “Questions from Commission Staff,” exh. 7, pp. 1-3.

 89 “Certain coated paperboard” was defined by the Commission as “solid bleached sulfate (SBS) paperboard,

coated recycled paperboard (CRP), and coated natural kraft paperboard (CNK) having a GE brightness of 80 or

higher and weighing not more than 340 grams per square meter in sheet form.”

Petitioners maintained that because the definition did not contain the phrase “suitable for high-quality print

graphics,” “certain coated paperboard,” as defined by the Commission, would include out-of-scope product, namely

coated paperboard used in packaging applications, which they argued is not “suitable for high-quality print

graphics.” Petitioners’ posthearing brief, “Questions from Commissioners,” exh. 1, p. 3. Respondents maintained

that the definition of “certain coated paperboard” is untenable and not a recognizable delineation in the industry

because there exists no bright line between coated paper and paperboard and there is much overlap between “thick

paper” and “thin paperboard.” Respondents’ posthearing brief, exh. 36, p. 2.

In the course of its scope inquiry, Commerce requested that the petitioners provide a definition of “coated

paperboard.” Petitioners responded that “there is no single definition that distinguishes between paper and

paperboard in terms of either weight or thickness. Such delineations will vary according to end use.” Petitioners

(continued...)

I-25
separate domestic like products. Both parties continue to urge the Commission to find one domestic like

product co-extensive with the scope as defined by Commerce.90 Petitioners claimed that “certain coated

paperboard” within the scope of these investigations are quite similar as both are “used for printing, are

sold to the same customers through the same channels of distribution, and are interchangeable where they

have similar basis weights.” Petitioners listed one primary difference, namely that the two products are

produced in different manufacturing facilities with different production employees.91

Respondents maintained that “certain coated paper other than certain coated paperboard” and

“certain coated paperboard” are part of a single domestic like product. They stated that the physical

characteristics of the two products are identical as both products have comparable porosity, moisture

content and are in sheet form. With regard to end use, respondents maintained that both are used in sheetfed presses and that there are only two customers for certain coated paperboard, which are commercial

printers that use the product for “covers” and firms that produce packaging. Respondents stated that the

two products are generally produced at separate paper mills, but that the production processes are very

similar (only the calibration of the paper-production machines being dissimilar) and production

employees could easily move from the production of one product to another. With regard to channels of

distribution, respondents claimed that they are identical for certain coated paperboard used as covers by

commercial printers. Respondents observed that the price of certain coated paper used for covers is

comparable to the price of certain coated paperboard.92

 89 (...continued)

then recommended what is now footnote 1 in Commerce’s scope definition. See Respondents’ posthearing brief,

exh. 37 (exh. 6).

 90 The parties appear to disagree as to the proper interpretation of Commerce’s final scope determination. 

Petitioners maintained that by not excluding the phrase, “suitable for high-quality print graphics” from the scope,

Commerce determined that coated packaging paperboard is excluded from the scope of these investigations.

Petitioners’ posthearing brief, “Questions from Commissioners,” exh. 1, p. 3. Respondents maintained that

Commerce did not determine that “suitable for high-quality print graphic” creates an end-use limitation to the scope,

but rather that any product fitting the physical specifications listed in the scope (brightness, basis weight, and in

sheet form) would be included within the scope. Respondents’ posthearing brief, exh. 1, p. 14.

 91 Petitioners’ posthearing brief, “Questions from Commissioners,” exh. 1, p. 4. Petitioners reported that they do

not produce “certain coated paperboard,” as defined by the Commission.

Petitioners also argued that if “certain coated paperboard” products deemed outside the scope of these

investigations are included then those products are very different as they are used for packaging applications. Ibid.

at p. 3.

 92 Respondents’ posthearing brief, exh. 3, p. 4 and exh. 36. Although arguing that the Commission’s definition

of “certain coated paperboard” is artificial and untenable, respondents contended that should the Commission find

two separate domestic like products then there is not substantial evidence that the “certain coated paperboard”

industry in the United States is materially injured or threatened with material injury by subject imports. 

Respondents’ posthearing brief, exh. 38. In its division of the U.S. industry, respondents included the following

U.S. firms in the U.S. certain coated paperboard industry: (1) Clearwater, (2) Georgia-Pacific, (3) International

Paper, (4) MeadWestvaco, and (5) Rock-Tenn. Respondents’ U.S. industry data includes coated paperboard

products regardless of end use. Clearwater and MeadWestvaco, according to their responses to the U.S. producer

questionnaire produce some product for the U.S. commercial printing industry and some for the U.S. packaging

industry. International Paper reported in its questionnaire response that all of its coated paperboard reported therein

is sold in the U.S. commercial printing industry. 

I-26
PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET CHARACTERISTICS

Certain coated paper is used in printed materials requiring high-gloss sheets, including annual

company reports, high-end brochures, catalogues, magazines, direct mail advertisements, and labels.1

Purchasers of certain coated paper consist of paper merchants/distributors and end users, which are

commercial printers. Final end-use customers include large corporations, publishing houses, and

advertising agencies.

A majority of U.S. integrated producers of certain coated paper reported that *** of their certain

coated paper is sold from inventory, with lead times ranging from ***.2 The lead times on U.S. integrated

producers’ sales produced to order range from ***. A *** of responding converters of certain coated

paper reported that most *** of their sales are from inventory, with *** reporting that *** of their sales

are produced to order. Lead times on converters’ sales from inventory range from *** and lead times on

converters’ sales produced to order range from ***. Half of the responding importers of certain coated

paper from China reported that all or most of their sales are from inventory and the other half reported

that all or most of their sales are produced to order in China. *** of the responding importers of certain

coated paper from Indonesia reported that all or most of their sales are produced to order in Indonesia. 

Importers’ lead times from inventory range from ***. Lead times on sales produced to order in China

range from *** and lead times on sales produced to order in Indonesia range from ***.

The Commission received questionnaire responses from 35 purchasers, including 22 distributors

and 13 end users.3

 Among responding purchasers, 33 reported purchasing certain coated paper produced

in the United States, 16 of which also reported purchasing imports from China and 7 of which also

reported purchasing imports from Indonesia; one purchaser reported purchasing imports exclusively from

China and nonsubject sources.4

 Four responding purchasers reported purchasing imports from both China

and Indonesia. Purchasers were asked how many suppliers they generally contact before making a

purchase. Six of 35 responding purchasers reported that they contact one supplier, 1 purchaser reported

that it contacts one to two suppliers, 7 purchasers reported that they contact two suppliers, 6 purchasers

reported that they contact three suppliers, and 3 reported that they contact three to six suppliers.5

 

When purchasers were asked if the relative shares of their total purchases of certain coated paper 

from different sources had changed since 2007, among 35 responding purchasers, 7 reported that their

shares of purchases from U.S. producers have increased.6

 Five purchasers reported that their shares of

purchases from U.S. producers have decreased, two of which cited price reasons and one cited quality. 

Two purchasers reported that their shares from U.S. producers have not changed. Eight purchasers

reported that their shares of purchases from China have increased since 2007, with four citing price, two

citing quality, and one citing a switch of its purchases from Indonesia to China due to environmental

 1 Coated paperboard is typically used to make folding cartons.

 2

 ***, reported that *** percent of *** sales are from inventory. *** reported that *** percent of their sales are

from inventory. U.S. producers of coated packaging paperboard reported that most or all of their sales are ***.

 3

 Three of the distributors identified themselves as converters and one identified itself as a retailer. Not every

purchaser responded to every question in the questionnaire.

 4

 One purchaser did not identify the countries of origin of its purchases. Twenty-two purchasers reported

purchasing imports from nonsubject sources.

 5

 Two purchasers reported that the number of suppliers they contact varies.

 6

 Specifically, purchaser *** reported that ***. Purchaser *** also reported that ***. Purchaser *** reported

that it increased its purchases from U.S. producer ***.

II-1
reasons.7

 Five purchasers reported that their shares of purchases from China have decreased, with two

citing the pendency of these investigations, one citing long lead times, and one citing a switch to U.S.

producers with an environmental certification from the Forest Steward Council (FSC). Three purchasers

reported that their shares of purchases from Indonesia have decreased, with one citing the pendency of

these investigations, one citing environmental reasons that resulted in a shift to a supplier in China, and

the other reportedly switching to a nonsubject supplier in Korea. Eighteen purchasers reported that their

shares of purchases from nonsubject sources have decreased, mostly citing price, availability, or

switching to U.S. product with FSC certification. Six purchasers reported increasing their shares of

purchases from nonsubject sources, including Germany, France, Finland, and Korea, citing reasons such

as availability, product range, shorter lead times, and quality. 

When firms were asked to list the geographic regions of the United States where they sell certain

coated paper, *** of the integrated producers reported that they served a nationwide market, with most

sales in 2009 being shipped to the Midwest, followed by the Southwest and the Northeast. *** of the

converters reported that they served a nationwide market and the *** reporting selling to specific

geographic regions, with most sales in 2009 being shipped to the Northeast, followed by the Southeast

and the Midwest. Three importers of certain coated paper from China reported selling nationwide, ***

reported selling to the ***, and *** reported selling to ***. Most sales of imports from China in 2009

were reportedly shipped to the Southeast, followed by the Northeast, the Midwest, and the West Coast.

*** importer of certain coated paper from Indonesia reported that it sells nationwide, one reported selling

to the ***, and one reported selling to the ***. Most sales of imports from Indonesia in 2009 were

reportedly shipped to the West Coast, followed *** by the Midwest and the Northeast. 

CHANNELS OF DISTRIBUTION

As shown in table II-1, the vast majority of U.S. integrated producers’ U.S. shipments of certain

coated paper were to merchants/distributors. Smaller shares of U.S. integrated producers’ U.S. shipments

of certain coated paper were sales through “paper directed buy” (PDB) programs and sales to end users.8

The majority of U.S. integrated producers’ shipments of coated packaging paperboard were to end users,

with the remainder going to merchants/distributors. A *** of converters’ U.S. shipments of certain

coated paper were to end users, with *** going to merchants/distributors. *** of U.S. importers’

shipments of imports from China were to merchants/distributors from 2007 to 2009; in the first six

months of 2010, *** of U.S. importers’ shipments of imports from China were to merchants/distributors,

with *** of shipments going to end users. *** of U.S. importers’ shipments of imports from Indonesia

and from nonsubject sources went to merchants/distributors. There were *** reported sales of imports

through PDB programs.

 7 One of these purchasers, ***, reported that it has stopped purchasing from its supplier of imports from China

due to these investigations. 

 8

 PDB programs are defined as sales of certain coated paper where the ultimate end-use customer (i.e., the

purchaser of printed materials from the printer) negotiates the paper source, specifications, and/or price directly with

the paper distributor or the paper mill. In these transactions, the printer for the ultimate end user must use the

specified paper and at the specific price. See further discussion of PDB programs on the following pages.

II-2
Table II-1

Certain coated paper: U.S. integrated producers’, converters’, and importers’ U.S. shipments of

certain coated paper, by sources and channels of distribution, 2007-09, and January-June 2010

Item

Period

2007 2008 2009

Jan.-June

2010

 Share of reported shipments (percent)

Integrated producers’ U.S. shipments of certain coated paper OTHER than coated packaging

paperboard to:

 Merchants/distributors 84.0 84.2 87.4 90.7

 End users 6.3 6.3 5.3 3.6

 PDB sales 9.7 9.5 7.3 5.7

Integrated producers’ U.S. shipments of coated packaging paperboard to:

 Merchants/distributors 39.4 37.4 36.5 36.2

 End users 60.6 62.6 63.5 63.8

 PDB sales 0.0 0.0 0.0 0.0

Integrated producers’ U.S. shipments of certain coated paper (total):

 Merchants/distributors 70.9 69.4 71.3 76.7

 End users 22.2 24.1 23.7 19.1

 PDB sales 6.9 6.5 5.0 4.2

Converters’ U.S. shipments of certain coated paper to:

 Merchants/distributors *** *** *** ***

 End users *** *** *** ***

 PDB sales *** *** *** ***

U.S. importers’ U.S. shipments of certain coated paper from China to:

 Merchants/distributors *** *** *** ***

 End users *** *** *** ***

 PDB sales *** *** *** ***

Table continued on following page. 

II-3
Table II-1--continued

Certain coated paper: U.S. integrated producers’, converters’, and importers’ U.S. shipments of

certain coated paper, by sources and channels of distribution, 2007-09, and January-June 2010

Item

Period

2007 2008 2009

Jan.-June

2010

 Share of reported shipments (percent)

U.S. importers’ U.S. shipments of certain coated paper from Indonesia to:

 Merchants/distributors *** *** *** ***

 End users *** *** *** ***

 PDB sales *** *** *** ***

U.S. importers’ U.S. shipments of certain coated paper from all other countries to:

 Merchants/distributors *** *** *** ***

 End users *** *** *** ***

 PDB sales *** *** *** ***

Note.–Data for domestic producers include only U.S. commercial shipments.

Source: Compiled from data submitted in response to Commission questionnaires.

There was *** customer overlap among U.S. integrated producers, converters, and importers of

certain coated paper in 2009. Specifically, among firms’ reported top five customers in 2009, ***

customers (***9

 and ***) were listed by U.S. integrated producers, converters, and importers. *** other

customers ***) were also listed by both U.S. integrated producers and importers among their top five

customers in 2009. *** U.S. integrated producers listed *** as their *** in 2009 and *** importer listed

*** as *** in 2009. *** U.S. integrated producers listed *** as their *** in 2009. 

U.S. integrated producers *** reported that they consider a variety of factors when choosing the

distributors for their products. Some of these producers cited factors including financial stability of

distributor, strength and technical expertise of sales force, level of commitment in terms of inventory, and

relative performance in the market.10 Petitioners also stated that they may choose to limit the numbers of

distributors they have in a particular region in order to limit the regional competition facing their

distributors, stating that they “try to make that balance between making sure {they} have sufficient

distribution footprint and protecting those folks with responsible distribution.”11 Furthermore, petitioners

stated that they do not have exclusive relationships with distributors and that the distributor ultimately

chooses how much warehouse space to allot to each supplier.12 *** also reported that ***.13 One

 9 ***.

 10 Conference transcript, p. 119 (Nelson). In addition, *** stated that its brand reputation ***. ***’s Producers’

Questionnaire response, app. B.

 11 Conference transcript, p. 120 (Dorn, Nelson).

 12 Conference transcript, p. 121 (Miller). 

 13 ***’s Producers’ Questionnaire response, app. B.

II-4
integrated producer reported that it will continue to supply a distributor even if it does not receive its ideal

amount of shelf space with that distributor and that it has sacrificed on price, not volume, in order to make

sales.14

Paper Directed Buy (PDB) Programs

PDB programs are sales of certain coated paper where the ultimate end-use customer (i.e., the

purchaser of printed materials from the printer) negotiates the paper source, specifications, and/or price

directly with the paper distributor or the paper mill. In these transactions, the printer for the ultimate end

user must use the specified paper and at the specific price. U.S. integrated producers reported that PDB

sales accounted for 5.0 percent of their total U.S. shipments of certain coated paper in 2009, as shown in

table II-1. *** U.S. integrated producers (***) reported participating in PDB programs. *** U.S.

integrated producer, ***, reported that it does not engage in PDB programs itself, but that it ***. No

importers reported participating in PDB programs. Three importers reported that they cannot participate

in such programs because the customers usually require environmental certifications and only U.S.-

produced certain coated paper has such certifications. Two of these importers also stated that they cannot

participate in PDB programs for several other reasons, including *** the large end-use customers that

participate in PDB programs; the fact that large end-use customers typically have a greater need to “buy

American;” such programs often require matching amounts of certain coated paper and web rolls of

coated paper and the importers are not able to compete against U.S. producers in the web roll segment of

the market; U.S. producers have long-term relationships with the end-use customers involved; and U.S.

producers offer complex rebate programs to PDB customers and the importers cannot compete at those

lower prices.

Among responding purchasers, seven merchants/distributors (***) and three end users

(commercial printers ***) reported engaging in PDB programs for a portion of their total purchases.15

Five of the distributors reported using U.S. paper mills in such programs. One distributor (***) reported

using U.S. paper mills *** and another distributor, Mac Papers, reported that it has used certain coated

paper from APP in such programs.16 All three end users reported using U.S. paper mills in PDB

programs, one of which ***. 

Two of the distributors reported participating in PDB programs because they provide them with

stable sales volumes; price stability; financial stability of customers base; and ***. When asked if there

are restrictions as to which paper sources they can use for PDB programs, four distributors cited issues

such as willingness of each participant (i.e., the paper mill, the end user, and the distributor), local sales

team,17 ability of the producer to guarantee prices over a period of time, franchise restrictions, supply

chain logistics, and environmental certifications. One of these distributors, ***, later stated that it is

unaware of any restriction that would prevent APP or any other foreign manufacturer from having its

paper used in PDB programs.18 One of these distributors also reported that changing the incumbent paper

source often results in losing the sale or ***. Two of the distributors that participate in PDB programs

reported that there are no restrictions as to which paper source they can use. One of these distributors

 14 Conference transcript, p. 122 (Miller). 

 15 As shown in table II-3, two responding purchasers characterized “willingness to or ability of supplier to engage

in PDB programs” as a “very important” factor in their purchasing decisions, while 5 reported that it was “somewhat

important,” and 24 reported that it was “not important.”

 16 Hearing transcript, p. 138 (McGehee).

 17 Specifically, one distributor reported that suppliers of imports of certain coated paper are generally excluded

from participating in PDB programs because they lack a local sales team capable of maintaining ongoing

relationships with the end-use customers. 

 18 Petitioner’s posthearing brief, exh. 1, p. 3.

II-5
stated that it promotes its paper to end users and is encouraged to do so ***. The other distributor stated

that it typically sources its PDB programs through U.S. producers to ensure reliability and speed of

delivery, product quality, and good service. One end user reported that its end-use customer selects the

paper source, another end user reported that the distributor selects the paper, and one end user reported

that it and its end-use customer must test and approve the certain coated paper used.

Private label sales

Private label sales are sales of certain coated paper to large distributors that put their own brand 

on the paper. Private label product reportedly tends to be economy grade and is generally sold at a lower

price than mill branded products.19 U.S. producer ***. U.S. producer ***. U.S. producer ***.20 ***.21

Importers ***.22 Respondents reported that they believe that ***.23

Petitioner contends that subject imports are increasingly entering the private label business, 

stating that subject import suppliers can easily bring in large volumes of product into the United States

through private label sales, which eliminate marketing and promotion costs. Petitioner further argues that

when subject import suppliers were the primary source for private label products, the lower prices of

private label products drove down prices of mill branded product.24

SUPPLY AND DEMAND CONSIDERATIONS

Supply

U.S. Supply

The supply response of U.S. producers to changes in price depends on such factors as the level of

excess capacity, the availability of alternate markets for U.S.-produced certain coated paper, inventory

levels, and the ability to shift production to the manufacture of other products. The evidence indicates

that U.S. producers have the ability to respond to changes in demand with moderate changes in supply,

due primarily to ***. 

Industry capacity 

U.S. integrated producers’ annual capacity utilization rates for certain coated paper ranged from

93 to 96 percent in 2007 to 77 to 87 percent 2009; they ranged from 92 to 100 percent in the first half of

2010.25 These levels of capacity utilization indicate that the U.S. integrated producers have limited

unused capacity with which they could increase production of certain coated paper in the event of a price

change.

 19 Petitioner’s posthearing brief, responses to questions from Commissioner Aranoff, exh. 2. Respondents’

posthearing brief, exh. 2, p. 12.

 20 Petitioner’s posthearing brief, responses to staff questions, exh. 4, p. 1.

 21 Petitioner’s posthearing brief, responses to questions from Commissioner Aranoff, exh. 2, p. 2.

 22 Respondents’ posthearing brief, exh. 2, p. 11.

 23 Ibid., p. 12.

 24 Petitioner’s posthearing brief, responses to questions from Commissioner Aranoff, exh. 2.

 25 See part III for further information.

II-6
Alternative markets

U.S. integrated producers’ exports, as a share of their total shipments, *** from

2007 to 2008 before decreasing in 2009. Exports of U.S. producers of certain coated paper other than

coated packaging paperboard were *** percent of their total shipments in 2007; *** percent in 2008; 7.3

percent in 2009; and were *** percent in the first half of 2010. Exports of U.S. producers of coated

packaging paperboard were *** percent of their total shipments in 2007; *** percent in 2008; *** percent

in 2009; and were *** percent in the first half of 2010.26 These data indicate that the U.S. producers of

certain coated paper other than packaging paperboard have *** capability to divert shipments to or from

alternative markets in response to changes in the price of certain coated paper, whereas the U.S. producers

of coated packaging paperboard have *** to divert shipments to or from alternative markets in response

to changes in the price of coated packaging paperboard.

Inventory levels

For U.S. producers of certain coated paper other than coated packaging paperboard, the ratio of

end-of-period inventories to their total shipments increased from 23.3 percent in 2007 to 28.7 percent in

2009 and were 25.2 percent in the first half of 2010. For U.S. producers of coated packaging paperboard,

the ratio of end-of-period inventories to their total shipments *** from *** percent in 2007 to *** percent

in 2009 and were *** percent in the first half of 2010. These data indicate that the U.S. producers of

certain coated paper other than coated packaging paperboard have some ability to use inventories as a

means of increasing shipments of certain coated paper to the U.S. market and that U.S. producers of

coated packaging paperboard *** ability to use inventories as a means of increasing shipments of certain

coated paper to the U.S. market.

Production alternatives

*** of the U.S. integrated producers and *** responding converters reported that they use the

same manufacturing equipment and the same workers used to make certain coated paper in the production

of other products, including uncoated free sheet paper, coated and uncoated groundwood paper, coated

paper in web roll form, kraft paper, and market pulp. 

Supply disruptions

*** U.S. integrated producers (***) reported having supply disruptions since 2007. *** reported

that demand has outpaced its production since the ***. *** reported that there was a fiber shortage in the

***. *** reported that it put customers of certain coated paper on allocation in *** and ***. ***

reported that it ***. *** reported that it had supply disruptions ***. *** reported that ***, it was unable

to meet all of its customers’ needs ***. *** reported that it had supply disruptions ***. *** also reported

that it had supply disruptions ***. *** converters reported having supply disruptions since 2007. 

*** of 32 responding purchasers reported that one or more suppliers of certain coated paper have

refused to supply them since 2007. Specifically, one purchaser cited U.S. integrated producer ***, stating

that it ***, resulting in extended delivery times of *** before returning to more “acceptable” times of ***

in ***. One purchaser reported that U.S. integrated producers restrict their franchise distributorships by

regional market and therefore it cannot purchase from ***. Purchaser (***) reported that U.S. integrated

producer ***. Also, in the preliminary phase of these investigations, purchaser *** reported that U.S.

integrated producer *** put it on allocation for one of its products in ***. 

 26 See part III for further information.

II-7
One purchaser named U.S. integrated producers ***, but did not provide specific instances. 

Subject Imports from China

The responsiveness of supply of imports from China to changes in price in the U.S. market is

affected by such factors as capacity utilization rates and the availability of home markets and other export

markets. Based on available information, producers in China have the capability to respond to changes in

demand with moderate changes in the quantity of shipments of certain coated paper to the U.S. market.27

The main contributing factors to the moderate degree of responsiveness of supply are the existence of

alternative markets combined with relatively high capacity utilization rates.

Industry capacity

During the period for which data were collected, the capacity utilization rate for reporting

producers in China of certain coated paper increased from 90.7 percent in 2007 to 95.9 percent in 2009; it

is projected to be 99.2 percent in 2010 and 99.3 percent in 2011.

Alternative markets

As shown in figure II-1, available data indicate that producers in China have some ability to

divert shipments to or from alternative markets in response to changes in the price of certain coated

paper. Specifically, the share of shipments by producers in China that went to the United States

decreased from 9.6 percent in 2007 to 9.3 percent in 2009; it is projected to be 1.0 percent in 2010 and 0.9

percent in 2011. The share of shipments by producers in China to export markets other than the United

States increased from 24.9 in 2007 to 29.1 percent in 2009; it is projected to be 35.2 percent in 2010 and

29.8 percent in 2011. The share of shipments by producers in China going to the home market decreased

from 65.5 percent in 2007 to 61.5 percent in 2009; it is projected to be 63.7 percent in 2010 and 69.5 

percent in 2011. The share of internal consumption by producers in China was zero in 2007 and

increased to 0.1 percent in 2009; it is projected to be virtually zero in 2010 and 2011.

 27 The Commission received responses from 10 firms accounting for approximately *** percent of Chinese

production of certain coated paper in 2009 and approximately *** percent of exports from China to the United States

in that year.

II-8
0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Percent of total shipments

Internal consumption 0.0 0.0 0.1 0.0 0.0

Shipments to home market 65.5 62.7 61.5 63.7 69.5

Exports to markets other

than the United States

24.9 27.6 29.1 35.2 29.8

Exports to the United States 9.6 9.7 9.3 1.0 0.7

2007 2008 2009 2010--

projected

2011--

projected

Figure II-1

Certain coated paper: Shares of total shipments of certain coated paper by producers in China,

by destination, 2007-09 and projected for 2010 and 2011

Source: Compiled from data submitted in response to Commission questionnaires.

Inventory levels

Inventories of responding producers in China, as a share of total shipments, increased from 3.6

percent in 2007 to 7.9 percent in 2008 before decreasing to 3.6 percent in 2009; they are projected to be

3.2 percent in 2010 and 2.7 percent in 2011. 

Supply disruptions

*** importers of certain coated paper from China (***) reported ***. ***. Three purchasers

reported that importers of product from both China and Indonesia have restricted supply due to these

investigations. One purchaser reported that importers of product from China suspended deliveries for one

month in 2008 due to the investigation on coated free sheet paper. One purchaser reported that supply of

certain coated paper was restricted from several suppliers for three to four months in early 2010 due to a

shortage in pulp. 

Subject Imports from Indonesia

The responsiveness of supply of imports from Indonesia to changes in price in the U.S. market is

affected by such factors as capacity utilization rates and the availability of home markets and other export

markets. Based on available information, producers in Indonesia have the capability to respond to

changes in demand with moderate to large changes in the quantity of shipments of certain coated paper to

II-9
the U.S. market. 28 The main contributing factors to this degree of responsiveness of supply are the

existence of unused capacity and alternative markets.

Industry capacity

During the period for which data were collected, the capacity utilization rate for reporting

producers in Indonesia of certain coated paper increased from *** percent in 2007 to *** percent in 2009;

it is projected to be *** percent in 2010 and 2011.

Alternative markets

As shown in figure II-2, available data indicate that producers in Indonesia have some ability to

divert shipments to or from alternative markets in response to changes in the price of certain coated paper. 

Specifically, the share of shipments by producers in Indonesia that went to the United States decreased

from *** percent in 2007 to *** percent in 2009; it is projected to be *** percent in 2010 and *** percent

in 2011. The share of shipments by producers in Indonesia to export markets other than the 

United States increased from *** in 2007 to *** percent in 2009; it is projected to be *** percent in 2010

and *** percent in 2011. The share of shipments by producers in Indonesia going to the home market

increased slightly from *** percent in 2007 to *** percent in 2009; it is projected to be *** percent in

2010 and *** percent in 2011. The share of internal consumption by producers in Indonesia decreased

slightly from *** percent in 2007 to *** percent in 2009; it is projected to be *** percent in 2010 and

2011.

Figure II-2

Certain coated paper: Shares of total shipments of certain coated paper by producers in

Indonesia, by destination, 2007-09 and projected for 2010 and 2011

* * * * * * *

Inventory levels

Responding Indonesia producers’ inventories, as a share of total shipments, decreased from ***

percent in 2007 to *** percent in 2009; they are projected to be *** percent in 2010 and 2011. 

Supply disruptions

*** importer of certain coated paper from Indonesia (***) reported that it has restricted the

supply of certain products in the United States as a result of these investigations as well as the

Commission’s 2007 investigation on coated free sheet paper when temporary antidumping duties were

put in place. Three purchasers reported that importers of product from both China and Indonesia have

restricted supply due to these investigations. One purchaser reported that supply of certain coated paper

was restricted from several suppliers for three to four months in early 2010 due to a pulp shortage. 

 28 The Commission received responses from three firms accounting for approximately *** percent of Indonesian

production of certain coated paper in 2009 and approximately *** percent of exports from Indonesia to the United

States in that year.

II-10
-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

2007 2008 2009 2010

Percent change

Real GDP growth

Nonsubject Imports

Imports from nonsubject sources of certain coated paper, as a share of the quantity of total U.S.

imports of certain coated paper, decreased from *** percent in 2007 to *** percent in 2009. Imports

from nonsubject sources accounted for *** percent of the quantity of total imports in the first half of

2010.29

Demand

The existence of substitutes for certain coated paper discussed below indicates that the demand 

for this product is likely to be relatively price elastic. The demand for certain coated paper is largely

determined by the overall economy and demand for high-end commercially printed advertisements,

reports, and brochures.30 Real GDP growth at seasonally adjusted annual rates is shown in figure II-3.31

As shown in figure II-4, commercial printing activity, as measured by RISI, began to decline in 

*** and decreased overall by *** percent from the first quarter of 2007 to the second quarter of 2010.32

Figure II-3

Certain Coated Paper: Real GDP growth, January 2007-June 2010

Source: Bureau of Economic Analysis.

 

 29 The largest sources of nonsubject imports include Canada, Germany, Finland, and Korea.

 30 Petitioner’s postconference brief, p. 17.

 31 U.S. Bureau of Economic Analysis. Gross Domestic Product, 2nd quarter 2010 (third estimate). September

30, 2010.

 32 RISI Commercial Printing Index, August 2010.

II-11
Figure II-4

Certain Coated Paper: RISI commercial printing activity index, January 2007-June 2010

* * * * * * *

Petitioner reported that demand for certain coated paper is expected to decline in 2011 and

2012.33 Specifically, petitioner cites RISI’s projections of a decline of *** percent in U.S. apparent

consumption from 2010 to 2011 and a further reduction of *** percent in 2012.34

When asked how the overall demand for certain coated paper has changed since January 2007, 10

of 11 responding U.S. integrated producers reported that demand has decreased or fluctuated, citing the

recession. More specifically, four integrated producers reported that demand decreased from the fourth

quarter of 2008 and improved in the second half of 2009, one reported that demand was especially week

in 2009, and two integrated producers reported that demand was still weak into 2010. Four of five

responding converters reported that demand has decreased, citing the recession and the increase of

competing forms of advertisement; one converter reported that demand has not changed since 2007.

All nine responding importers reported that demand has decreased or fluctuated since 2007,

mostly citing the recession.35 Two importers reported that demand in 2010 is stable or improving and one

importer reported that demand is currently still weak but is expected to improve. Four importers reported

that the recession caused a decline in prices, while one importer reported that the recession had no effect

on prices. 

Fifteen of 22 responding purchasers reported that demand has decreased since 2007, mostly citing

the recession.36 Four reported that demand had not changed, three reported that it had fluctuated, and one

reported that it had increased. Some purchasers reported that demand decreased by 15 to 30 percent

during the recession.

Apparent U.S. consumption of certain coated paper other than coated packaging paperboard by

quantity decreased by *** percent from 2007 to 2009 overall, decreasing by *** percent from 2007 to

2008 before decreasing further by *** percent from 2008 to 2009; in the first half of 2010, it was ***

percent above the first half of 2009. Apparent U.S. consumption of total certain coated paper by quantity

decreased by *** percent from 2007 to 2009 overall, decreasing by *** percent from 2007 to 2008 before

decreasing further by *** percent from 2008 to 2009; in the first half of 2010, it was *** percent above

the first half of 2009. 

In the preliminary phase of these investigations, respondents stated that most of the decline in

demand for certain coated paper in 2008 and 2009 is permanent, due to a structural shift of printed

materials to on-line content.37 One converter, three importers, and one purchaser reported that they or

their customers had switched from certain coated paper to electronic or on-line media. 

In the preliminary phase of these investigations, respondents also stated that purchasers of certain

coated paper built up inventories during 2008 in order to hedge against further price increases and that

these purchasers began to draw down inventories in the second half of 2008, resulting in reduced orders

in addition to the recessionary effect on demand.38 When asked how their level of inventories has

changed since 2007, 16 of 29 responding purchasers reported that their inventories of U.S. product have

 33 Petitioner’s posthearing brief, p. 9.

 34 Petitioner’s posthearing brief, responses to questions from Commissioner Pinkert, exh. 3. RISI Paper Trader,

July 2010.

 35 One importer also cited competing forms of advertisement, such as electronic media and the internet, for the

decrease in demand.

 36 One purchaser also cited a shift toward electronic media for the decrease in demand.

 37 Respondents’ postconference brief, pp. 14-15.

 38 Respondents’ postconference brief, p. 28.

II-12
decreased, while 7 reported that they have not changed, and 6 reported that they have increased.39

Purchasers of imports from China and Indonesia did not respond to this question.40

Business Cycles

When asked if the certain coated paper market was subject to business cycles, four U.S.

integrated producers and two converters reported that demand peaks in the third and fourth quarters 

leading up to the holiday season. Three integrated producers reported that there is also a peak in the first

quarter due to the printing of annual reports and spring fashion advertisements.41 Twelve of 28

responding purchasers reported that the certain coated paper market was subject to business cycles, with

eight specifically citing a peak in the fall and six citing a peak in the first quarter. Sixteen purchasers

reported that a business cycle does not exist in the certain coated paper market. 

In the preliminary phase of these investigations, respondents reported that there are seasonal

peaks in the spring and in the fall, but that the typical business cycle was disrupted in the second half of

2008 and 2009 due to the recession.42

Substitute Products

Six U.S. integrated producers and two converters listed substitutes for certain coated paper, three

of which cited uncoated paper and one of which cited electronic media. Two producers and two

converters cited solid bleached (or unbleached) sulfate paperboard or lightweight recycled paperboard as

a substitute. One U.S. integrated producer noted that uncoated paper does not print with the same image

and color quality as certain coated paper. One integrated producer noted that electronic or on-line media,

while not direct substitutes for certain coated paper, are viable alternatives to conventional print media. 

Three producers reported that the prices of alternative types of paper can affect the price of certain coated

paper, with one citing a time lag of 3 to 6 months.

Five of nine responding importers reported substitutes for certain coated paper, with three citing

coated groundwood paper, three citing electronic or on-line media, three citing web rolls, and one citing

supercalendared groundwood paper. Three importers reported that the prices of substitutes can affect the

price of certain coated paper, stating that the prices of printing papers (excluding newspaper) tend to

move together. One of these importers noted that, due to the recession, consumers of the more costly

certain coated paper have switched to less costly groundwood paper. Two importers reported that their

customers have switched from certain coated paper to electronic or on-line media and one importer

reported switching to coated groundwood.

Twenty-two of 32 responding purchasers reported that there are no substitutes for certain coated

paper. Ten purchasers cited possible substitutes, including uncoated free sheet paper, coated groundwood

paper, and supercalendared paper. Three of these purchasers specifically cited electronic or on-line media

as substitutes. One purchaser cited other forms as packaging as substitutes for paperboard, including

 39 Three of these purchasers noted that their inventories had fluctuated and slightly increased overall.

 40 Purchasers were also asked to provide their end-of-period inventories of certain coated paper from each source,

but not all purchasers responded. Total end-of-period inventories of U.S. product reported by 19 of the 31

responding purchasers of U.S. product *** by *** percent from 2007 to 2008 and *** by *** percent in 2009. Total

end-of-period inventories of imports from China reported by 10 of the 17 responding purchasers of imports from

China *** by *** percent from 2007 to 2008 and *** by *** percent in 2009. Total end-of-period inventories of

imports from Indonesia reported by 3 of the 6 responding purchasers of imports from Indonesia *** by *** percent

from 2007 to 2008 and *** by *** percent in 2009.

 41 Another integrated producer reported that national elections and the Olympics may also affect demand.

 42 Respondents also stated that, due to the lead times from China and Indonesia, imports are typically shipped in

January or February for the spring season. Conference transcript, p. 195 (Hunley).

II-13
plastic bags and shrink films. Three purchasers reported that the prices of substitutes can affect the price

of certain coated paper, stating that the prices of printing papers tend to move together. Three purchasers

reported that either they or their customers had actually switched to other types of paper and one

purchaser reported actually switching to on-line media.

Cost Share

The reported share of total cost of end uses made up of certain coated paper varied by end 

uses, but was in the moderate to high range for most end uses. Several purchasers indicated that certain

coated paper accounts for approximately 30 to 60 percent of the total cost of commercial printing.43

SUBSTITUTABILITY ISSUES

The degree of substitutability between domestic products, subject imports, and nonsubject

imports is examined in this section. The discussion is based upon the questionnaire responses from

producers, importers, and purchasers.

Factors Affecting Purchasing Decisions

Available information indicates that a variety of factors are considered important in the

purchasing decision for certain coated paper. While quality and price were mentioned most often as

being important factors used in purchasing decisions, other factors such as availability are also important 

considerations. Purchasers were asked to list the top three factors that they consider when choosing a

supplier of certain coated paper. Table II-2 summarizes the responses.

Table II-2

Certain coated paper: Ranking of factors used in purchasing decisions, as reported by U.S.

purchasers

Factor

Number of firms reporting

Number one factor Number two factor Number three factor

Quality 15 8 4

Price 8 12 8

Availability 5 7 8

Other1 349

 1 For the number one factor, other factors cited include one instance of “traditional supplier,” one instance of

“pre-arranged contracts,” and one instance of “customer request.” For the number two factor, other factors cited

include three instances of “reliability of supply/delivery” and one instance of “service.” For the number three factor,

other factors cited include three instances of “reliability of supply;” two instances of “service;” one instance of

“environmental attributes;” one instance of “flexibility;” one instance of “extension of credit;” and one instance of

“national branding potential.”

 

Source: Compiled from data submitted in response to Commission questionnaires.

 

 43 One purchaser reported that paperboard accounts for approximately 38 percent of the cost of printed folding

cartons. Another purchaser reported that certain coated paper can account for up to 95 percent of printed

promotional advertisement.

II-14
Quality was named by 15 of 27 purchasers as the number one factor generally considered in

deciding from whom to purchase certain coated paper, while 8 purchasers indicated that it was the

number two factor, and 4 reported that it was the number three factor. As indicated in table II-3, a large

majority of responding purchasers indicated that product consistency and quality meeting industry

standards were “very important” factors in their purchasing decisions.

Price was named by 8 purchasers as the number one factor generally considered in deciding from

whom to purchase certain coated paper, while 12 purchasers indicated that it was the number two factor,

and 8 purchasers responded that it was the number three factor. As indicated in table II-3, 29 of 

32 responding purchasers indicated that price was a “very important” factor in their purchasing decisions. 

When asked how often they purchase the certain coated paper that is offered at the lowest price, 15 of 31 

responding purchasers reported “sometimes,” 12 reported “usually,” 3 reported “never,” and 1 purchaser

reported “always.”44

When purchasers were asked if they had purchased from one source although comparable certain

coated paper were available from another source at a lower price, 25 of 31 responding purchasers reported

that they had done so, mostly citing lead and delivery times, availability, reliability of supply, paper mill

proximity, franchise relationship with supplier, minimum order requirements, past relationship with the

supplier, and service. 

Availability was named by five purchasers as the number one factor generally considered in

deciding from whom to purchase certain coated paper, while seven indicated that it was the number two

factor, and eight purchasers reported that it was the number three factor. As indicated in table II-3, 30 of

32 responding purchasers indicated that availability and reliability of supply were “very important”

factors in their purchasing decisions.

When asked if buying certain coated paper that is produced in the United States was an important

factor in their purchasing decisions, 19 of 32 responding purchasers responded “yes,” with two citing

shorter lead times from U.S. paper mills, one citing customer requiring use of environmentally-friendly

(or Forest Steward Council-certified paper), and one citing product range and laws or regulations

requiring the purchase of domestic product.45 Eight of 31 responding purchasers reported buying only

U.S.-produced certain coated paper since 2007, mostly citing reasons such as shorter lead times,

convenience, quality, traditional relationship, availability, and freedom from carrying inventories due to

short delivery times. 

Fourteen of 32 responding purchasers reported that they require suppliers to become certified for 

all or some of their purchases.46 When purchasers were asked what factors they consider when qualifying

a new supplier, purchasers most often cited product quality and consistency, reliability, service, supply

chain management, environmental record or certifications, lead time, product range, volume capacity, and

price. Certifications consist of lab testing for quality and consistency and reportedly take from *** to ***

to complete. Six purchasers reported that a supplier had failed in its attempt to qualify product with them. 

Two of these purchasers cited U.S. product (with one citing poor quality) and two purchasers cited

suppliers of imports from China47 due to inconsistent quality, poor service, long lead times, and poor

environmental record.

 44 One purchaser reported that it “usually” purchases certain coated paper that is offered at the lowest price when

purchasing for commercial printers, but that it “sometimes” does so when purchasing for end users.

 45 Of those purchasers that reported the share of total purchases that were affected by preferences to purchase

U.S.-produced product, six reported that such preferences affect 10 percent or less of their purchases, while four 

reported that they affect 25 to 40 percent, and two reported that they affect 60 to 80 percent of their purchases.

 46 Twelve of these purchasers reported that they require suppliers to be certified for all of their purchases.

 47 One of these purchasers named importer ***.

II-15
Table II-3

Certain coated paper: Importance of factors used in purchasing decisions, as reported by U.S.

purchasers

Factor1

Number of firms reporting

Very important Somewhat important Not important

Availability 30 2 0

Delivery terms 21 10 0

Delivery time 27 4 0

Discounts offered 13 16 1

Extension of credit 13 10 6

Price 29 3 0

Minimum quantity requirements 4 22 6

Packaging 4 20 7

Product consistency 29 3 0

Quality meets industry standards 28 3 0

Quality exceeds industry standards 11 13 8

Product range 8 18 5

Reliability of supply 30 2 0

Technical support/service 14 15 3

U.S. transportation costs 14 17 0

Willingness or ability of supplier to

engage in PDB programs 2 5 24

 1

 One purchaser also cited “social and environmental compliance” and “sampling capability” (e.g., when

attempting to meet custom specifications) as very important factors used in purchasing decisions.

Source: Compiled from data submitted in response to Commission questionnaires.

 

Twenty-four of 30 responding purchasers reported that they “always” know whether the certain

coated paper they purchase are imported or produced domestically; 19 reported that they “always” know

the manufacturer; and 15 reported that buyers are “sometimes” aware or interested in the country of origin

of the certain coated paper they purchase.48 

Fifteen of 34 responding purchasers reported that certain coated paper produced in the United

States “always” meet minimum quality specifications, while 19 reported “usually.” Six of 24 responding

purchasers reported that certain coated paper produced in China “always” meet minimum quality

specifications, while 16 reported “usually,” and two reported “rarely or never.” One of 13 responding

purchasers reported that certain coated paper produced in Indonesia “always” meet minimum quality

specifications, while 9 reported “usually,” 1 reported “sometimes,” and 2 reported “rarely or never.” 

 48 Seven purchasers reported that buyers are “usually” aware or interested in the country of origin of their

purchases and five reported “never.”

II-16
Comparisons of Domestic Product and Subject Imports

In order to determine whether U.S.-produced certain coated paper can generally be used in the

same applications as imports from China and Indonesia, producers and importers were asked whether the

products can “always,” “frequently,” “sometimes,” or “never” be used interchangeably. Four of nine

responding U.S. integrated producers and a majority of converters reported that U.S.-produced certain

coated paper and imports from China and Indonesia are always interchangeable, as shown in table II-4. 

Table II-4

Certain coated paper: Perceived degree of interchangeability of product produced in the United

States and in other countries, by country pairs

Country

comparison

U.S. integrated

producers

U.S. converters U.S. importers U.S. purchasers

AFSNAFSNAFSNAFSN

U.S. vs. subject countries:

 U.S. vs. China 4 2 3 0 3 1 0 0 3 4 1 0 4 15 4 1

 U.S. vs. Indonesia 4 2 3 0 2 1 1 0 2 4 1 0 4 10 1 0

U.S. vs. nonsubject countries:

 U.S. vs. Other 4 3 0 0 0 0 0 0 1 4 1 0 5 13 6 0

Subject country comparisons:

 China vs. Indonesia 4400301033207710

Subject countries vs. nonsubject countries:

 China vs. Other 4 3 0 0 0 0 0 0 1 4 1 0 3 9 3 0

 Indonesia vs. Other 4300000014102720

Note.–“A” = Always, “F” = Frequently, “S” = Sometimes, and “N” = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

A majority of the importers that compared certain coated paper from China and Indonesia with

those from the United States reported that they are always or frequently interchangeable. A majority of

the purchasers that compared certain coated paper from China and Indonesia with those from the United

States reported that they are frequently interchangeable.

As indicated in table II-5, seven of nine responding U.S. integrated producers reported that

differences other than price between U.S.-produced certain coated paper and subject imports are always,

frequently, or sometimes a significant factor in their sales, while two reported that they are never a

significant factor. Most of the responding converters reported that differences other than price between

U.S.-produced certain coated paper and subject imports are sometimes a significant factor in their sales. 

Responses from importers were mixed, with five of seven firms reporting that differences other than 

price between U.S.-produced certain coated paper and imports from China are always a significant factor. 

A plurality of responding importers reported that differences other than price between U.S.-produced

certain coated paper and imports from Indonesia area sometimes a significant factor.

II-17
Table II-5

Certain coated paper: Differences other than price between products from different sources1

Country comparison

U.S. integrated

producers

U.S. converters U.S. importers

AFSNAFSNAFSN

U.S. vs. subject countries:

 U.S. vs. China 1 2 4 2 1 0 2 0 5 1 1 0

 U.S. vs. Indonesia 124200301131

U.S. vs. nonsubject countries:

 U.S. vs. Other 0 2 3 3 0 0 0 0 1 0 3 1

Subject country comparisons:

 China vs. Indonesia 012100201141

Subject countries vs. nonsubject countries:

 China vs. Other 0 1 2 1 0 0 0 0 4 0 0 1

 Indonesia vs. Other 012100001011

 1

 Producers and importers were asked if differences other than price between certain coated paper produced in

the United States and in other countries are a significant factor in their firms’ sales of certain coated paper.

Note.–“A” = Always, “F” = Frequently, “S” = Sometimes, and “N” = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

One U.S. integrated producer reported that U.S. suppliers offer better quality and can offer

environmentally-friendly features such as FSC certification and post-consumer waste fibers. It also

reported that U.S. producers have shorter lead times, local warehousing, superior technical assistance, and

promotional support. Four other integrated producers reported that U.S. producers offer superior

availability, logistics, delivery time, technical support, product range, and shorter lead times on nonstandard orders.

Three importers of certain coated paper from China (***49) reported that, due to the long lead

times from China, they must keep higher inventory levels than suppliers of U.S. product and therefore

cannot always supply special orders. These importers also reported that U.S. producers have superior

technical support and automated customer service whereas the producers in China have a more manual

system. *** also reported that U.S.-produced certain coated paper has a higher fiber content and higher

stiffness, which allows the paper to run faster in high-speed presses and allows a lower basis weight paper

to be substituted in some applications. 

 49 Importer *** also imports certain coated paper from Indonesia.

II-18
Respondents contend that import suppliers APP, Eagle Ridge, and GPS cannot obtain the FSC

certification, which has resulted in lost sales.50 Respondents also reported that it is difficult for other

subject producers to obtain FSC certification.51

When asked if there had been any significant changes in product range or marketing of certain

coated paper since 2007, one U.S. integrated producer reported that the availability of environmentallyfriendly features (e.g., recycled fiber content, green power, certifications) has increased and another

reported the emergence of private label brands. 

Three of 35 responding purchasers reported that there were certain grades, sizes, or types of

certain coated paper that are only available from a single source, with one citing ***; another citing ***;

and one citing ***.

As indicated in table II-6, for the factors that nearly all purchasers reported were “very important”

factors used in purchasing decisions (see table II-3), most purchasers reported that the U.S. product is

superior to the product from both China and Indonesia with respect to availability, delivery 

time, delivery terms, reliability of supply, and technical support/service. Most purchasers reported that 

the U.S. product is comparable to the product from both China and Indonesia with respect to product 

consistency and quality meeting or exceeding industry standards. Alternatively, most purchasers 

reported that U.S. product is inferior to the product from both China and Indonesia with respect to price.

Other Country Comparisons 

In addition to comparisons between the U.S. product and imports from the subject country, U.S.

producer and importer comparisons between the United States and imports from nonsubject countries and

between subject imports and nonsubject imports are also shown in tables II-4 and II-5. A majority of U.S.

integrated producers, converters, and importers reported that U.S. product and imports from subject

countries are always or frequently interchangeable with imports from nonsubject countries. 

 50 APP reported that it has had its FSC certification publicly revoked and will not be able to regain it because the

FSC has “disassociated” itself from APP. Respondents’ posthearing brief, exh. 1, pp. 6 and 68. Respondents also

state that environmental organizations have specifically encouraged purchasers not to purchase certain coated paper

from APP. Respondents’ prehearing brief, pp. 149-151. 

 51 Respondents concede that while FSC-certified pulp can be purchased by subject producers, 80 percent of all

FSC-certified forests are in North America and Europe, whereas only 3 percent are in Asia. They also maintain that

plantations established after 1994 cannot apply for FSC certification. Respondents’ posthearing brief, exh. 1, pp. 6-7

and pp. 67-68.

II-19
Table II-6

Certain coated paper: Comparisons between U.S.-produced and subject imported product, as

reported by U.S. purchasers

Factor

U.S. vs. China U.S. vs. Indonesia

SC I SC I

Availability 20 3 0 12 1 0

Delivery terms 15 6 2 11 2 0

Delivery time 20 2 0 12 1 0

Discounts offered 5 14 3 5 7 1

Extension of credit 5 13 4 3 8 2

Lower price1 2 8 11 1 3 9

Minimum quantity requirements 14 8 0 10 3 0

Packaging 5 15 2 4 8 1

Product consistency 3 17 2 1 11 1

Quality meets industry standards 2 19 1 2 11 1

Quality exceeds industry standards 2 18 2 1 11 1

Product range 12 9 1 7 6 0

Reliability of supply 16 6 0 10 3 0

Technical support/service 18 4 0 11 2 0

Lower U.S. transportation costs 9 12 1 4 9 0

Willingness or ability of supplier to

engage in PDB programs 7 8 0 3 4 1

 1A rating of superior means that the price is generally lower. For example, if a firm reports “U.S. superior,” this

means that it rates the U.S. price generally lower than the subject import price.

Note.--S=U.S. product is superior, C=U.S. product is comparable, I=U.S. product is inferior.

Source: Compiled from data submitted in response to Commission questionnaires.

ELASTICITY ESTIMATES

U.S. Supply Elasticity52

The domestic supply elasticity for certain coated paper measures the sensitivity of the quantity

supplied by U.S. producers to changes in the U.S. market price of certain coated paper. The elasticity of

domestic supply depends on several factors including the level of excess capacity, producers’ ability to 

 52 A supply function is not defined in the case of a non-competitive market.

II-20
shift to production of other products, the existence of inventories, and the availability of alternate markets

for U.S.-produced certain coated paper. Analysis of these factors above indicates that U.S. producers

have some ability to increase or decrease shipments to the U.S. market; an estimate in the range of 2 to 4

is suggested. 

U.S. Demand Elasticity

The U.S. demand elasticity for certain coated paper measures the sensitivity of the overall

quantity demanded to a change in the U.S. market price of certain coated paper. This estimate depends on

factors discussed above such as the existence, availability, and commercial viability of substitute products

and the component share of certain coated paper in the production of downstream products. Based on the

available information, the aggregate demand elasticity for certain coated paper is likely to be in the range

of -0.75 to -1.25.

Substitution Elasticity53

The elasticity of substitution depends upon the extent of product differentiation between the

domestic and imported products. Product differentiation, in turn, depends upon such factors as quality

and conditions of sale (availability, sales terms/discounts, etc.). Based on available information, the

elasticity of substitution between U.S.-produced certain coated paper and imports from China and

Indonesia is likely to be in the range of 3 to 5.54

 53 The substitution elasticity measures the responsiveness of the relative U.S. consumption levels of the subject

imports and the domestic like products to changes in their relative prices. This reflects how easily purchasers switch

from the U.S. product to the subject products (or vice versa) when prices change.

 54 Petitioners contend that staff’s substitution elasticity estimate is too low and proposes an estimate in the range

of 5 to 8. Staff maintains its moderately high estimate of 3 to 5 because, as shown in table II-6, a majority of

responding purchasers ranked U.S. producer superior to subject imports with respect to several factors such as

availability, deliver terms, delivery time, minimum quantity requirements, reliability of supply, and technical

support/service.

II-21

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND

EMPLOYMENT

Information presented in this section of the report is based on (except as noted) the questionnaire

responses of eleven integrated producers1

 which are believed to account for the vast majority of U.S.

production of certain coated paper in 2009 and seven U.S. converters, which are estimated to account for

less than *** percent2

 of U.S. conversion activities in 2008. 

U.S. PRODUCERS

The Commission sent producers’ questionnaires to 15 firms identified by the parties as potential

U.S. integrated producers of certain coated paper and 107 firms identified by the parties as potential U.S.

converters.3

 Eleven firms submitted responses reporting that they engaged in U.S. integrated production.4

Seven firms submitted responses reporting that they engaged in U.S. converting activities. Throughout

this section of the report, data regarding U.S. integrated producers will be subdivided into three

categories: (1) U.S. producers of certain coated paper other than coated packaging paperboard, (2) U.S.

producers of coated packaging paperboard, and (3) a total of categories (1) and (2). Separate sections will

also be provided for data regarding U.S. converters. Brief descriptions of the categories of U.S. producers

follow. 

U.S. Producers of Certain Coated Paper Other Than Coated Packaging Paperboard

Nine of the eleven U.S. integrated producers reported manufacturing certain coated paper

products used in the commercial printing industry. These firms include: (1) Appleton, (2) Cascades, (3)

Clearwater, (4) International Paper, (5) MeadWestvaco, (6) Mohawk, (7) NewPage, (8) Sappi, and (9)

Smart.5

 A number of these firms produce text grades of coated free sheet paper and/or coated

groundwood paper produced from bleached chemi-thermo-mechanical pulp. A number of these firms

also produce what is generally referred to in the industry as “paperboard” that is considered by both

parties to be within the scope of these investigations. These products include those that are: (1) used in

the commercial printing industry as “covers” or cover stock and (2) paperboard products produced by

firms that traditionally serve the packaging market but do compete in the commercial printing industry. 

 1 The term “integrated” producers is used to distinguish those producers who produce sheeter rolls from U.S.

converters, which process sheeter rolls into sheet, and is not used to indicate the level of vertical integration of those

producers.

 2

 In the final phase of these investigations, the Commission did not request that U.S. producers break out their

U.S. shipments of sheeter rolls. In the preliminary phase of these investigations, U.S. integrated producers reported

*** short tons of U.S. commercial shipments to converters in 2008. U.S. converters which submitted responses to

the Commission’s questionnaire in the preliminary phase reported production of *** short tons in 2008, or ***

percent of total U.S. commercial shipments of sheeter rolls.

 3

 Petitioners identified 5 firms that they believed accounted for all U.S. integrated production of certain coated

paper other than coated packaging paperboard. Respondents submitted an expanded list of potential U.S. integrated

producers that included an additional 10 potential U.S. producers of coated packaging paperboard.

 4

 In addition to the eleven responding firms listed in table III-1, two firms, ***, reported that they did not produce

certain coated paper. One firm, ***, stated that it commenced production of a small volume (*** short tons) of

certain coated paper in ***, but did not submit a questionnaire response. One firm, ***, did not respond to the

Commission’s questionnaire.

 5

 Petitioners argued that these firms represent all the U.S. production of in-scope product. Petitioners’

posthearing brief, “Questions from the Commissioners,” exh. 3. 

III-1
Petitioners produce commercial printing cover stock and service the commercial printing industry. 

Cascade, Clearwater, International Paper, and MeadWestvaco produce coated paperboard products that

serve both the commercial printing and packaging industries.6

U.S. Producers of Coated Packaging Paperboard

On September 7, 2010, the Commission requested U.S. producer data from a number of firms

thought to produce coated packaging paperboard.7

 Four firms, (1) Clearwater, (2) Georgia-Pacific, (3)

MeadWestvaco, and (4) Rock-Tenn provided U.S. industry data regarding coated packaging paperboard.8

Only two firms, ***, reported producing coated paperboard for both the commercial printing and the

packaging industries.9

 Petitioners reported that they ***.10

U.S. Converters

During the preliminary phase of these investigations, petitioners contended that U.S. firms that

process sheeter rolls into certain coated paper should be part of the U.S. industry.11 Respondents did not

 6 According to petitioners, U.S. firms that traditionally have served the packaging market, yet still produce

paperboard products that compete in the commercial printing industry and that they deem to be within the scope of

these investigations include: Cascade, Clearwater, International Paper, and MeadWestvaco. Petitioners’ posthearing

brief, “Questions from the Commissioners,” exh. 3, pp. 1-2 and 6 (Scenario 2A is petitioners compilation of data for

paperboard produced by these firms that they deem within the scope).

 7

 The Commission requested U.S. producer data from the following U.S. integrated producers: (1) Cascades, (2)

Clearwater, (3) Georgia-Pacific, (4) Graphic Packaging, (5) International Paper, (6) Rock-Tenn, and (7)

MeadWestvaco. The Commission requested data pertaining to products that meet the physical specifications listed

in the scope (GE brightness, basis weight, and in sheet form) regardless of end use, specifically requesting

information regarding coated packaging paperboard in sheet form that meet the physical specifications listed in the

scope. 

In response, Clearwater and MeadWestvaco revised their submitted trade and financial data to include

product sold to the packaging industry. Georgia-Pacific, which had originally responded that it did not produce

certain coated paper, submitted a U.S. producer questionnaire containing information regarding its production of

coated packaging paperboard. International Paper, which originally had not responded to the Commission’s

questionnaire request, subsequently, submitted information regarding its operations on coated paperboard for

commercial printing applications. Rock-Tenn, which originally had not responded to the Commission’s

questionnaire request, subsequently, submitted information regarding its coated packaging paperboard operations. 

Cascades confirmed its original questionnaire response as correct. Graphic Packaging verified that it did not

produce coated packaging paperboard in sheet form.

 8

 Respondents contended that coated packaging paperboard is covered by the scope of these investigations, and

therefore, the Commission consider them part of the U.S. industry. Respondents’ posthearing brief, exhs. 8 and 23. 

 9

 Both Clearwater and MeadWestvaco provided the Commission with an original U.S. producer questionnaire

submission, which contained data regarding their commercial printing products, and then a revised September 22,

2010 submission which contained data regarding both commercial printing and coated packaging paperboard

products. Therefore, each firms’ U.S. industry data was capable of being subdivided by end use application.

 10 Petitioners’ posthearing brief, “Questions from Commissioners,” exh. 2, p. 1.

 11 In the preliminary phase, petitioners stated that they believed U.S. converters should be considered part of the

U.S. industry. Petitioners’ postconference brief, “Answers to Staff Questions,” exh. 9, p. 1. In the final phase,

petitioners did not object to the U.S. converters being part of the domestic industry. Petitioners’ prehearing brief, p.

9.

III-2
object to these firms being included in the U.S. industry.12 In its preliminary views, the Commission

determined that U.S. converters did engage in sufficient production related activities to be included in the

domestic industry.13 Therefore, the Commission sent producers’ questionnaires to 107 companies

believed to be potential U.S. converters of certain coated paper that were identified by the parties. Seven

firms submitted responses.14 The data submitted by U.S. converters are included in the U.S. employment

data as well as in the financial data set forth in Part VI of this report. The data submitted by U.S.

converters are not included in U.S. shipment and U.S. apparent consumption data as this would result in

the double-counting of U.S. shipments, once as U.S. shipments of sheeter rolls from the U.S. integrated

producers to the U.S. converters and then again as U.S. shipments of sheets from U.S. converters to their

customers. 

Table III-1 presents the list of reporting U.S. integrated producers and converters with each

company’s U.S. production location, share of reported U.S. integrated or converting production in 2009,

and position on the petition.

 12 Respondents did not take a definitive position, but indicated that the effects of the inclusion of U.S. converters

would be immaterial on the industry data given their relatively small size in the market. Conference transcript, p.

190 (Porter).

 13 The Commission stated in its preliminary views: “Although it is a close question and the record has not been

fully developed as to all factors, and absent argument to the contrary, we find that converters engage in sufficient

production related activities to be included in the domestic industry.” Certain Coated Paper Suitable for HighQuality Print Graphics Using Sheet-Fed Presses from China and Indonesia, Inv. Nos. 701-TA-470-471 and 731-

TA-1169-1170 (Preliminary), USITC Publication 4108, November 2009, p. 12. 

 14 The Commission’s questionnaire mailing list consisted of 210 firms (15 potential U.S. integrated producers,

107 potential U.S. converters, and 88 potential U.S. importers). All these firms received U.S. producer’s and U.S.

importer’s questionnaires. 

Four firms, ***, reported that they engaged exclusively in toll converting activities. ***. Data regarding

toller production activities are neither included in the trade section of part III of this report nor the apparent

consumption section of Part IV because these activities are reported by questionnaire responses of the tollees.

The following 24 firms reported that they did not produce or convert certain coated paper: ***. 

III-3
Table III-1

Certain coated paper: U.S. integrated producers and converters, U.S. production locations, shares

of U.S. production in 2009, and positions on the petition

Firm Production location

Share of

reported

production

(percent)

Position on the petition

China Indonesia

U.S. integrated producers of– 

Certain coated paper other than coated packaging paperboard

Appleton1 Combined Locks, WI *** Petitioner Petitioner

Cascades2 Versailles, CT *** *** ***

Clearwater Lewiston, ID

Cypress Bend, AR

*** *** ***

MeadWestvaco Richmond, VA *** *** ***

International Paper Memphis, TN

Franklin, VA

*** *** ***

Mohawk Cohoes, NY

Hamilton, OH

Ashtabula, OH

*** *** ***

NewPage3 Escanaba, MI

Luke, MD

Rumford, ME

Wickliffe, KY

Wisconsin Rapids, WI

*** Petitioner Petitioner

Sappi4 Cloquet, MN

Skowhegan, ME

Allentown, PA

*** Petitioner Petitioner

Smart5 Hamilton, OH *** *** ***

Coated packaging paperboard

Clearwater Lewiston, ID

Cypress Bend, AR

*** *** ***

Georgia-Pacific6 Atlanta, GA *** *** ***

MeadWestvaco Richmond, VA *** *** ***

Rock-Tenn7 Demopolis, AL

Battle Creek, MI

St. Paul, MN

Sheldon Springs, VT

Delaware Water, PA

Dallas, TX

*** *** ***

Table continued on next page.

III-4
Table III-1--Continued

Certain coated paper: U.S. integrated producers and converters, U.S. production locations,

shares of U.S. production in 2009, and positions on the petition

Firm Production location

Share of

reported

production

(percent)

Position on the petition

China Indonesia

U.S. converters

Case Harrison, NY (8)

*** ***

Clampitt Dallas, TX *** *** ***

National Converting Ennis, TX (9)

*** ***

Nekoosa Nekoosa, WI *** *** ***

Resource One Little Chute, WI (10)

*** ***

Wausau Mosinee, WI *** *** ***

Williams St. Louis, MO *** *** ***

 1 ***.

 2 ***. 

 3 ***.

 4 ***.

 5 ***.

 6 ***.

 7 ***.

 8 ***. 

 9 ***.

 10 ***. 

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

Overall U.S. Capacity of All U.S. Integrated Producers

All the U.S. integrated producers reported producing other products using the same

manufacturing equipment and/or production employees that were used to produce certain coated paper. 

Table III-2 presents data for the entire period of investigation for capacity, production, and capacity

utilization for all products.15 Table III-3 presents 2009 data for overall capacity as well as production by

product category and by firm.

 15 The out-of-scope paper products include web rolls, coated groundwood paper, uncoated freesheet, uncoated

groundwood, some packaging paperboard, kraft paper, and market pulp.

III-5
Table III-2

Certain coated paper and all other out-of-scope products: Overall capacity of U.S. integrated

producers, and production by firms, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Overall capacity (short tons)

Appleton *** *** *** *** ***

Cascades *** *** *** *** ***

Clearwater *** *** *** *** ***

Georgia-Pacific *** *** *** *** ***

International Paper *** *** *** *** ***

MeadWestvaco *** *** *** *** ***

Mohawk *** *** *** *** ***

NewPage *** *** *** *** ***

Rock-Tenn *** *** *** *** ***

Sappi *** *** *** *** ***

Smart *** *** *** *** ***

 Total 10,580,116 10,333,777 9,779,671 4,836,707 4,819,566

Overall production (short tons)

Appleton *** *** *** *** ***

Cascades *** *** *** *** ***

Clearwater *** *** *** *** ***

Georgia-Pacific *** *** *** *** ***

International Paper *** *** *** *** ***

MeadWestvaco *** *** *** *** ***

Mohawk *** *** *** *** ***

NewPage *** *** *** *** ***

Rock-Tenn *** *** *** *** ***

Sappi *** *** *** *** ***

Smart *** *** *** *** ***

 Total 10,298,358 10,138,969 8,434,510 4,025,561 4,614,096

Table continued on next page.

III-6
Table III-2--Continued

Certain coated paper and all other out-of-scope products: Overall capacity of U.S. integrated

producers, and production by firms, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Overall capacity utilization (percent)

Appleton *** *** *** *** ***

Cascades *** *** *** *** ***

Clearwater *** *** *** *** ***

Georgia-Pacific *** *** *** *** ***

International Paper *** *** *** *** ***

MeadWestvaco *** *** *** *** ***

Mohawk *** *** *** *** ***

NewPage *** *** *** *** ***

Rock-Tenn *** *** *** *** ***

Sappi *** *** *** *** ***

Smart *** *** *** *** ***

 Average 97.3 98.1 86.2 83.2 95.7

Source: Compiled from data submitted in response to Commission questionnaires.

Table III-3

Certain coated paper and other products: Overall capacity of U.S. integrated producers, and

production by firms and products, 2009

* * * * * * *

U.S. Integrated Producers

Certain Coated Paper Other Than Coated Packaging Paperboard

Four of the nine U.S. integrated producers of certain coated paper other than coated packaging

paperboard, ***, NewPage, Sappi, and *** reported changes in capacity or production due to

acquisitions, work stoppages and/or mill closures.16 Table III-4 lists these events that occurred during the

period of investigation.

 16 Petitioners maintained that unfairly traded subject imports are the major cause of the reported mill closures,

production slowdowns, and unemployment. Petitioners’ posthearing brief, “Questions from Commissioner

Williamson, exh. 2, p. 1. Respondents argued that these events are the result of the continuing efforts of the

domestic industry to consolidate and rationalize inefficient capacity and are presented to shareholders as positive

events. Respondents’ prehearing brief, pp. 78-79. 

III-7
Table III-4

Certain coated paper other than coated packaging paperboard: Events reported by U.S. integrated

producers occurring during the period of investigation that affected U.S. capacity or production

Firm Date Description of activity

Annual production

change

(short tons)

U.S. integrated producers of– 

Certain coated paper other than coated packaging paperboard

*** *** *** ***

New Page December 2007 Acquired Stora Enso North America Added the Wisconsin

Rapids, WI mill and

the Kimberly, WI mill.

July 2008 Shut down Kimberly, WI coated freesheet

facility

***

November 2008 Shut down Chillicothe sheeting facility (1)

January-March

2007

Temporary plant closures and market-related

downtime

***

April-December

2008

Temporary plant closures and market-related

downtime

***

JanuaryDecember 2009Temporary plant closures and market-related

downtime

***

January-March

2010

Temporary plant closures and market-related

downtime

***

Sappi August 2009 Closure of Muskegon, MI mill ***

*** *** *** (1)

 1 No information provided.

Source: Compiled from data submitted in response to Commission questionnaires; Conference transcript, pp. 26-27 (Nelson)

and pp. 34-35 (Ayer).

Data on U.S. integrated producers’ capacity, production, and capacity utilization pertaining to

their certain coated paper other than coated packaging paperboard operations are presented in table III-5. 

Total U.S. capacity decreased by 2.9 percent from 2007 to 2009 and increased by 15.0 percent between

January-June 2009 and January-June 2010.17 U.S. capacity volume accounted for 76.2 percent of

apparent U.S. consumption of certain coated paper other than coated packaging paperboard in 2009. 

Total U.S. production of certain coated paper other than coated packaging paperboard decreased by 15.3

percent from 2007 to 2009, and increased by 38.0 percent from January-June 2009 to January-June 2010. 

Capacity utilization ranged from 77.3 percent in January-June 2009 to 93.6 percent in 2008. 

 17 Respondents argued that petitioners’ relatively stable capacity during the period of investigation indicates that

all of the paper mill closures were the result of prudent restructuring and the shuttering of production of products

other than certain coated paper. Respondents’ prehearing brief, pp. 78-79. Petitioners stated that they allocated

overall capacity based on production and that the reduction in overall capacity (see table III-2) better depicts the

impact on capacity of the paper mill closures. Petitioners’ posthearing brief, “Questions from Commissioner

Williamson,” exh. 2, p. 1 and “Questions from Commissioner Pearson,” exh. 4.

III-8
Table III-5

Certain coated paper other than coated packaging paperboard: U.S. integrated producers’

capacity, production, and capacity utilization, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Capacity (short tons) 1,395,457 1,266,051 1,354,352 669,847 770,217

Production (short tons) 1,303,273 1,185,322 1,103,889 517,681 714,386

Capacity utilization (percent) 93.4 93.6 81.5 77.3 92.8

Source: Compiled from data submitted in response to Commission questionnaires.

Coated Packaging Paperboard

*** of the four U.S. integrated producers of coated packaging paperboard, ***, reported changes

in capacity or production due to acquisitions, work stoppages and/or mill closures. Table III-6 lists these

events that occurred during the period of investigation.

Table III-6

Coated packaging paperboard: Events reported by U.S. integrated producers occurring during the

period of investigation that affected U.S. capacity or production

* * * * * * *

Data on U.S. integrated producers’ capacity, production, and capacity utilization pertaining to

coated packaging paperboard operations are presented in table III-7. Total U.S. capacity remained steady

(lower by 0.9 percent) from 2007 to 2009 and decreased by 13.5 percent between January-June 2009 and

January-June 2010. Total U.S. production of coated packaging paperboard decreased by 12.6 percent

from 2007 to 2009, and increased by 0.5 percent from January-June 2009 to January-June 2010. Capacity

utilization ranged from 84.6 percent in 2009 to 100.6 percent in January-June 2010. 

Table III-7

Coated packaging paperboard: U.S. integrated producers’ capacity, production, and capacity

utilization, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Capacity (short tons) 668,754 676,762 662,891 320,291 277,185

Production (short tons) 641,740 671,261 561,132 277,639 278,967

Capacity utilization (percent) 96.0 99.2 84.6 86.7 100.6

Source: Compiled from data submitted in response to Commission questionnaires.

III-9
Total U.S. Integrated Producers

Data on U.S. integrated producers’ capacity, production, and capacity utilization pertaining to

both their packaging and non-packaging operations are presented in table III-8. Total U.S. capacity

decreased by 2.3 percent from 2007 to 2009 and increased by 5.8 percent between January-June 2009 and

January-June 2010. U.S. capacity volume accounted for 89.5 percent of apparent U.S. consumption of

certain coated paper in 2009. Total U.S. production of certain coated paper decreased by 14.4 percent

from 2007 to 2009, and increased by 24.9 percent from January-June 2009 to January-June 2010. 

Capacity utilization ranged from 80.3 percent in January-June 2009 to 95.6 percent in 2008. 

Table III-8

Certain coated paper (All U.S. integrated producers): U.S. integrated producers’ capacity,

production, and capacity utilization, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Capacity (short tons) 2,064,211 1,942,813 2,017,243 990,138 1,047,402

Production (short tons) 1,945,013 1,856,583 1,665,021 795,320 993,354

Capacity utilization (percent) 94.2 95.6 82.5 80.3 94.8

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. Converters

One of the seven reporting U.S. converters, ***, reported changes in capacity or production due

to acquisitions, work stoppages and/or mill closures. Table III-9 lists these events that occurred during

the period of investigation.

Table III-9

Certain coated paper: Events reported by U.S. converters occurring during the period of

investigation that affected U.S. capacity or production

Firm Date Description of activity

Annual production

change

(short tons)

U.S. converters

*** *** *** ***

Source: Compiled from data submitted in response to Commission questionnaires.

Data on U.S. converters’ capacity, production, and capacity utilization are presented in table III10. Total U.S. capacity remained steady throughout the entire period of investigation. Total U.S.

conversion production of certain coated paper decreased by *** percent from 2007 to 2009 and was lower

by *** percent from January-June 2009 to January-June 2010. Capacity utilization ranged from ***

percent in 2009 to *** percent in January-June 2009.

III-10
Table III-10

Certain coated paper: U.S. converters’ capacity, production, and capacity utilization, 2007-09,

January-June 2009, and January-June 2010

* * * * * * *

Four of the seven reporting U.S. converters reported producing other products using the same

manufacturing equipment and/or production employees that were used to produce certain coated paper. 

Table III-11 shows overall U.S. capacity for U.S. converters as well as the U.S. production of other

products for which they have allocated capacity.

Table III-11

Certain coated paper and other products: Overall capacity of U.S. converters, and production by

firms and products, 2009

* * * * * * *

U.S. PRODUCERS’ U.S. SHIPMENTS AND EXPORT SHIPMENTS

U.S. Integrated Producers

Certain Coated Paper Other Than Coated Packaging Paperboard

As detailed in table III-12, the volume of U.S. integrated producers’ U.S. shipments of certain

coated paper other than coated packaging paperboard decreased by 18.3 percent from 2007 to 2009, and

was higher by 47.8 percent from January-June 2009 to January-June 2010. The value of U.S. shipments

decreased by 22.9 percent from 2007 to 2009, and was higher by 34.4 percent from January-June 2009 to

January-June 2010. ***, reported *** internal consumption in 2008 (*** short tons and 2009 (*** short

tons). *** reported export shipments to ***. *** reported export shipments to ***. *** reported export

shipments to ***. 

III-11
Table III-12

Certain coated paper other than coated packaging paperboard: U.S. integrated producers’

shipments, by types, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Quantity (short tons)

U.S. commercial shipments 1,223,741 1,115,817 999,459 429,098 634,236

Export shipments *** *** *** *** ***

 Total shipments *** *** *** *** ***

Value ($1,000)

U.S. commercial shipments 1,327,764 1,262,975 1,023,688 461,806 620,782

Export shipments *** *** *** *** ***

 Total shipments *** *** *** *** ***

Unit value (per short ton)

U.S. commercial shipments 1,085 1,132 1,024 1,076 979

Export shipments *** *** *** *** ***

 Average *** *** *** *** ***

Share of quantity (percent)

U.S. commercial shipments *** *** *** *** ***

Export shipments *** *** *** *** ***

 Total 100.0 100.0 100.0 100.0 100.0

Note:–***.

Source: Compiled from data submitted in response to Commission questionnaires.

III-12
Coated Packaging Paperboard

As detailed in table III-13, the volume of U.S. integrated producers’ U.S. shipments of coated

packaging paperboard decreased by 7.0 percent from 2007 to 2009, and was lower by 2.1 percent from

January-June 2009 to January-June 2010. The value of U.S. shipments increased by 5.1 percent from

2007 to 2009, and was lower by 4.0 percent from January-June 2009 to January-June 2010. 

Table III-13

Coated packaging paperboard: U.S. integrated producers’ shipments, by types, 2007-09, JanuaryJune 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Quantity (short tons)

U.S. commercial shipments 513,481 533,155 477,774 231,671 226,869

Export shipments *** *** *** *** ***

 Total shipments *** *** *** *** ***

Value ($1,000)

U.S. commercial shipments 391,568 431,578 411,627 201,694 193,543

Export shipments *** *** *** *** ***

 Total shipments *** *** *** *** ***

Unit value (per short ton)

U.S. commercial shipments 763 809 862 871 853

Export shipments *** *** *** *** ***

 Average *** *** *** *** ***

Share of quantity (percent)

U.S. commercial shipments *** *** *** *** ***

Export shipments *** *** *** *** ***

 Total 100.0 100.0 100.0 100.0 100.0

Note:– ***.

Source: Compiled from data submitted in response to Commission questionnaires.

III-13
Total U.S. Integrated Producers

As detailed in table III-14, the volume of U.S. integrated producers’ U.S. shipments of certain

coated paper decreased by 15.0 percent from 2007 to 2009, and was higher by 30.3 percent from JanuaryJune 2009 to January-June 2010. The value of U.S. shipments decreased by 16.5 percent from 2007 to

2009, and was higher by 22.7 percent from January-June 2009 to January-June 2010.

Table III-14

Certain coated paper (All U.S. integrated producers): U.S. integrated producers’ shipments, by

types, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Quantity (short tons)

U.S. commercial shipments 1,737,222 1,648,972 1,477,233 660,769 861,105

Export shipments *** *** *** *** ***

 Total shipments *** *** *** *** ***

Value ($1,000)

U.S. commercial shipments 1,719,332 1,694,553 1,435,315 663,500 814,324

Export shipments *** *** *** *** ***

 Total shipments *** *** *** *** ***

Unit value (per short ton)

U.S. commercial shipments 990 1,028 972 1,004 946

Export shipments *** *** *** *** ***

 Average *** *** *** *** ***

Share of quantity (percent)

U.S. commercial shipments *** *** *** *** ***

Export shipments *** *** *** *** ***

 Total 100.0 100.0 100.0 100.0 100.0

Note:–***.

Source: Compiled from data submitted in response to Commission questionnaires.

III-14
U.S. Converters

As shown in table III-15, the volume of U.S. converters’ U.S. shipments of certain coated paper

decreased irregularly by *** percent from 2007 to 2009, and was lower by *** percent from JanuaryJune 2009 to January-June 2010. The value of U.S. shipments also decreased irregularly by *** percent

from 2007 to 2009, and was lower by *** percent from January-June 2009 to January-June 2010. None

of the U.S. producers reported internal consumption or transfers to related firms of certain coated paper.

Table III-15

Certain coated paper: U.S. converters’ shipments of slitted rolls, by types, 2007-09, January-June

2009, and January-June 2010

* * * * * * *

U.S. PRODUCERS’ IMPORTS AND PURCHASES OF IMPORTS

None of the U.S. integrated producers reported any U.S. imports or purchases of imports from

China or Indonesia. ***, reported that they purchased from U.S. importers the subject product from China

and Indonesia during the period of investigation.18 Table III-16 presents these purchases of certain coated

paper from China and Indonesia, the firms’ U.S. conversion production, and the ratio of their purchases to

their U.S. conversion production.

Table III-16

Certain coated paper: U.S. converters’ subject imports and purchases of subject imports, 2007-09,

January-June 2009, and January-June 2010

* * * * * * *

 18 ***.

III-15
U.S. PRODUCERS’ INVENTORIES

Data on end-of-period inventories of certain coated paper for the period of investigation are

presented in table III-17.

Table III-17

Certain coated paper: U.S. integrated producers’ and converters’ end-of-period inventories, 2007-

09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

U.S. integrated producers of– 

Certain coated paper other than coated packaging paperboard

Inventories (short tons) 306,146 283,990 309,884 342,037 342,866

Ratio to production (percent) 23.5 24.0 28.1 33.0 24.0

Ratio to U.S. shipments (percent) 25.0 25.5 31.0 39.9 27.0

Ratio to total shipments (percent) 23.3 23.5 28.7 37.2 25.2

Coated packaging paperboard

Inventories (short tons) *** *** *** *** ***

Ratio to production (percent) *** *** *** *** ***

Ratio to U.S. shipments (percent) *** *** *** *** ***

Ratio to total shipments (percent) *** *** *** *** ***

Total U.S. integrated producers

Inventories (short tons) *** *** *** *** ***

Ratio to production (percent) *** *** *** *** ***

Ratio to U.S. shipments (percent) *** *** *** *** ***

Ratio to total shipments (percent) *** *** *** *** ***

U.S. converters

Inventories (short tons) *** *** *** *** ***

Ratio to production (percent) *** *** *** *** ***

Ratio to U.S. shipments (percent) *** *** *** *** ***

Ratio to total shipments (percent) *** *** *** *** ***

Note.--January-June ratios are calculated using annualized production and shipment data.

Source: Compiled from data submitted in response to Commission questionnaires.

III-16
U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

Data provided by U.S. producers on the number of production and related workers (“PRWs”)

engaged in the production of certain coated paper,19 the total hours worked by such workers, wages paid to

such PRWs, productivity, and unit labor costs during the period of investigation are presented in table III18, by U.S. integrated producers and U.S. converters.20 

Table III-18

Certain coated paper: Average number of production and related workers producing certain coated

paper, hours worked, wages paid to such employees, and hourly wages, productivity, and unit labor

costs, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

U.S. integrated producers of– 

Certain coated paper other than coated packaging paperboard

PRWs (number) 1,874 1,723 1,614 1,654 1,590

Hours worked (1,000) 3,491 3,099 2,894 1,453 1,528

Wages paid ($1,000) 92,464 88,866 84,224 39,811 46,004

Hourly wages $26.49 $28.67 $29.10 $27.40 $30.11

Productivity (short tons per 1,000 hours) 344.0 349.0 350.9 331.9 433.9

Unit labor costs (per short ton) $77.00 $82.15 $82.93 $82.56 $69.40

Table continued on next page.

 19 Petitioners argued that the causal link between job losses and unfairly traded subject imports is further

confirmed by the Department of Labor’s issuance during the period of investigation of five Trade Adjustment

Assistance certifications for job losses at NewPage’s Kimberly, WI and Rumford, ME mills and for job losses at

Smart’s West Chicago, IL mill, Appleton’s Combined Locks, WI mill, and for Sappi’s Muskegon, MI mill. One

other certification application is pending before the Department of Labor for job losses at New Page’s Luke, MD

mill. Petitioners’ prehearing brief, p. 42.

 20 ***.

III-17
Table III-18–Continued

Certain coated paper: Average number of production and related workers producing certain

coated paper, hours worked, wages paid to such employees, and hourly wages, productivity, and

unit labor costs, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Coated packaging paperboard

PRWs (number) 1,157 1,183 1,083 1,101 1,055

Hours worked (1,000) 2,113 2,199 1,937 1,010 912

Wages paid ($1,000) 59,664 60,064 58,714 29,707 27,779

Hourly wages $28.24 $27.31 $30.31 $29.41 $30.46

Productivity (short tons per 1,000 hours) 213.0 213.7 195.6 188.6 208.8

Unit labor costs (per short ton) $132.54 $127.83 $154.94 $155.96 $145.88

Total U.S. integrated producers

PRWs (number) 3,278 3,146 2,917 2,969 2,864

Hours worked (1,000) 6,146 5,814 5,299 2,682 2,662

Wages paid ($1,000) 165,744 162,611 155,671 75,488 79,859

Hourly wages $26.97 $27.97 $29.38 $28.15 $30.00

Productivity (short tons per 1,000 hours) 313.1 314.0 309.1 292.4 368.4

Unit labor costs (per short ton) $86.13 $89.06 $95.04 $96.28 $81.43

U.S. converters

PRWs (number) *** *** *** *** ***

Hours worked (1,000) *** *** *** *** ***

Wages paid ($1,000) *** *** *** *** ***

Hourly wages *** *** *** *** ***

Productivity (short tons per 1,000 hours) *** *** *** *** ***

Unit labor costs (per short ton) *** *** *** *** ***

U.S. integrated producers and U.S. converters

PRWs (number) *** *** *** *** ***

Hours worked (1,000) *** *** *** *** ***

Wages paid ($1,000) *** *** *** *** ***

Hourly wages *** *** *** *** ***

Productivity (short tons per 1,000 hours) *** *** *** *** ***

Unit labor costs (per short ton) *** *** *** *** ***

Source: Compiled from data submitted in response to Commission questionnaires.

III-18
PART IV: U.S. IMPORTS, APPARENT CONSUMPTION, AND

MARKET SHARES

U.S. IMPORTERS

The Commission sent importer questionnaires to 88 firms listed by the parties as potential U.S.

importers of certain coated paper, as well as to all U.S. producers.1

 Questionnaire responses containing

usable data were received from 11 firms and accounted for the majority of U.S. imports from China and

Indonesia.2

 Of the eleven responding U.S. importers, four firms accounted for the vast majority of

reported U.S. imports from China and Indonesia. These four firms, Asia Pulp & Paper (Canada), Ltd.

(“APP”); Eagle Ridge Paper Co. (“Eagle Ridge”); Global Paper Solutions, Inc. (“GPS”); and Paper Max,

Ltd. (“Paper Max”) are all affiliated companies to large producers of certain coated paper in China and

Indonesia.3

 All of these companies, both the U.S. importers and foreign producers, are affiliated with

Asia Pulp & Paper, Ltd., headquartered in Singapore, which in turn is part of the multi-billion dollar

Indonesian conglomerate, Sinar Mas Group. 

In 2009, *** Unisource changed certain coated paper suppliers by ceasing to purchase product

produced in China and ***.4

 ***.5 ***.6 

 1 The Commission’s questionnaire mailing list consisted of 210 firms (15 potential U.S. integrated producers, 107

potential U.S. converters, and 88 potential U.S. importers). All these firms received U.S. producer’s and U.S.

importer’s questionnaires. 

The following eight firms reported that they did not import certain coated paper into the United States: 

***.

One firm, ***, reported solely U.S. imports of sheeter rolls (a product not within the scope of these

investigations) from China in 2009. 

 2 The 2009 volume of U.S. imports from China compiled from U.S. importer questionnaire responses accounted

for *** percent of U.S. imports from China compiled from adjusted Commerce statistics. The 2009 volume of U.S.

imports from Indonesia compiled from U.S. importer questionnaire responses accounted for *** percent of U.S.

imports from Indonesia compiled from adjusted Commerce statistics. The 2009 volume of U.S. imports from

nonsubject countries compiled from U.S. importer questionnaire responses accounted for *** percent of U.S.

imports from nonsubject countries compiled from adjusted Commerce statistics. 

 3

 All foreign producers from China and Indonesia that have submitted questionnaires to the Commission and are

participating in these investigations are affiliated with Asia Pulp & Paper, Ltd. of Singapore.

 4

 U.S. purchaser’s questionnaire response of ***, p. 14, question III-17. 

The parties disputed the reason that Unisource decided to switch suppliers. Respondents claimed that

Unisource switched suppliers because of a dispute over payment terms with respondents and that NewPage offered

favorable pricing because of the subsidies it received as part of the Alternative Fuel Tax Credit, the so-called “Black

Liquor Subsidies.” Respondents’ prehearing brief, p. 59. 

Petitioners claimed that Unisource switched to NewPage not because of price, but rather because of

Unisource’s concern that respondents wanted to dramatically increase its volume of imports into the United States

during a period of decreasing demand brought about by the recession. Petitioners submitted an affidavit from a

Unisource vice president which stated that ***. Petitioners’ posthearing brief, exh. 1.

 5

 U.S. purchaser’s questionnaire response of ***, p. 14, question III-17.

 6

 U.S. purchaser’s questionnaire response of ***, p. 5, question II-4(b). 

IV-1
In the second half of 2009, subsequent to the loss of its Unisource account, Asia Pulp & Paper

Co., Ltd. began to create a U.S. distribution network for its imported products named “Eagle Ridge

Paper.” The new firm ***. Respondents claim that the ***.7

 ***.8

Table IV-1 lists all responding U.S. importers of certain coated paper from Indonesia and China,

their U.S. locations, and their quantities of imports, by source, in 2009.

Table IV-1

Certain coated paper: Reported U.S. imports, by importers and by sources of imports, 2009

Importer U.S. location

Quantity (short tons)

China Indonesia

Nonsubject

countries Total

Appleton1 Combined Locks, WI *** *** *** *** ***

APP2 Brampton, ON *** *** *** ***

Eagle Ridge3 Brampton, ON *** *** *** ***

GPS4 Anaheim, CA *** *** *** ***

JPP5 Los Angeles, CA (5) *** *** *** ***

Mohawk Cohoes, NY *** *** (6)

*** ***

Moorim7 Denver, CO *** *** *** *** ***

O’Conner8 Buffalo, NY *** *** *** ***

Paper Max9 Anaheim, CA *** *** *** ***

Printing Papers Little Rock, AR *** *** *** *** ***

Sappi10 Boston, MA *** *** *** *** ***

 Total *** *** *** ***

 1 ***. 

 2 ***.

 3 ***.

 4 ***.

 5 ***.

 6 ***.

 7 ***.

 8 ***.

 9 ***. 10 ***. 

 Source: Compiled from data submitted in response to Commission questionnaires.

 7 Respondents reported that its total investment into Eagle Ridge has amounted to ***. Respondents posthearing

brief, exh. 1, pp. 62 and 123.

 8

 U.S. importer’s questionnaire response of ***, p. 9, question II-2; Conference transcript, p. 183 (Hunley).

IV-2
U.S. IMPORTS

Table IV-2 presents data for U.S. imports of certain coated paper from China, Indonesia, and

nonsubject countries. The data below are compiled using adjusted Commerce statistics. The adjustments

are based on those provided by the petitioners.9

 As shown, the volume of U.S. imports from China

increased by 2.0 percent from 2007 to 2009 and was lower by 62.4 percent from January-June 2009 to

January-June 2010.10 The volume of U.S. imports from Indonesia increased by 16.2 percent from 2007 to

2009, but was lower by 33.0 percent from January-June 2009 to January-June 2010. The volume of U.S.

imports from nonsubject countries decreased by 50.0 percent from 2007 to 2009, and was higher by 56.5

percent from January-June 2009 to January-June 2010. The largest sources of U.S. imports from

nonsubject countries in 2009 were (in descending order of volume): (1) Korea, (2) Japan, and 

(3) Germany.

 9 Petitioners’ posthearing brief, “Questions from Commissioner Lane,” exhs. 1 and 2. Respondents claimed that

petitioners’ assumption with regard to U.S. imports from nonsubject countries, specifically EU countries, may be

understated. Petitioners’ assumption is that for a number of HTS statistical reporting numbers (those for coated

groundwood paper), U.S. imports from nonsubject countries are entirely in the form of rolls and not included within

the scope of these investigations. Respondents claimed that certain EU export statistics show that a portion of these

imports are in sheet form. Respondents’ submitted EU export statistics show that the portion claimed to be in sheet

form would be equal to between 10.3 percent in 2009 and 12.4 percent in 2008 of total U.S. imports from nonsubject

countries. Respondents’ posthearing brief, exh. 1, pp. 11-12 and exh. 4.

Subsequent to Commerce adding three new HTS subheadings to the scope in its final determinations (HTS

4810.32, 4810.39, and 4810.92), U.S. imports from China entering under HTS 4810.92.12 have been adjusted and

increased using respondents’ assumptions. In its submissions to Commerce, respondents stated that two of Gold

East’s paper mills exported multi-ply paperboard products under HTS 4810.92.12. Respondents’ posthearing brief,

exh. 2, pp. 1-2 and exh. 3, p. 8. Although volume trends of U.S. imports from China remain similar to pre-adjusted

volumes, absolute volumes did increase by 14.2 percent in 2007, 19.5 percent in 2008, 18.8 percent in 2009, and

16.6 percent in interim 2010. 

Subsequent to Commerce adding three new HTS subheadings to the scope in its final determinations, U.S.

imports from Indonesia and nonsubject countries have not been further adjusted. In submissions to Commerce, no

producer in Indonesia reported exporting subject product under any of the additional HTS subheadings. Petitioners’

posthearing brief, “Questions from Commissioner Lane,” exhs. 5 and 6. 

The parties appear to agree that product within the scope of these investigations would not properly be

classified under HTS 4810.32 and 4810.39 as they cover “kraft paper or paperboard other than the kind used for

writing, printing, or other graphic purposes.” Petitioners posthearing brief, “Questions from Staff,” exh. 5, p. 2;

Respondents’ posthearing brief, exh. 3, pp. 6-7. Petitioners stated that Commerce added these HTS subheadings in

order to prevent circumvention of any issued order. Petitioners’ posthearing brief, “Questions from Commissioner

Lane,” exh. 1, p. 2. 

 10 In the preliminary phase of these investigations, respondents argued that the preliminary duties in the 2007

Coated Free Sheet Paper investigation distorted volumes of U.S. imports from subject countries particularly in the

first half of 2008. They maintained that the preliminary duties ceased in late 2007 and, given the order lead time,

U.S. imports in the first half of 2008 “were simply returning to historical levels,” and are not evidence of a “surge”

in U.S. imports from subject countries. Respondents’ postconference brief, p. 23.

IV-3
Table IV-2

Certain coated paper: U.S. imports, by sources, 2007-09, January-June 2009, and January-June

2010

Source

Calendar year January-June

2007 2008 2009 2009 2010

Quantity (short tons)

China 345,768 329,307 352,555 190,622 71,706

Indonesia 52,541 52,938 61,039 19,883 13,327

 Subtotal 398,309 382,245 413,593 210,506 85,033

All others 727,306 611,626 363,472 196,512 307,612

 Total 1,125,615 993,872 777,066 407,018 392,645

Value ($1,000)

1

China 318,066 319,306 297,527 165,213 63,243

Indonesia 45,543 48,765 52,384 16,458 11,536

 Subtotal 363,609 368,071 349,911 181,670 74,779

All others 737,251 650,135 368,605 204,901 286,665

 Total 1,100,860 1,018,206 718,516 386,572 361,443

Unit value (per short ton)

China 920 970 844 867 882

Indonesia 867 921 858 828 866

 Subtotal 913 963 846 863 879

All others 1,014 1,063 1,014 1,043 932

 Average 978 1,024 925 950 921

Share of quantity (percent)

China 30.7 33.1 45.4 46.8 18.3

Indonesia 4.7 5.3 7.9 4.9 3.4

 Subtotal 35.4 38.5 53.2 51.7 21.7

All others 64.6 61.5 46.8 48.3 78.3

 Total 100.0 100.0 100.0 100.0 100.0

Share of value (percent)

China 28.9 31.4 41.4 42.7 17.5

Indonesia 4.1 4.8 7.3 4.3 3.2

 Subtotal 33.0 36.1 48.7 47.0 20.7

All others 67.0 63.9 51.3 53.0 79.3

 Total 100.0 100.0 100.0 100.0 100.0

 1

 Landed, duty-paid.

Source: Compiled from adjusted Commerce statistics.

IV-4
CUMULATION CONSIDERATIONS

In assessing whether imports compete with each other and with the domestic like product, the

Commission has generally considered four factors: (1) fungibility, (2) presence of sales or offers to sell

in the same geographical market, (3) common or similar channels of distribution, and (4) simultaneous

presence in the market. Issues concerning fungibility and channels of distribution are addressed in 

Part II of this report. With regard to geographical markets and presence in the market, in the preliminary

phase of these investigations, the petitioners maintained that imported certain coated paper from China

and Indonesia competes without regard to geographical location in the United States and that these

imports have been simultaneously present in the U.S. market during the period of investigation.11 Official

Commerce statistics show that U.S. imports from China and Indonesia did enter the United States through

geographically dispersed U.S. ports of entry and monthly throughout the entire period of investigation.12

In the preliminary and final phases of these investigations, respondents did not address the issue of

cumulation of subject imports, but instead maintained that U.S. imports from Indonesia are negligible (see

Negligibility).13

NEGLIGIBILITY

The Tariff Act of 1930 provides for the termination of an investigation if imports of the subject

product from a country are less than 3 percent of total imports, or, if there is more than one such country,

their combined share is less than or equal to 7 percent of total imports, during the most recent 12 months

for which data are available preceding the filing of the petition.14 Section 771(24)(B) of the Act further

provides that in a countervailing duty investigation under section 701, imports of subject merchandise

from developing countries are negligible if such imports account for less than 4 percent of the volume of

all such merchandise imported into the United States in the specified 12-month period. In accordance

with section 771(B) of the Act, the United States Trade Representative has designated Indonesia as a

developing country under the countervailing duty law.15 In the preliminary phase of these investigations,

no party disputed that the share of the total quantity of U.S. imports from China surpassed the requisite

negligibility threshold during the period. Based on adjusted official Commerce statistics, U.S. imports

from China accounted for 43.9 percent of total U.S. imports from September 2008 to August 2009. With

regard to U.S. imports from Indonesia, however, Indonesian respondents argued that U.S. imports from

Indonesia during the period of September 2008 to August 2009 were below the negligibility thresholds of

3 and 4 percent.16

 11 Petition, p. 16; petitioners’ prehearing brief, p. 11. In the 2007 investigation on Coated Free Sheet Paper, the

Commission cumulated U.S. imports from China, Indonesia, and Korea. In that investigation, respondents presented

the argument that there existed geographical separation in the marketplace with U.S. imports supplying the Western

region of the United States and U.S. producers concentrated in the Eastern regions of the United States. No party

advanced that argument in these current investigations. Coated Free Sheet Paper from China, Indonesia, and

Korea, Inv. Nos. 701-TA-444-446 and 731-TA-1107-1109 (Final), USITC Publication 3965, December 2007, pp. 9-

10; See Petitioners’ postconference brief, p. 19 (“Imports of certain coated paper are not concentrated in the western

region of the United States, as is confirmed by official import statistics.”).

 12 See Petitioners’ postconference brief, exhs. 5 and 6.

 13 Respondents’ prehearing brief, p. 22.

 14 19 U.S.C. § 1677(24)(A)(ii).

 15 15 CFR § 2013.1.

 16 Respondent’s postconference brief, p. 11.

IV-5
In the preliminary phase of these investigations, the parties presented multiple methodologies for

the adjustment of official Commerce statistics.17 In the preliminary phase, the Commission determined

that U.S. imports from Indonesia were not negligible noting that “in light of the questions regarding the

import data from Indonesia, and the fact that official import data show subject imports exceed the 4

percent threshold for countervailing duty investigations, we do not find that imports from Indonesia are

negligible for purposes of the present material injury investigations. We will reexamine this issue and

seek to clarify the subject import data from Indonesia in any final phase investigations.”18 

In the final phase of these investigations, the Commission requested from U.S. importers monthly

September 2008 to August 2009 U.S. import data for Indonesia. Reported monthly U.S. import data for

Indonesia, as reported by U.S. importers, however, may be understated.19 Therefore, table IV-3 below

presents monthly U.S. import data from September 2008 to August 2009 using adjusted monthly

Commerce statistics using petitioners’ assumptions as to the adjustments as well as respondents’

adjustment regarding additional U.S. imports entering under the additional HTS subheading 4810.92.12.20

Using this methodology shows that U.S. imports from Indonesia accounted for 6.4 percent of total U.S.

imports from September 2008 to August 2009.21 

 17 One issue that the parties disputed in the preliminary phase was whether “multi-ply paperboard” was included

in the scope of these investigations. Respondents argued that this product is not properly included in the scope, but

the U.S. import volumes are included in the Commerce statistics, thereby overstating monthly U.S. imports from

Indonesia for purposes of the Commission’s negligibility analysis. Petitioners argued that multi-ply paperboard is

included in the scope definition of certain coated paper and therefore the official Commerce statistics are not

overstated. Commerce has determined that multi-ply paperboard is within the scope of these investigations. Certain

Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from Indonesia: Final Affirmative

Countervailing Duty Determination; “Issues and Decision Memorandum,” dated September 27, 2010, p. 50.

 18 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from China and

Indonesia, Inv. Nos. 701-TA-470-471 and 731-TA-1169-1170 (Preliminary), USITC Publication 4108, November

2009, p. 15. 

 19 Indonesian respondents reported that they accounted for *** percent of the export shipments to the United

States during the period of investigation. In 2009, Indonesian respondents reported export shipments to the United

States of *** short tons while U.S. importers reported 2009 U.S. imports from Indonesia of *** short tons, or ***

percent of reported 2009 export shipments.

 20 See Part IV, p. 4, fn. 9 for an explanation of the adjustments made to official Commerce statistics. Petitioners

argued that it would be improper to add any volume to U.S. imports under the three additional HTS subheadings in

the Commission’s negligibility calculation because Commerce added these subheadings to prevent circumvention of

any issued orders and properly classified subject imports would not enter under these HTS subheadings. Therefore,

petitioners argued that methodology 1 in the Commission’s prehearing report, which computed a 6.8 percent share

for U.S. imports from Indonesia using adjusted Commerce statistics, is the proper method for the computation of

negligibility. Petitioners’ posthearing brief, “Questions from Commissioner Lane,” exh. 1, p. 10. Respondents

argued that based on Commerce’s final scope determinations, all volumes from the three additional HTS

subheadings for Indonesia, China, and nonsubject countries should be used to compute negligibility. Petitioners

observed that even in the event that the Commission did decide to use all the U.S. import volumes from China,

Indonesia, and nonsubject countries in its negligibility computation, the share of U.S. imports from Indonesia would

be 5.2 percent, and therefore, still not below the negligibility threshold of 4 percent. Petitioners’ posthearing brief,

“Questions from Commissioner Lane,” exh. 1 (exh. 7). 

 21 The computation shown in table IV-3 uses “subject merchandise” data to compute Indonesian and total U.S.

imports meaning that these imports are those as defined by Commerce’s scope definition of these investigations. 

Neither of these methodologies expands the definition of “subject imports” to include sheeter rolls or web rolls.

IV-6
Table IV-3

Certain coated paper: Monthly U.S. imports, by sources of imports, September 2008-August 2009

Monthly Adjusted Commerce Statistics

Month/Year Indonesia Total imports

Quantity (short tons); shares (percent)

Sept. 2008 7,297 75,154

Oct. 2008 6,596 81,414

Nov. 2008 4,499 97,265

Dec. 2008 4,882 88,542

Jan. 2009 4,680 94,694

Feb. 2009 1,574 66,931

March 2009 3,629 65,174

April 2009 2,334 61,245

May 2009 2,891 59,822

June 2009 4,774 59,152

July 2009 3,753 61,368

Aug. 2009 8,754 58,329

 Total quantity 55,665 869,090

Share of total (percent) 6.4

Source: Adjusted Commerce statistics.

APPARENT U.S. CONSUMPTION AND MARKET SHARES

Apparent U.S. Consumption Using U.S. Shipments from U.S. Producers of Certain Coated Paper

Other Than Coated Packaging Paperboard

Data on apparent U.S. consumption of certain coated paper other than coated packaging

paperboard are presented in table IV-4. From 2007 to 2009, the quantity of apparent U.S. consumption

decreased by 24.4 percent and was higher by 22.8 percent from January-June 2009 to January-June 2010. 

From 2007 to 2009, the value of apparent U.S. consumption decreased by 28.3 percent and was higher by

15.8 percent from January-June 2009 to January-June 2010.

Data on U.S. market shares for certain coated paper other than coated packaging paperboard are

presented in table IV-5. From 2007 to 2009, U.S. producers’ market share based on quantity increased by

4.2 percentage points and based on value increased 4.1 percentage points. Between January-June 2009

and January-June 2010, U.S. producers’ market share based on volume increased by 10.4 percentage

points and based on value increased by 8.8 percentage points. U.S. imports from China gained 5.1

percentage points of U.S. market share from 2007 to 2009 based on quantity and 4.0 percentage points

based on value. Between the interim periods, U.S. imports from China lost 15.8 percentage points of U.S.

market share based on quantity and 13.0 percentage points based on value. U.S. imports from Indonesia

gained 1.2 percentage points of U.S. market share from 2007 to 2009 based on quantity and 1.1

IV-7
percentage points based on value. Between the interim periods, U.S. imports from Indonesia lost 1.1

percentage points of U.S. market share based on quantity and 0.8 percentage points based on value. U.S.

imports from nonsubject countries lost 10.5 percentage points of U.S. market share from 2007 to 2009

based on quantity and 9.2 percentage points based on value. Between the interim periods, U.S. imports

from nonsubject countries gained 6.5 percentage points of U.S. market share based on quantity and 5.0

percentage points based on value. 

Table IV-4

Certain coated paper other than coated packaging paperboard: U.S. shipments of domestic

product, U.S. imports by sources, and apparent U.S. consumption, 2007-09, January-June 2009,

and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Quantity (short tons)

U.S. producers’ U.S. shipments 1,223,741 1,115,817 999,459 429,098 634,236

U.S. imports from–

 China 345,768 329,307 352,555 190,622 71,706

 Indonesia 52,541 52,938 61,039 19,883 13,327

 Subtotal 398,309 382,245 413,593 210,506 85,033

 All other countries 727,306 611,626 363,472 196,512 307,612

 Total imports 1,125,615 993,872 777,066 407,018 392,645

Apparent U.S. consumption 2,349,356 2,109,689 1,776,525 836,116 1,026,881

Value ($1,000)

U.S. producers’ U.S. shipments 1,327,764 1,262,975 1,023,688 461,806 620,782

U.S. imports from–

 China 318,066 319,306 297,527 165,213 63,243

 Indonesia 45,543 48,765 52,384 16,458 11,536

 Subtotal 363,609 368,071 349,911 181,670 74,779

 All other countries 737,251 650,135 368,605 204,901 286,665

 Total imports 1,100,860 1,018,206 718,516 386,572 361,443

Apparent U.S. consumption 2,428,624 2,281,181 1,742,203 848,377 982,225

Source: Compiled from data submitted in response to Commission questionnaires and from adjusted Commerce statistics.

IV-8
Table IV-5

Certain coated paper other than coated packaging paperboard: Apparent U.S. consumption and

market shares, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Quantity (short tons)

Apparent U.S. consumption 2,349,356 2,109,689 1,776,525 836,116 1,026,881

Value ($1,000)

Apparent U.S. consumption 2,428,624 2,281,181 1,742,203 848,377 982,225

Share of quantity (percent)

U.S. producers’ U.S. shipments 52.1 52.9 56.3 51.3 61.8

U.S. imports from–

 China 14.7 15.6 19.8 22.8 7.0

 Indonesia 2.2 2.5 3.4 2.4 1.3

 Subtotal 17.0 18.1 23.3 25.2 8.3

 All other countries 31.0 29.0 20.5 23.5 30.0

 Total imports 47.9 47.1 43.7 48.7 38.2

Share of value (percent)

U.S. producers’ U.S. shipments 54.7 55.4 58.8 54.4 63.2

U.S. imports from–

 China 13.1 14.0 17.1 19.5 6.4

 Indonesia 1.9 2.1 3.0 1.9 1.2

 Subtotal 15.0 16.1 20.1 21.4 7.6

 All other countries 30.4 28.5 21.2 24.2 29.2

 Total imports 45.3 44.6 41.2 45.6 36.8

Note.–Because of rounding, figures may not add to totals shown.

Source: Compiled from data submitted in response to Commission questionnaires and from adjusted Commerce statistics. 

IV-9
Apparent U.S. Consumption Using U.S. Shipments from U.S. Producers of Total U.S. Integrated

Production

Data on apparent U.S. consumption of certain coated paper are presented in table IV-6. From

2007 to 2009, the quantity of apparent U.S. consumption of certain coated paper decreased by 21.3

percent and was higher by 17.4 percent from January-June 2009 to January-June 2010. From 2007 to

2009, the value of apparent U.S. consumption decreased by 23.6 percent and was higher by 12.0 percent

from January-June 2009 to January-June 2010.

Data on U.S. market shares for certain coated paper are presented in table IV-7. From 2007 to

2009, U.S. producers’ market share based on quantity increased by 4.8 percentage points and based on

value increased 5.7 percentage points. Between January-June 2009 and January-June 2010, U.S.

producers’ market share based on volume increased by 6.8 percentage points and based on value

increased by 6.1 percentage points. U.S. imports from China gained 3.6 percentage points of U.S. market

share from 2007 to 2009 based on quantity and 2.5 percentage points based on value. Between the

interim periods, U.S. imports from China lost 12.1 percentage points of U.S. market share based on

quantity and 10.4 percentage points based on value. U.S. imports from Indonesia gained 0.9 percentage

points of U.S. market share from 2007 to 2009 based on quantity and 0.8 percentage points based on

value. Between the interim periods, U.S. imports from Indonesia lost 0.8 percentage points of U.S.

market share based on quantity and 0.6 percentage points based on value. U.S. imports from nonsubject

countries lost 9.3 percentage points of U.S. market share from 2007 to 2009 based on quantity and 9.0

percentage points based on value. Between the interim periods, U.S. imports from nonsubject countries

gained 6.1 percentage points of U.S. market share based on quantity and 4.9 percentage points based on

value. 

IV-10
Table IV-6

Certain coated paper (All U.S. integrated producers): U.S. shipments of domestic product, U.S.

imports by sources, and apparent U.S. consumption, 2007-09, January-June 2009, and JanuaryJune 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Quantity (short tons)

U.S. producers’ U.S. shipments 1,737,222 1,648,972 1,477,233 660,769 861,105

U.S. imports from–

 China 345,768 329,307 352,555 190,622 71,706

 Indonesia 52,541 52,938 61,039 19,883 13,327

 Subtotal 398,309 382,245 413,593 210,506 85,033

 All other countries 727,306 611,626 363,472 196,512 307,612

 Total imports 1,125,615 993,872 777,066 407,018 392,645

Apparent U.S. consumption 2,862,837 2,642,844 2,254,299 1,067,787 1,253,750

Value ($1,000)

U.S. producers’ U.S. shipments 1,719,332 1,694,553 1,435,315 663,500 814,324

U.S. imports from--

 China 318,066 319,306 297,527 165,213 63,243

 Indonesia 45,543 48,765 52,384 16,458 11,536

 Subtotal 363,609 368,071 349,911 181,670 74,779

 All other countries 737,251 650,135 368,605 204,901 286,665

 Total imports 1,100,860 1,018,206 718,516 386,572 361,443

Apparent U.S. consumption 2,820,192 2,712,759 2,153,830 1,050,071 1,175,768

Source: Compiled from data submitted in response to Commission questionnaires and from adjusted Commerce statistics.

IV-11
Table IV-7

Certain coated paper (All U.S. integrated producers): Apparent U.S. consumption and market

shares, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Quantity (short tons)

Apparent U.S. consumption 2,862,837 2,642,844 2,254,299 1,067,787 1,253,750

Value ($1,000)

Apparent U.S. consumption 2,820,192 2,712,759 2,153,830 1,050,071 1,175,768

Share of quantity (percent)

U.S. producers’ U.S. shipments 60.7 62.4 65.5 61.9 68.7

U.S. imports from–

 China 12.1 12.5 15.6 17.9 5.7

 Indonesia 1.8 2.0 2.7 1.9 1.1

 Subtotal 13.9 14.5 18.3 19.7 6.8

 All other countries 25.4 23.1 16.1 18.4 24.5

 Total imports 39.3 37.6 34.5 38.1 31.3

Share of value (percent)

U.S. producers’ U.S. shipments 61.0 62.5 66.6 63.2 69.3

U.S. imports from--

 China 11.3 11.8 13.8 15.7 5.4

 Indonesia 1.6 1.8 2.4 1.6 1.0

 Subtotal 12.9 13.6 16.2 17.3 6.4

 All other countries 26.1 24.0 17.1 19.5 24.4

 Total imports 39.0 37.5 33.4 36.8 30.7

Note.–Because of rounding, figures may not add to totals shown.

Source: Compiled from data submitted in response to Commission questionnaires and from adjusted Commerce statistics. 

IV-12
RATIO OF IMPORTS TO U.S. PRODUCTION

Data on the ratio of imports to U.S. production of certain coated paper are presented in table IV-8.

Table IV-8

Certain coated paper: U.S. production, U.S. imports, and ratios of imports to production, 2007-09,

January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Quantity (short tons)

U.S. production of– 

 Certain coated paper other than 

 coated packaging paperboard 1,303,273 1,185,322 1,103,889 517,681 714,386

 Total U.S. integrated 1,945,013 1,856,583 1,665,021 795,320 993,354

U.S. imports from--

 China 345,768 329,307 352,555 190,622 71,706

 Indonesia 52,541 52,938 61,039 19,883 13,327

 Subtotal 398,309 382,245 413,593 210,506 85,033

 All other countries 727,306 611,626 363,472 196,512 307,612

 Total imports 1,125,615 993,872 777,066 407,018 392,645

Ratio of imports to U.S. production of certain coated paper other than packaging

paperboard(percent)

U.S. imports from--

 China 26.5 27.8 31.9 36.8 10.0

 Indonesia 4.0 4.5 5.5 3.8 1.9

 Subtotal 30.6 32.2 37.5 40.7 11.9

 All other countries 55.8 51.6 32.9 38.0 43.1

 Total imports 86.4 83.8 70.4 78.6 55.0

Ratio of imports to total U.S. production (percent)

U.S. imports from--

 China 17.8 17.7 21.2 24.0 7.2

 Indonesia 2.7 2.9 3.7 2.5 1.3

 Subtotal 20.5 20.6 24.8 26.5 8.6

 All other countries 37.4 32.9 21.8 24.7 31.0

 Total imports 57.9 53.5 46.7 51.2 39.5

Source: Compiled from data submitted in response to Commission questionnaires and from adjusted Commerce statistics.

IV-13

PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

Raw Material Costs

U.S. integrated producers of certain coated paper reported that pulp, chemicals and dyes, coating

additives, and packaging are the principal raw materials used in producing certain coated paper. Most of

the integrated producers reported that pulp accounts for between *** percent and *** percent of the total

cost of production and that chemicals and dyes account for between *** percent and *** percent. Six of

the integrated producers reported that the cost of pulp has decreased by *** to *** percent since 2007 and

five reported that the cost of pulp has increased by *** to *** percent. Nearly all of the integrated

producers reported that the cost of chemicals and dyes has increased by *** to *** percent since 2007.

U.S. Inland Transportation Costs

U.S. integrated producers reported that U.S. inland transportation costs of certain coated paper

range from *** to *** percent of the delivered price. Converters reported that U.S. inland transportation

costs range from *** to *** percent of the delivered price. Importers reported that U.S. inland

transportation costs range from *** to *** percent of the delivered price.

U.S. inland shipping distances for U.S.-produced certain coated paper and certain coated paper

produced in China and Indonesia were requested from both U.S. producers and U.S. importers. For the

U.S. producers, *** percent of their U.S. sales in 2009 occurred within distances of 100 miles from their

facilities, *** percent occurred within distances of 101 to 1,000 miles, and *** percent occurred within

distances over 1,000 miles from their facilities. For converters, *** percent of sales in 2009 occurred

within 100 miles of their facilities, *** percent of sales occurred within 101 to 1,000 miles, and ***

percent occurred within distances over 1,000 miles. For importers of certain coated paper from China,

approximately *** percent of sales in 2009 occurred within 100 miles of their storage facilities, ***

percent of sales occurred within 101 to 1,000 miles, and *** occurred within distances over 1,000 miles.

For importers of certain coated paper from Indonesia, approximately *** percent of sales by value in

2009 occurred within 100 miles of their storage facilities, *** percent of sales occurred within 101 to

1,000 miles, and *** occurred within distances over 1,000 miles.

PRICING PRACTICES

Pricing Methods

When questionnaire respondents were asked how they determined the prices that they charge for

certain coated paper, *** of the U.S. integrated producers reported the use of price lists, *** reported

using transaction-by-transaction negotiations, and *** reported ***. *** converters reported the use of

***, *** reported using transaction-by-transaction negotiations, and *** reported using both. ***

importers of certain coated paper from China reported using transaction-by-transaction negotiations and

*** reported the use of price lists. Importers of certain coated paper from Indonesia reported determining

prices *** or through transaction-by-transaction negotiations.

*** U.S. integrated producers reported that they quote prices of certain coated paper on an f.o.b.

basis and *** quote prices on a delivered basis. Converters typically quote prices on a delivered basis.

*** importers reported that they quote prices of certain coated paper on a delivered basis and ***

reported that they quote prices of certain coated paper on an f.o.b. basis.

V-1
Alternative fuel tax credit

In early 2009, U.S. paper mills began applying for and receiving an alternative fuel tax credit of

$0.50 per gallon of kraft pulp by-product (or “black liquor”) they produced.1

 The tax credit expired at the

end of 2009.2

 Six U.S. integrated producers and one converter reported receiving the “black liquor” tax

credit. In the preliminary phase of these investigations, respondent parties contended that the alternative

fuel tax credit allowed U.S. integrated producers to lower prices on its certain coated paper in 2009.3

 ***

integrated producers (***) reported that the tax credit had no effect on their sales prices.4

 Integrated

producer *** reported that the ***.5

 Integrated producer *** reported that, ***.6

Sales Terms and Discounts

U.S. producers and importers of certain coated paper from China and Indonesia were asked what

share of their sales were on a (1) long-term contract basis (multiple deliveries for more than 12 months),

(2) short-term contract basis (up to and including 12 months), and (3) spot sales basis (for a single

delivery) during 2009. *** integrated producers reported that *** of their sales are on a spot basis, two

U.S. integrated producers reported a mixture of short-term contracts and spot sales, *** reported a

mixture of long-term and short-term contracts and spot sales, and *** reported a mixture of long-term

contracts and spot sales. These producers’ long-term contracts can last from *** to ***.7

 These

producers’ short-term contracts typically last ***. Most converters reported that they sell exclusively on

a spot basis, with *** reporting that most of ***. Converters’ short-term contracts last ***.

Among the importers that reported sales of imports from China, *** reported that *** of their

sales are on a spot basis, *** reported that a majority of their sales are on a long-term contract basis; and

*** reported that all of *** sales are on a short-term contract basis. Among the importers that reported

sales of imports from Indonesia, *** reported that *** of their sales are on a spot basis, and *** reported

that a majority of *** sales are on a long-term contract basis, but also reported some short-term contracts

and spot sales. Importers’ long-term contracts typically fix prices with an approximate expected quantity,

and do not contain meet-or-release provisions, whereas importers’ short-term contracts fix both price but

not quantity and do not contain meet-or-release provisions.

*** reported that they offer non-standard discounts based on volume. Three converters also

reported that they offer discounts based on volume. *** of eight responding importers of certain coated

paper from China and Indonesia reported applying discounts on a transaction-by-transaction basis, either

based on volume or to meet competition. 

When purchasers were asked if a price leader existed in the certain coated paper market, 21 of 34

responding purchasers responded “yes.” Specifically, 14 purchasers reported that U.S. producers are the

price leaders, citing their large market share and the fact that they are typically first in announcing price

 1 The tax credit is under Section 6426(e) of the Internal Revenue Code that went into effect in 2007. Petitioners’

postconference brief, answers to Staff Questions, exh. 6, p. 2. Such kraft pulp by-product results from the

production of certain coated paper and other papers, including other coated free sheet papers and coated groundwood

paper. IRS Notice 2006-92. http://www.irs.gov/pub/irs-drop/n-06-92.pdf.

 2

 U.S. integrated producer *** reported that it does not expect the alternative fuel tax credit to be renewed.

 3

 Conference transcript, pp. 12-13 (Durling). Petitioners stated in the preliminary phase of these investigations

that they ***. Petitioner’s postconference brief, Answer to Staff Questions, exh. 6, p. 8.

 4

 ***’s U.S. Producers’ Questionnaire responses at IV-3 (b).

 5

 ***’s U.S. Producers’ Questionnaire response at IV-3 (b).

 6

 ***’s U.S. Producers’ Questionnaire responses at IV-3 (b).

 7

 ***. 

V-2
increases.8

 Four purchasers reported that suppliers of imports from China were price leaders, one cited

suppliers of imports from Indonesia, and two cited suppliers of imports from Asia, stating that they

offered the lowest prices.

PRICE DATA

The Commission requested U.S. integrated producers, converters, and importers of certain coated

paper from China and Indonesia to provide quarterly data for the total quantity and f.o.b. value of selected

products that were shipped to unrelated customers in the U.S. market.9

 Data were requested for the period

January 2007-June 2010. The products for which pricing data were requested are as follows:

Product 1.—Coated paper, two-side coated sheets, 70-100 pounds text basis weights, GE 

brightness levels equal to or above 86 but less than 90.

Product 2.— Coated paper, two-side coated sheets, 70-100 pounds text basis weights, GE 

brightness levels equal to or above 90 but less than 96.

Product 3.— Coated paper, one-side coated sheets, 70-100 pounds text basis weights, GE 

brightness levels equal to or greater than 83.

Product 4.— Coated paper, two-side coated sheets, 80-100 pounds cover basis weights, GE 

brightness levels equal to or greater than 86 but less than 90.

Product 5. — Coated paper, two-side coated sheets, 80-100 pounds cover basis weights, GE 

brightness levels equal to or greater than 90 but less than 96.

*** U.S. integrated producers, *** converters,10 *** importers of product imported from 

China (***), and *** importers of product imported from Indonesia (***) provided pricing data for sales

of the requested products, although not all firms reported pricing data for all products for all quarters.11

Pricing data reported by these firms accounted for approximately *** percent of the quantity of U.S.

producers’s U.S. shipments of certain coated paper other than coated packaging paperboard, *** percent

 8 Two of these purchasers stated that U.S. producers became price leaders from 2009 and into the spring of 2010.

 9 For product 1, firms were also asked to report pricing data separately for non-PDB sales and PDB sales. PDB

programs are defined as sales of certain coated paper where the ultimate end-use customer (i.e., the purchaser of

printed materials from the printer) negotiates the paper source, specifications, and/or price directly with the paper

distributor or the paper mill. In these transactions, the printer for the ultimate end user must use the specified paper

and at the specific price. *** integrated producers (***) reported sales of product 1 via PDB programs. The sales

prices of product 1 sold via PDB programs reported by these integrated producers were ***. The total sales volumes

of product 1 sold via PDB programs ***. Inclusion of sales of product 1 sold via PDB programs ***. Pricing data

on product 1 presented here combine the data reported on non-PDB and PDB sales.

 Firms were also requested to provide pricing data on sales of imports from nonsubject sources. These prices are

presented in app. D.

 10 The U.S. sales prices presented here include sales reported by integrated producers and converters. Sales

reported by converters accounted for *** percent of the sales data presented here and do not change the price trends

or margins of underselling. Among the responding converters, *** and *** reported that they *** use U.S.-sourced

sheeter rolls in their conversion of sheets, while *** reported that it used sheeter rolls from ***.

 11 Staff excluded pricing data on *** reported by U.S. integrated producer *** because the product it reported

***. E-mail from ***.

V-3
of the quantity of U.S. imports from China, and *** of the quantity of U.S. imports from Indonesia during

January 2007-June 2010.12

Price Trends

Weighted-average f.o.b. prices reported for U.S. integrated producers, converters, and importers

are presented in tables V-1 through V-5 and in figures V-1 through V-5 on a quarterly basis during

January 2007-June 2010. For sales reported by U.S. integrated producers and converters, product 2

accounted for *** percent of the total quantity reported by U.S. integrated producers and converters for

all pricing products over the entire period, product 5 accounted for *** percent, product 1 accounted for

*** percent, product 4 accounted for *** percent, and product 3 accounted for *** percent. For sales of

products imported from China, product 1 accounted for *** percent of the total quantity reported by

importers for all pricing products from China over the entire period, product 4 accounted for *** percent,

and product 3 accounted for *** percent. There were *** reported sales of products 2 or 5 imported from

China. For sales of products imported from Indonesia, product 1 accounted for *** percent of the total

quantity reported by importers for all pricing products from Indonesia over the entire period and product

4 accounted for *** percent. There were *** reported sales of products 2, 3, or 5 imported from

Indonesia. 

The weighted-average sales prices of U.S.-produced product 1 increased *** overall by ***

percent from the first quarter of 2007 to the second quarter of 2010, first increasing by *** percent from

the first quarter of 2007 to their highest point in the *** and then decreasing by *** percent to ***, after

which ***. The weighted-average sales prices of product 1 imported from China fluctuated and increased

overall by *** percent from the first quarter of 2007 to the second quarter of 2010, first fluctuating but

generally increasing by *** from the first quarter of 2007 to their highest point in the *** and then

decreasing by *** to their lowest point in the ***, after which they increased by *** percent to the

second quarter of 2010. The weighted-average sales prices of product 1 imported from Indonesia

fluctuated and increased overall by *** percent from the first quarter of 2007 to the second quarter of

2010, first increasing by *** percent from the first quarter of 2007 to the their highest point in the ***,

before decreasing by *** to the *** and *** thereafter.

The weighted-average sales prices of U.S.-produced product 2 decreased overall by *** percent

over the entire period, slightly increasing by 4.1 percent from the first quarter of 2007 to the second

quarter of 2009 before decreasing by 16.1 percent to the fourth quarter of 2009, after which they ***. 

There were no reported sales of product 2 imported from China or Indonesia.

The weighted-average sales price of U.S.-produced product 3 fluctuated in a narrow range,

remaining relatively flat and increasing *** overall by *** percent over the entire period. The weightedaverage sales prices of product 3 imported from China fluctuated but generally increased, increasing

overall by *** percent from the first quarter of 2007 to the second quarter of 2010, with ***.

The weighted-average sales prices of U.S.-produced product 4 fluctuated and increased overall by

*** over the entire period, first increasing by *** percent from the first quarter of 2007 to their highest

level in *** before decreasing by *** percent thereafter. The weighted-average sales prices of product 4

imported from China fluctuated and increased by *** percent over the entire period, fluctuating but

decreasing by *** percent from the first quarter of 2007 to their lowest level in the *** before increasing

by *** percent thereafter. ***. The weighted-average sales prices of product 4 imported from Indonesia

decreased by *** percent from ***.

 12 Importer *** originally reported ***. Petitioner contends that ***. Petitioner’s prehearing brief, p. 27, fn. 94. 

***. Respondents’ posthearing brief, exh. 2, p. 4.

V-4
The weighted-average sales prices of U.S.-produced product 5 fluctuated and decreased overall

by 13.0 percent, fluctuating in a narrow range from the first quarter of 2007 to the second quarter of 2009,

after which they decreased by 15.2 percent to the second quarter of 2010. There were no reported sales of

product 5 imported from China or Indonesia.

Table V-1

Certain coated paper: Weighted-average f.o.b. prices and quantities of domestic and imported

product 1 and margins of underselling/(overselling), by quarters, January 2007-June 2010

* * * * * * *

Table V-2

Certain coated paper: Weighted-average f.o.b. prices and quantities of domestic product 21

, by

quarters, January 2007-June 2010

Period

United States

Price

(per short ton)

Quantity

(short tons)

2007:

 Jan.-Mar. $1,217.03 55,320

 Apr.-June 1,227.19 58,300

 July-Sept. 1,243.25 57,878

 Oct.-Dec. 1,229.43 54,032

2008:

 Jan.-Mar. 1,262.72 52,315

 Apr.-June 1,270.76 53,101

 July-Sept. 1,299.17 47,183

 Oct.-Dec. 1,288.65 43,360

2009:

 Jan.-Mar. 1,280.20 34,581

 Apr.-June 1,266.64 35,922

 July-Sept. 1,170.19 38,222

 Oct.-Dec. 1,063.04 49,398

2010:

 Jan.-Mar. *** ***

 Apr.-June *** ***

 1 Coated paper, two-side coated sheets, 70-100 pounds text basis weights, GE brightness levels equal

to or above 90 but less than 96.

Source: Compiled from data submitted in response to Commission questionnaires.

V-5
Table V-3

Certain coated paper: Weighted-average f.o.b. prices and quantities of domestic and imported

product 3 and margins of underselling/(overselling), by quarters, January 2007-June 2010

* * * * * * *

Table V-4

Certain coated paper: Weighted-average f.o.b. prices and quantities of domestic and imported

product 4 and margins of underselling/(overselling), by quarters, January 2007-June 2010

* * * * * * *

Table V-5

Certain coated paper: Weighted-average f.o.b. prices and quantities of domestic product 51 and

margins of underselling/(overselling), by quarters, January 2007-June 2010

Period

United States

Price

(per short ton)

Quantity

(short tons)

2007:

 Jan.-Mar. $1,338.17 43,606

 Apr.-June 1,346.43 42,134

 July-Sept. 1,336.61 44,799

 Oct.-Dec. 1,352.44 45,951

2008:

 Jan.-Mar. 1,323.60 42,789

 Apr.-June 1,327.70 39,362

 July-Sept. 1,350.19 40,359

 Oct.-Dec. 1,387.41 35,571

2009:

 Jan.-Mar. 1,394.03 26,046

 Apr.-June 1,372.05 27,398

 July-Sept. 1,269.98 33,225

 Oct.-Dec. 1,196.20 40,054

2010:

 Jan.-Mar. 1,177.87 38,099

 Apr.-June 1,164.08 41,629

 1 Coated paper, two-side coated sheets, 80-100 pounds cover basis weights, GE brightness levels equal to or

greater than 90 but less than 96.

Source: Compiled from data submitted in response to Commission questionnaires.

V-6
Figure V-1

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and imported

product 1, by quarters, January 2007-June 2010

* * * * * * *

Figure V-2

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic product 2, by

quarters, January 2007-June 2010

* * * * * * *

Figure V-3

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and imported

product 3, by quarters, January 2007-June 2010

* * * * * * *

Figure V-4

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and imported

product 4, by quarters, January 2007-June 2010

* * * * * * *

V-7
Price

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1,500

12341234123412

2007 2008 2009 2010

Dollars per short ton

US

Quantity

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

12341234123412

2007 2008 2009 2010

Short tons

US

Figure V-5

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic product 5, by

quarters, January 2007-June 2010

Source: Table V-5.

V-8
Table V-6

Certain coated paper: Summary of weighted-average f.o.b. prices for products 1-5 from the United

States, China, and Indonesia

Item Number of

quarters

Low price 

(per short ton)

High price

(per short ton)

Change in price1

(percent)

Product 1 

United States 14 $*** $*** ***

China 14 *** *** ***

Indonesia 14 *** *** ***

Product 2

United States 14 *** *** ***

China 0 (2) (2) (2)

Indonesia 0 (2) (2) (2)

Product 3

United States 14 *** *** ***

China 14 *** *** ***

Indonesia 0 (2) (2) (2)

Product 4

United States 14 *** *** ***

China 14 *** *** ***

Indonesia 2 *** *** ***

Product 5

United States 14 1,164.08 1,394.03 -13.0

China 0 (2) (2) (2)

Indonesia 0 (2) (2) (2)

 1 Percentage change from the first quarter in which price data were available to the last quarter in which price data

were available, based on unrounded data.

 2 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.

Price Comparisons

Margins of underselling and overselling for the period are presented by product category in table 

V-7. The data show that prices of imports from China were lower than the U.S. producers’ prices in 39

out of 42 quarterly comparisons, by margins ranging from 1.5 percent to 25.2 percent. The prices of

imports from China were higher than U.S. producers’ prices in 3 quarterly comparisons, by margins

ranging from 1.4 to 14.3 percent. The data show that prices of imports from Indonesia were lower than 

the U.S. producer prices in 9 out of 16 quarterly comparisons, by margins ranging from 2.6 percent to

14.4 percent. The prices of imports from Indonesia were higher than U.S. producers’ prices in 7 quarterly

comparisons, by margins ranging from 0.6 to 18.7 percent.

Respondents contend that U.S. product sells at a “natural premium” to subject imports, due to shorter

lead times, more secure supply chains, and purchasers’ preferences to buy U.S. product.13 U.S. producer 

 13 Respondents’ prehearing brief, p. 65.

V-9
Table V-7

Certain coated paper: Instances of underselling/overselling and the range and average of margins for

products 1-5, January 2007-June 2010

Underselling Overselling

Number

of

instances

Range

(percent)

 Quantity

of

imports

from

China

(short

tons)

 Quantity

of

imports

from

Indonesia

(short

tons)

Average

margin

(percent)

Number

of

instances

Range

(percent)

Quantity

of

imports

from

China

(short

tons)

 Quantity

of

imports

from

Indonesia

(short

tons)

Average

margin

(percent)

By product:

 Product 1 21 1.5 to 15.7 353,827 57,821 7.6 7 0.6 to 14.3 2,703 39,835 6.1

 Product 2 0 (1) (1) (1) (1) 0 (1) (1) (1) (1)

 Product 3 14 8.7 to 25.2 12,578 (1) 19.1 0 (1) (1) (1) (1)

 Product 4 13 2.3 to 13.7 137,272 14 7.2 3 1.4 to 18.7 12,620 44 11.2

 Product 5 0 (1) (1) (1) (1) 0 (1) (1) (1) (1)

By country:

 China 39 1.5 to 25.2 503,677 12.0 3 1.4 to 14.3 15,323 9.8

 Indonesia 9 2.6 to 14.4 57,834 5.7 7 0.6 to 18.7 39,879 6.7

By year:

 2007 15 1.5 to 25.1 191,071 11.0 1 1.4 11,698 1.4

 2008 14 2.3 to 25.2 173,491 9.2 2 0.6 to 1.3 21,728 0.9

 2009 15 2.6 to 23.6 179,400 12.3 3 6.0 to 18.7 13,120 10.7

 2010 4 6.6 to 20.8 17,549 10.8 4 2.7 to 14.3 8,656 10.3

 Total2 48 1.5 to 25.2 561,511 10.8 10 0.6 to 18.7 55,202 7.7

 1 Not applicable.

 2 Total number of instances for all cited products for both subject countries, range of margins for all cited products for both

subject countries, and average margin for all cited products for both subject countries.

Source: Compiled from data submitted in response to Commission questionnaires.

New Page reported that historically it was able to receive a premium of $40 to $60 per ton, which has

eroded over time as it has lowered its prices to compete with subject imports.14 Respondents contend that

such a premium is consistent with the average margins of underselling in the pricing products in which

subject imports mostly compete (1 and 4), as shown in table V-7.15

Petitioner asserts that economy grades of paper (those typically with brightness levels of 86-89)

can compete directly against premium grades. Specifically, petitioner reported that some subject imports

 14 Hearing transcript, p. 133 (Nelson) and p. 189 (DeVoe).

 15 Respondents’ posthearing brief, exh. 1, p. 36. A premium of $40 to $60 per ton is approximately equivalent to

a premium of 4 to 6 percent for pricing products 1 and 4 and approximately equivalent to a premium of 3 to 5 for

pricing product 3. As shown in table V-7, the average margins of underselling for products 1 and 4 is 7.2 to 7.6

percent and the average margin of underselling for product 3 is 19.1 percent.

V-10
straddle the economy grade and the premium grade and thus can compete directly with both economy and

premium domestic products.16 Moreover, petitioner reported that the prices of the different grades of

certain coated paper impact one another. Petitioner asserts that the historical relationship between the

prices the U.S. industry charges for the premium grades and the economy grades widened to an

“unsustainable” level in the ***, as the prices of economy grade products declined sharply, leading to

price reductions in the premium grades in ***.17 

Respondents contend that the prices of U.S. producers’ premium grades fell, not because of

subject imports, but because purchasers shifted to economy grades during the recession in order to save

money on print jobs.18 Respondents also assert that U.S. producers had an incentive to reduce their prices

on the premium grades in order to maintain volume on high-margin product.19 Respondents further

contend that the shift among purchasers from premium grades to economy grades began in ***.20

Petitioner also asserts that the determining factor in U.S. profit margins and prices is subject

import volumes. In its prehearing brief, petitioner presented econometric estimates21 of the effect of

subject and nonsubject import volumes and demand on the U.S. industry profit margin, defined here as

the sales price of certain coated paper minus the price of pulp.22 Notably, petitioner’s model does not

include an estimate of the effect of the price of pulp on the profit margin because petitioner asserts that 

 16 Hearing transcript, p. 219 (DeVoe) and pp. 216-217 (Nelson). 

 17 Hearing transcript, p. 132 (Miller) and p. 118 (Van Ert). When asked for the historical relationship between the

prices of different grades, petitioner reported that from ***, U.S. producer ***’s intermediate premium grade

product #2 was priced between *** percent above its economy grade product #3 and its highest premium grade

product #1 was priced between *** percent above its economy grade product during this period. Petitioner’s

posthearing brief, responses to staff questions, exh. 1, p. 1.

 18 Respondents’ posthearing brief, p. 8.

 19 Respondents’ posthearing brief, exh. 1, p. 16.

 20 Respondents’ posthearing brief, p. 6.

 21 Petitioner also submitted a regression based on a difference-in-difference model in which it attempts to estimate

the effect of the explanatory variables listed above on the difference between the price of certain coated paper (i.e.,

sheets) and the price of coated web rolls. Petitioner reported that such a model can capture the effect of cost and

demand variables omitted from its regression summarized above due to lack of data. Petitioner’s difference-indifference model implicitly assumes that certain coated paper sheets and coated web rolls face similar supply and

demand drivers but that only coated paper sheets face competition from dumped imports. Petitioner’s prehearing

brief, exh. 5, pp. 10-12. Respondents contend that web roll prices face demand factors unrelated to subject imports

that are different than the demand factors for certain coated paper sheets; namely, they state that coated web rolls are

used in the printing of catalogs, magazines, text books, and publications, whereas certain coated paper sheets are

used in commercial printing consisting of annual reports, high-end brochures, and advertisements. Respondents’

posthearing brief, exh. 6, p. 10 and att. B.

 22 Specifically, petitioner defined U.S. industry performance as U.S. producer ***’s U.S. sales price of #3

economy grade certain coated paper sheets minus the cost of pulp as measured by RISI. It states that it used ***’s

sales prices of its #3 coated sheet because there are no public historical price series available for certain coated

paper. Petitioner’s prehearing brief, exh. 5, p. 4. Staff estimates that the correlation coefficient between the *** #3

coated sheet price series and U.S. prices of pricing product 1 (the pricing product that most closely matches #3

coated sheet) is ***. Staff also estimates that the *** #3 coated sheet price series is relatively highly correlated with

the U.S. prices of pricing products 2, 4, and 5 (with correlation coefficients ranging between ***), but is not very

highly correlated with U.S. sales prices of pricing product 3 (with a correlation coefficient of ***). Petitioner’s

regression also includes seasonal quarterly effects and is based on quarterly data from the first quarter of 2002 to the

first quarter of 2010. Petitioner used a commercial print activity index as measured by RISI as a proxy for demand. 

V-11
changes in the price of pulp lead to equal changes in the sales price of certain coated paper and thus have

no impact on U.S. profit margins.23 Petitioner reported that its model indicates that subject import

volumes have a “statistically significant negative impact” and that demand did not have a statistically

significant impact on U.S. profit margins.24 More specifically, petitioner estimates that the U.S.

industry’s profit margin falls by $*** for every additional ton of subject imports.25

Respondents assert that petitioner’s proposed econometric model disregards the important effect

of the price of pulp on the U.S. industry’s profit margins, possibly causing biased results.26 Respondents,

therefore, presented an alternative econometric model in which they include the price of pulp as another

explanatory factor in determining U.S. profit margins, in addition to those proposed by petitioner,

effectively allowing for changes in raw material costs not to be fully passed through to the sales price.27

Respondents reported that their alternative model indicates that the price of pulp and demand are both

statistically significant and “economically meaningful drivers” of the U.S. industry’s profit margin,

whereas the impact of subject import volumes was “very small.”28 More specifically, they estimate that a

one percent increase in the price of pulp is associated with a *** percent decline in the profit margin and

that a one percent increase in the commercial print index is associated with a *** percent increase in the

profit margin.29 

LOST SALES AND LOST REVENUES

The Commission requested that U.S. integrated producers and converters report any instances of

lost sales or revenues they experienced due to competition from imports of certain coated paper from

China and Indonesia since January 2006.30 Integrated producers and converters provided *** lost sales

allegations totaling $*** and *** lost revenues allegations totaling $***. Staff contacted the ***

purchasers cited in the allegations; *** responded. *** confirmed lost sales allegations totaling $*** and

 23 Petitioner stated that its model implicitly assumes that domestic producer pass through changes in raw material

costs one-for-one. Petitioner’s posthearing brief, responses to staff questions, exh. 2, p. 3.

 24 Ibid. Staff notes that one cannot necessarily infer magnitude or the true sign of the parameter based on

statistical significance alone. See James J. Fetzer, “Inference for econometric modeling in antidumping,

countervailing duty and safeguard investigations,” World Trade Review (2009) 8(4): 377, 377-380.

 25 Petitioner also reported that the interval of estimates of the effect of subject imports on profit margins range

from $*** to $***. Petitioner’s posthearing brief, responses to staff questions, exh. 2, pp. 3-4.

 26 Respondents stated that omitting a relevant variable can lead to bias in the coefficients of the remaining

variables. Respondents’ posthearing brief, exh. 6, p. 1. 

 27 Respondents’ model, therefore, implicitly assumes that U.S. producers pass through raw material costs at a rate

other than one-for-one. Respondents also presented a second alternative model, in which they incorporated subject

import prices (instead of subject import volumes) as one of the explanatory factors. That model also indicates that

the price of pulp and demand are the principal factors in determining the profit margin. Respondent’s posthearing

brief, exh. 6, p. 18. 

 28 Respondents’ posthearing brief, exh. 6, p. 1. 

 29 Respondents’ posthearing brief, exh. 6, p. 12. Respondents also presented the estimates of the percent

contribution to the change in the profit margin is explained by each factor; namely, they estimate that changes in the

price of pulp account for *** percent of the change in the price-minus-pulp margin; changes in demand account for

*** percent; and changes in subject import volumes account for *** percent. Respondents’ posthearing brief, exh. 6,

p. 15.

 30 *** allegations provided by converters total $*** or *** percent of the total value of lost sales allegations and

*** allegations provided by converters total $*** or *** percent of the total value of lost revenues allegations. 

V-12
*** purchasers confirmed lost revenues allegations totaling $***.31 The results are summarized in tables

V-8 and V-9 and are discussed below.

Table V-8

Certain coated paper: U.S. integrated producers’ and converters’ lost sales allegations

* * * * * * *

Table V-9

Certain coated paper: U.S. integrated producers’ and converters’ lost revenue allegations

* * * * * * *

*** was named in a lost revenues allegation valued at $*** allegedly occurring in ***. It agreed

with the allegation. 

*** was named in a lost revenues allegation valued at $*** allegedly occurring in ***. It agreed

with the allegation. 

*** was named in a lost sales allegation valued at $*** allegedly occurring in ***. It agreed with

the allegation. It further reported that it has switched from purchasing certain coated paper from U.S.

producers to suppliers of imports from China and Indonesia due to price and that U.S. producers have

reduced their prices in order to compete with subject imports.

*** was named in *** lost sales allegations valued at $*** and *** lost 

revenues allegations valued at $*** allegedly occurring in 2009. It agreed with the ***. It further

reported that it has switched from purchasing certain coated paper from U.S. producers to suppliers of

imports from China due to price and that U.S. producers have reduced their prices in order to compete

with imports from China.

*** was named in a lost sales allegation valued at $***. It agreed with the allegation. It further

reported that it has switched from purchasing certain coated paper from U.S. 

producers to suppliers of imports from China and Indonesia due to price and that U.S. producers have

reduced their prices in order to compete with subject imports. Specifically, it reported that integrated

producers *** reduced their prices in *** by approximately $*** per short ton.

*** was named in *** lost sales *** valued at $*** and *** lost revenues *** valued at $***. It

reported that there was not enough information provided in the allegations to provide a specific response

to the transactions cited; however, it did report that it *** due to price and that U.S. producers have

reduced their prices in order to compete with subject imports.

*** was named in a lost sales allegation valued at $***. It agreed with the allegation. It further

reported that it has switched from purchasing certain coated paper from U.S. producers to suppliers of

imports from China and Indonesia due to price and that U.S. producers have reduced their prices in order

to compete with subject imports. 

*** was named in a lost sales allegation at $*** and a lost revenues allegation valued at $***

allegedly occurring in ***. It agreed with the allegations. It further reported that it has switched from

purchasing certain coated paper from U.S. producers to suppliers of imports from China and Indonesia

due to price as well as quality. It also reported that U.S. producers have reduced their prices in order to

 31 ***. ***’s response to the lost sales allegation, e-mail from ***. Staff estimates that a lost sale of *** short

tons of U.S. product from *** is roughly valued at $***, based on U.S. producers’ weighted-average prices of U.S.-

produced sheet products in *** presented earlier in part V of this report. Likewise, staff estimates that a lost sale of

*** short tons of U.S. product from *** is roughly valued at $***. If the allegation of $*** is considered a

confirmed lost sale, the total confirmed lost sales would total $***.

V-13
compete with subject imports, but that prices of imports from Europe, Korea, and Japan have also driven

prices down.

*** was named in a lost sales allegation valued at $***. It did not respond to the specific

transaction cited in the allegation, but did report that it has switched from purchasing certain coated paper

from U.S. producers to suppliers of imports from China due to price and that U.S. producers have reduced

their prices to compete with imports from China.

*** was named in a lost sales allegation valued at $*** allegedly occurring in ***. *** reported

that it did reduce its purchases from U.S. producers by *** short tons from *** and increased its

purchases of imports from China by *** short tons in that period, due to a variety of factors, one of which

may have been price.32 *** then switched from purchasing subject imports in *** to U.S. integrated

producer *** and ***.33 ***. ***. Respondents claim that ***.34

***.35 ***.36 

*** was named in *** lost revenues *** allegedly occurring in ***. It disagreed with the

allegations, stating that the prices cited in the allegations ***. *** further reported that it has not switched

from purchasing certain coated paper from U.S. producers to suppliers of imports from China and/or

Indonesia; however, it did report that U.S. producers have reduced their prices in order to compete with

subject imports.

*** was named in *** lost sales ***, *** valued at $*** and another ***. It disagreed with the

allegations, stating that ***. Specifically, it reported that ***. ***. It also reported that ***. 

***.37 ***.38 

***.39 It further reported that it has not switched purchasing certain coated paper from U.S.

producers to suppliers of imports from China and/or Indonesia; however, it did report that U.S. producers

have reduced their prices in order to compete with subject imports.

 32 ***’s response to the lost sales allegation, e-mail from ***. 

 33 Respondents’ postconference brief, pp. 45-46. 

 34 Respondents’ postconference brief, at exh. 1, pp. 7-8.

 35 Petitioners’ postconference brief, “Answers to Staff Questions,” pp. 2-3.

 36 Petitioners’ postconference brief, “Answers to Staff Questions,” exh. Q4-2.

 37 ***’s Purchasers’ Questionnaire response at II-4 (a) and (b).

 38 Respondents’ postconference brief, exh. 19.

 39 ***’s Purchasers’ Questionnaire response at II-4 (a) and (b).

V-14
PART VI: FINANCIAL EXPERIENCE OF THE U.S. PRODUCERS

BACKGROUND

The financial results on certain coated paper other than coated packaging paperboard represent

the combined operations of Appleton, Cascade, Clearwater, International Paper, MeadWestvaco,

Mohawk, NewPage, Sappi, and Smart Papers, which are integrated or semi-integrated producers. The

following converters are also included in the financial results on certain coated paper other than coated

packaging paperboard: Nekoosa, Resource One, Wausau, and Williams Paper.1

 Financial results on

coated packaging paperboard, as described in a previous section of this report, were reported by producers

Clearwater, Georgia Pacific, MeadWestvaco, and Rock-Tenn. (Note: Clearwater and MeadWestvaco are

classified as producing both certain coated paper other than coated packaging paperboard and coated

packaging paperboard).

Overall revenue represents commercial sales comprised primarily of domestic shipments followed

by smaller shares of exports. Revenue for coated packaging paperboard also includes internal

consumption reported by ***.2

 With the exception of Sappi, financial results were reported on the basis

of U.S. generally accepted accounting principles (“GAAP”).3

 The U.S. producer questionnaire response

of NewPage was verified on August 10-11, 2010. Revisions pursuant to verification are reflected in this

and other sections of the staff report.4

OPERATIONS ON CERTAIN COATED PAPER OTHER THAN

COATED PACKAGING PAPERBOARD

Income-and-loss data for operations on certain coated paper other than coated packaging

paperboard are presented in table VI-1 and on an average unit basis in table VI-2.5

 A corresponding

 1 ***. USITC auditor final-phase notes. 

 2 ***. Ibid. 

 3 Sappi’s financial results are based on International Financial Reporting Standards (IFRS). With the exception of

Rock-Tenn and Williams Paper, which both reported on the basis of fiscal-years ending in September, financial

results were reported on a calendar-year basis. 

 The following companies (all converters) are not reflected in the industry’s financial results because the financial

sections of their U.S. producer questionnaire responses were incomplete or largely incomplete: ***. Ibid. To the

extent that these companies responded to the Commission’s question regarding actual and anticipated negative

effects due to subject imports, their responses are reflected in this section of the report. ***, a converter that

reported its financial results for the preliminary phase of these investigations did not submit a U.S. producer

questionnaire response for the final phase. 

 ***. Ibid. 

 4

 Verification report, pp. 2-3. 

 5

 Differences between the trade section and financial section of this report, in terms of total sales/shipment

volume and value, in part reflect the elimination of converters in the trade section in order to avoid the double

counting of volume. Staff also notes that some double counting of sales volume is inevitable when combining the

financial results of producers and converters. However, the aggregated financial results are still generally

meaningful on a consolidated basis due to the offsetting effect of any double counted volume being reported once as

revenue at the integrated level and again as a component of raw material cost at the converter level. Because total

sales volume reflects some double counting, average sales and cost values on a producer and converter-basis are

more specific to those operations (see table VI-3) as compared to average values based on consolidated financial

results (see table VI-2). 

 As noted above and with regard to other differences between trade and financial section, ***. USITC auditor

final-phase notes. 

VI-1
variance analysis of the financial results of operations on certain coated paper other than coated

packaging paperboard is presented in table VI-3.6

As shown in table VI-1, a notable trend of the financial results on certain coated paper other than

coated packaging paperboard was the steady decline in sales volume and corresponding sales revenue

throughout the full-year period. While the overall decline in absolute operating income between 2007

and 2009 can be attributed to a combination of negative price, cost/expense, and volume variances (see

summary section of table VI-3), period-to-period negative variances alternated; i.e., the negative cost

expense variance occurred between 2007 and 2008, while the negative price variance occurred between

2008 and 2009. Table VI-2, which presents average unit values, indicates that the full-year period-toperiod cost/expense variances were driven largely by changes in raw material costs. Notwithstanding the

large negative price variance between interim 2009 and interim 2010, interim 2010 profitability margins

were at about the same level as full-year 2009. As shown in the summary section of table VI-3, the

absence of a further decline in relative profitability in interim 2010 is due largely to an even larger

corresponding positive cost/expense variance. Product and company-specific financial results are

discussed further in the combined financial results section below. 

OPERATIONS ON COATED PACKAGING PAPERBOARD

Income-and-loss data for operations on coated packaging paperboard are presented in table VI-4

and on an average unit basis in table VI-5. A variance analysis for the financial results of operations on

coated packaging paperboard is presented in table VI-6. 

The pattern of sales volume and corresponding revenue for coated packaging paperboard was

somewhat different compared to certain coated paper other than coated packaging paperboard (see table

VI-1). As shown in table VI-4, coated packaging paperboard sales peaked in 2008 and subsequently

declined. A primary similarity between the two product groups is that both reported negative

cost/expense variances between 2007 and 2008 which contributed to corresponding declines in

profitability. Unlike the financial results on certain coated paper other than packaging paperboard,

however, coated packaging paperboard reported a notable increase in profitability in 2009 which is

attributable, at least in part, to simultaneous positive price and cost/expense variances between 2008 and

2009 (see summary section of table VI-6). As shown in table VI-5, the components of COGS which

contributed most importantly to the positive cost/expense variance were lower average raw materials and 

 6 The Commission’s variance analysis is generally calculated in three parts: sales variance, cost of sales variance,

and SG&A expense variance. Each part consists of a price variance (in the case of the sales variance) or a cost

variance (in the case of the cost of sales and SG&A expense variance) and a volume variance. The sales or cost

variance is calculated as the change in unit price times the new volume, while the volume variance is calculated as

the change in volume times the old unit price. Summarized at the bottom of table VI-3 and table VI-6, the price

variance is from sales, the cost/expense variance is the sum of those items from COGS and SG&A variances,

respectively, and the volume variance is the sum of the corresponding lines under the price and cost/expense

variances.

VI-2
Table VI-1

Results of operations on certain coated paper other than coated packaging paperboard, 2007-09,

January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Quantity (short tons)

Total net sales quantity 1,346,842 1,245,756 1,106,137 475,950 696,014

Value ($1,000)

Total net sales value 1,439,201 1,374,311 1,124,728 503,326 676,989

Cost of goods sold:

Fiber/pulp 290,188 280,301 208,604 88,746 126,329

Other raw material costs 302,938 316,877 297,875 135,413 175,121

 Total raw material costs 593,126 597,179 506,479 224,159 301,450

Direct labor 198,687 186,056 192,964 88,606 119,926

Other factory costs 437,701 406,809 348,246 161,562 215,094

 Total cost of goods sold 1,229,514 1,190,043 1,047,690 474,327 636,470

Gross profit 209,686 184,267 77,038 28,999 40,519

Selling expenses 29,584 25,213 21,611 10,962 11,491

General and administrative expenses 66,083 75,496 62,712 31,263 32,130

 Total SG&A expenses 95,667 100,709 84,322 42,225 43,621

Operating income1 114,020 83,558 (7,284) (13,226) (3,102)

Interest expense 67,675 61,326 79,474 28,962 32,846

Other expenses 4,225 4,341 28,284 4,645 2,848

Other income items 2,607 265 1,005 714 1,134

Tax credit for alternative fuel mixture1 0 0 139,868 56,721 3,557

Net income or (loss) 44,726 18,157 25,830 10,603 (34,104)

Depreciation/amortization 81,396 89,600 80,753 39,736 39,643

Estimated cash flow 126,123 107,757 106,583 50,339 5,538

Table continued on next page.

VI-3
Table VI-1--Continued

Results of operations on certain coated paper other than coated packaging paperboard, 2007-09,

January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Ratio to net sales (percent)

Fiber/pulp 20.2 20.4 18.5 17.6 18.7

Other raw material costs 21.0 23.1 26.5 26.9 25.9

 Total raw material costs 41.2 43.5 45.0 44.5 44.5

Direct labor 13.8 13.5 17.2 17.6 17.7

Other factory costs 30.4 29.6 31.0 32.1 31.8

 Cost of goods sold 85.4 86.6 93.2 94.2 94.0

Gross profit 14.6 13.4 6.8 5.8 6.0

SG&A expenses 6.6 7.3 7.5 8.4 6.4

Operating income (loss)1 7.9 6.1 (0.6) (2.6) (0.5)

Net income or (loss) 3.1 1.3 2.3 2.1 (5.0)

Number of producers reporting

Operating losses1 43775

Data 13 13 13 13 13

 1 The Commission’s U.S. producer questionnaire classified the alternative fuel mixture tax credit as a separate

“other” (non-operating) income item. If the alternative fuel mixture tax credit were treated as a component of

operating income, operating income for the period examined would be as follows:

Value ($1,000)

Operating income 114,020 83,558 132,584 43,495 455

Ratio to net sales (percent)

Operating income 7.9 6.1 11.8 8.6 0.1

COGS 85.4 86.6 80.7 83.0 93.5

Number of producers reporting

Operating losses 4 3 4 5 5

Source: Compiled from data submitted in response to Commission questionnaires.

VI-4
Table VI-2

Results of operations on certain coated paper other than coated packaging paperboard (per short

ton), 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Unit value (dollars per short ton)

Total net sales 1,069 1,103 1,017 1,058 973

Cost of goods sold:

 Fiber/Pulp 215 225 189 186 182

 Other raw materials 225 254 269 285 252

 Total raw materials 440 479 458 471 433

 Direct labor 148 149 174 186 172

 Other factory costs 325 327 315 339 309

 Total cost of goods sold 913 955 947 997 914

Gross profit 156 148 70 61 58

SG&A expenses 71 81 76 89 63

Operating income (loss)1 85 67 (7) (28) (4)

 1 The Commission’s U.S. producer questionnaire classified the alternative fuel mixture tax credit as a separate

“other” (non-operating) income item. If the alternative fuel mixture tax credit were treated as a component of

operating income, operating income for the period examined would be as follows:

Unit value (dollars per short ton)

Operating income 85 67 120 91 1

Source: Compiled from data submitted in response to Commission questionnaires.

VI-5
Table VI-3

Variance analysis of financial results of operations on certain coated paper other than coated

packaging paperboard, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year Jan.-June

2007-09 2007-08 2008-09 2009-10

Value ($1,000)

Total net sales:

 Price variance (57,263) 43,128 (95,557) (59,058)

 Volume variance (257,210) (108,018) (154,026) 232,721

 Total net sales variance (314,473) (64,890) (249,583) 173,663

Cost of sales:

 Raw materials:

 Cost variance (19,355) (48,569) 23,770 26,353

 Volume variance 106,002 44,517 66,929 (103,644)

 Net raw material variance 86,647 (4,052) 90,699 (77,291)

 Direct labor:

 Cost variance (29,786) (2,282) (27,761) 9,649

 Volume variance 35,509 14,912 20,852 (40,968)

 Net direct labor variance 5,722 12,631 (6,908) (31,320)

 Other factory costs:

 Cost variance 11,231 (1,959) 12,970 21,168

 Volume variance 78,225 32,851 45,593 (74,701)

 Net other factory cost variance 89,456 30,892 58,563 (53,533)

 Net cost of sales:

 Cost variance (37,911) (52,809) 8,980 57,170

 Volume variance 219,736 92,280 133,374 (219,313)

 Total net cost of sales variance 181,825 39,471 142,354 (162,143)

Gross profit variance (132,648) (25,419) (107,229) 11,520

SG&A expenses:

 Expense variance (5,753) (12,222) 5,100 18,127

 Volume variance 17,097 7,180 11,287 (19,523)

 Total SG&A variance 11,344 (5,042) 16,386 (1,396)

Operating income variance (121,304) (30,461) (90,843) 10,124

Summarized as:

 Price variance (57,263) 43,128 (95,557) (59,058)

 Net cost/expense variance (43,664) (65,032) 14,079 75,297

 Net volume variance (20,377) (8,558) (9,365) (6,115)

Source: Compiled from data submitted in response to Commission questionnaires.

VI-6
Table VI-4

Results of operations on coated packaging paperboard, 2007-09, January-June 2009, and JanuaryJune 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Quantity (short tons)

Total net sales quantity 706,382 742,050 631,972 323,343 332,313

Value ($1,000)

Total net sales value 505,451 566,907 513,307 262,520 261,861

Cost of goods sold:

Fiber/pulp 90,243 110,846 86,067 41,904 44,298

Other raw material costs 125,488 156,976 121,749 66,489 69,302

 Total raw material costs 215,731 267,822 207,816 108,393 113,600

Direct labor 46,639 49,040 44,964 23,790 24,018

Other factory costs 187,706 211,299 168,733 82,099 85,398

 Total cost of goods sold 450,076 528,161 421,513 214,282 223,016

Gross profit 55,375 38,746 91,794 48,238 38,845

Selling expenses 9,692 12,814 8,561 4,601 3,449

General and administrative expenses 15,674 14,420 14,184 7,978 8,381

 Total SG&A expenses 25,366 27,234 22,745 12,579 11,830

Operating income1 30,009 11,512 69,049 35,659 27,015

Interest expense 2,707 3,183 1,602 234 2,158

Other expenses 00000

Other income items 0 0 0 0 0

Tax credit for alternative fuel mixture1 0 0 78,320 37,980 2,670

Net income or (loss) 27,302 8,329 145,767 73,405 27,527

Depreciation/amortization 34,559 35,252 30,340 16,583 15,168

Estimated cash flow 61,861 43,581 176,107 89,988 42,695

Table continued on next page.

VI-7
Table VI-4--Continued

Results of operations on coated packaging paperboard, 2007-09, January-June 2009, and JanuaryJune 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Ratio to net sales (percent)

Fiber/pulp 17.9 19.6 16.8 16.0 16.9

Other raw material costs 24.8 27.7 23.7 25.3 26.5

 Total raw material costs 42.7 47.2 40.5 41.3 43.4

Direct labor 9.2 8.7 8.8 9.1 9.2

Other factory costs 37.1 37.3 32.9 31.3 32.6

 Cost of goods sold 89.0 93.2 82.1 81.6 85.2

Gross profit 11.0 6.8 17.9 18.4 14.8

SG&A expenses 5.0 4.8 4.4 4.8 4.5

Operating income1 5.9 2.0 13.5 13.6 10.3

Net income or (loss) 5.4 1.5 28.4 28.0 10.5

Number of producers reporting

Operating losses1 00000

Data 4 4 4 4 4

 1 The Commission’s U.S. producer questionnaire classified the alternative fuel mixture tax credit as a separate

“other” (non-operating) income item. If the alternative fuel mixture tax credit were treated as a component of

operating income, operating income for the period examined would be as follows:

Value ($1,000)

Operating income 30,009 11,512 147,369 73,639 29,685

Ratio to net sales (percent)

Operating income 5.9 2.0 28.7 28.1 11.3

COGS 89.0 93.2 66.9 67.2 84.1

Source: Compiled from data submitted in response to Commission questionnaires.

VI-8
Table VI-5

Results of operations on coated packaging paperboard (per short ton), 2007-09, January-June

2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Unit value (dollars per short ton)

Total net sales 716 764 812 812 788

Cost of goods sold:

 Fiber/Pulp 128 149 136 130 133

 Other raw materials 178 212 193 206 209

 Total raw materials 305 361 329 335 342

 Direct labor 66 66 71 74 72

 Other factory costs 266 285 267 254 257

 Total cost of goods sold 637 712 667 663 671

Gross profit 78 52 145 149 117

SG&A expenses 36 37 36 39 36

Operating income1 42 16 109 110 81

 1 The Commission’s U.S. producer questionnaire classified the alternative fuel mixture tax credit as a separate

“other” (non-operating) income item. If the alternative fuel mixture tax credit were treated as a component of

operating income, the industry’s operating income for the period examined would be as follows:

Unit value (dollars per short ton)

Operating income 42 16 233 228 89

Source: Compiled from data submitted in response to Commission questionnaires.

VI-9
Table VI-6

Variance analysis of financial results of operations on coated packaging paperboard, 2007-09,

January-June 2009, and January-June 2010

Item

Calendar year Jan.-June

2007-09 2007-08 2008-09 2009-10

Value ($1,000)

Total net sales:

 Price variance 61,100 35,934 30,497 (7,942)

 Volume variance (53,244) 25,522 (84,097) 7,283

 Total net sales variance 7,856 61,456 (53,600) (659)

Cost of sales:

 Raw materials:

 Cost variance (14,810) (41,198) 20,276 (2,200)

 Volume variance 22,725 (10,893) 39,730 (3,007)

 Net raw material variance 7,915 (52,091) 60,006 (5,207)

 Direct labor:

 Cost variance (3,238) (46) (3,199) 432

 Volume variance 4,913 (2,355) 7,275 (660)

 Net direct labor variance 1,675 (2,401) 4,076 (228)

 Other factory costs:

 Cost variance (800) (14,115) 11,221 (1,021)

 Volume variance 19,773 (9,478) 31,345 (2,278)

 Net other factory cost variance 18,973 (23,593) 42,566 (3,299)

 Net cost of sales:

 Cost variance (18,848) (55,359) 28,299 (2,790)

 Volume variance 47,411 (22,726) 78,349 (5,944)

 Total net cost of sales variance 28,563 (78,085) 106,648 (8,734)

Gross profit variance 36,419 (16,629) 53,048 (9,393)

SG&A expenses:

 Expense variance (51) (587) 449 1,098

 Volume variance 2,672 (1,281) 4,040 (349)

 Total SG&A variance 2,621 (1,868) 4,489 749

Operating income variance 39,040 (18,497) 57,537 (8,644)

Summarized as:

 Price variance 61,100 35,934 30,497 (7,942)

 Net cost/expense variance (18,899) (55,946) 28,748 (1,692)

 Net volume variance (3,161) 1,515 (1,708) 989

Source: Compiled from data submitted in response to Commission questionnaires.

VI-10
other factory costs.7

 Product and company-specific financial results are discussed further in the

combined financial results section below. 

COMBINED OPERATIONS ON CERTAIN COATED PAPER OTHER THAN

PACKAGING PAPERBOARD AND COATED PACKAGING PAPERBOARD

Income-and-loss data for combined operations on certain coated paper other than coated

packaging paperboard and coated packaging paperboard are presented in table VI-7 and on an average

unit basis in table VI-8. Table VI-9 presents selected company-specific financial information and

corresponding product subtotals. Selected financial results by product group for first half and second half

2008, first half and second half 2009, and first half 2010 are presented in table VI-10 .8

 

Restructuring and Related Activity

As described in Part III of this report, U.S. producers reporting their financial results to the

Commission underwent restructuring/consolidation during the period examined. Of the companies

specifically reporting that they incurred non-recurring charges during the period examined, in large part

related to restructuring activity, the amounts reported by ***.9

 As noted below, *** reported reductions

 7 ***:

Item

Calendar year January-June

2007 2008 2009 2009 2010

Value ($1,000)

Operating income *** *** *** *** ***

Ratio to net sales (percent)

Operating income *** *** *** *** ***

 8

 Footnote 3 and footnote 7 describe concerns regarding the financial results reported by ***: 

Item

Calendar year January-June

2007 2008 2009 2009 2010

Value ($1,000)

Operating income *** *** *** *** ***

Ratio to net sales (percent)

Operating income *** *** *** *** ***

 9

 The extent to which restructuring charges are directly reflected in the financial results reported to the

Commission varies based on how these charges are treated for internal reporting purposes. ***. 

 Public financial information indicates that MeadWestvaco incurred restructuring charges related to its Packaging

Resources segment (i.e., the segment which includes certain coated paper operations) during the period examined

with the most substantial being $42 million in 2009 out of company-wide total restructuring charges of $189 million. 

 Since public financial information indicates that its restructuring charges are not directly assigned to segmentlevel operations ***. USITC auditor final-phase notes. 

VI-11
Table VI-7

Combined results of operations on certain coated paper other than coated packaging paperboard

and coated packaging paperboard, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Quantity (short tons)

Total net sales quantity 2,053,224 1,987,806 1,738,109 799,293 1,028,327

Value ($1,000)

Total net sales value 1,944,652 1,941,218 1,638,035 765,846 938,850

Cost of goods sold:

Fiber/pulp 380,431 391,147 294,671 130,650 170,627

Other raw material costs 428,426 473,853 419,624 201,902 244,423

 Total raw material costs 808,857 865,001 714,295 332,552 415,050

Direct labor 245,326 235,096 237,928 112,396 143,944

Other factory costs 625,407 618,108 516,979 243,661 300,492

 Total cost of goods sold 1,679,590 1,718,204 1,469,203 688,609 859,486

Gross profit 265,061 223,013 168,832 77,237 79,364

Selling expenses 39,276 38,027 30,172 15,563 14,940

General and administrative expenses 81,757 89,916 76,896 39,241 40,511

 Total SG&A expenses 121,033 127,943 107,067 54,804 55,451

Operating income1 144,029 95,070 61,765 22,433 23,913

Interest expense 70,382 64,509 81,076 29,196 35,004

Other expenses 4,225 4,341 28,284 4,645 2,848

Other income items 2,607 265 1,005 714 1,134

Tax credit for alternative fuel mixture1 0 0 218,188 94,701 6,227

Net income or (loss) 72,028 26,486 171,597 84,008 (6,577)

Depreciation/amortization 115,955 124,852 111,093 56,319 54,811

Estimated cash flow 187,984 151,338 282,691 140,327 48,233

Table continued on next page.

VI-12
Table VI-7--Continued

Combined results of operations on certain coated paper other than coated packaging paperboard

and coated packaging paperboard, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Ratio to net sales (percent)

Fiber/pulp 19.6 20.2 18.0 17.1 18.2

Other raw material costs 22.0 24.4 25.6 26.4 26.0

 Total raw material costs 41.6 44.6 43.6 43.4 44.2

Direct labor 12.6 12.1 14.5 14.7 15.3

Other factory costs 32.2 31.8 31.6 31.8 32.0

 Cost of goods sold 86.4 88.5 89.7 89.9 91.5

Gross profit 13.6 11.5 10.3 10.1 8.5

SG&A expenses 6.2 6.6 6.5 7.2 5.9

Operating income1 7.4 4.9 3.8 2.9 2.5

Net income or (loss) 3.7 1.4 10.5 11.0 (0.7)

Number of producers reporting

Operating losses1 43775

Data2 15 15 15 15 15

 1 The Commission’s U.S. producer questionnaire classified the alternative fuel mixture tax credit as a separate

“other” (non-operating) income item. If the alternative fuel mixture tax credit were treated as a component of

operating income, operating income for the period examined would be as follows:

Value ($1,000)

Operating income 144,029 95,070 279,953 117,134 30,140

Ratio to net sales (percent)

Operating income 7.4 4.9 17.1 15.3 3.2

COGS 86.4 88.5 76.4 77.5 90.9

Number of producers reporting

Operating losses2 43455

 2 As indicated at the beginning of this section, 15 companies reported their financial results. Clearwater and

MeadWestvaco were the only companies reporting financial results classified by the Commission as certain coated

paper other than coated packaging paperboard and coated packaging paperboard, respectively. 

Source: Compiled from data submitted in response to Commission questionnaires.

VI-13
Table VI-8

Combined results of operations on certain coated paper other than packaging paperboard and

coated packaging paperboard (per short ton), 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Unit value (dollars per short ton)

Total net sales 947 977 942 958 913

Cost of goods sold:

 Fiber/Pulp 185 197 170 163 166

 Other raw materials 209 238 241 253 238

 Total raw materials 394 435 411 416 404

 Direct labor 119 118 137 141 140

 Other factory costs 305 311 297 305 292

 Total cost of goods sold 818 864 845 862 836

Gross profit 129 112 97 97 77

SG&A expenses 59 64 62 69 54

Operating income1 70 48 36 28 23

 1 The Commission’s U.S. producer questionnaire classified the alternative fuel mixture tax credit as a separate

“other” (non-operating) income item. If the alternative fuel mixture tax credit were treated as a component of

operating income, operating income for the period examined would be as follows:

Unit value (dollars per short ton)

Operating income 70 48 161 147 29

Source: Compiled from data submitted in response to Commission questionnaires.

Table VI-9

Selected company-specific financial results of operations on certain coated paper other than coated

packaging paperboard and coated packaging paperboard, respectively, by firm, 2007-09, January-June 2009,

and January-June 2010

* * * * * * *

VI-14
Table VI-10

Results of operations, January-June 2008 (overall certain coated paper operations from preliminary staff report), July-December

2008 (overall certain coated paper operations from preliminary staff report (extrapolated)), January-June 2009, July-December 2009

(extrapolated), and January-June 2010 (primary product groups as identified in final staff report)

Item

Jan.-June July-Dec. Jan.-June July-Dec. Jan.-June

2008 2008 2009 2009 2010

Sales: Unit value (dollars per short ton)

Sales (converters) -- CCP other than coated packaging paperboard 560 804 595

Sales (producers) -- CCP other than coated packaging paperboard 1,075 990 981

Sales (producers) -- coated packaging paperboard 812 813 788

Sales -- overall CCP sales (preliminary staff report) 1,184 1,123

Cost of goods sold: Ratio to net sales (percent)

COGS (converters) -- CCP other than coated packaging paperboard 83.5 89.1 86.8

COGS (producers) -- CCP other than coated packaging paperboard 94.4 92.3 94.1

COGS (producers) -- coated packaging paperboard 81.6 82.6 85.2

COGS -- overall certain coated paper (preliminary staff report) 83.9 87.7

Gross profit (loss): Ratio to net sales (percent)

Gross profit (converters) -- CCP other than coated packaging paperboard 16.5 10.9 13.2

Gross profit (producers) -- CCP other than coated packaging paperboard 5.6 7.7 5.9

Gross profit (producers) -- coated packaging paperboard 18.4 17.4 14.8

Gross profit -- overall certain coated paper (preliminary staff report) 16.1 12.3

Operating income or (loss):1 Ratio to net sales (percent)

Operating income (converters) -- CCP other than coated packaging paperboard 4.4 (0.4) 2.0

Operating income (loss) (producers) -- CCP other than coated packaging paperboard (2.8) 1.0 (0.5)

Operating income (producers) -- coated packaging paperboard 13.6 13.3 10.3

Operating income -- overall certain coated paper (preliminary staff report) 7.9 4.7

1

 The operating income (loss) information presented in this table does not directly reflect the impact of the alternative fuel mixture tax credit. Notes to table

VI-1, table VI-4, and table VI-7 present operating adjusted to reflect the inclusion of the alternative fuel mixture tax credit.

Note: Second half information was extrapolated by subtracting first half financial results from full-year financial results. 2008 is based on financial results

reported to the Commission during the preliminary phase of these investigations. In terms of a time series, staff believes that the 2008 financial results are

most directly comparable to the certain coated paper other than coated packaging paperboard producer category. 

Source: Compiled from data submitted in response to Commission questionnaires.

VI-15
in average conversion costs in 2009 and interim 2010, respectively, which appear to reflect, at least in

part, the elimination of capacity and corresponding efficiencies related to restructuring.10

In early 2008, NewPage, which purchased Stora Enso North America on December 21, 2007,

announced major restructuring plans. According to NewPage, the company “. . . expect{ed} to generate

annualized synergies as a result of the acquisition of approximately $265 million within 18 months

following its completion. These synergies are expected to come form optimizing paper production,

reducing input costs, and reducing selling, general and administrative expenses.”11 As indicated in

footnote 9, NewPage specifically identified *** in 2008 as restructuring activity directly related to its

certain coated paper operations; i.e., NewPage closed other facilities during this period which were not

directly related to certain coated paper operations.12 In its 2009 10-K and with respect to its overall

operations, NewPage states that “{w}e completed our integration activities during the third quarter of

2009, at which time we had achieved approximately $200 synergies. Additional synergies may be

realized in the future from anticipated economies of scale when our paper machines return to running at

historical operating patterns with a beneficial grade mix.”13 Sappi, which accounted for the ***.14

With regard to its decision to close the Muskegon, MI mill, Sappi also states in its 2009 annual report that

“{c}ompared to fiscal 2008, sales volume dropped by 18 percent to 1,274,000 tons in 2009 as a result of

the significant decrease in economic activity and demand for print advertising in North America. In these

circumstances we decided to close our Muskegon mill which was the smallest and least efficient of our

North American coated 

woodfree mills. The full range of products previously produced at the Muskegon mill were successfully

transferred to our Somerset and Cloquet mills.”15 

Revenue 

As shown in table VI-3 and when considering product groups, there were some differences in the

pattern of change in sales volume during the period examined. In particular, coated packaging

paperboard reported a modest increase in overall sales volume in 2008 compared to 2007, while the

certain coated paper other than coated packaging paperboard reported a decline in sales volume.16 As

 10 ***. E-mail with attachment from counsel for Petitioners on behalf of Sappi to USITC auditor, October 5,

2010.

 11 NewPage 2007 10-K, p. 18.

 12 In its U.S. producer questionnaire response, NewPage described this restructuring as follows: ***. NewPage

response to question III-9, U.S. producer questionnaire.

 13 NewPage 2009 10-K, p.26. 

 14 Sappi response to question III-9 of U.S. producer questionnaire. 

 15 Sappi 2009 annual report, p. 45. ***. E-mail with attachment from counsel for Petitioners on behalf of Sappi

to USITC auditor, October 5, 2010.

 16 With regard to overall coated paper demand, NewPage stated that “{d}uring 2008, North American coated

paper demand declined significantly compared to 2007, as a result of decreased advertising spending and magazine

and catalog circulation resulting from macroeconomic factors. North American customers purchased approximately

12 million short tons of coated paper in 2008 and approximately 13 million short tons of coated paper in 2007.” 

NewPage 2008 10-K, p. 4. The following year NewPage made a similar statement observing that overall coated

paper purchases in North American declined to 9 million short tons in 2009. NewPage 2009 10-K, p 4. According

to NewPage and with regard to the interim period “{d}uring the first half of 2010, North American printing paper

demand increased compared to the first half of 2009, as a result of decreased advertising spending and magazine and

catalog circulation during the first half of 2009 largely attributable to general economic factors and inventory

reductions by customers.” NewPage 2010 (first half) 10-Q, p. 23. 

VI-16
shown in table VI-9, the increase in coated packaging paperboard sales volume is attributable ***. For

the rest of the period, changes in sales volume were more uniform with the majority of producers

reporting declines in sales volume in 2009 and then increases in interim 2010. In contrast with sales

volume, in which producers for much of the period reported similar patterns of period-to-period change,

company-specific trends in average sales value were less uniform and reflect both changes in both

underlying price and product mix.17 18 The variance analysis for certain coated paper other than coated

packaging paperboard and coated packaging paperboard (see table VI-3 and table VI-6) shows that the

former generated negative price variances for most of the period, the exception being 2007-2008, while

the latter, with exception of interim 2009-2010, generated positive price variances.19 

Cost of Goods Sold

MeadWestvaco is the only U.S. producer reporting financial results to the Commission that is

fully integrated with respect to the underlying wood/fiber source.20 As shown in table VI-9,

MeadWestvaco’s average pulp/fiber cost was among the least volatile of companies reporting that

information. The remaining producers either primarily purchase fiber and internally produce pulp

(Clearwater, Georgia Pacific, International Paper, NewPage, Sappi) or purchase market pulp from

unrelated parties (Appleton, Cascade, Mohawk, Smart).21 As shown in table VI-9, the full-year average

fiber/pulp raw material cost (specific to producers in both product categories) peaked in 2008, declined in

2009, and was marginally lower on an overall basis in interim 2010.22 23 The “other raw materials”

 17 ***. Sappi response to question III-7, U.S. producer questionnaire. ***. NewPage response to question III-7,

U.S. producer questionnaire.

 ***. MeadWestvaco response to question III-7, U.S. producer questionnaire. ***. Clearwater response to

question III-7, U.S. producer questionnaire 

 18 With regard to coated paper products in general, NewPage states in its 2009 10-K that “North American prices

for coated paper products historically have been determined by North American supply and demand, rather than

directly by raw material costs and other costs of sales.” NewPage 2009 10-K, p. 25.

 19 While the majority of producers in both product categories reported increases in average sales value in 2008

compared to 2007, the pattern of company-specific changes in average sales value in subsequent periods was less

uniform. 

 20 ***. MeadWestvaco response to question III-10, U.S. producer questionnaire. ***. USITC auditor finalphase notes. 

 21 According to NewPage, “{t}he former SENA {Stora Enso} mills have historically been a net purchaser of

market pulp. Following the Acquisition {in late 2007}, we intend to use substantially all of our excess pulp

production internally, thus reducing the amount of pulp purchased from third parties.” NewPage 2007 10-K, p. 9. In

2009 NewPage stated that it internally produced pulp represented approximately 94 percent of its pulp requirements. 

NewPage 2009 10-K, p. 27. ***. Sappi response to question III-8, U.S. producer questionnaire. 

 22 With regard to the pattern of higher input costs in 2008 in general, NewPage stated in its 2008 10-K that

“{d}uring 2008, we experienced significant increases in our input costs due to substantially higher prices for wood,

chemicals, natural gas, coal and electricity. In particular, costs of certain petroleum-based chemicals and

transportation costs increased substantially.” NewPage 2008 10-K, pp. 27-28.

 23 Because of variations in underlying input costs, the “pulp” line item, as reported in the Commission’s

questionnaire, is designated as “fiber/pulp” in the relevant tables presented in this section of the report. Verification

report, p. 7.

VI-17
component of COGS generally reflects chemicals related to pulping, depending on the level of companyspecific integration, and coating.24 25

On an overall basis, U.S. producers collectively reported that variable costs ranged from around

62.0 percent to 64.6 percent of total COGS during the period examined, peaking in 2008, while fixed

costs ranged from 35.4 percent to 38.0 percent of COGS, peaking in interim 2009.26 ***. 

The pattern of other factory costs, which includes variable costs such as energy, as well as fixed

manufacturing overhead, was highest for both product groups on a per ton basis in 2008; i.e., despite

reductions in sales volume and increasing market-related downtime, average other factory costs declined

in 2009 compared to 2008. As shown in table VI-9 and relative to the timing of their respective

restructurings, ***. 

According to Appleton, ***.27 

In contrast with the general pattern reflected in table VI-9, ***.28 ***.29

With regard to the relative decline in overall average other factory costs in interim 2010

compared to interim 2009 (see table VI-2), this pattern, at least in part, appears to reflect the impact of

Sappi’s reduced costs after the closure of its Muskegon, MI mill in 2009. Additionally, the relative

increase in the industry’s overall sales volume in interim 2010 compared to interim 2009 also would have

generally resulted in improved fixed cost absorption as machine downtime was reduced.30

 

Tax Credit for Alternative Fuel Mixture

As it relates to this investigation in particular, only the U.S. producers that produce pulp are

eligible to claim the alternative fuel mixture tax credit. As described by MeadWestvaco and with respect

to its overall operations, “{t}hrough December 31, 2009, the U.S. Internal Revenue Code allowed an

excise tax credit for alternative fuel mixtures produced by a taxpayer for sale, or for use as a fuel in a

taxpayer’s trade or business. MWV {MeadWestvaco} qualified for the alternative fuel mixture credit

because it uses an alternative fuel known as black liquor, which is a byproduct of its wood pulping

 24 Ibid. 

 25 According to NewPage and with respect to its overall operations, “{t}he principal components of our cost of

sales are chemicals, fiber, energy, labor, maintenance and depreciation and amortization. Costs for commodities

including chemicals, wood and energy, are the most variable component of cost of sales because the prices of many

of the commodities that we use can fluctuate substantially . . .” NewPage 2009 10-K, p. 27.

 26 Addressing fixed costs specifically, NewPage states that “{p}aper manufacturing is highly capital intensive

and a large portion of our and our competitors operating costs are fixed. Additionally, paper machines are large,

complex systems that operate more efficiently when operated continuously. Consequently, both we and our

competitors typically continue to run our machines whenever marginal sales exceed marginal costs.” NewPage

2007 10-K, p. 19.

 Producer-specific shares of variable versus fixed costs were not uniform which is generally consistent with

differences in underlying cost structure and assumptions regarding cost classification. ***. Verification report, p. 8. 

***. 

 27 Appleton response to question III-11, U.S. producer questionnaire. 

 28 ***. USITC auditor final-phase notes.

 29 Ibid.

 30 With respect to its overall operations, NewPage in its 2010 10-Q (first half) stated that “{w}e took 39,000 tons

of market-related downtime in the first half of 2010 compared to 310,000 tons of market-related downtime in the

first half of 2009.” NewPage 2010 10-Q (first half), p. 26.

VI-18
process, to power its paperboard mills.”31 While the IRS announced in July 2010 that black liquor sold or

used in 2009 is eligible for the cellulosic biofuel tax credit (a non-refundable tax credit of $1.01 per

gallon of qualifying fuel), the Health Care and Education Reconciliation Act of 2010 reportedly excluded

black liquor from the definition of cellulosic fuel. As such and with respect to black liquor specifically,

the basis of any claim for the cellulosic biofuel tax credit by U.S. producers would in effect be the same

black liquor which was the basis of the alternative fuel mixture tax credit. Since the two credits cannot be

claimed simultaneously or allocated, money received under the alternative fuel mixture tax credit plus

interest would have to be returned to the U.S. Government in order to claim the benefit (an offset to

taxable income) from the cellulosic biofuel tax credit. At this point, Rock-Tenn is the only company that

it has indicated that it will revise its tax filings in order to claim the cellulosic biofuel tax credit.32 

With respect to U.S. producers reporting financial results to the Commission, a comparison of

public financial information generally indicates that International Paper made the largest overall claim

(i.e., not specific to certain coated paper) for the alternative fuel mixture tax credit. In contrast, ***

accounts for the largest amount allocated to certain coated paper operations.33 

As indicated in table VI-1, table VI-4, and table VI-7, the format of the Commission’s income

statement in this report classifies the alternative fuel mixture tax credit below operating income; i.e.,

effectively it is treated as “other” income. The classification of the alternative fuel mixture tax credit,

however, for public financial reporting is not uniform. With respect to the U.S. producers responding to

the Commission’s questionnaire and whose public income statement classification has been determined,

MeadWestvaco and NewPage classify the tax credit as a component of “other” income, International

Paper and Rock-Tenn classify it as a direct offset to COGS, Sappi classifies it as a separate line item that

was explicitly part of operating income, and Clearwater classifies it as a component of its Pulp and

Paperboard segment operating income.34 35 

Table VI-1, table VI-4, and table VI-7 show that U.S. producers began recognizing the tax credit

in the first half of 2009. The majority of the cumulative gain was recognized in full-year 2009 with some

companies also recognizing residual amounts in interim 2010. When asked how the alternative fuel

mixture tax credit impacted their operations, Clearwater stated that the ***. According to Cascade there

 31 MeadWestvaco 2009 10-K, p. 17.

 32 Petitioner’s posthearing brief, response to Commissioner Aranoff’s questions (attachment 5) and response to

staff questions (attachment 7). Respondent’s posthearing brief, response to staff questions (attachment 2, pp. 15-

19). Rock-Tenn 2010 10-Q (Q3), p. 7. 

 33 International Paper: $2.1 billion; MeadWestvaco: $375 million; NewPage: $317 million; Clearwater: $170.6

million; Sappi: $132 million. (Source: International Paper 2009 10-K, p. 31. MeadWestvaco 2009 10-K, p. 32. 

NewPage 2009 10-K, p, 33. NewPage 2010 10-Q (first half), p. 27. Clearwater 2009 10-K, p. 26. Sappi annual

report, p. 21.)

 34 MeadWestvaco 2009 10-K, p. 32. NewPage 2009 10-K, p. 33. International Paper 2009 10-K, p. 31. RockTenn 2009 10-K , p. 19. Clearwater 2009 10-K, pp. 26-27. Sappi 2009 Annual Report, pp. 44-46. The manner in

which Georgia Pacific formally treats the alternative fuel mixture tax credit was not determined.

 35 With regard to NewPage’s income statement classification, the company’s controller and chief accounting

officer stated that “{t}he alternative fuel tax mixture credit was a non-recurring, extraordinary item which expired at

the end of 2009. Our conclusion was and is that including this credit as an offset to NewPage’s cost of goods sold

would have distorted the results for 2009, making it difficult to evaluate financial performance across prior and

future periods.” Petitioner’s posthearing brief, response to Commissioner Williamson’s questions (attachment 3,

exhibit 2). 

VI-19
***. Georgia Pacific stated that ***. Similarly, International Paper stated that ***.36 As described by

NewPage, ***.37 Rock-Tenn stated that ***.38 Similarly, according to Sappi ***.39 

U.S. producers that purchase all of their pulp requirements and therefore could not claim the tax

credit (Appleton, Cascade, Mohawk, Smart) generally indicated that ***.40 While the pulp component of

raw material costs for these producers reached its ***.41 According to Appleton, ***.42 ***.43

CAPITAL EXPENDITURES, RESEARCH AND DEVELOPMENT EXPENSES, 

ASSETS, AND RETURN ON INVESTMENT

Data on capital expenditures, research and development (“R&D”) expenses, assets, and return on

investment related to certain coated paper operations are presented in table VI-11.

***.44 ***.45

Table VI-11

Operations on certain coated paper other than coated packaging paperboard and coated packaging

paperboard, respectively: Capital expenditures, R&D expenses, total assets, and return on investment, by

firms, 2007-09, January-June 2009, and January-June 2010

* * * * * * *

 36 Clearwater, Cascade, Georgia Pacific, International Paper, responses to question III-10, U.S. producer

questionnaire.

 37 NewPage response to question III-10, U.S. producer questionnaire. ***. Verification report, p. 9.

 38 Rock-Tenn response to question III-10, U.S. producer questionnaire. 

 39 Sappi response to question III-10, U.S. producer questionnaire.

 40 Appleton, Cascade, Mohawk, and Smart responses to question III-10, U.S. producer questionnaire.

 41 As indicated in the preliminary staff report, a NewPage executive noted during the company’s 2nd quarter 2009

earnings conference call that “. . . our competitive cost advantage is reduced due to the impact of substantially lower

pulp prices. While the tax credit is currently benefitting all producers, it’s actually potentially benefitting the nonintegrated producer more, due to the flattening of the cost curve. The highest cost producers are the non-integrated

mills and they have been receiving substantial benefits in their costs due to extra pulp that’s been produced, and sold

at lower prices so that the domestic producers can benefit from the subsidy.” Respondent’s postconference brief,

exhibit 7 (2nd quarter 2009 NewPage Corporation Earnings Conference Call, p. 4).

 42 Appleton response to question III-11, U.S. producer questionnaire.

 43 ***. August 20, 2010 e-mail with attachment from *** to USITC auditor. 

 44 Verification report, p. 9.

 45 ***. USITC auditor final-phase notes. 

VI-20
CAPITAL AND INVESTMENT

The Commission requested U.S. producers to describe any actual or anticipated negative effects

of imports of certain coated paper and paperboard from China and Indonesia on their firms’ growth,

investment, ability to raise capital, existing development and production efforts (including efforts to

develop a derivative or more advanced version of the product), or the scale of capital investments. 

Actual Negative Effects

Converters

Case46 ***.

Clampitt47 ***.

Nekoosa ***.

Resource One ***.

Wausau ***.

Williams Paper ***.

Integrated Producers

Appleton ***.

Cascade ***.

Clearwater ***.

Georgia Pacific ***.

International Paper ***.

MeadWestvaco ***.

Mohawk ***.

NewPage ***.

Rock-Tenn ***.

Sappi ***.

Smart Papers ***.

Anticipated Negative Effects

Converters

Case ***.

Clampitt ***.

Resource One ***.

Nekoosa ***.

Wausau ***.

Williams Paper ***.

Integrated Producers

Appleton ***.

Cascade ***.

 46 ***.

 47 ***.

VI-21
Clearwater ***.

Georgia Pacific ***.

International Paper ***.

MeadWestvaco ***.

Mohawk ***.

NewPage ***.

Rock-Tenn ***.

Sappi ***.

Smart Papers ***.

VI-22
PART VII: THREAT CONSIDERATIONS

Section 771(7)(F)(i) of the Act (19 U.S.C. § 1677(7)(F)(i)) provides that–

In determining whether an industry in the United States is threatened

with material injury by reason of imports (or sales for importation) of the

subject merchandise, the Commission shall consider, among other

relevant economic factors1

--

(I) if a countervailable subsidy is involved, such information as may be

presented to it by the administering authority as to the nature of the

subsidy (particularly as to whether the countervailable subsidy is a

subsidy described in Article 3 or 6.1 of the Subsidies Agreement), and

whether imports of the subject merchandise are likely to increase,

(II) any existing unused production capacity or imminent, substantial

increase in production capacity in the exporting country indicating the

likelihood of substantially increased imports of the subject merchandise

into the United States, taking into account the availability of other export

markets to absorb any additional exports,

(III) a significant rate of increase of the volume or market penetration of

imports of the subject merchandise indicating the likelihood of

substantially increased imports,

(IV) whether imports of the subject merchandise are entering at prices

that are likely to have a significant depressing or suppressing effect on

domestic prices, and are likely to increase demand for further imports,

(V) inventories of the subject merchandise,

(VI) the potential for product-shifting if production facilities in the

foreign country, which can be used to produce the subject merchandise,

are currently being used to produce other products,

(VII) in any investigation under this title which involves imports of both

a raw agricultural product (within the meaning of paragraph (4)(E)(iv))

and any product processed from such raw agricultural product, the

likelihood that there will be increased imports, by reason of product

shifting, if there is an affirmative determination by the Commission

under section 705(b)(1) or 735(b)(1) with respect to either the raw

agricultural product or the processed agricultural product (but not both),

 1 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall consider

{these factors} . . . as a whole in making a determination of whether further dumped or subsidized imports are

imminent and whether material injury by reason of imports would occur unless an order is issued or a suspension

agreement is accepted under this title. The presence or absence of any factor which the Commission is required to

consider . . . shall not necessarily give decisive guidance with respect to the determination. Such a determination

may not be made on the basis of mere conjecture or supposition.”

VII-1
(VIII) the actual and potential negative effects on the existing

development and production efforts of the domestic industry, including

efforts to develop a derivative or more advanced version of the domestic

like product, and

(IX) any other demonstrable adverse trends that indicate the probability

that there is likely to be material injury by reason of imports (or sale for

importation) of the subject merchandise (whether or not it is actually

being imported at the time).2

Information on the nature of the subsidies was presented earlier in this report; information on the

volume and pricing of imports of the subject merchandise is presented in Parts IV and V; and information

on the effects of imports of the subject merchandise on U.S. producers’ existing development and

production efforts is presented in Part VI. Information on inventories of the subject merchandise; foreign

producers’ operations, including the potential for “product-shifting;” any other threat indicators, if

applicable; and any dumping in third-country markets, follows.

THE INDUSTRY IN CHINA

The Commission received responses from ten firms accounting for approximately *** percent of

2009 production of certain coated paper in China and approximately *** percent of exports to the United

States from China.3

 The ten reporting Chinese producers include: (1) Daewoo Paper Manufacturing Co.,

Ltd. (“Daewoo”); (2) Gold East Paper (Jiangsu) Co., Ltd. (“Gold East”); (3) Gold Huansheng Paper Co.,

Ltd. (“Gold Huansheng”); (4) Ningbo Asia Pulp & Paper Co., Ltd. (“Ningbo Asia”); (5) Ningbo

Zhonghua Paper Co., Ltd. (“Ningbo Zhonghua”); (6) Yan Zhou Tian Zhang Paper Industry Co., Ltd.

(“Sun Paper”); (7) Tiger Forest & Paper Co., Ltd. (“Tiger Forest”); (8) Stora Enso Suzhou Paper Co., Ltd.

(“Stora Enso”); (9) Shandong Chenming Paper Holdings, Ltd. (“Chenming”); and (10) Zhuhai Hongta

Renheng Paper Co., Ltd. (“Renheng”).4

 Four of the reporting producers, Gold East, Gold Huansheng,

Ningbo Asia, and Ningbo Zhonghua, are related companies and are also affiliates of the large

conglomerate, Asia Pulp & Paper Co., Ltd., headquartered in Singapore. Asia Pulp & Paper Co., Ltd. is

also affiliated with Indonesian respondents and a number of U.S. importers. ***. Daewoo, Renheng, and

Stora Enso reported that they *** during the period of investigation. Tiger Forest reported that ***. 

Capacity, production, and export shipment data regarding the individual firms are presented in table VII1.

 2 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping

investigations, “. . . the Commission shall consider whether dumping in the markets of foreign countries (as

evidenced by dumping findings or antidumping remedies in other WTO member markets against the same class or

kind of merchandise manufactured or exported by the same party as under investigation) suggests a threat of material

injury to the domestic industry.”

 3

 Percentages provided are based upon estimates provided by Chinese producers of certain coated paper in their

responses to the Commission’s Foreign Producer questionnaire.

 4

 Four firms, ***, reported that they neither produced in China nor exported to the United States certain coated

paper during the period of investigation. ***. Respondents’ prehearing brief, exh. 39.

VII-2
Table VII-1

Certain coated paper: China’s reported production capacity, production, and shipments, by firm,

2009

Chinese producer

 Share of

reported

2009

production

in China

(percent)

Quantity (short tons); capacity utilization and share of total shipments

(percent)

Capacity Production

Capacity

utilization

Exports to

the U.S.

Share of

total

shipments

exported to

the U.S.

Chenming *** *** *** *** *** ***

Daewoo *** *** *** *** *** ***

Gold East *** *** *** *** *** ***

Gold Huansheng *** *** *** *** *** ***

Ningbo Asia *** *** *** *** *** ***

Ningbo Zhonghua *** *** *** *** *** ***

Renheng *** *** *** *** *** ***

Stora Enso *** *** *** *** *** ***

Sun Paper *** *** *** *** *** ***

Tiger Forest *** *** *** *** *** ***

 Total 100.0 3,832,237 3,673,622 95.9 353,386 100.0

***.

Source: Compiled from data submitted in Commission questionnaire responses.

APP Affiliated Chinese Producers

The four Asia Pulp & Paper Co., Ltd. affiliated producers, Gold East, Gold Huansheng, Ningbo

Asia, and Ningbo Zhonghua, accounted for *** percent of reported 2009 Chinese production of certain

coated paper. Specific data regarding each affiliated firm are presented below.

Gold East

Gold East reported that *** percent of its total sales in the most recent fiscal year were sales of

certain coated paper. In 2009, *** percent of Gold East’s total shipments of certain coated paper were

exported to the United States, *** percent of its shipments were to its home market, and *** percent of its

shipments were to European Union countries, and *** percent of total shipments went to export markets

in ***. From 2007 to 2009, Gold East’s exports to the United States increased by *** percent. 

VII-3
Gold East’s reported capacity decreased from 2007 to 2009 ***,5

 and is projected to ***.6 Its

production decreased by *** percent from 2007 to 2009, and is projected to ***. Gold East reported that

its largest U.S. importer of certain coated paper in 2008 was ***. 

Gold Huansheng

Gold Huansheng reported that *** percent of its total sales in the most recent fiscal year were

sales of certain coated paper. In 2009, *** percent of Gold Huansheng’s total shipments of certain coated

paper were exported to the United States, *** percent of its shipments were to its home market, ***

percent of its shipments were to the European Union, and *** percent of its shipments were to other

export markets in ***. Gold Huansheng’s exports to the United States increased by *** percent from

2007 to 2009 and are projected to ***. Gold Huansheng’s reported capacity *** from 2007 to 2009, and

is projected to ***. Its production *** from 2007 to 2009, and is projected to ***. Gold Huansheng

reported that its largest U.S. importer of certain coated paper in 2009 was ***. 

Ningbo Asia

Ningbo Asia reported that *** percent of its total sales in the most recent fiscal year were sales of

certain coated paper. In 2009, *** percent of Ningbo Asia’s total shipments of certain coated paper were

exported to the United States, *** percent of its shipments were to its home market, *** percent of its

shipments were to the European Union, and *** percent of its shipments were to other export markets in

***. Ningbo Asia’s exports to the United States increased by *** percent from 2007 to 2009 (***) and

are projected to ***. Ningbo Asia’s reported capacity *** from 2007 to 2009, and is projected to ***. 

Its production increased by *** percent from 2007 to 2009, and is projected to ***. Ningbo Asia

reported that its largest U.S. importer of certain coated paper in 2009 was ***. 

Ningbo Zhonghua

Ningbo Zhonghua reported that *** percent of its total sales in the most recent fiscal year were

sales of certain coated paper. In 2009, *** percent of Ningbo Zhonghua’s total shipments of certain

coated paper were exported to the United States, *** percent of its shipments were to its home market,

*** percent of its shipments were to the European Union, and *** percent of its shipments were to other

export markets in ***. Ningbo Zhonghua’s exports to the United States increased by *** percent from

2007 to 2009 and are projected to ***. Ningbo Zhonghua’s reported capacity *** from 2007 to 2009,

and is projected to ***. Its production increased by *** percent from 2007 to 2009, and is projected to

*** from 2009 to 2011. Ningbo Zhonghua reported that its largest U.S. importer of certain coated paper

in 2009 was ***. 

Producers in China not affiliated with APP

Chenming

 Chenming reported that *** percent of its total sales in the most recent fiscal year were sales of

certain coated paper. In 2009, *** percent of Chenming’s total shipments of certain coated paper were

exported to the United States, *** percent of its shipments were to its home market, *** percent of its

shipments were to the European Union, and *** percent of its shipments were to other export markets

 5 ***.

 6

 ***.

VII-4
such as ***. Chenmings’s exports to the United States decreased by *** percent from 2007 to 2009, and

are projected to be ***. Its export Chenming’s reported capacity increased by *** percent from 2007 to

2009, and is projected to ***.7

 Its production increased by *** percent from 2007 to 2009, and is

projected to ***. Chenming reported that its largest U.S. importer of certain coated paper in 2009 was

***. 

Sun Paper

 Sun Paper reported that *** percent of its total sales in the most recent fiscal year were sales of

certain coated paper. In 2009, *** percent of Sun Paper’s total shipments of certain coated paper were

exported to the United States, *** percent of its shipments were to its home market, *** of its shipments

were to the European Union, and *** of its shipments were to other export markets, ***. Sun Paper’s

exports to the United States increased by *** percent from 2007 to 2009, but were ***. Its export

shipments to the United States are projected to ***. Sun Paper’s reported capacity *** from 2007 to

2009, and is projected to ***. Its production increased by *** percent from 2007 to 2009, and is

projected to ***. Sun Paper reported that its exclusive U.S. importer of certain coated paper in 2009 was

***. 

Daewoo, Renheng, Stora Enso, and Tiger Forest

Daewoo reported that ***. Renheng and Stora Enso reported that ***. Tiger Forest reported

***. 

Other Data

RISI, an information provider for the global forest products industry, projects an increase of 17.3

percent in Chinese capacity to produce coated woodfree paper products from 2010 to 2011. During the

same 2010 to 2011 time horizon, RISI projects an increase of 7.5 percent in the apparent consumption of

coated woodfree paper in China.8

 Respondents maintained that Chinese producers currently have high

capacity utilization rates and that increases in capacity to produce certain coated paper in China are

necessary to keep up with increased demand in its home market and not intended for export markets.

Respondents also observed that Chinese producers *** Unisource. Unisource, another large national

paper distributor, stopped receiving shipments from respondents in July 2009, after it decided earlier in

2009 to obtain its supply needs from New Page.9

Table VII-2 presents cumulative data for reported capacity, production, and shipments of certain

coated paper for all reporting producers in China. Cumulatively, producers in China reported that in

2009, 9.3 percent of their total shipments of certain coated paper were exported to the United States, 61.5

percent of its shipments were to its home market, 7.6 percent of its shipments were to the European

Union, and 21.5 percent of its shipments were to other export markets. Chinese producers’ exports to the

United States increased by 3.6 percent from 2007 to 2009, but were lower by 85.8 percent from JanuaryJune 2009 to January-June 2010. Export shipments to the United States are projected to ***. Chinese

 7 Chenming reported that ***. Foreign Producer’s questionnaire response of Chenming, p. 6, response to

question II-1.

 8

 Respondents’ prehearing brief, p. 129 (citing RISI World Pulp & Recovered Paper Forecast found at exh. 27).

 9

 Respondents’ prehearing brief, pp. 121-122; Respondents’ posthearing brief, pp. 12-14 and exh. 1, pp. 84-86.

VII-5
producer’s reported capacity decreased by 1.1 percent from 2007 to 2009, and is projected to ***.10 Their

production increased by 4.5 percent from 2007 to 2009, and is projected to *** from 2009 to 2011. 

 10 Three producers of certain coated paper in China reported projections to increase their capacity in 2010 and

2011 of approximately *** short tons. These firms include: ***. Responses to foreign producer questionnaires,

question II-8a; Respondents’ posthearing brief, exh. 1, p. 4. Another firm in China, ***, is projected to begin

producing certain coated paper in 2010 or 2011 with an approximately *** short tons capacity facility. Petitioners

contended that other data sources such as that of EMGE & Co., a paper industry consultancy, projects capacity to

product coated woodfree paper in China to increase by 2.6 million metric tons (2.9 million short tons) by 2011. 

Petitioners’ prehearing brief, p. 55-57 and exh. 8. 

VII-6
Table VII-2

Certain coated paper: China’s reported production capacity, production, shipments, and

inventories, 2007-09, January-June 2009, January-June 2010, and projections for 2010 and 2011

Item

Actual experience Projections

2007 2008 2009

January-June

2009 2010 2010 2011

Quantity (short tons)

Capacity 3,875,558 3,919,692 3,832,237 1,927,417 1,850,778 3,885,009 4,778,462

Production 3,515,012 3,626,445 3,673,622 1,772,807 1,833,516 3,852,608 4,744,995

End-of-period inventories 129,672 274,467 137,314 212,720 221,840 121,696 119,740

Shipments:

 Internal consumption 1,759 1,075 2,365 1,335 906 1,643 1,643

 Home market 2,335,641 2,183,226 2,347,216 1,177,097 1,114,446 2,448,392 3,398,091

 Exports to–

 The United States 341,194 339,324 353,386 176,325 25,002 39,907 31,787

 European Union 241,836 231,857 288,749 124,432 137,383 269,614 268,668

 Asia 481,410 483,826 530,852 268,037 331,943 722,074 722,754

 All other markets 164,779 242,536 290,985 123,018 179,829 362,072 354,644

 Total exports 1,229,219 1,297,543 1,463,972 691,812 674,157 1,393,667 1,377,853

Total shipments 3,566,619 3,481,844 3,813,553 1,870,244 1,789,509 3,843,702 4,777,587

Ratios and shares (percent)

Capacity utilization 90.7 92.5 95.9 92.0 99.1 99.2 99.3

Inventories to production 3.7 7.6 3.7 6.0 6.0 3.2 2.5

Inventories to total shipments 3.6 7.9 3.6 5.7 6.2 3.2 2.5

Shares of total quantity of

shipments:

 Internal consumption 0.0 0.0 0.1 0.1 0.1 0.0 0.0

 Home market 65.5 62.7 61.5 62.9 62.3 63.7 71.1

 Exports to–

 The United States 9.6 9.7 9.3 9.4 1.4 1.0 0.7

 European Union 6.8 6.7 7.6 6.7 7.7 7.0 5.6

 Asia 13.5 13.9 13.9 14.3 18.5 18.8 15.1

 All other markets 4.6 7.0 7.6 6.6 10.0 9.4 7.4

 Total exports 34.5 37.3 38.4 37.0 37.7 36.3 28.8

Table continued on next page.

VII-7
Table VII-2--Continued

Certain coated paper: China’s reported production capacity, production, shipments, and

inventories, 2007-09, January-June 2009, January-June 2010, and projections for 2010 and 2011

Item

Actual experience Projections

2007 2008 2009

January-June

2009 2010 2010 2011

Value ($1,000)

Commercial shipments

 Home market 1,622,893 1,675,454 1,516,050 701,186 869,019 1,659,953 2,136,627

 Export shipments to– 

 United States 282,056 301,698 283,216 143,768 19,946 32,039 25,470

 European Union 193,168 198,064 212,948 86,464 108,606 226,304 226,878

 Asia 347,767 397,965 368,325 176,600 265,955 551,593 557,530

 All other markets 126,711 191,818 204,388 84,370 149,043 296,616 289,803

 Total exports 949,702 1,089,545 1,068,877 491,202 543,550 1,106,552 1,099,681

Total commercial shipments 2,572,595 2,764,999 2,584,927 1,192,388 1,412,569 2,766,505 3,236,308

Unit value (dollars per short ton)

Commercial shipments

 Home market 695 767 646 596 780 678 681

 Export shipments to– 

 United States 827 889 801 815 798 803 801

 European Union 799 854 737 695 791 839 844

 Asia 722 823 694 659 801 764 771

 All other markets 769 791 702 686 829 819 817

 Total exports 773 840 730 710 806 794 798

Total commercial shipments 722 794 678 638 790 720 717

Note.–January-June inventory ratios are calculated using annualized production and shipments data.

Source: Compiled from data submitted in Commission questionnaire responses.

VII-8
Eight of the ten reporting Chinese producers reported that they produced products other than

certain coated paper using the same manufacturing equipment and/or production-related employees. Only

*** reported that they produced exclusively certain coated paper. Table VII-3 presents data for the entire

period of investigation for capacity, production, and capacity utilization for all products. Table VII-4

presents 2009 data for overall capacity as well as production by product category and by firm.

Table VII-3

Certain coated paper and all other out-of-scope products: Overall capacity, production, and

capacity utilization of Chinese producers, 2007-09, January-June 2009, and January-June 2010

Item

Calendar year January-June

2007 2008 2009 2009 2010

Overall capacity (short tons) 5,747,288 5,756,103 6,219,169 3,113,940 3,094,965

Overall production (short tons) 5,343,296 5,469,750 5,742,680 2,783,255 2,957,783

Overall capacity utilization (percent) 93.0 95.0 92.3 89.4 95.6

Source: Compiled from data submitted in response to Commission questionnaires.

Table VII-4

Certain coated paper and other products: Overall capacity of Chinese producers, and production

by firms and products, 2009

Firm Overall capacity

Chinese production of– 

Certain coated

paper1

Other coated

paper2

Uncoated

freesheet3

Other

products4

Quantity (short tons)

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

 1 This category includes products within the scope of these investigations.

 2

 This category includes products such as web rolls and coated groundwood paper. These products are not within the scope of

these investigations. 

 3

 This category includes products such as uncoated freesheet, uncoated groundwood. These products are not within the scope

of these investigations. 

 4

 This category includes other paper products such packaging paperboard, kraft paper, and market pulp. These products are

not within the scope of these investigations.

Source: Compiled from data submitted in response to Commission questionnaires.

VII-9
THE INDUSTRY IN INDONESIA

The Commission received responses from three producers of certain coated paper in Indonesia. 

As the firms are all related, they submitted a consolidated response to the Commission’s foreign producer

questionnaire. These firms included: (1) PT. Pindo Deli Pulp and Paper Mills, (2) PT. Pabrik Kertas

Tjiwi Kimia, Tbk., and (3) PT. Indah Kiat Pulp & Paper Tbk. (collectively, “Indonesian respondents”). 

Indonesian respondents are affiliates of the large conglomerate, Asia Pulp & Paper Co., Ltd.,

headquartered in Singapore. The Indonesian respondents claimed to account for approximately ***

percent of production of certain coated paper in Indonesia, and accounted for *** percent of the exports

to the United States during the period of investigation. 

Indonesian respondents reported that *** percent of their total sales in the most recent fiscal year

were sales of certain coated paper. In 2009, *** percent of Indonesian respondents’ total shipments of

certain coated paper were exported to the United States, *** percent of their shipments were to their home

market, *** percent of their shipments were to the European Union, and *** percent of their shipments

were to other export markets such as ***. From 2007 to 2009, Indonesian respondents’ exports to the

United States decreased by *** percent and are projected to ***.11 Indonesian respondents’ reported

capacity remained steady from 2007 to 2009, and is projected to ***. Their production increased by ***

percent from 2007 to 2009, and is projected to ***. Indonesian respondents reported that its largest U.S.

importer of certain coated paper in 2009 was ***. Table VII-5 presents data for reported capacity,

production, and shipments of certain coated paper for all reporting producers in Indonesia. 

Table VII-5

Certain coated paper: Indonesia’s reported production capacity, production, shipments, and

inventories, 2007-09, January-June 2009, January-June 2010, and projections for 2010 and 2011

* * * * * * *

Indonesian respondents reported that they produced products other than certain coated paper

using the same manufacturing equipment and/or production-related employees. Table VII-6 presents data

for the entire period of investigation for capacity, production, and capacity utilization for all products. 

Table VII-7 presents 2009 data for overall capacity as well as production by product category and by

firm.

Table VII-6

Certain coated paper and all other out-of-scope products: Overall capacity, production, and

capacity utilization of Indonesian producers, 2007-09, January-June 2009, and January-June 2010

* * * * * * *

Table VII-7

Certain coated paper and other products: Overall capacity of Indonesian producers, and

production by firms and products, 2009

* * * * * * *

 11 Indonesian respondents stated ***. Foreign producer questionnaire response of Indonesian respondents, p. 9,

question II-8b.

VII-10
COMBINED INDUSTRY DATA FOR BOTH SUBJECT COUNTRIES

Table VII-8 presents data for capacity, production, and shipments of certain coated paper from all

reporting producers in China and Indonesia combined. 

Table VII-8

Certain coated paper: China and Indonesia’s reported production capacity, production, shipments,

and inventories, 2007-09, January-June 2009, January-June 2010, and projections for 2010 and

2011

* * * * * * *

U.S. IMPORTERS’ INVENTORIES

Reported inventories held by U.S. importers of subject merchandise from China and Indonesia

and nonsubject countries are shown in table VII-9.

Table VII-9

Certain coated paper: U.S. importers’ end-of-period inventories of subject and nonsubject

imports, by sources, 2007-2009, January-June 2009, and January-June 2010

* * * * * * *

U.S. IMPORTERS’ CURRENT ORDERS

The Commission requested U.S. importers to indicate whether they imported or arranged for the

importation of certain coated paper after June 30, 2010. *** of the 11 reporting U.S. importers stated that

they had imported or arranged for importation since June 30, 2010. 

ANTIDUMPING AND COUNTERVAILING DUTY ORDERS IN THIRD-COUNTRY MARKETS

The tabulation below lists the governments that have placed antidumping, countervailing duty or

safeguard duties on certain coated paper.

 Country imposing

duty

Country against which

duty is imposed

Amount of duty

(percent ad valorem)

Commencement date of duty

China Japan and Korea 10.4 to 71.0 2003 original AD order

August 2009 duties continued for 5

years

Taiwan Japan 8.0 to 44.0 2000 original AD order

India Global safeguard 20.0 provisional

0

April 2009

November 2009 (no injury)

European Union China Proceedings ongoing Initiation of antidumping proceeding

February 18, 2010

Initiation of anti-subsidy proceeding

April 17, 2010

Source: Petitioners’ postconference brief, “Answers to Staff Questions,” exh. 8; Government of India, Ministry of Finance,

Directorate General of Safeguards website, at http://dgsafeguards.gov.in/Coated%20Paper%20and%20Paper%20Board.doc,

accessed August 12, 2010; Official Journal of the European Union, 2010/C 41/06, February 18, 2010 and 2010/C 99/13, April 17,

2010.

VII-11
INFORMATION ON PRODUCERS IN NONSUBJECT COUNTRIES

In assessing whether the domestic industry is materially injured or threatened with material injury

“by reason of subject imports,” the legislative history states “that the Commission must examine all

relevant evidence, including any known factors, other than the dumped or subsidized imports, that may be

injuring the domestic industry, and that the Commission must examine those other factors (including nonsubject imports) ‘to ensure that it is not attributing injury from other sources to the subject imports.’”12

The worldwide market environment for coated free sheet paper during the period of investigation

has been tumultuous, with demand, production, and shipments declining rapidly, leading to excess

production capacity despite some reductions in capacity. Global demand for coated free sheet paper

decreased as the severe economic downturn caused advertising expenditures to drop sharply, reducing

demand for magazines and catalogues. This cyclical decline in demand was accompanied by a structural

decline in demand for coated free sheet paper, particularly in North America and Europe, as some

advertisers migrated away from the print medium. Global demand for coated free sheet paper declined by

approximately 16 percent, from 30 million tons in 2006 to an estimated 25.2 million tons in 2009, with

most of this decline occurring within the past two years. The drop in demand began in North America

and Europe, but in 2009 spread to Asia and Latin America. As demand fell, producers cut production and

shipments of coated free sheet paper. Despite capacity reductions by some producers, excess capacity for

coated free sheet paper remained, particularly in Europe.13 In January-June 2010, global economic

recovery caused demand for coated free sheet to increase above 2009 levels but demand remained below

2008 levels.14 

The United States imports certain coated paper from a number of nonsubject countries. Canada,

Finland, Germany, and Korea are four important suppliers to the United States. Information on these

countries’ trade in certain coated paper is provided below.

Canada

Table VII-10 presents data on Canadian exports and imports of certain coated paper, and table

VII-11 shows data for Canadian exports to the United States as a share of total Canadian exports. During

2007-09, Canada had a large trade deficit in certain coated paper. The United States accounted for more

than 80 percent of total Canadian exports of certain coated paper between 2007 and 2009.15

 12 Mittal Steel Point Lisas Ltd. v. United States, Slip Op. 2007-1552 at 17 (Fed. Cir., Sept. 18, 2008), quoting

from Statement of Administrative Action on Uruguay Round Agreements Act, H.R. Rep. 103-316, Vol. I at 851-52;

see also Bratsk Aluminum Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006).

 13 Maine, John. “Green Shoots of Recovery in Printing and Writing Paper Markets?” September 10, 2009

http://www.risiinfo.com (accessed September 11, 2009); Maine, John. “North American Coated Paper Demand and

Capacity Are Closing the Gap, but Europe Will Likely Announce Huge Closures in 2010.” October 22, 2009

http://www.risiinfo.com (accessed October 22, 2009); Stora Enso, “Interim Review January-March 2009" April 23,

2009 http://www.storaenso.com (accessed October 22, 2009); Stora Enso, “Interim Review January-September

2009" October 22, 2009 http://www.storaenso.com (accessed October 22, 2009). 

 14 Stora Enso press release, “Stora Enso CEO Jouko Karvinen Comments on Second Quarter Results Announced

Today” July 22, 2010 http://www.storaenso.com (accessed July 22, 2010). 

 15 Two Canadian firms (Domtar Corporation and Thunder Bay Fine Papers) were reported to have produced

coated free sheet paper during the period of investigation. Their production may have included certain coated paper. 

2008 Lockwood-Post Directory of Pulp & Paper Mills Global Edition. Bedford, Massachusetts: RISI, Inc., 2008.

VII-12
Table VII-10

Certain coated paper: Canada’s exports and imports, 2007-09

Destination

Calendar year

2007 2008 2009

Quantity (short tons)

Exports 5,466 4,651 3,187

Imports 240,442 226,598 176,060

Net exports (234,977) (221,946) (172,874)

Note.–Export and import figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Table VII-11

Certain coated paper: Canada’s total exports and exports to the United States, 2007-09

Destination

Calendar year

2007 2008 2009

Quantity (short tons)

United States 5,266 3,897 3,110

World 5,466 4,651 3,187

Share of total (percent)

United States 96.3 83.8 97.6

Note.–Export figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Finland

Table VII-12 presents data on Finland’s exports and imports of certain coated paper, and table

VII-13 shows data for Finland’s exports to the United States as a share of total Finnish exports. Finland

was a net exporter of certain coated paper during 2007-09, supplying paper to numerous countries,

including Brazil, Denmark, Germany, Mexico, Russia, and Sweden. Finland’s exports declined by 21

percent between 2008 and 2009 as the global recession reduced demand for certain coated paper. During

the period, exports to the United States accounted for no more than 7 percent of total Finnish exports of

certain coated paper.16 

 16 Six Finnish firms (Ahlstrom Kauttua Oy, Jujo Thermal Ltd., M-real Corp., Stora Enso, Tervakoski Oy, and

UPM) were reported to have produced coated free sheet paper during the period of investigation. Some of these

firms likely produced certain coated paper. 2008 Lockwood-Post Directory of Pulp & Paper Mills Global Edition.

Bedford, Massachusetts: RISI, Inc., 2008.

VII-13
Table VII-12

Certain coated paper: Finland’s exports and imports, 2007-09

Destination

Calendar year

2007 2008 2009

Quantity (short tons)

Exports 464,126 450,116 356,427

Imports 48,366 32,586 28,515

Net exports 415,760 417,530 327,911

Note.–Export and import figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Table VII-13

Certain coated paper: Finland’s total exports and exports to the United States, 2007-09

Destination

Calendar year

2007 2008 2009

Quantity (short tons)

United States 30,419 17,627 6,160

World 464,126 450,116 356,427

Share of total (percent)

United States 6.6 3.9 1.7

Note.–Export figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Germany

Table VII-14 presents data on German exports and imports of certain coated paper, and table VII15 shows data for German exports to the United States as a share of total German exports. Germany

exported and imported large volumes of certain coated paper during 2007-09. Other European countries

were the destination for much of Germany’s exports. Between 2008 and 2009, Germany’s exports of

certain coated paper fell by 20 percent in response to weaker foreign demand. Germany’s largest export

market during the period was France, but in 2009 France accounted for only 8 percent of total German

exports. Exports to the United States comprised only 5 percent of total German exports of certain coated

paper in 2009.17 

 17 Approximately 14 German firms were reported to have produced coated free sheet paper during the period of

investigation. Some of these firms likely produced certain coated paper. These firms are: Buttenpapierfabrik

Gmund GmbH & Co. KG, Hahnemuhle FineArt GmbH, Papierfabrik August Koehler AG, Koehler Kehl GmbH, Mreal Corp., Nordland Papier GmbH, Sappi Fine Papers, Papierfabrik Scheufelen GmbH & Co. KG, Stora Enso,

Papierfabrick Zerkall Renker & Sohne GmbH & Co. KG, Steinbeis Temming Papier GmbH & Co., Illig’sche

Papierfabrick, Kanzan Spezialpapiere GmbH, and Felix Schoeller Jr. 2008 Lockwood-Post Directory of Pulp &

(continued...)

VII-14
Table VII-14

Certain coated paper: Germany’s exports and imports, 2007-09

Destination

Calendar year

2007 2008 2009

Quantity (short tons)

Exports 1,750,966 1,682,510 1,343,128

Imports 879,601 870,005 664,258

Net exports 871,365 812,505 678,870

Note.–Export and import figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Table VII-15

Certain coated paper: Germany’s total exports and exports to the United States, 2007-09

Destination

Calendar year

2007 2008 2009

Quantity (short tons)

United States 144,557 98,441 65,415

World 1,750,966 1,682,510 1,343,128

Share of total (percent)

United States 8.3 5.9 4.9

Note.–Export figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Korea

Table VII-16 presents data on Korean exports and imports of certain coated paper, and table VII17 shows data for Korean exports to the United States as a share of total Korean exports. Korea was a

large net exporter of certain coated paper during 2007-09. The United States was Korea’s largest export

market for certain coated paper but it accounted for no more than 28 percent of Korea’s total exports

during the period. Other large export markets for Korea included Iran, Australia, Bangladesh, Japan, and

China.18

 17 (...continued)

Paper Mills Global Edition. Bedford, Massachusetts: RISI, Inc., 2008.

 18 Eight Korean firms were reported to have produced coated free sheet paper during the period of investigation. 

Some of these firms likely produced certain coated paper. These firms are: EN Paper Mfg. Co., Ltd., Hankuk Paper

Mfg. Co., Ltd., Hansol Paper Co., Ltd., Moorim Paper Co., Ltd., Namhan Paper Co., Ltd., Samwha Paper Co., Ltd.,

Daehan Paper Co., Ltd., and Hongwon Paper Mfg. Co., Ltd. 2008 Lockwood-Post Directory of Pulp & Paper Mills

Global Edition. Bedford, Massachusetts: RISI, Inc., 2008.

VII-15
Table VII-16

Certain coated paper: Korea’s exports and imports, 2007-09

Destination

Calendar year

2007 2008 2009

Quantity (short tons)

Exports 1,619,620 1,485,741 1,471,155

Imports 20,867 22,605 14,242

Net exports 1,598,753 1,463,136 1,456,914

Note.–Export and import figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Table VII-17

Certain coated paper: Korea’s total exports and exports to the United States, 2007-09

Destination

Calendar year

2007 2008 2009

Quantity (short tons)

United States 451,159 382,576 238,969

World 1,619,620 1,485,741 1,471,155

Share of total (percent)

United States 27.9 25.7 16.2

Note.–Export figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

VII-16
APPENDIX A

FEDERAL REGISTER NOTICES

A-1

Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 59209 

7See the Department’s memorandum entitled, 

‘‘2007 Administrative Review of the Antidumping 

Duty Order on Wooden Bedroom Furniture from the 

People’s Republic of China: Due Date for Interested 

Parties to Submit Comments on Draft Results of 

Redetermination Pursuant to Remand,’’ dated July 

16, 2010. 

8See Timken, 893 F.2d at 341. 

9See NSR Final Results. 

and its determination that it could not 

address its failure to consider the 

February 5, 2009, submission as a 

ministerial error. On June 7, 2010, the 

Department filed an unopposed motion 

for voluntary remand with the Court so 

that the Department could fully 

consider and evaluate the overlooked 

record evidence, prepare draft remand 

results, issue a draft to the parties for 

comment, analyze those comments, and 

take such action as may be appropriate 

pertaining to Bon Ten. On June 8, 2010, 

the Court granted the Department’s 

voluntary remand motion. 

On June 11, 2010, we issued a 

supplemental questionnaire to Bon Ten, 

in which we provided Bon Ten the 

opportunity to submit a no-shipment 

certification. On June 15, 2010, Bon Ten 

submitted a certification that it had no 

shipments of WBF during the period 

August 1, 2007, through December 31, 

2007, the portion of the 2007 AR POR 

that was not covered by the preceding 

NSR POR. On July 16, 2010, we released 

to all interested parties for comment: (1) 

Our draft redetermination pursuant to 

the remand finding that Bon Ten had 

properly submitted its no-shipment 

certification and stating our intent to 

rescind the AR with respect to Bon Ten; 

(2) a U.S. Customs and Border 

Protection (‘‘CBP’’) data listing of all 

type 3 entries (i.e., entries subject to 

antidumping and countervailing duty 

tariffs) classified under subheadings 

7009.92.5000, 9403.50.9080, and 

9403.50.9040 of the Harmonized Tariff 

Schedule of the United States that 

entered the United States during the 

2007 AR POR and were exported/ 

manufactured by Bon Ten; and (3) a 

draft version of Bon Ten’s amended 

final cash deposit instructions reflecting 

the draft redetermination results, which 

the Department intends to send to CBP, 

pending the expiration of the period of 

appeal or, if appealed, pending a final 

and conclusive court decision.7 We 

received no comments from interested 

parties on the Department’s draft 

redetermination results, CBP data, or the 

draft version of the cash deposit 

instructions for Bon Ten. 

On August 9, 2010, the Department 

issued its final results of 

redetermination pursuant to Bon Ten v. 

United States. The remand 

redetermination explained that, in 

accordance with the CIT’s instructions, 

we have reconsidered the record 

information with regard to Bon Ten’s 

no-shipment certification and separaterate status for the 2007 AR. Based on 

this reconsideration, we have 

determined to rescind the 2007 AR with 

respect to Bon Ten pursuant to 19 CFR 

351.214(j) and 19 CFR 351.213(d)(3). 

Timken Notice 

In its decision in Timken, the CAFC 

held that, pursuant to section 516A(e) of 

the Tariff Act of 1930, as amended (‘‘the 

Act’’), the Department must publish a 

notice of a court decision that is not ‘‘in 

harmony’’ with a Department 

determination and must suspend 

liquidation of entries pending a 

‘‘conclusive’’ court decision.8 The CIT’s 

decision in Bon Ten v. United States, 

issued on September 17, 2010, 

constitutes a final decision of that Court 

that is not in harmony with the 

Department’s Final Results and 

Amended Final Results. This notice is 

published in fulfillment of the 

publication requirements of Timken. 

Accordingly, pending the expiration of 

the period of appeal or, if appealed, 

pending a final and conclusive court 

decision, the Department will instruct 

CBP to collect a cash-deposit rate for 

Bon Ten, effective October 31, 2008, 

based on the rate established in the final 

results of Bon Ten’s NSR (i.e., 0.00 

percent) until completion of any 

subsequent administrative review of 

Bon Ten.9

This notice is issued and published in 

accordance with section 516A(c)(1) of 

the Act. 

Dated: September 23, 2010. 

Paul Piquado, 

Acting Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. 2010–24321 Filed 9–24–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT Of COMMERCE 

International Trade Administration 

[C–560–824] 

Certain Coated Paper Suitable for 

High–Quality Print Graphics Using 

Sheet–Fed Presses from Indonesia: 

Final Affirmative Countervailing Duty 

Determination 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerc. 

SUMMARY: The Department of Commerce 

(the Department) has determined that 

countervailable subsidies are being 

provided to producers and exporters of 

certain coated paper suitable for high– 

quality print graphics using sheet–fed 

presses (coated paper) from Indonesia. 

For information on the estimated 

countervailing duty rates, please see the 

‘‘Suspension of Liquidation’’ section, 

below. 

EFFECTIVE DATE: September 27, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Gene Calvert or Nicholas Czajkowski, 

AD/CVD Operations, Office 6, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230; 

telephone: (202) 482–3586 and (202) 

482–1395, respectively. 

SUPPLEMENTARY INFORMATION: 

Case History 

The following events have occurred 

since the announcement of the 

preliminary determination, which was 

published in the Federal Register on 

March 9, 2010. See Certain Coated 

Paper from Indonesia: Preliminary 

Affirmative Countervailing Duty 

Determination and Alignment of Final 

Countervailing Duty Determination with 

Final Antidumping Duty Determination, 

75 FR 10761 (March 9, 2010) 

(Preliminary Determination). 

The Department issued additional 

supplemental questionnaires to the 

Government of Indonesia (GOI), and to 

cross–owned company respondents PT 

Pabrik Kertas Tjiwi Kimia Tbk., PT 

Indah Kiat Pulp and Paper Tbk., and PT 

Pindo Deli Pulp and Paper Mills 

(collectively, APP/SMG) regarding the 

programs under investigation. Parties 

submitted timely responses to these 

supplemental questionnaires on May 11 

and May 26 (the GOI and APP/SMG) 

and June 25 (the GOI only). On April 7 

and April 8, APP/SMG and Appleton 

Coated LLC, NewPage Corporation, S.D. 

Warren Company d/b/a Sappi Fine 

Paper North America, and the United 

Steel, Paper and Forestry, Rubber, 

Manufacturing, Energy, Allied 

Industrial and Service Workers 

International Union (collectively, 

Petitioners), respectively, submitted 

timely requests for a hearing pursuant to 

19 CFR 351.310(c), which they both 

subsequently withdrew on August 6, 

2010. 

The Department conducted 

verification of the questionnaire 

responses submitted by the GOI and 

APP/SMG from June 28, 2010 through 

July 8, 2010. The Department issued the 

final business–proprietary version of the 

verification reports on August 6, 2010. 

We received case briefs from the GOI 

and APP/SMG, jointly, and from 

Petitioners on August 16. We received 


srobinson on DSKHWCL6B1PROD with NOTICES
59210 Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 

1 ‘‘ ‘Paperboard’ refers to Certain Coated Paper 

that is heavier, thicker and more rigid than coated 

paper which otherwise meets the product 

description. In the context of Certain Coated Paper, 

paperboard typically is referred to as ‘cover,’ to 

distinguish it from ‘text.’’’ 

2One of the key measurements of any grade of 

paper is brightness. Generally speaking, the brighter 

the paper the better the contrast between the paper 

and the ink. Brightness is measured using a GE 

Reflectance Scale, which measures the reflection of 

light off of a grade of paper. One is the lowest 

reflection, or what would be given to a totally black 

grade, and 100 is the brightest measured grade. 

rebuttal briefs from these parties on 

August 23. 

Scope of the Investigation 

The merchandise under investigation 

includes certain coated paper and 

paperboard1 in sheets suitable for high 

quality print graphics using sheet–fed 

presses; coated on one or both sides 

with kaolin (China or other clay), 

calcium carbonate, titanium dioxide, 

and/or other inorganic substances; with 

or without a binder; having a GE 

brightness level of 80 or higher;2

weighing not more than 340 grams per 

square meter; whether gloss grade, satin 

grade, matte grade, dull grade, or any 

other grade of finish; whether or not 

surface–colored, surface–decorated, 

printed (except as described below), 

embossed, or perforated; and 

irrespective of dimensions (Certain 

Coated Paper). 

Certain Coated Paper includes (a) 

coated free sheet paper and paperboard 

that meets this scope definition; (b) 

coated groundwood paper and 

paperboard produced from bleached 

chemi–thermo-mechanical pulp 

(BCTMP) that meets this scope 

definition; and (c) any other coated 

paper and paperboard that meets this 

scope definition. 

Certain Coated Paper is typically (but 

not exclusively) used for printing multi– 

colored graphics for catalogues, books, 

magazines, envelopes, labels and wraps, 

greeting cards, and other commercial 

printing applications requiring high 

quality print graphics. 

Specifically excluded from the scope 

are imports of paper and paperboard 

printed with final content printed text 

or graphics. 

As of 2009, imports of the subject 

merchandise are provided for under the 

following categories of the Harmonized 

Tariff Schedule of the United States 

(HTSUS): 4810.14.11, 4810.14.1900, 

4810.14.2010, 4810.14.2090, 

4810.14.5000, 4810.14.6000, 4810.14.70, 

4810.19.1100, 4810.19.1900, 

4810.19.2010, 4810.19.2090, 

4810.22.1000, 4810.22.50, 4810.22.6000, 

4810.22.70, 4810.29.1000, 4810.29.5000, 

4810.29.6000, 4810.29.70, 4810.32, 

4810.39 and 4810.92. While HTSUS 

subheadings are provided for 

convenience and customs purposes, the 

written description of the scope of the 

investigation is dispositive. 

Scope Comments 

Following the Preliminary 

Determination, on August 3, 2010, the 

Department issued a decision 

memorandum addressing three scope 

issues in this and the concurrent 

antidumping and countervailing duty 

investigations on certain coated paper 

from Indonesia and the People’s 

Republic of China: (1) whether to clarify 

the scope of these investigations to 

exclude multi–ply coated paper and 

paperboard; (2) whether to modify the 

scope language by striking the phrase 

‘‘suitable for high–quality print 

graphics;’’ and (3) whether to add three 

HTSUS numbers which may include in– 

scope merchandise (i.e., HTSUS 

4810.32, 4810.39 and 4810.92). See 

August 3, 2010, Memorandum to Ronald 

K. Lorentzen, Deputy Assistant 

Secretary for Import Administration, 

from Susan Kuhbach, Director, Office 1, 

entitled ‘‘Scope’’ (August 3, 2010 Scope 

Memorandum). For the reasons 

explained in the August 3, 2010, Scope 

Memorandum, the Department 

determined that: (1) multi–ply products 

that otherwise meet the description of 

the scope of the investigations are not 

excluded from the scope; (2) the 

‘‘suitable for high–quality print 

graphics’’ language should not be 

deleted from the scope; and (3) the three 

HTSUS numbers at issue should be 

added to the scope. 

The Department subsequently 

provided the interested parties an 

opportunity to comment on its post– 

preliminary scope determination. In 

response, the respondents in these 

investigations filed a case brief on 

August 20, 2010, and the petitioners 

filed a rebuttal brief on August 24, 2010. 

Based on the Department’s analysis of 

these comments and the factual records 

of these investigations, the Department 

continues to find that multi–ply coated 

paper and paperboard are not excluded 

from the scope of the investigations, that 

the ‘‘suitable for high–quality print 

graphics’’ language should be 

maintained, and that the three HTSUS 

numbers listed above should be added 

to the scope. For a complete discussion 

of the parties’ comments and the 

Department’s position, see ‘‘Issues and 

Decision Memorandum for the Final 

Determination in the Countervailing 

Duty Investigation of Certain Coated 

Paper Suitable for High–Quality Print 

Graphics Using Sheet–Fed Presses from 

the People’s Republic of China,’’ dated 

concurrently with this notice and 

incorporated herein by reference. 

Injury Test 

Because Indonesia is a ‘‘Subsidies 

Agreement Country’’ within the meaning 

of section 701(b) of the Tariff Act of 

1930, as amended (the Act), the 

International Trade Commission (ITC) is 

required to determine pursuant to 

section 701(a)(2) of the Act whether 

imports of the subject merchandise from 

Indonesia materially injure, or threaten 

material injury to, a United States 

industry. On November 23, 2009, the 

ITC published its preliminary 

determination that there is a reasonable 

indication that an industry in the 

United States is materially injured by 

reason of allegedly subsidized imports 

from Indonesia of subject merchandise. 

See Certain Coated Paper Suitable for 

High–Quality Print Graphics Using 

Sheet–Fed Presses from China and 

Indonesia, 74 FR 61174 (November 23, 

2009); and Certain Coated Paper 

Suitable for High–Quality Print 

Graphics Using Sheet–Fed Presses from 

China and Indonesia (Preliminary), 

USITC Pub. 4108, Inv. Nos. 701–TA– 

470–471 and 731–TA–1169–1170 

(November 2009). 

Period of Investigation 

The period for which we are 

measuring subsidies, i.e., the period of 

investigation (POI), is January 1, 2008 

through December 31, 2008. 

Analysis of Comments Received 

All non–scope issues raised in the 

case and rebuttal briefs submitted by the 

GOI, APP/SMG, and Petitioners are 

addressed in the Memorandum to 

Ronald K. Lorentzen, Deputy Assistant 

Secretary for Import Administration, 

‘‘Issues and Decision Memorandum for 

Certain Coated Paper Suitable for High– 

Quality Print Graphics Using Sheet–Fed 

Presses from Indonesia: Final 

Affirmative Countervailing Duty 

Determination’’ (September 20, 2010) 

(hereafter referred to as the ‘‘Decision 

Memorandum’’), which is hereby 

adopted by this notice. Attached to this 

notice as an Appendix is a list of the 

issues that parties have raised and to 

which we have responded in the 

Decision Memorandum. Parties can find 

this public memorandum in the 

Department’s Central Records Unit, 

located in Room 7046 in the main 

Commerce building. In addition, a 

complete version of the Decision 

Memorandum can be accessed directly 

on the Internet at http://ia.ita.doc.gov/ 

ia–highlights-and–news.html or http:// 

ia.ita.doc.gov/frn/. The paper copy and 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 59211 

electronic version of the Decision 

Memorandum are identical in content. 

Application of Adverse Facts Available 

For purposes of this final 

determination, we relied, in part, on 

adverse facts available (AFA), as 

provided for in sections 776(a) and (b) 

of the Act, to determine the 

countervailable subsidy rate for one 

program under investigation. A full 

discussion of our decision to apply AFA 

is presented in the Decision 

Memorandum in the section 

‘‘Application of Facts Otherwise 

Available.’’ 

Suspension of Liquidation 

In accordance with section 

705(c)(1)(B)(i)(I) of the Act, we have 

calculated an individual rate for APP/ 

SMG. Section 705(c)(5)(A)(i) of the Act 

states that for companies not 

investigated, we will determine an all 

others rate equal to the weighted 

average countervailable subsidy rates 

established for exporters and producers 

individually investigated, excluding any 

zero and de minimis countervailable 

subsidy rates, and any rates based 

entirely on AFA under section 776 of 

the Act. 

Producer/Exporter Net Subsidy Rate 

PT Pabrik Kertas Tjiwi 

Kimia, Tbk..

PT Pindo Deli Pulp and 

Paper Mills.

PT Indah Kiat Pulp and 

Paper, Tbk..

(i.e., APP/SMG) ............ 17.94% 

All Others ...................... 17.94% 

Although suspension of liquidation 

was required on the date of publication 

of the Preliminary Determination, we 

subsequently instructed U.S. Customs 

and Border Protection, pursuant to 

section 703(d) of the Act, to discontinue 

the suspension of liquidation for 

countervailing duty purposes for subject 

merchandise entered on or after July 7, 

2010, but to continue the suspension of 

liquidation of entries made on or after 

March 9, 2010 (the publication date of 

the Preliminary Determination) through 

July 6, 2010. 

If the ITC issues a final affirmative 

injury determination, we will issue a 

countervailing duty order and continue 

with the suspension of liquidation 

under section 706(a) of the Act. We will 

then require a cash deposit of estimated 

countervailing duties for entries of 

subject merchandise in the amounts 

indicated above. If the ITC determines 

that material injury, or threat of material 

injury, does not exist, this proceeding 

will be terminated and all estimated 

duties deposited or securities posted as 

a result of the suspension of liquidation 

will be refunded or canceled. 

ITC Notification 

In accordance with section 705(d) of 

the Act, we will notify the ITC of our 

determination. In addition, we are 

making available to the ITC all non– 

privileged and non–proprietary 

information related to this investigation. 

We will allow the ITC access to all 

privileged and business proprietary 

information in our files, provided the 

ITC confirms that it will not disclose 

such information, either publicly or 

under an Administrative Protective 

Order (APO), without the written 

consent of the Assistant Secretary for 

Import Administration. 

Return or Destruction of Proprietary 

Information 

In the event that the ITC issues a final 

negative injury determination, this 

notice will serve as the only reminder 

to parties subject to an APO of their 

responsibility concerning the 

destruction of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305(a)(3). Timely 

written notification of the return/ 

destruction of APO materials or 

conversion to judicial protective order 

is hereby requested. Failure to comply 

with the regulations and terms of an 

APO is a violation which is subject to 

sanction. 

This determination is issued and 

published pursuant to sections 705(d) 

and 777(i) of the Act. 

Dated: Septmber 20, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

APPENDIX 

Issues and Decision Memorandum 

I. Summary 

II. Background 

III. Subsidies Valuation 

A. Period of Investigation 

B. Allocation Period 

C. Discount Rates and 

Uncreditworthiness 

D. Cross–Ownership 

E. Attribution of Subsidies Sales 

Denominator 

IV. Application of Facts Otherwise 

Available 

A. APP/SMG Purchased Its Own Debt 

from the GOI 

B. Corroboration 

V. Analysis of Programs 

A. Programs Determined To Be 

Countervailable 

1. Provision of Standing Timber for 

Less Than Adequate Remuneration 

2. Government Prohibition of Log 

Exports 

3. Debt Forgiveness Through the 

Indonesian Government’s 

Acceptance of Financial 

Instruments with No Market Value 

4. Debt Forgiveness Through APP/ 

SMG’s Buyback of Its Own Debt 

from the Indonesian Government 

B. Programs Determined To Have 

Been Not Used During the Period of 

Investigation 

1. Government Provision of Interest 

Free Reforestation Loans 

2. Government Forgiveness of 

Stumpage Obligations 

3. Tax Incentives for Investment in 

Priority Business Lines and 

Designated Regions 

a. Corporate Income Tax Deduction 

b. Accelerated Depreciation and 

Amortization 

c. Extension of Loss Carryforward 

d. Reduced Withholding Tax on 

Dividends 

VI. Analysis of Comments 

PROVISION OF STANDING TIMBER/LOG

EXPORT BAN

Comment 1: Whether the Department 

Should Account for any Volumes of 

Timber Determined to have been 

Harvested Contrary to Indonesian Law 

in its Benefit Calculations 

Comment 2: Whether the Department 

Should Adjust APP/SMG’s Reported 

Harvest Based on its Verification 

Findings 

Comment 3: Whether the Department 

Should Use the GOI Conversion Factor 

Study for Conversion Ratios 

Comment 4: Whether the Department 

has Assumed the Existence of Distortive 

Effects Due to the Log Export Ban 

Log Benchmarks 

Comment 5: Whether Export Prices to 

Indonesia Should be Used as the Basis 

for Benchmark Calculations 

Comment 6: Whether Specific Export 

Transactions Provided by Respondents 

are an Appropriate Starting Point for 

Calculating a Benchmark 

Comment 7: Whether the Sabah Export 

Data Provides an Appropriate Starting 

Point for Calculating a Benchmark 

Comment 8: Whether Other Data on the 

Record Provides an Appropriate Starting 

Point for Calculating a Benchmark 

Comment 9: Whether the AUV from the 

WTA Should be Used Only as a 

Fallback when More Specific 

Information is not Available 

Comment 10: Whether the Department 

Should Make an Adjustment to 

Reported Export Quantities from 

Malaysia in the WTA Data 


srobinson on DSKHWCL6B1PROD with NOTICES
59212 Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 

Comment 11: Whether Certain HTS 

numbers Should Be Excluded from 

WTA Statistics 

Comment 12: The Department Should 

Ensure that its Benchmark for the Log 

Export Ban Program Captures the Full 

Price an Indonesian Firm Would Pay for 

Imported Pulp Logs 

Comment 13: Whether the Department 

Should Use Monthly Malaysian 

Exchange Rates to Convert the Monthly 

Malaysian Export Statistics used as 

Benchmarks 

Comment 14: Whether the Department 

Should Round the Malaysian Export 

Statistics 

Comment 15: Whether the Department 

Should Use the GOI Study of Operating 

Costs in Indonesia to Adjust the 

Benchmark for the Provision of 

Standing Timber 

Debt Forgiveness 

Comment 16: Whether the Department 

Should Apply AFA Regarding Debt 

Forgiveness through APP/SMG’s 

Buyback of its Own Debt 

Comment 17: Whether Commerce’s 

Decision to Cancel the Verification of 

the IBRA Debt Sale Was Improper 

Comment 18: Whether the Department 

Should Apply the Highest Rate 

Calculated for any Other Program as 

AFA Regarding the APP/SMG Debt 

Buyback Allegation 

Comment 19: Whether the Department 

Should Adjust the Benefit Calculation 

Regarding the APP/SMG Debt Buyback 

Program 

Comment 20: Whether the Department 

Should Revise the Interest Rate Used to 

Calculate the Discount Rate Used for 

Calculating APP/SMG’s Allocable 

Subsidies 

Other 

Comment 21: Whether the Department 

Should Countervail SPA’s Outstanding 

DR Fees as an Interest–Free Loan 

VII. Recommendation 

[FR Doc. 2010–24182 Filed 9–24–10; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–570–959] 

Certain Coated Paper Suitable for 

High-Quality Print Graphics Using 

Sheet-Fed Presses From the People’s 

Republic of China: Final Affirmative 

Countervailing Duty Determination 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

(the ‘‘Department’’) has determined that 

countervailable subsidies are being 

provided to producers and exporters of 

certain coated paper suitable for highquality print graphics using sheet-fed 

presses from the People’s Republic of 

China (‘‘PRC’’). For information on the 

estimated countervailing duty rates, 

please see the ‘‘Suspension of 

Liquidation’’ section, below. 

DATES: Effective Date: September 27, 

2010. 

FOR FURTHER INFORMATION CONTACT: 

David Neubacher, Jennifer Meek, and 

Mary Kolberg, AD/CVD Operations, 

Office 1, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230; telephone: (202) 

482–5823, (202) 482–2778, and (202) 

482–1785, respectively. 

SUPPLEMENTARY INFORMATION: 

Period of Investigation 

The period for which we are 

measuring subsidies, or the period of 

investigation (‘‘POI’’), is January 1, 2008, 

through December 31, 2008. 

Case History 

The following events have occurred 

since the publication of the preliminary 

determination in the Federal Register 

on March 9, 2010. See Certain Coated 

Paper Suitable for High-Quality Print 

Graphics Using Sheet-Fed Presses from 

the People’s Republic of China: 

Preliminary Affirmative Countervailing 

Duty Determination and Alignment of 

Final Countervailing Duty 

Determination with Final Antidumping 

Duty Determination, 75 FR 10774 

(March 9, 2010) (‘‘Preliminary 

Determination’’). 

On March 4, 2010, the Department 

initiated investigations into new 

subsidy allegations on several grant 

programs to Shandong Sun Paper 

Industry Co., Ltd. and Yanzhou 

Tianzhang Paper Industry Co., Ltd. 

(collectively, ‘‘Sun companies’’). See 

Memorandum from David Neubacher, 

International Trade Compliance 

Analyst, Office 1, to Susan Kuhbach, 

Director, Office 1, Import 

Administration, regarding ‘‘New 

Subsidy Allegations,’’ (March 4, 2010), 

available in the Department’s Central 

Records Unit in Room 7046 of the main 

Department building (‘‘CRU’’). 

On March 5, 2010, the Department 

issued a questionnaire regarding the 

new subsidy allegations to the 

Government of the People’s Republic of 

China (‘‘GOC’’), and received a response 

on April 2, 2010. 

On March 17, 2010, the Department 

received a submission from Appleton 

Coated LLC, NewPage Corporation, 

S.D.Warren Company d/b/a Sappi Fine 

Paper North America, and United Steel, 

Paper and Forestry, Rubber, 

Manufacturing, Energy, Allied 

Industrial and Service Workers 

International Union (collectively, 

‘‘Petitioners’’) regarding additional 

information to be collected from Gold 

East (Jiangsu) Co., Ltd., Gold Huasheng 

Paper Co., Ltd., and their reporting 

cross-owned companies (collectively, 

‘‘Gold companies’’) in connection with 

the entered value adjustment. 

The Department issued supplemental 

questionnaires to the GOC on April 14, 

May 12, and May 21, 2010, and received 

responses on April 29, May 19, and May 

26, 2010, respectively. The Department 

issued supplemental questionnaires to 

the Gold companies on April 22, May 

12, and May 21, 2010, and received 

responses on May 14, May 20 (a portion 

of the response was timely filed on May 

27), and May 26, 2010, respectively. 

Finally, the Department issued 

supplemental questionnaires to the Sun 

companies on April 1, and May 14, 

2010, and received responses on April 

27, and May 28, 2010, respectively. 

On March 31, 2010, the Department 

determined to investigate Petitioners’ 

uncreditworthiness allegation for the 

Gold companies for the years 2006– 

2008. See Memorandum from Nancy 

Decker, Program Manager, Office 1, to 

Susan Kuhbach, Director, Office 1, 

Import Administration, regarding 

‘‘Uncreditworthiness Allegation for Gold 

East (Jiangsu) Co., Ltd., (‘‘Gold East’’), 

Gold Huasheng Paper Co., Ltd. (‘‘GH’’), 

Ningbo Zhonghua Paper Co., Ltd. 

(‘‘NZ’’), Ningbo Asia Pulp & Paper Co. 

Ltd., and Hainan Jinhai Pulp and Paper 

Co., Ltd. (collectively, the ‘‘APP 

companies’’),’’ (March 31, 2010), 

available in the CRU. 

On June 1, 2010, the Department 

published an amended affirmative 

preliminary determination to correct a 

significant ministerial error in the 

Preliminary Determination. See Certain 

Coated Paper Suitable For High-Quality 

Print Graphics Using Sheet-Fed Presses 

from the People’s Republic of China: 

Amended Affirmative Preliminary 

Countervailing Duty Determination, 75 

FR 30370 (June 1, 2010) (‘‘Amended 

Preliminary Determination’’). 

From June 7, 2010, to June 18, 2010, 

the Department conducted verification 

of the questionnaire responses 

submitted by the GOC, Gold companies, 

and Sun companies. See Memorandum 

from David Neubacher and Jennifer 

Meek, International Trade Compliance 

Analysts, Office 1, to Susan H. Kuhbach,


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59212 Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 

Comment 11: Whether Certain HTS 

numbers Should Be Excluded from 

WTA Statistics 

Comment 12: The Department Should 

Ensure that its Benchmark for the Log 

Export Ban Program Captures the Full 

Price an Indonesian Firm Would Pay for 

Imported Pulp Logs 

Comment 13: Whether the Department 

Should Use Monthly Malaysian 

Exchange Rates to Convert the Monthly 

Malaysian Export Statistics used as 

Benchmarks 

Comment 14: Whether the Department 

Should Round the Malaysian Export 

Statistics 

Comment 15: Whether the Department 

Should Use the GOI Study of Operating 

Costs in Indonesia to Adjust the 

Benchmark for the Provision of 

Standing Timber 

Debt Forgiveness 

Comment 16: Whether the Department 

Should Apply AFA Regarding Debt 

Forgiveness through APP/SMG’s 

Buyback of its Own Debt 

Comment 17: Whether Commerce’s 

Decision to Cancel the Verification of 

the IBRA Debt Sale Was Improper 

Comment 18: Whether the Department 

Should Apply the Highest Rate 

Calculated for any Other Program as 

AFA Regarding the APP/SMG Debt 

Buyback Allegation 

Comment 19: Whether the Department 

Should Adjust the Benefit Calculation 

Regarding the APP/SMG Debt Buyback 

Program 

Comment 20: Whether the Department 

Should Revise the Interest Rate Used to 

Calculate the Discount Rate Used for 

Calculating APP/SMG’s Allocable 

Subsidies 

Other 

Comment 21: Whether the Department 

Should Countervail SPA’s Outstanding 

DR Fees as an Interest–Free Loan 

VII. Recommendation 

[FR Doc. 2010–24182 Filed 9–24–10; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–570–959] 

Certain Coated Paper Suitable for 

High-Quality Print Graphics Using 

Sheet-Fed Presses From the People’s 

Republic of China: Final Affirmative 

Countervailing Duty Determination 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

(the ‘‘Department’’) has determined that 

countervailable subsidies are being 

provided to producers and exporters of 

certain coated paper suitable for highquality print graphics using sheet-fed 

presses from the People’s Republic of 

China (‘‘PRC’’). For information on the 

estimated countervailing duty rates, 

please see the ‘‘Suspension of 

Liquidation’’ section, below. 

DATES: Effective Date: September 27, 

2010. 

FOR FURTHER INFORMATION CONTACT: 

David Neubacher, Jennifer Meek, and 

Mary Kolberg, AD/CVD Operations, 

Office 1, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230; telephone: (202) 

482–5823, (202) 482–2778, and (202) 

482–1785, respectively. 

SUPPLEMENTARY INFORMATION: 

Period of Investigation 

The period for which we are 

measuring subsidies, or the period of 

investigation (‘‘POI’’), is January 1, 2008, 

through December 31, 2008. 

Case History 

The following events have occurred 

since the publication of the preliminary 

determination in the Federal Register 

on March 9, 2010. See Certain Coated 

Paper Suitable for High-Quality Print 

Graphics Using Sheet-Fed Presses from 

the People’s Republic of China: 

Preliminary Affirmative Countervailing 

Duty Determination and Alignment of 

Final Countervailing Duty 

Determination with Final Antidumping 

Duty Determination, 75 FR 10774 

(March 9, 2010) (‘‘Preliminary 

Determination’’). 

On March 4, 2010, the Department 

initiated investigations into new 

subsidy allegations on several grant 

programs to Shandong Sun Paper 

Industry Co., Ltd. and Yanzhou 

Tianzhang Paper Industry Co., Ltd. 

(collectively, ‘‘Sun companies’’). See 

Memorandum from David Neubacher, 

International Trade Compliance 

Analyst, Office 1, to Susan Kuhbach, 

Director, Office 1, Import 

Administration, regarding ‘‘New 

Subsidy Allegations,’’ (March 4, 2010), 

available in the Department’s Central 

Records Unit in Room 7046 of the main 

Department building (‘‘CRU’’). 

On March 5, 2010, the Department 

issued a questionnaire regarding the 

new subsidy allegations to the 

Government of the People’s Republic of 

China (‘‘GOC’’), and received a response 

on April 2, 2010. 

On March 17, 2010, the Department 

received a submission from Appleton 

Coated LLC, NewPage Corporation, 

S.D.Warren Company d/b/a Sappi Fine 

Paper North America, and United Steel, 

Paper and Forestry, Rubber, 

Manufacturing, Energy, Allied 

Industrial and Service Workers 

International Union (collectively, 

‘‘Petitioners’’) regarding additional 

information to be collected from Gold 

East (Jiangsu) Co., Ltd., Gold Huasheng 

Paper Co., Ltd., and their reporting 

cross-owned companies (collectively, 

‘‘Gold companies’’) in connection with 

the entered value adjustment. 

The Department issued supplemental 

questionnaires to the GOC on April 14, 

May 12, and May 21, 2010, and received 

responses on April 29, May 19, and May 

26, 2010, respectively. The Department 

issued supplemental questionnaires to 

the Gold companies on April 22, May 

12, and May 21, 2010, and received 

responses on May 14, May 20 (a portion 

of the response was timely filed on May 

27), and May 26, 2010, respectively. 

Finally, the Department issued 

supplemental questionnaires to the Sun 

companies on April 1, and May 14, 

2010, and received responses on April 

27, and May 28, 2010, respectively. 

On March 31, 2010, the Department 

determined to investigate Petitioners’ 

uncreditworthiness allegation for the 

Gold companies for the years 2006– 

2008. See Memorandum from Nancy 

Decker, Program Manager, Office 1, to 

Susan Kuhbach, Director, Office 1, 

Import Administration, regarding 

‘‘Uncreditworthiness Allegation for Gold 

East (Jiangsu) Co., Ltd., (‘‘Gold East’’), 

Gold Huasheng Paper Co., Ltd. (‘‘GH’’), 

Ningbo Zhonghua Paper Co., Ltd. 

(‘‘NZ’’), Ningbo Asia Pulp & Paper Co. 

Ltd., and Hainan Jinhai Pulp and Paper 

Co., Ltd. (collectively, the ‘‘APP 

companies’’),’’ (March 31, 2010), 

available in the CRU. 

On June 1, 2010, the Department 

published an amended affirmative 

preliminary determination to correct a 

significant ministerial error in the 

Preliminary Determination. See Certain 

Coated Paper Suitable For High-Quality 

Print Graphics Using Sheet-Fed Presses 

from the People’s Republic of China: 

Amended Affirmative Preliminary 

Countervailing Duty Determination, 75 

FR 30370 (June 1, 2010) (‘‘Amended 

Preliminary Determination’’). 

From June 7, 2010, to June 18, 2010, 

the Department conducted verification 

of the questionnaire responses 

submitted by the GOC, Gold companies, 

and Sun companies. See Memorandum 

from David Neubacher and Jennifer 

Meek, International Trade Compliance 

Analysts, Office 1, to Susan H. Kuhbach, 


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1 ‘Paperboard’ refers to Certain Coated Paper that 

is heavier, thicker and more rigid than coated paper 

which otherwise meets the product description. In 

the context of Certain Coated Paper, paperboard 

typically is referred to as ‘cover,’ to distinguish it 

from ‘text.’ 

2One of the key measurements of any grade of 

paper is brightness. Generally speaking, the brighter 

the paper the better the contrast between the paper 

and the ink. Brightness is measured using a GE 

Reflectance Scale, which measures the reflection of 

light off of a grade of paper. One is the lowest 

reflection, or what would be given to a totally black 

grade, and 100 is the brightest measured grade. 

Director, AD/CVD Operations, Office 1, 

regarding ‘‘Verification Report of the 

Government of the People’s Republic of 

China’’ (July 28, 2010); Memorandum 

from David Neubacher, David Layton, 

and Jennifer Meek, International Trade 

Compliance Analysts, Office 1, to Susan 

H. Kuhbach, Director, AD/CVD 

Operations, Office 1, regarding 

‘‘Verification Report of Shandong Sun 

Paper Industry Joint Stock Co., Ltd., and 

Yanzhou Tianzhang Paper Industry Co., 

Ltd.’’ (August 4, 2010); and 

Memorandum from David Neubacher, 

Scott Holland, David Layton, and 

Jennifer Meek, International Trade 

Compliance Analysts, Office 1, to Susan 

H. Kuhbach, Director, AD/CVD 

Operations, Office 1, regarding 

‘‘Verification Report of Gold East Paper 

(Jiangsu) Co., Ltd. and its reported crossowned affiliates’’ (August 24, 2010). 

On August 26, 2010, we issued a 

preliminary determination regarding the 

creditworthiness of the Gold companies 

for the years 2006–2008. See 

Memorandum from Mary Kolberg, 

International Trade Compliance 

Analyst, Office 1, to Susan H. Kuhbach, 

Director, AD/CVD Operations, Office 1, 

regarding ‘‘Preliminary Creditworthiness 

Determination for Gold East Paper 

(Jiangsu) Co., Ltd. and its Cross-Owned 

Affiliates,’’ (August 26, 2010). 

On August 27, 2010, the Department 

issued its Post-Preliminary Analysis for 

the Gold and Sun companies. See 

Memorandum from The Team, Office 1, 

to Ronald K. Lorentzen, Deputy 

Assistant Secretary for Import 

Administration, regarding 

‘‘Countervailing Duty Investigation of 

Certain Coated Paper Suitable for HighQuality Print Graphics Using Sheet-Fed 

Presses from the People’s Republic of 

China: Post-Preliminary Analysis 

Memorandum for Gold East Paper 

(Jiangsu) Co., Ltd. (‘‘GE’’), Gold 

Huasheng Paper Co., Ltd. (‘‘GHS’’), and 

their reported cross-owned affiliates 

(collectively, ‘‘APP companies’’),’’ 

(August 27, 2010) and Memorandum 

from The Team, Office 1, to Ronald K. 

Lorentzen, Deputy Assistant Secretary 

for Import Administration, regarding 

‘‘Countervailing Duty Investigation of 

Certain Coated Paper Suitable for HighQuality Print Graphics Using Sheet-Fed 

Presses from the People’s Republic of 

China: Post-Preliminary Analysis 

Memorandum for Shandong Sun Paper 

Industry Joint Stock Co., Ltd. (‘‘Sun 

Paper’’) and Yanzhou Tianzhang Paper 

Industry Co. Ltd. (‘‘Yanzhou 

Tianzhang’’) (collectively, ‘‘Sun 

companies’’),’’ (August 27, 2010), 

available in the CRU. (These analyses 

are referred to herein as ‘‘PostPreliminary Analyses’’.) 

On August 30, 2010, the Department 

determined not to investigate a new 

subsidy allegation regarding currency 

undervaluation. See Memorandum form 

The Team to Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration, regarding ‘‘New 

Subsidy Allegation—Currency,’’ (August 

30, 2010), available in the CRU. 

We received case briefs from the GOC, 

the Gold companies, the Sun 

companies, and Petitioners on 

September 7, 2010. The same parties 

submitted rebuttal briefs on September 

10, 2010. 

The GOC, Gold companies, and 

Petitioners requested a hearing. The 

same parties later withdrew their 

requests. Therefore, no hearing was 

held. 

Scope of the Investigation 

The merchandise covered by this 

investigation includes certain coated 

paper and paperboard 1 in sheets 

suitable for high quality print graphics 

using sheet-fed presses; coated on one 

or both sides with kaolin (China or other 

clay), calcium carbonate, titanium 

dioxide, and/or other inorganic 

substances; with or without a binder; 

having a GE brightness level of 80 or 

higher; 2 weighing not more than 340 

grams per square meter; whether gloss 

grade, satin grade, matte grade, dull 

grade, or any other grade of finish; 

whether or not surface-colored, surfacedecorated, printed (except as described 

below), embossed, or perforated; and 

irrespective of dimensions (‘‘Certain 

Coated Paper’’). 

Certain Coated Paper includes: (a) 

Coated free sheet paper and paperboard 

that meets this scope definition; (b) 

coated groundwood paper and 

paperboard produced from bleached 

chemi-thermo-mechanical pulp 

(‘‘BCTMP’’) that meets this scope 

definition; and (c) any other coated 

paper and paperboard that meets this 

scope definition. 

Certain Coated Paper is typically (but 

not exclusively) used for printing multicolored graphics for catalogues, books, 

magazines, envelopes, labels and wraps, 

greeting cards, and other commercial 

printing applications requiring high 

quality print graphics. 

Specifically excluded from the scope 

are imports of paper and paperboard 

printed with final content printed text 

or graphics. 

As of 2009, imports of the subject 

merchandise are provided for under the 

following categories of the Harmonized 

Tariff Schedule of the United States 

(‘‘HTSUS’’): 4810.14.11, 4810.14.1900, 

4810.14.2010, 4810.14.2090, 

4810.14.5000, 4810.14.6000, 4810.14.70, 

4810.19.1100, 4810.19.1900, 

4810.19.2010, 4810.19.2090, 

4810.22.1000, 4810.22.50, 4810.22.6000, 

4810.22.70, 4810.29.1000, 4810.29.5000, 

4810.29.6000, 4810.29.70, 4810.32, 

4810.39 and 4810.92. While HTSUS 

subheadings are provided for 

convenience and customs purposes, the 

written description of the scope of this 

investigation is dispositive. 

Scope Comments 

Following the Preliminary 

Determination, on August 3, 2010, the 

Department issued a decision 

memorandum addressing three scope 

issues in this and the concurrent 

antidumping and countervailing duty 

investigations on certain coated paper 

from Indonesia and the People’s 

Republic of China: (1) Whether to clarify 

the scope of these investigations to 

exclude multi-ply coated paper and 

paperboard; (2) whether to modify the 

scope language by striking the phrase 

‘‘suitable for high-quality print 

graphics;’’ and (3) whether to add three 

HTSUS numbers which may include inscope merchandise (i.e., HTSUS 

4810.32, 4810.39 and 4810.92). See 

August 3, 2010, Memorandum to Ronald 

K. Lorentzen, Deputy Assistant 

Secretary for Import Administration, 

from Susan Kuhbach, Director, Office 1, 

entitled ‘‘Scope’’ (August 3, 2010 Scope 

Memorandum). For the reasons 

explained in the August 3, 2010, Scope 

Memorandum, the Department 

determined that: (1) Multi-ply products 

that otherwise meet the description of 

the scope of the investigations are not 

excluded from the scope; (2) the 

‘‘suitable for high-quality print graphics’’ 

language should not be deleted from the 

scope; and (3) the three HTSUS 

numbers at issue should be added to the 

scope. 

The Department subsequently 

provided the interested parties an 

opportunity to comment on its postpreliminary scope determination. In 

response, the respondents in these 

investigations filed a case brief on 

August 20, 2010, and Petitioners filed a 

rebuttal brief on August 24, 2010. Based 

on the Department’s analysis of these 


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comments and the factual records of 

these investigations, the Department 

continues to find that multi-ply coated 

paper and paperboard are not excluded 

from the scope of the investigations, that 

the ‘‘suitable for high-quality print 

graphics’’ language should be 

maintained, and that the three HTSUS 

numbers listed above should be added 

to the scope. For a complete discussion 

of the parties’ comments and the 

Department’s position, see 

Memorandum from Susan Kuhbach, 

Acting Deputy Assistant Secretary for 

Antidumping and Countervailing Duty 

Operations, to Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration, entitled ‘‘Issues and 

Decision Memorandum for the Final 

Determination in the Countervailing 

Duty Investigation of Certain Coated 

Paper Suitable For High-Quality Print 

Graphics Using Sheet-Fed Presses from 

the People’s Republic of China’’ 

(September 20, 2010) (hereafter 

‘‘Decision Memorandum’’), which is 

hereby adopted by this notice. 

Injury Test 

Because the PRC is a ‘‘Subsidies 

Agreement Country’’ within the meaning 

of section 701(b) of the Tariff Act of 

1930, as amended (‘‘the Act’’), the 

International Trade Commission (the 

‘‘ITC’’) is required to determine whether 

imports of the subject merchandise from 

the PRC materially injure, or threaten 

material injury to, a U.S. industry. On 

November 9, 2009, the U.S. 

International Trade Commission (‘‘ITC’’) 

issued its affirmative preliminary 

determination that there is a reasonable 

indication that an industry in the 

United States is materially injured by 

reason of allegedly subsidized imports 

of coated paper from the PRC. See 

Certain Coated Paper Suitable for HighQuality Print Graphics Using Sheet-Fed 

Presses From China and Indonesia; 

Determinations, Investigation Nos. 701– 

TA–470–471 and 731–TA–1169–1170, 

74 FR 61174 (November 23, 2009). 

Analysis of Comments Received 

All issues raised in the case and 

rebuttal briefs by parties to this 

investigation are addressed in the 

above-referenced Decision 

Memorandum. Attached to this notice 

as an Appendix is a list of the issues 

that parties have raised and to which we 

have responded in the Decision 

Memorandum. Parties can find a 

complete discussion of all issues raised 

in this investigation and the 

corresponding recommendations in this 

public memorandum, which is on file in 

the CRU. In addition, a complete 

version of the Decision Memorandum 

can be accessed directly on the Internet 

at http://ia.ita.doc.gov/frn/. The paper 

copy and electronic version of the 

Decision Memorandum are identical in 

content. 

Use of Adverse Facts Available 

Consistent with the Preliminary 

Determination, we have continued to 

rely on facts available and to draw an 

adverse inference, in accordance with 

sections 776(a) and (b) of the Act, for 

certain of our findings. With respect to 

the GOC’s provision of papermaking 

chemicals, we determine that kaolin 

clay, caustic soda and titanium dioxide 

are being provided by governmental 

authorities for the reasons explained in 

the Preliminary Determination and we 

determine that the subsidy conferred 

through the GOC’s provision of caustic 

soda is specific for the reasons 

explained in the Post-Preliminary 

Analysis. With respect to the GOC’s 

provision of land use rights in the 

Yangpu Economic Development Zone, 

we determine that the subsidy is 

specific for the reason explained in 

Post-Preliminary Analyses. Finally, with 

respect to the GOC’s provision of 

electricity, we determine that the GOC 

has made a financial contribution that is 

specific, and we have applied an 

adverse inference is determining the 

benefit for the reasons explained in the 

Preliminary Determination. 

Sun Companies 

In a departure from the Preliminary 

Determination, the Department now 

finds that the use of ‘‘facts otherwise 

available’’ pursuant to section 776(a) of 

the Act is warranted with regard to the 

Sun companies. At verification, we 

learned that numerous companies that 

meet the Department’s criteria for being 

‘‘cross-owned,’’ as that term is defined in 

19 CFR 351.525(b)(6)(vi), and that 

produced certain coated paper or inputs 

for paper products were not included in 

the Sun companies’ responses. 

Therefore, information that the 

Department needs to calculate the Sun 

companies’ subsidy rate has not been 

provided and the Department is unable 

to accurately determine the appropriate 

level of subsidization provided to the 

Sun companies. By not providing this 

information despite being in a position 

to do so, the Sun companies failed to act 

to the best of their ability. Accordingly, 

we find that an adverse inference is 

warranted, pursuant to section 776(b) of 

the Act. 

For the final determination and 

consistent with the Department’s recent 

practice, we are computing a total AFA 

rate for the Sun companies, generally 

using program-specific rates determined 

for the cooperating respondent or in 

past cases. Specifically, for programs 

other than those involving income tax 

exemptions and rate reductions, we will 

apply the highest calculated rate for the 

identical program in this investigation if 

a responding company used the 

identical program. If there is no 

identical program match within the 

investigation, we will use the highest 

non-de minimis rate calculated for the 

same or similar program in another PRC 

CVD investigation. Absent an above-de 

minimis subsidy rate calculated for the 

same or similar program, we will apply 

the highest calculated subsidy rate for 

any program otherwise listed that could 

conceivably be used by the Sun 

companies. See, e.g., Certain Kitchen 

Shelving and Racks from the People’s 

Republic of China: Final Affirmative 

Countervailing Duty Determination, 74 

FR 37012 (July 27, 2009) and the 

accompanying Issues and Decision 

Memorandum at ‘‘Use of Facts 

Otherwise Available and Adverse Facts 

Available’’ at 4–5. The Department has 

further amended its methodology to 

exclude any calculated rate for a 

program by a voluntary respondent. See 

Aluminum Extrusions From the People’s 

Republic of China: Preliminary 

Affirmative Countervailing Duty 

Determination, 75 FR 54302, 54305 

(September 7, 2010). 

Also, as explained in Certain TowBehind Lawn Groomers and Certain 

Parts Thereof from the People’s 

Republic of China: Initiation of 

Countervailing Duty Investigation, 73 FR 

42324 (July 21, 2008) and accompanying 

Initiation Checklist, where the GOC can 

demonstrate through complete, 

verifiable, positive evidence that noncooperative companies (including all 

their facilities and cross-owned 

affiliates) are not located in particular 

provinces whose subsidies are being 

investigated, the Department does not 

intend to include those provincial 

programs in determining the 

countervailable subsidy rate for the noncooperative companies. 

The GOC failed to provide verifiable 

information demonstrating that the Sun 

companies are located in particular 

provinces or that they have no facilities 

or cross-owned affiliates in any other 

province in the PRC, as requested. 

Therefore, the Department makes the 

adverse inference that the Sun 

companies have facilities and/or crossowned affiliates that received subsidies 

under all of the sub-national programs 

alleged prior to the selection of 

mandatory respondents. 

In deciding which facts to use as 

AFA, section 776(b) of the Act and 19 

CFR 351.308(c)(1) authorize the 


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Department to rely on information 

derived from: (1) The petition; (2) a final 

determination in the investigation; (3) 

any previous review or determination; 

or (4) any other information placed on 

the record. The Department’s practice 

when selecting an adverse rate from 

among the possible sources of 

information is to ensure that the rate is 

sufficiently adverse ‘‘as to effectuate the 

statutory purposes of the adverse facts 

available rule to induce respondents to 

provide the Department with complete 

and accurate information in a timely 

manner.’’ See, e.g., Notice of Final 

Determination of Sales at Less Than 

Fair Value: Static Random Access 

Memory Semiconductors From Taiwan, 

63 FR 8909, 8932 (February 23, 1998). 

The Department’s practice also ensures 

‘‘that the party does not obtain a more 

favorable result by failing to cooperate 

than if it had cooperated fully.’’ See 

Uruguay Round Agreements Act 

Statement of Administrative Action 

(‘‘SAA’’), attached to H.R. Rep. No. 103– 

316, Vol. I, at 870 (1994), reprinted in 

1994 U.S.C.C.A.N 3773, 4163. 

Consistent with this, we have 

calculated the Sun companies’ 

countervailable subsidy rate as follows: 

Loans 

For the ‘‘Preferential Lending to the 

Coated Paper Industry’’ and ‘‘Fast 

Growth High-Yield Forestry Program 

Loans’’ programs, we have applied the 

loan rate calculated for the Gold 

companies in this investigation, 8.89 

percent, to each program. 

Grants 

The Department included in its 

investigation numerous grant programs: 

‘‘Funds for Forestry Plantation 

Construction and Management,’’ ‘‘State 

Key Technologies Renovation Project 

Fund,’’ ‘‘Loan Interest Subsidies for 

Major Industrial Technology Reform 

Projects in Wuhan,’’ ‘‘Funds for Water 

Treatment Improvement Projects in the 

Songhuajiang Basin,’’ ‘‘Special Fund for 

Energy Saving Technology Reform in 

Wuhan and Shougang Municipality,’’ 

‘‘Clean Production Technology Fund,’’ 

‘‘Famous Brands Awards,’’ ‘‘Grants to 

Enterprises Achieving RMB 10 Million 

in Sales Revenue and Implementing 

‘Three Significant Projects,’ ’’ ‘‘Grants to 

Large Enterprises in Jining City,’’ ‘‘Funds 

for Water Treatment and Pollution 

Control Projects for Three Rivers and 

Three Lakes,’’ ‘‘Grants for Programs 

Under the 2007 Science and Technology 

Development Plan in Shandong 

Province,’’ ‘‘Special Funds for Economic 

and Trade Development,’’ and ‘‘Interest 

Subsidies for Forestry Loans.’’ The Gold 

companies did not use any of these 

programs and the Department has not 

calculated above de minimis rates for 

any of these programs in prior 

investigations. Moreover, all previously 

calculated rates for grant programs from 

prior PRC CVD investigations have been 

de minimis. Therefore, for each of these 

programs, we have determined to use 

the highest calculated subsidy rate by a 

non-voluntary respondent for any 

program otherwise listed, which could 

conceivably have been used by the Sun 

companies. This rate was 8.89 percent 

for the ‘‘Government Policy Lending 

Program’’ calculated for the Gold 

companies in this investigation. 

Income Tax Rate Reduction and 

Exemption Programs 

For ‘‘The ‘Two Free, Three Half’ 

Program,’’ ‘‘Income Tax Subsidies for 

Foreign Invested Enterprises (‘FIEs’) 

Based on Geographic Location,’’ 

‘‘Income Tax Reduction for FIEs 

Purchasing Domestically Produced 

Equipment,’’ ‘‘Local Income Tax 

Exemption and Reduction Program for 

‘Productive FIEs,’ ’’ ‘‘Preferential Tax 

Policies for Technology or KnowledgeIntensive FIEs,’’ ‘‘Preferential Tax 

Programs for FIEs that are New or High 

Technology Enterprises,’’ ‘‘Income Tax 

Reductions for High-Technology 

Industries in Guandong Province,’’ 

‘‘Income Tax Exemption Program for 

Export-Oriented FIEs,’’ we have applied 

an adverse inference that the Sun 

companies paid no income tax during 

the POI (i.e., calendar year 2008). The 

standard income tax rate for 

corporations in the PRC was 30 percent, 

plus a three percent provincial income 

tax rate. See GOC’s Response to the 

Department’s Initial Questionnaire, 

dated January 8, 2010. Therefore, the 

highest possible benefit for these 

income tax programs is 33 percent. We 

are applying the 33 percent AFA rate on 

a combined basis (i.e., the eight 

programs combined provided a 33 

percent benefit). This 33 percent AFA 

rate does not apply to tax credit and 

refund programs. 

Other Tax Benefits and VAT/Tariff 

Reductions and Exemptions 

We are using the rates calculated for 

the Gold companies in this investigation 

for the following programs: ‘‘Preferential 

Tax Policies for Research and 

Development at FIEs’’ (0.01 percent); 

‘‘Exemption from Maintenance and 

Construction Taxes and Education 

Surcharges for FIEs’’ (0.34 percent); 

‘‘Value Added-Tax and Tariff 

Exemptions on Imported Equipment’’ 

(3.46 percent); ‘‘Domestic VAT Refunds 

for Companies Located in the Hainan 

Economic Development Zone’’ (0.37 

percent); and ‘‘VAT Rebates on 

Domestically Produced Equipment’’ 

(0.20 percent). For the programs the 

Gold companies did not use, ‘‘Corporate 

Income Tax Refund Program for 

Reinvestment of FIE Profits in Export 

Orientated Enterprises,’’ and ‘‘Income 

Tax Credits for Domestically Owned 

Companies Purchasing Domestically 

Produced Equipment,’’ we have used the 

highest non-de minimis rate for any 

indirect tax program from a PRC CVD 

investigation. The rate we selected is 

1.51 percent, which was the rate 

calculated for respondent Gold East 

Paper (Jiangsu) Co., Ltd. (‘‘GE’’) for the 

‘‘Value-added Tax and Tariff 

Exemptions on Imported Equipment,’’ 

program. See Coated Free Sheet Paper 

from the People’s Republic of China: 

Final Affirmative Countervailing Duty 

Determination, 72 FR 60645 (October 

25, 2007) and accompanying Issues and 

Decision Memorandum at 14. 

Provision of Goods and Services for Less 

Than Adequate Remuneration (‘‘LTAR’’) 

For ‘‘Provision of Electricity for 

LTAR,’’ ‘‘Provision of Papermaking 

Chemicals for LTAR,’’ and ‘‘Land in the 

Yangpu Economic Development Zone,’’ 

we have used the rates calculated for the 

Gold companies in this investigation, 

0.08 percent, 0.80 percent and 0.85 

percent, respectively. 

Economic Development Zones (‘‘EDZs’’) 

For the ‘‘Subsidies in the Nanchang 

Economic Development Zone,’’ 

Petitioners alleged that land, water and 

electricity were provided to producers 

of coated paper for LTAR in the 

Nanchang EDZ. For land, we have 

applied the rate calculated for the Gold 

companies in this investigation, 0.85 

percent. For water, the Department has 

not calculated an above de minimis rate 

for this program in prior investigations. 

Therefore, we have applied the land for 

LTAR rate calculated for the Gold 

companies in this investigation, 0.85 

percent because this program is similar 

to other EDZ LTAR programs in this 

investigation. We are not applying a 

sub-national rate for electricity, as we 

are already applying a national-level 

rate to the Sun companies as AFA. 

For ‘‘Subsidies in the Wuhan 

Economic Development Zone,’’ 

Petitioners alleged that land was 

provided to producers of coated paper at 

LTAR in the Wuhan EDZ. Therefore, we 

have applied the rate calculated for the 

Gold companies in this investigation, 

0.85 percent. For ‘‘Subsidies in the 

Yangpu Economic Development Zone,’’ 

Petitioners alleged that land and 

electricity were provided to producers 

of coated paper at LTAR in the Yangpu 


srobinson on DSKHWCL6B1PROD with NOTICES
59216 Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 

EDZ. For land, we are applying the rate 

calculated for the Gold companies in 

this investigation, 0.85 percent. For 

electricity, as previously discussed we 

are not applying a sub-national rate. 

Finally, for ‘‘Subsidies in the Zhenjiang 

Economic Development Zone,’’ 

Petitioners alleged that electricity was 

provided to producers of coated paper at 

LTAR in the Zhenjiang EDZ. As 

discussed above, we are not applying a 

sub-national rate for electricity. 

Section 776(c) of the Act provides 

that, when the Department relies on 

secondary information rather than on 

information obtained in the course of an 

investigation or review, it shall, to the 

extent practicable, corroborate that 

information from independent sources 

that are reasonably at its disposal. 

Secondary information is ‘‘information 

derived from the petition that gave rise 

to the investigation or review, the final 

determination concerning the subject 

merchandise, or any previous review 

under section 751 concerning the 

subject merchandise.’’ See e.g., SAA, at 

870. The Department considers 

information to be corroborated if it has 

probative value. See id. To corroborate 

secondary information, the Department 

will, to the extent practicable, examine 

the reliability and relevance of the 

information to be used. The SAA 

emphasizes, however, that the 

Department need not prove that the 

selected facts available are the best 

alternative information. See SAA at 869. 

With regard to the reliability aspect of 

corroboration, we note that these rates 

were calculated in recent final CVD 

determinations. Further, the calculated 

rates were based upon verified 

information about the same or similar 

programs. Moreover, no information has 

been presented in this investigation that 

calls into question the reliability of 

these calculated rates that we are 

applying as AFA. Finally, unlike other 

types of information, such as publicly 

available data on the national inflation 

rate of a given country or national 

average interest rates, there typically are 

no independent sources for data on 

company-specific benefits resulting 

from countervailable subsidy programs. 

With respect to the relevance aspect 

of corroborating the rates selected, the 

Department will consider information 

reasonably at its disposal in considering 

the relevance of information used to 

calculate a countervailable subsidy 

benefit. Where circumstances indicate 

that the information is not appropriate 

as AFA, the Department will not use it. 

See Fresh Cut Flowers From Mexico; 

Final Results of Antidumping Duty 

Administrative Review, 61 FR 6812 

(February 22, 1996). 

In the absence of record evidence 

concerning these programs due to Sun 

companies’ decision to impede the 

investigation, the Department has 

reviewed the information concerning 

PRC subsidy programs in this and other 

cases. For those programs for which the 

Department has found a program-type 

match, we find that, because these are 

the same or similar programs, they are 

relevant to the programs of this case. For 

the programs for which there is no 

program-type match, the Department 

has selected the highest calculated 

subsidy rate for any PRC program from 

a non-voluntary respondent from which 

the Sun companies could receive a 

benefit to use as AFA. The relevance of 

this rate is that it is an actual calculated 

CVD rate for a PRC program from which 

the Sun companies could conceivably 

receive a benefit. Further, this rate was 

calculated for a period close to the POI 

in the instant case. Moreover, the Sun 

companies’ failure to respond to 

requests for information has ‘‘resulted in 

an egregious lack of evidence on the 

record to suggest an alternative rate.’’ 

See Shanghai Taoen Int’l Trading Co., 

Ltd. v. United States, 360 F. Supp. 2d 

1339, 1348 (Ct. Int’l Trade 2005). Due to 

the lack of participation by the Sun 

companies and the resulting lack of 

record information concerning these 

programs, the Department has 

corroborated the rates it selected to the 

extent practicable. 

On this basis, we determine that the 

AFA countervailable subsidy rate for the 

Sun companies is 178.03 percent ad 

valorem. 

Suspension of Liquidation 

In accordance with section 

705(c)(1)(B)(i)(I) of the Act, we have 

calculated individual rates for each 

producer/exporter of the subject 

merchandise individually investigated. 

Section 705(c)(5)(A)(i) of the Act states 

that for companies not investigated, we 

will determine an ‘‘all others’’ rate equal 

to the weighted-average countervailable 

subsidy rates established for exporters 

and producers individually 

investigated, excluding any zero and de 

minimis countervailable subsidy rates, 

and any rates determined entirely under 

section 776 of the Act. As the Sun 

companies’ subsidy rate was determined 

entirely under section 776 of the Act, 

the Gold companies’ calculated rate was 

used as the All Others rate. 

Exporter/manufacturer Net subsidy 

rate 

Gold East Paper (Jiangsu) Co., Ltd, Gold Huasheng Paper Co., Ltd., Gold East Trading (Hong Kong) Company Ltd., Ningbo 

Zhonghua Paper Co., Ltd., and Ningbo Asia Pulp & Paper Co., Ltd .................................................................................................. 17.64 

Shandong Sun Paper Industry Joint Stock Co., Ltd. and Yanzhou Tianzhang Paper Industry Co., Ltd ............................................... 178.03 

All Others ................................................................................................................................................................................................. 17.64 

Also, in accordance with section 

703(d) of the Act, we instructed U.S. 

Customs and Border Protection to 

discontinue the suspension of 

liquidation for countervailing duty 

purposes for subject merchandise 

entered on or after July 7, 2010, but to 

continue the suspension of liquidation 

of entries made from March 9, 2010, 

through July 6, 2010. 

We will issue a countervailing duty 

order if the ITC issues a final affirmative 

injury determination, and we will 

require a cash deposit of estimated 

countervailing duties for such entries of 

merchandise in the amounts indicated 

above. If the ITC determines that 

material injury, or threat of material 

injury, does not exist, this proceeding 

will be terminated and all estimated 

deposits or securities posted as a result 

of the suspension of liquidation will be 

refunded or canceled. 

ITC Notification 

In accordance with section 705(d) of 

the Act, we will notify the ITC of our 

determination. In addition, we are 

making available to the ITC all nonprivileged and non-proprietary 

information related to this investigation. 

We will allow the ITC access to all 

privileged and business proprietary 

information in our files, provided the 

ITC confirms that it will not disclose 

such information, either publicly or 

under an APO, without the written 

consent of the Assistant Secretary for 

Import Administration. 

Return or Destruction of Proprietary 

Information 

In the event that the ITC issues a final 

negative injury determination, this 

notice will serve as the only reminder 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 59217 

to parties subject to an administrative 

protective order (‘‘APO’’) of their 

responsibility concerning the 

destruction of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305(a)(3). Timely 

written notification of the return/ 

destruction of APO materials or 

conversion to judicial protective order is 

hereby requested. Failure to comply 

with the regulations and terms of an 

APO is a violation which is subject to 

sanction. 

This determination is published 

pursuant to sections 705(d) and 777(i) of 

the Act. 

Dated: September 20, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

Appendix 

List of Comments and Issues in the Decision 

Memorandum 

General Issues 

Comment 1 Application of CVD Law to the 

PRC 

Comment 2 Application of the CVD Law to 

NMEs and the Administrative Protection 

Act 

Comment 3 Double Counting/Overlapping 

Remedies 

Comment 4 Cutoff Date for Identifying 

Subsidies 

Currency 

Comment 5 Opportunity to Comment and 

the Initiation Standard 

Comment 6 The Determination Not To 

Investigate the Alleged Currency Subsidy 

Comment 7 The Department’s Analysis of a 

Unified Rate of Exchange 

Scope 

Comment 8 Burden Imposed on 

Respondents 

Comment 9 Whether Multi-ply Paperboard 

Was Intended To Be in the Scope 

Comment 10 Physical Characteristics and 

End-use Applications Distinguish Multiply Paper From the Covered Merchandise 

Comment 11 Whether the Department 

Should Retain the ‘‘Suitability’’ Language 

in the Scope Description 

Comment 12 Whether Inclusion of Multiply Paper in the Scope Affects Respondent 

Selection 

Comment 13 Scope Expansion Violates 

Standing and Injury Requirements 

Chemicals for LTAR 

Comment 14 Benchmarks—Papermaking 

Chemicals 

Comment 15 Provision of Papermaking 

Chemicals for LTAR—Specificity 

Comment 16 Government Ownership and 

Determining Whether a Financial 

Contribution Has Occurred 

Preferential Lending to the Coated Paper 

Industry 

Comment 17 Whether Chinese Banks Are 

Authorities 

Comment 18 Whether the Policy Loan 

Program Is Specific 

Lending Benchmarks 

Comment 19 Whether Negative Real 

Interest Rates Should Be Excluded From 

the Regression 

Comment 20 Whether the Regression Is 

Statistically Valid 

Comment 21 Should the Department Use an 

In-Country Benchmark 

Comment 22 Terms of Loan Rates in the 

IMF Data 

Comment 23 Whether the Long-Term and 

Discount Rates Are Flawed 

Provision of Land for LTAR 

Comment 24 Whether HYDC Is an 

Authority 

Comment 25 Financial Contribution 

Comment 26 Whether To Use an In-country 

Benchmark 

Comment 27 Whether There Are Flaws in 

the Thai Benchmark 

Comment 28 Specificity of Land for LTAR 

Based on AFA 

Issues Related to Sun Companies 

Comment 29 Whether To Use Revised Sales 

Values for the Sun Companies 

Comment 30 Whether To Apply Adverse 

Facts Available to Sun Companies’ 

Unreported Loans 

Comment 31 Whether To Apply Facts 

Available to Sun Companies’ Unreported 

Cross-Owned Companies 

Issues Related to Gold Companies 

Comment 32 Whether To Grant the Gold 

Companies an EV Adjustment 

Comment 33 Creditworthiness 

Comment 34 Whether To Adjust the 

Uncreditworthiness Benchmark 

Comment 35 GE Sales Denominator 

Comment 36 Whether To Attribute 

Subsidies Received by Input Suppliers 

Whose Inputs Are Not Used for 

Merchandise Exported to the United States 

Comment 37 Whether the Department 

Should Attribute Subsidies From Pulp 

Producers Based on the Percentage of Total 

Pulp Sales to the Paper Producers Covered 

Comment 38 Whether To Countervail 

Additional Financing Reported by the Gold 

Companies 

Comment 39 Whether To Adjust the Gold 

Companies’ Interest Calculation 

Comment 40 Whether To Adjust JHP’s 

Reported VAT and Duty Exemptions on 

Imported Equipment 

Comment 41 Whether To Use an 

Alternative Electricity Benchmark 

Comment 42 Whether To Apply AFA to 

JAP and JHP Caustic Soda Purchases 

[FR Doc. 2010–24184 Filed 9–24–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–958] 

Certain Coated Paper Suitable for 

High-Quality Print Graphics Using 

Sheet-Fed Presses From the People’s 

Republic of China: Final Determination 

of Sales at Less Than Fair Value 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: September 27, 

2010. 

SUMMARY: On May 6, 2010, the 

Department of Commerce 

(‘‘Department’’) published its 

preliminary determination of sales at 

less than fair value (‘‘LTFV’’) in the 

antidumping investigation of certain 

coated paper suitable for high-quality 

print graphics using sheet-fed presses 

(‘‘coated paper’’) from the People’s 

Republic of China (‘‘PRC’’). We invited 

interested parties to comment on our 

preliminary determination of sales at 

LTFV. Based on our analysis of the 

comments we received, we have made 

changes to our margin calculations for 

the mandatory respondents. The final 

dumping margins for this investigation 

are listed in the ‘‘Final Determination 

Margins’’ section below. 

FOR FURTHER INFORMATION CONTACT: 

Lindsey Novom and Demitri 

Kalogeropoulos, AD/CVD Operations, 

Office 8, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230; telephone: (202) 

482–5256 or (202) 482–2623, 

respectively. 

SUPPLEMENTARY INFORMATION: 

Case History 

The Department published its 

preliminary determination of sales at 

LTFV on May 6, 2010. See Certain 

Coated Paper Suitable for High-Quality 

Print Graphics Using Sheet-Fed Presses 

from the People’s Republic of China: 

Notice of Preliminary Determination of 

Sales at Less Than Fair Value and 

Postponement of Final Determination, 

75 FR 24892, (May 6, 2010) 

(‘‘Preliminary Determination’’). 

On May 19, 2010, Shandong Sun 

Paper Industry Joint Stock Co., Ltd., 

Yanzhou Tianzhang Paper Industry Co., 

Ltd., Shandong International Paper and 

Sun Coated Paperboard Co., Ltd., 

International Paper and Sun 

Cartonboard Co., Ltd. (collectively ‘‘Sun 

Paper Companies’’) ceased participating 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 59217 

to parties subject to an administrative 

protective order (‘‘APO’’) of their 

responsibility concerning the 

destruction of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305(a)(3). Timely 

written notification of the return/ 

destruction of APO materials or 

conversion to judicial protective order is 

hereby requested. Failure to comply 

with the regulations and terms of an 

APO is a violation which is subject to 

sanction. 

This determination is published 

pursuant to sections 705(d) and 777(i) of 

the Act. 

Dated: September 20, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

Appendix 

List of Comments and Issues in the Decision 

Memorandum 

General Issues 

Comment 1 Application of CVD Law to the 

PRC 

Comment 2 Application of the CVD Law to 

NMEs and the Administrative Protection 

Act 

Comment 3 Double Counting/Overlapping 

Remedies 

Comment 4 Cutoff Date for Identifying 

Subsidies 

Currency 

Comment 5 Opportunity to Comment and 

the Initiation Standard 

Comment 6 The Determination Not To 

Investigate the Alleged Currency Subsidy 

Comment 7 The Department’s Analysis of a 

Unified Rate of Exchange 

Scope 

Comment 8 Burden Imposed on 

Respondents 

Comment 9 Whether Multi-ply Paperboard 

Was Intended To Be in the Scope 

Comment 10 Physical Characteristics and 

End-use Applications Distinguish Multiply Paper From the Covered Merchandise 

Comment 11 Whether the Department 

Should Retain the ‘‘Suitability’’ Language 

in the Scope Description 

Comment 12 Whether Inclusion of Multiply Paper in the Scope Affects Respondent 

Selection 

Comment 13 Scope Expansion Violates 

Standing and Injury Requirements 

Chemicals for LTAR 

Comment 14 Benchmarks—Papermaking 

Chemicals 

Comment 15 Provision of Papermaking 

Chemicals for LTAR—Specificity 

Comment 16 Government Ownership and 

Determining Whether a Financial 

Contribution Has Occurred 

Preferential Lending to the Coated Paper 

Industry 

Comment 17 Whether Chinese Banks Are 

Authorities 

Comment 18 Whether the Policy Loan 

Program Is Specific 

Lending Benchmarks 

Comment 19 Whether Negative Real 

Interest Rates Should Be Excluded From 

the Regression 

Comment 20 Whether the Regression Is 

Statistically Valid 

Comment 21 Should the Department Use an 

In-Country Benchmark 

Comment 22 Terms of Loan Rates in the 

IMF Data 

Comment 23 Whether the Long-Term and 

Discount Rates Are Flawed 

Provision of Land for LTAR 

Comment 24 Whether HYDC Is an 

Authority 

Comment 25 Financial Contribution 

Comment 26 Whether To Use an In-country 

Benchmark 

Comment 27 Whether There Are Flaws in 

the Thai Benchmark 

Comment 28 Specificity of Land for LTAR 

Based on AFA 

Issues Related to Sun Companies 

Comment 29 Whether To Use Revised Sales 

Values for the Sun Companies 

Comment 30 Whether To Apply Adverse 

Facts Available to Sun Companies’ 

Unreported Loans 

Comment 31 Whether To Apply Facts 

Available to Sun Companies’ Unreported 

Cross-Owned Companies 

Issues Related to Gold Companies 

Comment 32 Whether To Grant the Gold 

Companies an EV Adjustment 

Comment 33 Creditworthiness 

Comment 34 Whether To Adjust the 

Uncreditworthiness Benchmark 

Comment 35 GE Sales Denominator 

Comment 36 Whether To Attribute 

Subsidies Received by Input Suppliers 

Whose Inputs Are Not Used for 

Merchandise Exported to the United States 

Comment 37 Whether the Department 

Should Attribute Subsidies From Pulp 

Producers Based on the Percentage of Total 

Pulp Sales to the Paper Producers Covered 

Comment 38 Whether To Countervail 

Additional Financing Reported by the Gold 

Companies 

Comment 39 Whether To Adjust the Gold 

Companies’ Interest Calculation 

Comment 40 Whether To Adjust JHP’s 

Reported VAT and Duty Exemptions on 

Imported Equipment 

Comment 41 Whether To Use an 

Alternative Electricity Benchmark 

Comment 42 Whether To Apply AFA to 

JAP and JHP Caustic Soda Purchases 

[FR Doc. 2010–24184 Filed 9–24–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–958] 

Certain Coated Paper Suitable for 

High-Quality Print Graphics Using 

Sheet-Fed Presses From the People’s 

Republic of China: Final Determination 

of Sales at Less Than Fair Value 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: September 27, 

2010. 

SUMMARY: On May 6, 2010, the 

Department of Commerce 

(‘‘Department’’) published its 

preliminary determination of sales at 

less than fair value (‘‘LTFV’’) in the 

antidumping investigation of certain 

coated paper suitable for high-quality 

print graphics using sheet-fed presses 

(‘‘coated paper’’) from the People’s 

Republic of China (‘‘PRC’’). We invited 

interested parties to comment on our 

preliminary determination of sales at 

LTFV. Based on our analysis of the 

comments we received, we have made 

changes to our margin calculations for 

the mandatory respondents. The final 

dumping margins for this investigation 

are listed in the ‘‘Final Determination 

Margins’’ section below. 

FOR FURTHER INFORMATION CONTACT: 

Lindsey Novom and Demitri 

Kalogeropoulos, AD/CVD Operations, 

Office 8, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230; telephone: (202) 

482–5256 or (202) 482–2623, 

respectively. 

SUPPLEMENTARY INFORMATION: 

Case History 

The Department published its 

preliminary determination of sales at 

LTFV on May 6, 2010. See Certain 

Coated Paper Suitable for High-Quality 

Print Graphics Using Sheet-Fed Presses 

from the People’s Republic of China: 

Notice of Preliminary Determination of 

Sales at Less Than Fair Value and 

Postponement of Final Determination, 

75 FR 24892, (May 6, 2010) 

(‘‘Preliminary Determination’’). 

On May 19, 2010, Shandong Sun 

Paper Industry Joint Stock Co., Ltd., 

Yanzhou Tianzhang Paper Industry Co., 

Ltd., Shandong International Paper and 

Sun Coated Paperboard Co., Ltd., 

International Paper and Sun 

Cartonboard Co., Ltd. (collectively ‘‘Sun 

Paper Companies’’) ceased participating 


srobinson on DSKHWCL6B1PROD with NOTICES
59218 Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 

1See letter from Sun Paper Companies, regarding 

‘‘Certain Coated Paper Suitable for High-Quality 

Print Graphics Using Sheet-Fed Presses from the 

People’s Republic of China; Withdrawal from 

Antidumping Case,’’ dated May 19, 2010. 

2See Memorandum to the file, ‘‘Wage Rate Data,’’ 

dated July 16, 2010. 

in the investigation.1 On May 10, 2010, 

Gold East Paper (Jiangsu) Co., Ltd. 

(‘‘GE’’), Gold Huasheng Paper Co., Ltd. 

(‘‘GHS’’), Gold East (Hong Kong) Trading 

Co., Ltd. (‘‘GEHK’’), Ningbo Zhonghua 

Paper Co., Ltd. (‘‘NBZH’’), Ningbo Asia 

Pulp and Paper Co., Ltd. (‘‘NAPP’’), 

collectively referred to as the ‘‘GE 

Group,’’ or ‘‘APP-China,’’ alleged that the 

Department made ministerial errors in 

its Preliminary Determination. On May 

13, 2010, APP-China and Appleton 

Coated LLC, NewPage Corporation, S.D. 

Warren Company d/b/a Sappi Fine 

Paper North America, and United Steel, 

Paper and Forestry, Rubber, 

Manufacturing, Energy, Allied 

Industrial and Service Workers 

International Union (collectively, 

‘‘Petitioners’’) submitted comments on 

APP-China’s allegations. On June 9, 

2010, the Department released a memo 

detailing the errors it found to be 

‘‘clerical’’ in nature, but determined not 

to amend the Preliminary Determination 

as the ministerial errors were not 

significant under 19 CFR 351.224(g). 

In a Memo to the File, on May 19, 

2010, regarding ‘‘Phone Call Regarding 

Factual Information Submission and 

Tackifier Input,’’ the Department 

requested information with respect to 

APP-China’s ‘‘tackifier’’ input. On May 

21, 2010, APP-China submitted the 

input data. APP-China and Shandong 

Chenming Paper Holding Ltd. 

(‘‘Chenming’’) also submitted a marketoriented industry (‘‘MOI’’) submission, 

on May 19, 2010. 

Between May 26, 2010, and June 25, 

2010, the Department conducted 

verifications of several of the APP-China 

entities and their affiliated U.S. reseller 

Global Paper Solutions Inc. (‘‘GPS’’). The 

Department released both verification 

reports for these companies on July 21, 

2010. See the ‘‘Verification’’ section 

below for additional information. 

Petitioners submitted a request for a 

public hearing on May 28, 2010, and 

June 3, 2010, respectively. On August 6, 

2010, APP-China and Petitioners filed 

timely requests for a withdrawal of 

request for a public hearing. 

APP-China and Petitioners submitted 

surrogate value comments on June 29, 

2010. On July 6, 2010, Petitioners 

submitted rebuttal comments on this 

information. On July 27, 2010, the 

Department requested a revised factors 

of production (‘‘FOP’’) and sales 

database from APP-China, and on July 

30, 2010, APP-China submitted the 

requested databases to the Department. 

On August 5, 2010, case briefs were 

filed by Petitioners, APP-China, and the 

Government of China (‘‘GOC’’), APPChina, and Chenming, collectively, 

submitted a separate case brief on 

August 5, 2010. On August 10, 2010, 

Petitioners filed their rebuttal brief, and 

on August 11, 2010, APP-China filed its 

rebuttal brief. The Department released 

labor wage rate data on July 16, 2010.2

Petitioners and APP-China submitted 

comments on the labor wage rate data 

on July 23, 2010. The Department 

released additional (Honduran) labor 

wage rate data on August 5, 2010, and 

Petitioners submitted comments on this 

information on August 9, 2010. On 

August 12, 2010, APP-China requested 

that the Department reject parts of 

Petitioners’ August 10, 2010 rebuttal 

brief because it contains certain new 

information. On August 16, 2010, 

Petitioners submitted a response to 

APP-China’s request. On August 17, 

2010, the Department rejected APPChina’s request and continued to accept 

the Petitioners’ rebuttal brief as filed 

because the information at issue already 

existed on the record of this 

investigation. On August 19, 2010, APPChina submitted a request for 

reconsideration, and Petitioners 

submitted a request to remove APPChina’s request for reconsideration from 

the record on August 23, 2010. On 

September 1, 2010, the Department 

rejected APP-China’s August 19, 2010, 

request for reconsideration and 

Petitioners’ August 23, 2010 submission 

because they contained untimely filed 

written arguments within the meaning 

of 19 CFR 351.309 of the Department’s 

regulations. In accordance with 19 CFR 

351.302(d), the Department removed the 

submissions from the record of the 

proceeding and has not considered them 

for purposes of the final determination. 

On September 3, 2010 APP-China 

resubmitted its request for 

reconsideration, and Petitioners 

resubmitted their request to remove 

APP-China’s request for reconsideration. 

On September 16, 2010, the Department 

issued its final response not to reject 

Petitioners’ rebuttal brief. 

Scope Comments 

Following the Preliminary 

Determination, on August 3, 2010, the 

Department issued a decision 

memorandum addressing three scope 

issues in this and the concurrent 

antidumping and countervailing duty 

investigations on certain coated paper 

from Indonesia and the People’s 

Republic of China: (1) Whether to clarify 

the scope of these investigations to 

exclude multi-ply coated paper and 

paperboard; (2) whether to modify the 

scope language by striking the phrase 

‘‘suitable for high-quality print 

graphics;’’ and (3) whether to add three 

Harmonized Tariff Schedule of the 

United States (‘‘HTSUS’’) numbers 

which may include in-scope 

merchandise (i.e., HTSUS 4810.32, 

4810.39 and 4810.92). See August 3, 

2010, Memorandum to Ronald K. 

Lorentzen, Deputy Assistant Secretary 

for Import Administration, from Susan 

Kuhbach, Director, Office 1, entitled 

‘‘Scope’’ (August 3, 2010 Scope 

Memorandum). For the reasons 

explained in the August 3, 2010, Scope 

Memorandum, the Department 

determined that: (1) Multiply products 

that otherwise meet the description of 

the scope of the investigations are not 

excluded from the scope; (2) the 

‘‘suitable for high-quality print graphics’’ 

language should not be deleted from the 

scope; and (3) the three HTSUS 

numbers at issue should be added to the 

scope. 

The Department subsequently 

provided the interested parties an 

opportunity to comment on its postpreliminary scope determination. In 

response, the respondents in these 

investigations filed a case brief on 

August 20, 2010, and the petitioners 

filed a rebuttal brief on August 24, 2010. 

Based on the Department’s analysis of 

these comments and the factual records 

of these investigations, the Department 

continues to find that multi-ply coated 

paper and paperboard are not excluded 

from the scope of the investigations, that 

the ‘‘suitable for high-quality print 

graphics’’ language should be 

maintained, and that the three HTSUS 

numbers listed above should be added 

to the scope. For a complete discussion 

of the parties’ comments and the 

Department’s position, see ‘‘Issues and 

Decision Memorandum for the Final 

Determination in the Countervailing 

Duty Investigation of Certain Coated 

Paper Suitable for High-Quality Print 

Graphics Using Sheet-Fed Presses from 

the People’s Republic of China,’’ dated 

concurrently with this notice and 

incorporated herein by reference. 

Period of Investigation 

The period of investigation (‘‘POI’’) is 

January 1, 2009, through June 30, 2009. 

This period corresponds to the two most 

recent fiscal quarters prior to the month 

of the filing of the petition, which was 

September 2009. See 19 CFR 

351.204(b)(1). 


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3 ‘‘ ‘Paperboard’ refers to Certain Coated Paper that 

is heavier, thicker and more rigid than coated paper 

which otherwise meets the product description. In 

the context of Certain Coated Paper, paperboard 

typically is referred to as ‘cover,’ to distinguish it 

from ‘text.’ ’’ 

4One of the key measurements of any grade of 

paper is brightness. Generally speaking, the brighter 

the paper the better the contrast between the paper 

and the ink. Brightness is measured using a GE 

Reflectance Scale, which measures the reflection of 

light off of a grade of paper. One is the lowest 

reflection, or what would be given to a totally black 

grade, and 100 is the brightest measured grade. 

Verification 

As provided in section 782(i) of the 

Tariff Act of 1930, as amended (‘‘Act’’), 

we verified the information submitted 

by APP-China for use in our final 

determination. See the Department’s 

verification reports on the record of this 

investigation in the Central Records 

Unit (‘‘CRU’’), Room 7046 of the main 

Department building, with respect to 

these entities. For all verified 

companies, we used standard 

verification procedures, including the 

examination of relevant accounting and 

production records, as well as original 

source documents provided by 

respondents. 

Analysis of Comments Received 

All non-scope issues raised in the 

case and rebuttal briefs by parties to this 

investigation are addressed in the 

‘‘Investigation of Certain Coated Paper 

Suitable for High-Quality Print Graphics 

Using Sheet-Fed Presses from the 

People’s Republic of China: Issues and 

Decision Memorandum,’’ dated 

concurrently with this notice and 

hereby adopted in this notice (‘‘Issues 

and Decision Memorandum’’). A list of 

the issues which parties have raised and 

to which we have responded in the 

Issues and Decision Memorandum is 

attached to this notice as Appendix I. 

The Issues and Decision Memorandum 

is a public document on file in the CRU 

and is accessible on the Web at 

ia.ita.doc.gov/frn. The paper copy and 

electronic version of the memorandum 

are identical in content. 

Changes Since the Preliminary 

Determination 

• Sun Paper Companies did not 

submit a complete database of all 

reportable U.S. sales, refused to undergo 

verification, and withdrew from 

participating in the investigation. We 

have also found that Sun Paper 

Companies did not demonstrate that 

they are entitled to a separate rate, and 

are therefore part of the PRC entity. 

Thus, we have applied total adverse 

facts available (‘‘AFA’’) to the PRC 

entity, which includes Sun Paper 

Companies. See ‘‘Use of Facts Available’’ 

and ‘‘PRC-Wide Rate’’ sections below. 

See also Comment 6 of the Issues and 

Decision Memorandum. 

• For APP-China, we made the 

following changes since the Preliminary 

Determination: 

Æ We revised the targeted dumping 

analysis to include another customer 

alleged by Petitioners. See Comment 4 

of the Issues and Decision 

Memorandum. 

Æ The Department has revised APPChina’s margin calculation to 

incorporate minor corrections submitted 

at verification, as well as other minor 

discrepancies noted in the verification 

report. See Comments 10 and 11 of the 

Issues and Decision Memorandum. See 

also the public version of the APP-China 

Verification report on file in the CRU. 

Æ The Department is no longer 

deducting certain commissions from 

those sales classified as ‘‘Channel 1’’ 

sales, based on APP-China’s minor 

correction from verification. See 

Comment 12 of the Issues and Decision 

Memorandum. 

Æ The Department has made 

corrections to the Preliminary 

Determination that we found to be 

‘‘clerical’’ in nature in our Ministerial 

Error Memo. See Comment 13 of the 

Issues and Decision Memorandum. 

Æ The Department has revised the 

calculation of foreign truck freight to 

include the weight of the packing. See 

Comment 15 of the Issues and Decision 

Memorandum. 

Æ The Department has revised the 

calculation of domestic inland 

insurance and brokerage and handling 

to include the weight of the packing. 

See Final Analysis Memo. 

Æ The Department has revised the 

surrogate value (‘‘SV’’) for tapioca starch 

(‘‘TSTARCH’’). For the final 

determination, the Department is 

valuing TSTARCH using the Indonesian 

HTS category 110814, labeled ‘‘Manioc 

(cassava) starch.’’ See Comment 22 of 

the Issues and Decision Memorandum. 

Æ The Department is using HTS 

category 3906.90.90, labeled ‘‘other 

acrylic polymers in other forms,’’ to 

value the non-market economy (‘‘NME’’) 

portion of APP-China’s tackifier input. 

See Comment 25 of the Issues and 

Decision Memorandum. 

Æ The Department has revised the SV 

for surface sizing starch (‘‘SSS’’). For the 

final determination, the Department is 

valuing SSS using the Indian HTS 

category 3505.10.00, labeled ‘‘dextrins 

and other modified starches (for 

example, pregelantinized or esterified 

starches).’’ See Comment 29 of the Issues 

and Decision Memorandum. 

Æ We have revised the calculation of 

the wage rate. See Comment 30 of the 

Issues and Decision Memorandum. 

Æ We have revised the brokerage and 

handling surrogate value. See Comment 

31 of the Issues and Decision 

Memorandum. 

Scope of Investigation 

The merchandise covered by this 

investigation includes certain coated 

paper and paperboard 3 in sheets 

suitable for high quality print graphics 

using sheet-fed presses; coated on one 

or both sides with kaolin (china or other 

clay), calcium carbonate, titanium 

dioxide, and/or other inorganic 

substances; with or without a binder; 

having a GE brightness level of 80 or 

higher;4 weighing not more than 340 

grams per square meter; whether gloss 

grade, satin grade, matte grade, dull 

grade, or any other grade of finish; 

whether or not surface-colored, surfacedecorated, printed (except as described 

below), embossed, or perforated; and 

irrespective of dimensions (‘‘Certain 

Coated Paper’’). 

Certain Coated Paper includes (a) 

coated free sheet paper and paperboard 

that meets this scope definition; (b) 

coated groundwood paper and 

paperboard produced from bleached 

chemi-thermo-mechanical pulp 

(‘‘BCTMP’’) that meets this scope 

definition; and (c) any other coated 

paper and paperboard that meets this 

scope definition. 

Certain Coated Paper is typically (but 

not exclusively) used for printing multicolored graphics for catalogues, books, 

magazines, envelopes, labels and wraps, 

greeting cards, and other commercial 

printing applications requiring high 

quality print graphics. 

Specifically excluded from the scope 

are imports of paper and paperboard 

printed with final content printed text 

or graphics. 

As of 2009, imports of the subject 

merchandise are provided for under the 

following categories of the HTSUS: 

4810.14.11, 4810.14.1900, 4810.14.2010, 

4810.14.2090, 4810.14.5000, 

4810.14.6000, 4810.14.70, 4810.19.1100, 

4810.19.1900, 4810.19.2010, 

4810.19.2090, 4810.22.1000, 4810.22.50, 

4810.22.6000, 4810.22.70, 4810.29.1000, 

4810.29.5000, 4810.29.6000, 4810.29.70, 

4810.32, 4810.39 and 4810.92. While 

HTSUS subheadings are provided for 

convenience and customs purposes, the 

written description of the scope of the 

investigations is dispositive. 

Surrogate Country 

In the Preliminary Determination, we 

stated that we had selected India as the 

appropriate surrogate country to use in 

this investigation for the following 


srobinson on DSKHWCL6B1PROD with NOTICES
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5See, e.g., Preliminary Determination of Sales at 

Less Than Fair Value and Partial Affirmative 

Determination of Critical Circumstances: Certain 

Polyester Staple Fiber from the People’s Republic of 

China, 71 FR 77373, 77377 (December 26, 2006), 

unchanged in Final Determination of Sales at Less 

Than Fair Value and Partial Affirmative 

Determination of Critical Circumstances: Certain 

Polyester Staple Fiber from the People’s Republic of 

China, 72 FR 19690 (April 19, 2007). 

6For the Preliminary Determination, the 

Department applied partial AFA to Sun Paper 

Companies for failing to report all reportable U.S. 

sales made during the POI. See Preliminary 

Determination, 75 FR at 24901–24902. 

reasons: (1) It is a significant producer 

of comparable merchandise; (2) it is at 

a level of economic development 

comparable to that of the PRC, pursuant 

to section 773(c)(4) of the Act; and (3) 

we have reliable data from India that we 

can use to value the FOPs. See 

Preliminary Determination, 75 FR at 

24898. For the final determination, we 

received no comments on surrogate 

country selection and made no changes 

to our findings with respect to the 

selection of a surrogate country. 

Separate Rates 

In proceedings involving NME 

countries, the Department begins with a 

rebuttable presumption that all 

companies within the country are 

subject to government control and, thus, 

should be assigned a single 

antidumping duty deposit rate. It is the 

Department’s policy to assign all 

exporters of merchandise subject to an 

investigation in an NME country this 

single rate unless an exporter can 

demonstrate that it is sufficiently 

independent so as to be entitled to a 

separate rate. See Final Determination of 

Sales at Less Than Fair Value: Sparklers 

from the People’s Republic of China, 56 

FR 20588 (May 6, 1991) (‘‘Sparklers’’), as 

amplified by Notice of Final 

Determination of Sales at Less Than 

Fair Value: Silicon Carbide from the 

People’s Republic of China, 59 FR 22585 

(May 2, 1994) (‘‘Silicon Carbide’’), and 

19 CFR 351.107(d). 

In the Preliminary Determination, we 

found that the four mandatory 

respondents (i.e., GE, GHS (and their 

affiliates, NAPP and NBZH), Tianzhang, 

and IP Paperboard/IP Cartonboard), and 

the separate-rate respondent Chenming, 

demonstrated their eligibility for 

separate-rate status. For the final 

determination, we continue to find that 

the evidence placed on the record of 

this investigation by GE, GHS (their 

affiliates, NAPP and NBZH), and 

Chenming demonstrates both a de jure 

and de facto absence of government 

control, with respect to their respective 

exports of the merchandise under 

investigation, and, thus are eligible for 

separate-rate status. See Preliminary 

Determination, 75 FR at 24899–24900. 

However, we are no longer finding that 

Tianzhang, and IP Paperboard/IP 

Cartonboard are eligible for separate rate 

status, as they withdrew from 

participating in the investigation. 

Margin for the Separate Rate Company 

As discussed above, the Department 

continues to find that Chenming has 

demonstrated its eligibility for a 

separate rate. Consistent with the 

Department’s practice, as the separate 

rate, we have established a margin for 

Chenming based on the rate we 

calculated for the cooperating 

mandatory respondent, APP-China.5

Use of Facts Available (‘‘FA’’) 

Sections 776(a)(1) and (2) of the Act 

provide that the Department shall apply 

‘‘facts otherwise available’’ if, inter alia, 

necessary information is not on the 

record, or an interested party: (A) 

Withholds information requested by the 

Department, (B) fails to provide such 

information by the deadline, or in the 

form or manner requested, (C) 

significantly impedes a proceeding, or 

(D) provides information that cannot be 

verified, as provided by section 782(i) of 

the Act. 

Where the Department determines 

that a response to a request for 

information does not comply with the 

request, section 782(d) of the Act 

provides that the Department will 

inform the party submitting the 

response and will, to the extent 

practicable, provide that party the 

opportunity to remedy or explain its 

deficiency. If the party fails to remedy 

the deficiency within the applicable 

time limits, subject to section 782(e) of 

the Act, the Department may disregard 

all or part of the original and subsequent 

responses, as appropriate. Pursuant to 

section 782(e) of the Act, the 

Department shall not decline to 

consider submitted information if all of 

the following requirements are met: (1) 

The information is submitted by the 

established deadline; (2) the information 

can be verified; (3) the information is 

not so incomplete that it cannot serve as 

a reliable basis for reaching the 

applicable determination; (4) the 

interested party has demonstrated that it 

acted to the best of its ability; and (5) 

the information can be used without 

undue difficulties. 

Section 782(e) of the Act states that 

the Department shall not decline to 

consider information deemed 

‘‘deficient’’ under section 782(d) if: (1) 

The information is submitted by the 

established deadline; (2) the information 

can be verified; (3) the information is 

not so incomplete that it cannot serve as 

a reliable basis for reaching the 

applicable determination; (4) the 

interested party has demonstrated that it 

acted to the best of its ability; and (5) 

the information can be used without 

undue difficulties. 

Furthermore, section 776(b) of the Act 

states that if the administering authority 

finds that an interested party has not 

acted to the best of its ability to comply 

with a request for information, the 

administering authority may, in 

reaching its determination, use an 

inference that is adverse to that party. 

The adverse inference may be based 

upon: (1) The petition, (2) a final 

determination in the investigation under 

this title, (3) any previous review under 

section 751 of the Act or determination 

under section 753 of the Act, or (4) any 

other information placed on the record. 

Because Sun Paper Companies ceased 

participating in the instant 

investigation, the Department was not 

able to conduct verification of Sun 

Paper Companies’ responses. 

Verification is integral to the 

Department’s analysis because it allows 

the Department to satisfy itself that it is 

relying upon accurate information and 

calculating dumping margins as 

accurately as possible. By failing to 

participate in verification, Sun Paper 

Companies prevented the Department 

from verifying its reported information, 

including separate rates information, 

and significantly impeded the 

proceeding. In addition, by not 

permitting verification, Sun Paper 

Companies failed to demonstrate that 

they operate free of government control 

and are entitled to a separate rate. 

Accordingly, Sun Paper Companies is 

considered part of the PRC-wide entity 

for purposes of this final determination. 

Thus, we find that, in accordance with 

sections 776(a)(2)(A), (C) and (D) of the 

Act, the use of FA for the PRC-wide 

entity (which includes Sun Paper 

Companies) is appropriate for this final 

determination. 

First, the PRC-wide entity, which 

includes Sun Paper Companies, failed to 

submit a full and proper database of all 

sales to unaffiliated U.S. customers 

during the POI. Accordingly, we find 

that the PRC wide entity withheld 

information requested by the 

Department pursuant to section 

776(a)(2)(A) of the Act.6 Second, we 

find that the PRC-wide entity, which 

includes the Sun Paper Companies, 

significantly impeded the Department’s 

proceeding pursuant to sections 

776(a)(2)(C) of the Act, by failing to 

provide the requested information and 

by refusing to allow verification of their 

data. Based on the above, we have 


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7See Notice of Final Determination of Sales at 

Less than Fair Value: Static Random Access 

Memory Semiconductors From Taiwan, 63 FR 8909, 

8932 (February 23, 1998). 8See Brake Rotors From the People’s Republic of 

China: Final Results and Partial Rescission of the 

Seventh Administrative Review; Final Results of the 

Eleventh New Shipper Review, 70 FR 69937, 69939 

(November 18, 2005); See also, SAA at 870. 9See, e.g., Certain Cased Pencils from the 

People’s Republic of China; Preliminary Results of 

Antidumping Duty Administrative Review and 

Intent to Rescind in Part, 70 FR 76755, 76761 

(December 28, 2005) unchanged in final, Certain 

Cased Pencils from the People’s Republic of China; 

Final Results and Partial Rescission of 

Antidumping Duty Administrative Review, 71 FR 

38366 (July 6, 2006), and accompanying Issues and 

Decision Memorandum at Comment 10. 

10See Final Determination of Sales at Less Than 

Fair Value: Certain Cold-Rolled Carbon Quality 

Steel Products from the People’s Republic of China, 

65 FR 34660 (May 21, 2000), and accompanying 

Issues and Decision Memorandum at ‘‘Facts 

Available.’’ 

11See Final Determination of Sales at Less Than 

Fair Value: Sodium Hexametaphosphate From the 

People’s Republic of China, 73 FR 6479, 6481 

(February 4, 2008), quoting SAA at 870. 

12See Tapered Roller Bearings and Parts Thereof, 

Finished and Unfinished, From Japan, and Tapered 

Roller Bearings, Four Inches or Less in Outside 

Diameter, and Components Thereof, From Japan; 

Preliminary Results of Antidumping Duty 

Administrative Reviews and Partial Termination of 

Administrative Reviews, 61 FR 57391, 57392 

(November 6, 1996), unchanged in Tapered Roller 

Bearings and Parts Thereof, Finished and 

Unfinished, From Japan, and Tapered Roller 

Bearings, Four Inches or Less in Outside Diameter, 

and Components Thereof, From Japan; Final 

Results of Antidumping Duty Administrative 

Continued 

determined that the PRC-wide entity, 

which includes the Sun Paper 

Companies, failed to act to the best of 

its ability by not providing the 

requested information and by ceasing 

their participation in the proceeding. 

Therefore, we have determined that 

when selecting from among FA, an 

adverse inference is warranted for the 

PRC-wide entity, including the Sun 

Paper Companies, pursuant to section 

776(b) of the Act. 

The PRC-Wide Rate 

Because we begin with the 

presumption that all companies within 

a NME country are subject to 

government control, and because only 

the companies listed under the ‘‘Final 

Determination Margins’’ section, below, 

have overcome that presumption, we are 

applying a single antidumping rate (i.e., 

the PRC-wide rate) to all other exporters 

of subject merchandise from the PRC. 

These other companies did not 

demonstrate entitlement to a separate 

rate. See, e.g., Synthetic Indigo From the 

People’s Republic of China; Notice of 

Final Determination of Sales at Less 

Than Fair Value, 65 FR 25706, 25707 

(May 3, 2000). The PRC-wide rate 

applies to all entries of subject 

merchandise except for entries from the 

companies eligible for separate rate 

status. 

In the Preliminary Determination, the 

Department preliminarily determined 

that there were exporters/producers of 

the subject merchandise during the POI 

from the PRC that did not respond to the 

Department’s request for information. 

Further, we treated these PRC 

producers/exporters as part of the PRCwide entity because they did not apply 

for a separate rate. As a result, we found 

that the use of FA was appropriate to 

determine the PRC-wide rate pursuant 

to section 776(a)(2)(A) of the Act. See 

Preliminary Determination, 75 FR at 

24900–02. 

Thus, in the Preliminary 

Determination, the Department 

determined that, in selecting from 

among the FA, an adverse inference is 

appropriate because the PRC-wide 

entity failed to cooperate by not acting 

to the best of its ability to comply with 

requests for information. See Id. As 

AFA, we preliminarily assigned to the 

PRC-wide entity a rate of 135.8 percent, 

the highest calculated rate from the 

petition. See id; see also Statement of 

Administrative Action accompanying 

the URAA, H.R. Rep. No. 103–316, vol. 

1, at 870 (1994) (‘‘SAA’’). 

Section 776(a)(2) of the Act provides 

that, if an interested party (A) withholds 

information requested by the 

Department, (B) fails to provide such 

information by the deadline, or in the 

form or manner requested, (C) 

significantly impedes a proceeding, or 

(D) provides information that cannot be 

verified, the Department shall use, 

subject to sections 782(d) and (e) of the 

Act, facts otherwise available in 

reaching the applicable determination. 

Because the PRC-wide entity (including 

Sun Paper Companies) did not respond 

to our requests for information, 

withheld information requested by the 

Department, and did not allow their 

information to be verified, pursuant to 

sections 776(a)(2)(A), (C), and (D) of the 

Act, we determine, as in the Preliminary 

Determination, that the use of facts 

otherwise available is appropriate to 

determine the PRC-wide rate. 

Selection of the Adverse Facts 

Available Rate 

In deciding which facts to use as 

AFA, section 776(b) of the Act and 19 

CFR 351.308(c)(1) provide that the 

Department may rely on information 

derived from (1) The petition, (2) a final 

determination in the investigation, (3) 

any previous review or determination, 

or (4) any information placed on the 

record. In selecting a rate for AFA, the 

Department selects a rate that is 

sufficiently adverse ‘‘as to effectuate the 

purpose of the facts available rule to 

induce respondents to provide the 

Department with complete and accurate 

information in a timely manner.’’ 7 It is 

also the Department’s practice to select 

a rate that ensures ‘‘that the party does 

not obtain a more favorable result by 

failing to cooperate than if it had 

cooperated fully.’’ 8

Generally, the Department finds 

selecting the highest rate in any segment 

of the proceeding as AFA to be 

appropriate.9 It is the Department’s 

practice to select, as AFA, the higher of 

the (a) highest margin alleged in the 

petition, or (b) the highest calculated 

rate of any respondent in the 

investigation.10 In the instant 

investigation, as AFA, we have assigned 

to the PRC-wide entity the highest 

petition rate, recalculated using the 

revised wage rate, on the record of this 

proceeding that can be corroborated. See 

Certain Coated Paper Suitable for HighQuality Print Graphics Using Sheet-Fed 

Presses From Indonesia and the 

People’s Republic of China: Initiation of 

Antidumping Duty Investigations, 74 FR 

53710 (October 20, 2009) (‘‘Initiation 

Notice’’), and Memorandum to the File, 

regarding ‘‘Recalculation of Petition 

Margins,’’ dated concurrently with this 

notice. The Department determines that 

this information is the most appropriate 

from the available sources to effectuate 

the purposes of AFA. 

Corroboration 

Section 776(c) of the Act provides 

that, when the Department relies on 

secondary information rather than on 

information obtained in the course of an 

investigation as FA, it must, to the 

extent practicable, corroborate that 

information from independent sources 

reasonably at its disposal. Secondary 

information is described as ‘‘information 

derived from the petition that gave rise 

to the investigation or review, the final 

determination concerning merchandise 

subject to this investigation, or any 

previous review under section 751 

concerning the merchandise subject to 

this investigation.’’ 11 To ‘‘corroborate’’ 

means that the Department will satisfy 

itself that the secondary information to 

be used has probative value. 

Independent sources used to corroborate 

may include, for example, published 

price lists, official import statistics and 

customs data, and information obtained 

from interested parties during the 

particular investigation. To corroborate 

secondary information, the Department 

will, to the extent practicable, examine 

the reliability and relevance of the 

information used.12


srobinson on DSKHWCL6B1PROD with NOTICES
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Reviews and Termination in Part, 62 FR 11825 

(March 13, 1997). 

13See Comment 30 of Issues and Decision 

Memorandum. 

14See Id. See also Memorandum to the File, 

regarding ‘‘Recalculation of Petition Margins,’’ dated 

concurrently with this notice. 

15See Preliminary Determination, 75 FR at 24905. 

16See Memorandum entitled ‘‘Separate-Rates 

Practice and Application of Combination Rates in 

Antidumping Investigations involving Non-Market 

Economy Countries’’ dated April 5, 2005, available 

at http://ia.ita.doc.gov/policy/index.html. 

The AFA rate that the Department 

used is from the Petition; however, we 

have updated the labor wage rate used 

to calculate the Petition rates. The 

Department’s practice is not to 

recalculate dumping margins provided 

in petitions, but rather to corroborate 

the applicable petition rate when 

applying that rate as AFA. In the instant 

case, however, the surrogate wage rate 

used in the Petition was based upon the 

Department’s methodology that the 

Federal Circuit invalidated in Dorbest 

II.13 In light of the Federal Circuit 

decision to invalidate the wage rate 

methodology, the Department has 

adjusted the petition rate using the 

surrogate value for labor used in this 

final determination.14

The AFA rate that the Department 

used is from the Petition. To corroborate 

the AFA margin that we have selected, 

we compared this margin to the 

transaction-specific margins we found 

for the cooperating mandatory 

respondents. We found that the margin 

of 135.83 percent has probative value 

because it is in the range of the 

transaction-specific margins that we 

found for APP-China during the period 

of investigation. See APP-China’s Final 

Analysis Memo. Accordingly, we find 

this rate is reliable and relevant, 

considering the record information, and 

thus, has probative value. See 

Memorandum to the File, regarding 

‘‘Corroboration of the PRC-Wide Entity 

Rate and for the Final Determination in 

the Antidumping Duty Investigation of 

Certain Coated Paper Suitable for HighQuality Print Graphics Using Sheet-Fed 

Presses from the People’s Republic of 

China,’’ dated concurrently with this 

notice. Given that numerous PRC-wide 

entities did not respond to the 

Department’s requests for information 

and that Sun Paper Companies, which 

is part of the PRC-wide entity, ceased 

participating in the investigation, the 

Department concludes that the updated 

petition rate of 135.83 percent, as total 

AFA for the PRC-wide entity, is 

sufficiently adverse to prevent these 

respondents from benefitting from their 

lack of cooperation. See SAA at 870. 

Accordingly, we found that the rate of 

135.83 percent is corroborated to the 

extent practicable within the meaning of 

section 776(c) of the Act. 

The PRC-wide rate applies to all 

entries of the merchandise under 

investigation except for entries from 

APP-China and Chenming, as they have 

demonstrated eligibility for a separate 

rate. These companies and their 

corresponding antidumping duty cash 

deposit rates are listed below in the 

‘‘Final Determination’’ section of this 

notice. 

Combination Rates 

In the Preliminary Determination, the 

Department stated that it would 

calculate combination rates for 

respondents that are eligible for a 

separate rate in this investigation.15 This 

practice is described in the Separate 

Rate Policy Bulletin.16

Final Determination 

The weighted-average dumping 

margin percentages are as follows: 

Exporter Producer Percent 

margin 

Gold East Paper (Jiangsu) Co., Ltd.; .............................................

Gold Huasheng Paper Co., Ltd.; ....................................................

Ningbo Zhonghua Paper Co., Ltd.; ................................................

Ningbo Asia Pulp and Paper Co., Ltd.; ..........................................

Gold East (Hong Kong) Trading Co., Ltd ......................................

Gold East Paper (Jiangsu) Co., Ltd.; ...........................................

Gold Huasheng Paper Co., Ltd.; ..................................................

Ningbo Zhonghua Paper Co., Ltd.; ..............................................

Ningbo Asia Pulp and Paper Co., Ltd ..........................................

7.60 

Shandong Chenming Paper Holdings Ltd Shandong Chenming Paper Holdings Ltd .................................... 7.60 

PRC-Wide Entity* ........................................................................... ....................................................................................................... 135.83 

* The PRC-Wide Entity includes the Sun Paper Companies. 

Disclosure 

We will disclose the calculations 

performed within five days of the date 

of publication of this notice to parties in 

this proceeding in accordance with 19 

CFR 351.224(b). 

Continuation of Suspension of 

Liquidation 

In accordance with section 

735(c)(1)(B) of the Act, we are directing 

U.S. Customs and Border Protection 

(‘‘CBP’’) to continue to suspend 

liquidation of all imports of subject 

merchandise entered or withdrawn from 

warehouse, for consumption on or after 

the date of publication of the 

Preliminary Determination in the 

Federal Register. We will instruct CBP 

to require a cash deposit or the posting 

of a bond equal to the weighted-average 

amount by which the normal value 

exceeds U.S. price, as follows: (1) The 

rate for the exporter/producer 

combinations listed in the chart above 

will be the rate we have determined in 

this final determination; (2) for all PRC 

exporters of subject merchandise which 

have not received their own rate, the 

cash-deposit rate will be the PRC-wide 

rate; and (3) for all non-PRC exporters 

of subject merchandise which have not 

received their own rate, the cash-deposit 

rate will be the rate applicable to the 

PRC exporter/producer combination 

that supplied that non-PRC exporter. 

These suspension-of-liquidation 

instructions will remain in effect until 

further notice. 

ITC Notification 

In accordance with section 735(d) of 

the Act, we have notified the 

International Trade Commission (‘‘ITC’’) 

of our final determination of sales at 

LTFV. As our final determination is 

affirmative, in accordance with section 

735(b)(2) of the Act, the ITC will, within 

45 days, determine whether the 

domestic industry in the United States 

is materially injured or threatened with 

material injury, by reason of imports or 

sales (or the likelihood of sales) for 

importation of the subject merchandise. 

If the ITC determines that material 

injury or threat of material injury does 

not exist, the proceeding will be 

terminated and all securities posted will 

be refunded or canceled. If the ITC 

determines that such injury does exist, 

the Department will issue an 

antidumping duty order directing CBP 

to assess antidumping duties on all 

imports of the subject merchandise 

entered or withdrawn from warehouse 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 59223 

1The respondents are: PT. Pindo Deli Pulp & 

Paper Mills (PD), PT. Pabrik Kertas Tjiwi Kimia, 

Tbk (TK), PT Indah Kiat Pulp & Paper Tbk (IK) 

(collectively PD/TK/IK). In the preliminary 

determination, we determined it appropriate to treat 

PD, TK, and IK as one entity for margin calculation 

purposes because they met the regulatory criteria 

for collapsing. See Memorandum to John M. 

Andersen, Acting Deputy Assistant Secretary for 

Import Administration, from the Team entitled, 

‘‘Whether To Treat Respondents as a Single Entity 

for Margin Calculation Purposes in the 

Antidumping Duty Investigation of Certain Coated 

Paper Suitable for High-Quality Print Graphics 

Using Sheet-Fed Presses From Indonesia,’’ dated 

April 21, 2010. No party commented on this 

preliminary determination and we found nothing at 

verification that would otherwise compel us to 

reverse this determination. Therefore, we have 

continued to treat these affiliated companies as one 

entity in the final determination. 

for consumption on or after the effective 

date of the suspension of liquidation. 

Notification Regarding APO 

This notice also serves as a reminder 

to the parties subject to administrative 

protective order (‘‘APO’’) of their 

responsibility concerning the 

disposition of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305. Timely 

notification of return or destruction of 

APO materials or conversion to judicial 

protective order is hereby requested. 

Failure to comply with the regulations 

and the terms of an APO is a 

sanctionable violation. 

This determination and notice are 

issued and published in accordance 

with sections 735(d) and 777(i)(1) of the 

Act. 

Dated: September 20, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

Appendix I—List of Issues 

Case Issues: 

Comment 1: Whether to Grant MarketOriented Industry (‘‘MOI’’) Status to the 

Coated Paper Industry 

Comment 2A: Whether Simultaneous 

Application of Countervailing Duties 

(‘‘CVDs’’) and Antidumping Duties 

Calculated Using the NME Methodology is 

Contrary to Law 

Comment 2B: Whether Simultaneous 

Application of Countervailing Duties and 

Antidumping Duties Calculated Using the 

NME Methodology to Imports of the Same 

Products Results in the Imposition of 

Double Remedies 

Comment 3: Whether Targeted Dumping Test 

Violates the Administrative Procedures Act 

(‘‘APA’’) and is Flawed 

Comment 4: Whether to Revise the Targeted 

Dumping Analysis in Light of APP-China’s 

Minor Corrections Filed at Verification 

Comment 5: Whether the Department Should 

Apply Zeroing 

Comment 6: Application of Adverse Facts 

Available (‘‘AFA’’) to Sun Paper Companies 

Comment 7: Whether to Apply MarketOriented Economy (‘‘MOE’’) Treatment to 

APP-China 

Comment 8: Whether to Apply AFA to All 

Sales and Expense Information of GPS 

Comment 9: Whether to Reclassify Certain 

APP-China Sales from Export Price (‘‘EP’’)- 

to ‘‘Constructed Export Price (‘‘CEP’’) 

Comment 10: Whether the Department 

Should Reject APP-China’s Minor 

Correction 

Comment 11: Whether the Department 

Should Deduct Certain Rebates for APPChina 

Comment 12: Whether the Department 

Should Deduct Certain Commission 

Expenses 

Comment 13: Whether the Department 

Should Correct Certain Ministerial Errors 

Comment 14: Whether to Deduct Domestic 

Inland Insurance from U.S. Price 

Comment 15: Application of Foreign Truck 

Freight 

Comment 16: Whether to Treat All of APPChina’s Market Economy (‘‘ME’’) Pulp 

Purchases as Market Economy Purchases 

(‘‘MEPs’’) 

Comment 17: Whether to Accept APPChina’s ME Purchases from Thailand and 

Korea 

Comment 18: Whether to Employ the 33 

Percent Threshold for GE Group’s ME 

Purchases 

Comment 19: Valuation of Calcium 

Carbonate Ore (‘‘CCORE’’) 

Comment 20: Valuation of Optical Brightener 

(‘‘OBA/OBAS/OBAL’’) 

Comment 21: Valuation of Masculine Starch 

Transforming Agent (‘‘MSTA’’) 

Comment 22: Valuation of Tapioca Starch 

(‘‘TSTARCH’’) 

Comment 23: Valuation of Wet End Starch 

(‘‘WESTARCH’’) 

Comment 24: Valuation of Dispersing Agent 

A (‘‘DISPERSANTA’’) 

Comment 25: Valuation of Tackifier 

Comment 26: Valuation of Hypochlorous 

Natrium/Sodium Hypochlorite (‘‘BACLO/ 

NACLO’’) 

Comment 27: Valuation of Coating Binding 

Agent (‘‘CBA’’) 

Comment 28: Valuation of Coating Starch 

(‘‘CSTARCH’’) 

Comment 29: Valuation of Surface Sizing 

Starch (‘‘SSS’’) 

Comment 30: Selection of Labor Rate 

Comment 31: Valuation of Brokerage & 

Handling 

Comment 32: Whether the Department 

Should Include Certain Direct Selling 

Expenses in the Calculation of SG&A 

[FR Doc. 2010–24159 Filed 9–24–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–560–823] 

Certain Coated Paper Suitable for 

High-Quality Print Graphics Using 

Sheet-Fed Presses From Indonesia: 

Final Determination of Sales at Less 

Than Fair Value 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

determines that certain coated paper 

suitable for high-quality print graphics 

using sheet-fed presses (certain coated 

paper) from Indonesia is being, or is 

likely to be, sold in the United States at 

less-than-fair-value (LTFV), as provided 

in section 735 of the Tariff Act of 1930, 

as amended (the Act). The estimated 

margins of sales at LTFV are shown in 

the ‘‘Final Determination Margins’’ 

section of this notice. 

DATES: Effective Date: September 27, 

2010.

FOR FURTHER INFORMATION CONTACT: 

Gemal Brangman or Brian Smith, AD/ 

CVD Operations, Office 2, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone (202) 482–3773 and 

(202) 482–1766, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On May 6, 2010, the Department of 

Commerce (Department) published in 

the Federal Register the preliminary 

determination of sales at LTFV in the 

antidumping duty investigation of 

certain coated paper from Indonesia. 

See Certain Coated Paper Suitable for 

High-Quality Print Graphics Using 

Sheet-Fed Presses From Indonesia: 

Notice of Preliminary Determination of 

Sales at Less Than Fair Value and 

Postponement of Final Determination, 

75 FR 24885 (May 6, 2010) (Preliminary 

Determination). 

On May 10, 2010, the respondents1 in 

this investigation alleged a ministerial 

error in the Department’s preliminary 

margin calculation. 

On May 14, 2010, the Department 

issued a post-preliminary analysis for 

PD/TK/IK evaluating whether the use of 

quarterly cost averaging periods was 

warranted in this investigation. See 

Memorandum to Neal Halper, Director, 

Office of Accounting, entitled 

‘‘Alternative Cost Averaging Period 

Analysis Memorandum—PT Pabrik 

Kertas Tjiwi Kimia Tbk., PT Pindo Deli 

Pulp and Paper Mills, and PT Indah Kiat 

Pulp Tbk,’’ dated May 14, 2010. Based 

on the data and methodology described 

in this memorandum, we found that the 

change in the total cost of 

manufacturing recognized by PD/TK/IK 

during the period of investigation (POI) 

for its highest-volume products sold in 

the U.S. and home markets did not meet 

the Department’s standard for 

significance (i.e., greater than 25 percent


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 59223 

1The respondents are: PT. Pindo Deli Pulp & 

Paper Mills (PD), PT. Pabrik Kertas Tjiwi Kimia, 

Tbk (TK), PT Indah Kiat Pulp & Paper Tbk (IK) 

(collectively PD/TK/IK). In the preliminary 

determination, we determined it appropriate to treat 

PD, TK, and IK as one entity for margin calculation 

purposes because they met the regulatory criteria 

for collapsing. See Memorandum to John M. 

Andersen, Acting Deputy Assistant Secretary for 

Import Administration, from the Team entitled, 

‘‘Whether To Treat Respondents as a Single Entity 

for Margin Calculation Purposes in the 

Antidumping Duty Investigation of Certain Coated 

Paper Suitable for High-Quality Print Graphics 

Using Sheet-Fed Presses From Indonesia,’’ dated 

April 21, 2010. No party commented on this 

preliminary determination and we found nothing at 

verification that would otherwise compel us to 

reverse this determination. Therefore, we have 

continued to treat these affiliated companies as one 

entity in the final determination. 

for consumption on or after the effective 

date of the suspension of liquidation. 

Notification Regarding APO 

This notice also serves as a reminder 

to the parties subject to administrative 

protective order (‘‘APO’’) of their 

responsibility concerning the 

disposition of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305. Timely 

notification of return or destruction of 

APO materials or conversion to judicial 

protective order is hereby requested. 

Failure to comply with the regulations 

and the terms of an APO is a 

sanctionable violation. 

This determination and notice are 

issued and published in accordance 

with sections 735(d) and 777(i)(1) of the 

Act. 

Dated: September 20, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

Appendix I—List of Issues 

Case Issues: 

Comment 1: Whether to Grant MarketOriented Industry (‘‘MOI’’) Status to the 

Coated Paper Industry 

Comment 2A: Whether Simultaneous 

Application of Countervailing Duties 

(‘‘CVDs’’) and Antidumping Duties 

Calculated Using the NME Methodology is 

Contrary to Law 

Comment 2B: Whether Simultaneous 

Application of Countervailing Duties and 

Antidumping Duties Calculated Using the 

NME Methodology to Imports of the Same 

Products Results in the Imposition of 

Double Remedies 

Comment 3: Whether Targeted Dumping Test 

Violates the Administrative Procedures Act 

(‘‘APA’’) and is Flawed 

Comment 4: Whether to Revise the Targeted 

Dumping Analysis in Light of APP-China’s 

Minor Corrections Filed at Verification 

Comment 5: Whether the Department Should 

Apply Zeroing 

Comment 6: Application of Adverse Facts 

Available (‘‘AFA’’) to Sun Paper Companies 

Comment 7: Whether to Apply MarketOriented Economy (‘‘MOE’’) Treatment to 

APP-China 

Comment 8: Whether to Apply AFA to All 

Sales and Expense Information of GPS 

Comment 9: Whether to Reclassify Certain 

APP-China Sales from Export Price (‘‘EP’’)- 

to ‘‘Constructed Export Price (‘‘CEP’’) 

Comment 10: Whether the Department 

Should Reject APP-China’s Minor 

Correction 

Comment 11: Whether the Department 

Should Deduct Certain Rebates for APPChina 

Comment 12: Whether the Department 

Should Deduct Certain Commission 

Expenses 

Comment 13: Whether the Department 

Should Correct Certain Ministerial Errors 

Comment 14: Whether to Deduct Domestic 

Inland Insurance from U.S. Price 

Comment 15: Application of Foreign Truck 

Freight 

Comment 16: Whether to Treat All of APPChina’s Market Economy (‘‘ME’’) Pulp 

Purchases as Market Economy Purchases 

(‘‘MEPs’’) 

Comment 17: Whether to Accept APPChina’s ME Purchases from Thailand and 

Korea 

Comment 18: Whether to Employ the 33 

Percent Threshold for GE Group’s ME 

Purchases 

Comment 19: Valuation of Calcium 

Carbonate Ore (‘‘CCORE’’) 

Comment 20: Valuation of Optical Brightener 

(‘‘OBA/OBAS/OBAL’’) 

Comment 21: Valuation of Masculine Starch 

Transforming Agent (‘‘MSTA’’) 

Comment 22: Valuation of Tapioca Starch 

(‘‘TSTARCH’’) 

Comment 23: Valuation of Wet End Starch 

(‘‘WESTARCH’’) 

Comment 24: Valuation of Dispersing Agent 

A (‘‘DISPERSANTA’’) 

Comment 25: Valuation of Tackifier 

Comment 26: Valuation of Hypochlorous 

Natrium/Sodium Hypochlorite (‘‘BACLO/ 

NACLO’’) 

Comment 27: Valuation of Coating Binding 

Agent (‘‘CBA’’) 

Comment 28: Valuation of Coating Starch 

(‘‘CSTARCH’’) 

Comment 29: Valuation of Surface Sizing 

Starch (‘‘SSS’’) 

Comment 30: Selection of Labor Rate 

Comment 31: Valuation of Brokerage & 

Handling 

Comment 32: Whether the Department 

Should Include Certain Direct Selling 

Expenses in the Calculation of SG&A 

[FR Doc. 2010–24159 Filed 9–24–10; 8:45 am] 

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–560–823] 

Certain Coated Paper Suitable for 

High-Quality Print Graphics Using 

Sheet-Fed Presses From Indonesia: 

Final Determination of Sales at Less 

Than Fair Value 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

determines that certain coated paper 

suitable for high-quality print graphics 

using sheet-fed presses (certain coated 

paper) from Indonesia is being, or is 

likely to be, sold in the United States at 

less-than-fair-value (LTFV), as provided 

in section 735 of the Tariff Act of 1930, 

as amended (the Act). The estimated 

margins of sales at LTFV are shown in 

the ‘‘Final Determination Margins’’ 

section of this notice. 

DATES: Effective Date: September 27, 

2010. 

FOR FURTHER INFORMATION CONTACT: 

Gemal Brangman or Brian Smith, AD/ 

CVD Operations, Office 2, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone (202) 482–3773 and 

(202) 482–1766, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On May 6, 2010, the Department of 

Commerce (Department) published in 

the Federal Register the preliminary 

determination of sales at LTFV in the 

antidumping duty investigation of 

certain coated paper from Indonesia. 

See Certain Coated Paper Suitable for 

High-Quality Print Graphics Using 

Sheet-Fed Presses From Indonesia: 

Notice of Preliminary Determination of 

Sales at Less Than Fair Value and 

Postponement of Final Determination, 

75 FR 24885 (May 6, 2010) (Preliminary 

Determination). 

On May 10, 2010, the respondents1 in 

this investigation alleged a ministerial 

error in the Department’s preliminary 

margin calculation. 

On May 14, 2010, the Department 

issued a post-preliminary analysis for 

PD/TK/IK evaluating whether the use of 

quarterly cost averaging periods was 

warranted in this investigation. See 

Memorandum to Neal Halper, Director, 

Office of Accounting, entitled 

‘‘Alternative Cost Averaging Period 

Analysis Memorandum—PT Pabrik 

Kertas Tjiwi Kimia Tbk., PT Pindo Deli 

Pulp and Paper Mills, and PT Indah Kiat 

Pulp Tbk,’’ dated May 14, 2010. Based 

on the data and methodology described 

in this memorandum, we found that the 

change in the total cost of 

manufacturing recognized by PD/TK/IK 

during the period of investigation (POI) 

for its highest-volume products sold in 

the U.S. and home markets did not meet 

the Department’s standard for 

significance (i.e., greater than 25 percent 


srobinson on DSKHWCL6B1PROD with NOTICES
59224 Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 

2No party commented on the Department’s postpreliminary quarterly cost analysis and we found 

nothing at verification that warrants the reversal of 

this determination. Therefore, we have continued to 

apply our normal POI-average cost methodology in 

the final determination. 

3The petitioners include the following 

companies: Appleton Coated LLC, NewPage 

Corporation, S.D. Warren Company d/b/a/Sappi 

Fine Paper North America, and the United Steel, 

Paper and Forestry, Rubber, Manufacturing, Energy, 

Allied Industrial and Service Workers International 

Union. 

4 ‘‘ ‘Paperboard’ refers to Certain Coated Paper that 

is heavier, thicker and more rigid than coated paper 

which otherwise meets the product description. In 

the context of Certain Coated Paper, paperboard 

typically is referred to as ‘cover,’ to distinguish it 

from ‘text.’ ’’ 

5One of the key measurements of any grade of 

paper is brightness. Generally speaking, the brighter 

the paper the better the contrast between the paper 

and the ink. Brightness is measured using a GE 

Reflectance Scale, which measures the reflection of 

light off of a grade of paper. One is the lowest 

reflection, or what would be given to a totally black 

grade, and 100 is the brightest measured grade. 

change from the high to the low 

quarter). See Certain Welded Stainless 

Steel Pipes From the Republic of Korea: 

Final Results of Antidumping Duty 

Administrative Review, 74 FR 31242 

(June 30, 2009) and accompanying 

Issues and Decision Memorandum at 

Comment 1. Therefore, we determined 

that no change to our normal POIaverage cost methodology was 

warranted in this case.2

On May 11, 2010, we issued the cost 

verification agenda to PD/TK/IK. 

On May 19, 2010, we determined that 

the error alleged by PD/TK/IK in its May 

10, 2010, submission was a ministerial 

error, but not a significant ministerial 

error as defined by 19 CFR 351.224(g), 

and stated that we would correct this 

error for purposes of the final 

determination. See Memorandum from 

The Team to James Maeder, Director, 

AD/CVD Operations Office 2, entitled 

‘‘Respondent’s Allegation of Ministerial 

Error in the Preliminary Determination,’’ 

dated May 19, 2010. 

On June 1, 2010, we issued a sales 

supplemental questionnaire to PD/TK/ 

IK and received PD/TK/IK’s response to 

this questionnaire on June 16, 2010. 

On June 4, 2010, we issued the sales 

verification agenda to PD/TK/IK. 

During May and June 2010, we 

verified the sales and cost of production 

(COP) questionnaire responses of PD/ 

TK/IK. During June and July 2010, we 

issued the COP and sales verification 

reports. See Memorandum to The File 

entitled ‘‘Verification of the Cost 

Response of PT Pabrik Kertas Tjiwi 

Kimia Tbk., PT Pindo Deli Pulp and 

Paper Mills, and PT Indah Kiat Pulp and 

Paper Tbk. in the Antidumping 

Investigation of Certain Coated Paper 

Suitable for High-Quality Print Graphics 

Using Sheet-Fed Presses From 

Indonesia,’’ dated June 29, 2010; 

Memorandum to The File entitled 

‘‘Verification of the Sales Response of 

(Affiliated Company) in the 

Antidumping Duty Investigation of 

Certain Coated Paper Suitable for HighQuality Print Graphics Using Sheet-Fed 

Presses (Coated Paper) From Indonesia,’’ 

dated July 26, 2010; Memorandum to 

The File entitled ‘‘Verification of the 

Sales Response of PT Pindo Deli Pulp & 

Paper Mills and PT Pabrik Kertas Tjiwi 

Kimia, Tbk in the Antidumping Duty 

Investigation of Certain Coated Paper 

Suitable for High-Quality Print Graphics 

Using Sheet-Fed Presses (Coated Paper) 

From Indonesia,’’ dated July 26, 2010; 

Memorandum to The File entitled 

‘‘Verification of the Sales Response of 

PT Indah Kiat Pulp & Paper Tbk. and 

(Affiliated Company) in the 

Antidumping Duty Investigation of 

Certain Coated Paper Suitable for HighQuality Print Graphics Using Sheet-Fed 

Presses (Coated Paper) From Indonesia,’’ 

dated July 30, 2010; and Memorandum 

to The File entitled ‘‘Verification of the 

Sales Response of (Affiliated Company) 

in the Antidumping Duty Investigation 

of Certain Coated Paper Suitable for 

High-Quality Print Graphics Using 

Sheet-Fed Presses (Coated Paper) From 

Indonesia,’’ dated July 30, 2010. 

On August 3, 2010, we issued a 

memorandum addressing certain scope 

issues in this investigation. See 

Memorandum to Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration, from Susan Kuhbach, 

Director, Office 1, entitled ‘‘Scope’’ 

(August 3, 2010 Scope Memorandum). 

On August 10 and 16, 2010, 

respectively, the petitioners3 in this 

investigation and PD/TK/IK each 

submitted case and rebuttal briefs on all 

issues excluding scope. On August 18 

and 25, 2010, the Department met with 

the petitioners’ and PD/TK/IK’s 

counsels, respectively, to discuss the 

issues raised in these case and rebuttal 

briefs. See the Department’s memoranda 

to the file entitled, ‘‘Meeting With 

Petitioner’s Counsel,’’ dated August 18, 

2010, and ‘‘Meeting With the 

Respondent Counsel,’’ dated August 25, 

2010. 

On August 20, 2010, PD/TK/TK filed 

its case brief on scope issues, and on 

August 24, 2010, the petitioners filed 

their rebuttal brief on scope issues. 

Period of Investigation 

The POI is July 1, 2008, to June 30, 

2009. This period corresponds to the 

four most recent fiscal quarters prior to 

the month of the filing of the petition. 

See 19 CFR 351.204(b)(1). 

Scope of Investigation 

The merchandise under investigation 

includes certain coated paper and 

paperboard4 in sheets suitable for high 

quality print graphics using sheet-fed 

presses; coated on one or both sides 

with kaolin (China or other clay), 

calcium carbonate, titanium dioxide, 

and/or other inorganic substances; with 

or without a binder; having a GE 

brightness level of 80 or higher; 5

weighing not more than 340 grams per 

square meter; whether gloss grade, satin 

grade, matte grade, dull grade, or any 

other grade of finish; whether or not 

surface-colored, surface-decorated, 

printed (except as described below), 

embossed, or perforated; and 

irrespective of dimensions (‘‘Certain 

Coated Paper’’). 

Certain Coated Paper includes (a) 

Coated free sheet paper and paperboard 

that meets this scope definition; (b) 

coated groundwood paper and 

paperboard produced from bleached 

chemi-thermo-mechanical pulp 

(‘‘BCTMP’’) that meets this scope 

definition; and (c) any other coated 

paper and paperboard that meets this 

scope definition. 

Certain Coated Paper is typically (but 

not exclusively) used for printing multicolored graphics for catalogues, books, 

magazines, envelopes, labels and wraps, 

greeting cards, and other commercial 

printing applications requiring high 

quality print graphics. 

Specifically excluded from the scope 

are imports of paper and paperboard 

printed with final content printed text 

or graphics. 

As of 2009, imports of the subject 

merchandise are provided for under the 

following categories of the Harmonized 

Tariff Schedule of the United States 

(‘‘HTSUS’’): 4810.14.11, 4810.14.1900, 

4810.14.2010, 4810.14.2090, 

4810.14.5000, 4810.14.6000, 4810.14.70, 

4810.19.1100, 4810.19.1900, 

4810.19.2010, 4810.19.2090, 

4810.22.1000, 4810.22.50, 4810.22.6000, 

4810.22.70, 4810.29.1000, 4810.29.5000, 

4810.29.6000, 4810.29.70, 4810.32, 

4810.39 and 4810.92. While HTSUS 

subheadings are provided for 

convenience and customs purposes, the 

written description of the scope of the 

investigation is dispositive. 

Scope Comments 

Following the Preliminary 

Determination, on August 3, 2010, the 

Department issued a decision 

memorandum addressing three scope 

issues in this and the concurrent 

antidumping and countervailing duty 

investigations on certain coated paper 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 59225 

6These investigations include Notice of Final 

Determination of Sales at Less Than Fair Value: 

Polyethylene Retail Carrier Bags from Taiwan, 75 

FR 14569 (March 26, 2010), Polyethylene Retail 

Carrier Bags from Indonesia: Final Determination of 

Sales at Less Than Fair Value, 75 FR 16431 (April 

1, 2010), and accompanying Issues and Decision 

Memorandum at Comment 1; and Certain Oil 

Country Tubular Goods from the People’s Republic 

of China: Final Determination of Sales at Less Than 

Fair Value, Affirmative Final Determination of 

Critical Circumstances and Final Determination of 

Targeted Dumping, 75 FR 20335 (April 19, 2010) 

and accompanying Issues and Decision 

Memorandum at Comment 2. 

from Indonesia and the People’s 

Republic of China: (1) Whether to clarify 

the scope of these investigations to 

exclude multi-ply coated paper and 

paperboard; (2) whether to modify the 

scope language by striking the phrase 

‘‘suitable for high-quality print 

graphics;’’ and (3) whether to add three 

HTSUS numbers which may include inscope merchandise (i.e., HTSUS 

4810.32, 4810.39 and 4810.92). See 

August 3, 2010 Scope Memorandum. 

For the reasons explained in the August 

3, 2010, Scope Memorandum, the 

Department determined that: (1) Multiply products that otherwise meet the 

description of the scope of the 

investigations are not excluded from the 

scope; (2) the ‘‘suitable for high-quality 

print graphics’’ language should not be 

deleted from the scope; and (3) the three 

HTSUS numbers at issue should be 

added to the scope. 

The Department subsequently 

provided the interested parties an 

opportunity to comment on its postpreliminary scope determination. In 

response, the respondents in these 

investigations filed a case brief on 

August 20, 2010, and the petitioners 

filed a rebuttal brief on August 24, 2010. 

Based on the Department’s analysis of 

these comments and the factual records 

of these investigations, the Department 

continues to find that multi-ply coated 

paper and paperboard are not excluded 

from the scope of the investigations, that 

the ‘‘suitable for high-quality print 

graphics’’ language should be 

maintained, and that the three HTSUS 

numbers listed above should be added 

to the scope. For a complete discussion 

of the parties’ comments and the 

Department’s position, see ‘‘Issues and 

Decision Memorandum for the Final 

Determination in the Countervailing 

Duty Investigation of Certain Coated 

Paper Suitable for High-Quality Print 

Graphics Using Sheet-Fed Presses from 

the People’s Republic of China,’’ dated 

concurrently with this notice and 

incorporated herein by reference. 

Analysis of Comments Received 

All issues (except scope issues) raised 

in the case and rebuttal briefs submitted 

by the parties to this investigation are 

addressed in the ‘‘Issues and Decision 

Memorandum for the Final 

Determination in the Less-Than-FairValue Investigation of Certain Coated 

Paper Suitable for High-Quality Print 

Graphics Using Sheet-Fed Presses from 

Indonesia’’ from Susan H. Kuhbach, 

Acting Deputy Assistant Secretary for 

Antidumping and Countervailing Duty 

Operations, to Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration (Decision Memo), dated 

concurrently with this notice, which is 

hereby adopted by this notice. A list of 

the issues that parties have raised and 

to which we have responded, all of 

which are in the Decision Memo, is 

attached to this notice as an appendix. 

Parties can find a complete discussion 

of all issues raised in this investigation 

and the corresponding 

recommendations in the Decision 

Memo, which is on file in the Central 

Records Unit, Room 1117 of the 

Commerce Department. In addition, a 

complete version of the Decision Memo 

can be accessed directly on the Web at 

http://ia.ita.doc.gov/frn. The paper copy 

and electronic version of the Decision 

Memo are identical in content. 

Verification 

As provided in section 782(i) of the 

Act, we verified the sales and COP 

information submitted by PD/TK/IK for 

use in our final determination. We used 

standard verification procedures 

including an examination of relevant 

accounting and production records, and 

original source documents provided by 

the respondent. Our sales and cost 

verification results are outlined in 

separate verification reports. See 

‘‘Background’’ section above for a list of 

verification reports the Department has 

issued in this investigation. The 

verification reports are on file and 

available in the Central Records Unit, 

Room 1117 of the Commerce 

Department. 

Changes Since the Preliminary 

Determination 

Based on our analysis of the 

comments received and our findings at 

verification, we have made certain 

changes to the margin calculations for 

PD/TK/IK. For a discussion of these 

changes, see the ‘‘Margin Calculations’’ 

section of the Decision Memo. 

Targeted Dumping 

The statute allows the Department to 

employ the average-to-transaction 

margin calculation methodology under 

the following circumstances: (1) There 

is a pattern of export prices that differ 

significantly among purchasers, regions 

or periods of time; and (2) the 

Department explains why such 

differences cannot be taken into account 

using the average-to-average or 

transaction-to-transaction methodology. 

See section 777A(d)(1)(B) of the Act. 

In the Preliminary Determination, we 

conducted customer, regional, and timeperiod targeted dumping analyses based 

on timely allegations of targeted 

dumping filed by the petitioners, using 

the methodology adopted in Certain 

Steel Nails from the United Arab 

Emirates: Notice of Final Determination 

of Sales at Not Less Than Fair Value, 73 

FR 33985 (June 16, 2008), and Certain 

Steel Nails from the People’s Republic 

of China: Final Determination of Sales 

at Less Than Fair Value and Partial 

Affirmative Determination of Critical 

Circumstances, 73 FR 33977 (June 16, 

2008), and applied in more recent 

investigations.6 As a result, we 

preliminarily determined that, with 

respect to sales by PD/TK/IK for certain 

customers, regions and time periods, 

there was a pattern of prices that 

differed significantly. However, we also 

found that these differences could be 

taken into account using the average-toaverage methodology because the 

average-to-average methodology did not 

conceal differences in the patterns of 

prices between the targeted and nontargeted groups by averaging low-priced 

sales to the targeted group with highpriced sales to the non-targeted group. 

We stated further that the standard 

average-to-average methodology took 

into account the price difference 

because the alternative average-totransaction methodology yielded no 

difference in the margin or yielded a 

difference in the margin that was so 

insignificant relative to the size of the 

resulting margin as to be immaterial. 

Therefore, for the preliminary 

determination, we applied the standard 

average-to-average methodology to all of 

PD/TK/IK’s U.S. sales. See Preliminary 

Determination at 75 FR 24887–24888. 

For the final determination, we 

performed our targeted-dumping 

analysis following the methodology 

employed in the Preliminary 

Determination, after making certain 

revisions to PD/TK/IK’s reported data 

based on verification findings and the 

comments submitted by the parties, as 

enumerated in the ‘‘Margin 

Calculations’’ section of the Decision 

Memo. Because the results of our final 

targeted-dumping analysis were 

consistent with those of our preliminary 

targeted-dumping analysis, we have 

continued to apply the standard 

average-to-average methodology to all of 

PD/TK/IK’s U.S. sales in the final 


srobinson on DSKHWCL6B1PROD with NOTICES
59226 Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 

determination. For further discussion, 

see the Decision Memo at Comment 1. 

Continuation of Suspension of 

Liquidation 

In accordance with section 

735(c)(1)(B) of the Act, we are directing 

U.S. Customs and Border Protection 

(CBP) to continue to suspend 

liquidation of all imports of subject 

merchandise that are entered or 

withdrawn from warehouse, for 

consumption on or after May 6, 2010, 

the date of publication of the 

preliminary determination in the 

Federal Register. We will instruct CBP 

to continue to require a cash deposit or 

the posting of a bond for all companies 

based on the estimated weightedaverage dumping margins shown below. 

The suspension of liquidation 

instructions will remain in effect until 

further notice. 

Final Determination Margins 

We determine that the weightedaverage dumping margins are as follows: 

Manufacturer/Exporter Weighted-Average 

margin (percent) 

PT. Pabrik Kertas Tjiwi Kimia Tbk./PT. Pindo Deli Pulp and Paper/PT. Indah Kiat Pulp and Paper Tbk ......................... 20.13 

All Others ............................................................................................................................................................................. 20.13 

All-Others Rate 

Section 735(c)(5)(A) of the Act 

provides that the estimated ‘‘All Others’’ 

rate shall be an amount equal to the 

weighted average of the estimated 

weighted-average dumping margins 

established for exporters and producers 

individually investigated, excluding any 

zero and de minimis margins, and any 

margins determined entirely under 

section 776 of the Act. PD/TK/IK is the 

only respondent in this investigation for 

which the Department calculated a 

company-specific rate. Therefore, for 

purposes of determining the all-others 

rate and pursuant to section 735(c)(5)(A) 

of the Act, we are using the weightedaverage dumping margin calculated for 

PD/TK/IK, as referenced above. See, e.g., 

Notice of Final Determination of Sales 

at Less Than Fair Value: Stainless Steel 

Sheet and Strip in Coils From Italy, 64 

FR 30750, 30755 (June 8, 1999); Coated 

Free Sheet Paper from Indonesia: Notice 

of Preliminary Determination of Sales at 

Less Than Fair Value and Postponement 

of Final Determination, 72 FR 30753, 

30757 (June 4, 2007), unchanged in 

Notice of Final Determination of Sales 

at Less Than Fair Value: Coated Free 

Sheet Paper from Indonesia, 72 FR 

60636 (October 25, 2007); and Certain 

Magnesia Carbon Bricks from Mexico: 

Notice of Final Determination of Sales 

at Less Than Fair Value, 75 FR 45097 

(August 2, 2010). 

Disclosure 

We will disclose the calculations 

performed within five days of the date 

of publication of this notice to parties in 

this proceeding in accordance with 19 

CFR 351.224(b). 

International Trade Commission 

Notification 

In accordance with section 735(d) of 

the Act, we have notified the 

International Trade Commission (ITC) of 

our final determination. As our final 

determination is affirmative, the ITC 

will determine within 45 days whether 

imports of the subject merchandise are 

causing material injury, or threat of 

material injury, to an industry in the 

United States. If the ITC determines that 

material injury or threat of injury does 

not exist, the proceeding will be 

terminated and all securities posted will 

be refunded or canceled. If the ITC 

determines that such injury does exist, 

the Department will issue an 

antidumping duty order directing CBP 

to assess antidumping duties on all 

imports of the subject merchandise 

entered, or withdrawn from warehouse, 

for consumption on or after the effective 

date of the suspension of liquidation. 

Return or Destruction of Proprietary 

Information 

This notice will serve as the only 

reminder to parties subject to 

administrative protective order (APO) of 

their responsibility concerning the 

destruction of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305(a)(3). Timely 

written notification of return/ 

destruction of APO materials or 

conversion to judicial protective order is 

hereby requested. Failure to comply 

with the regulations and the terms of an 

APO is a sanctionable violation. 

We are issuing and publishing this 

determination and notice in accordance 

with sections 735(d) and 777(i) of the 

Act. 

Dated: September 20, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

Appendix—Issues in Decision Memo 

Comments 

Comment 1: Targeted Dumping 

Comment 2: Capitalization of Foreign 

Exchange Losses in Log Costs 

Comment 3: Market Price for Certain Logs 

Comment 4: Inclusion of Sawmill Logs in Log 

Costs 

Comment 5: Transfer Price for Logs 

Comment 6: IK’s Pulp Costs 

Comment 7: General and Administrative 

(G&A) Expenses 

Comment 8: Financial Expenses 

Comment 9: Unreported Sales to Puerto Rico 

Comment 10: Treatment of Bank Charges, 

Loading Fees, Administrative (ADM) Fees, 

and Automatic Manifest System (AMS) 

Fees 

Comment 11: Billing Adjustments 

Comment 12: Rebates 

Comment 13: Freight Revenue 

Comment 14: International Freight 

Comment 15: Foreign Inland Freight 

Comment 16: Treatment of Certain U.S. Sales 

[FR Doc. 2010–24160 Filed 9–24–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

RIN 0648–XZ25 

Fisheries of the South Atlantic, Gulf of 

Mexico, and Caribbean; Southeastern 

Data, Assessment, and Review 

(SEDAR); Public Meeting 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Notice of SEDAR Steering 

Committee Meeting. 

SUMMARY: The SEDAR Steering 

Committee will meet to discuss the 

SEDAR assessment schedule, budget, 

and the SEDAR process. See 

SUPPLEMENTARY INFORMATION. 

DATES: The SEDAR Steering Committee 

will meet on Tuesday, October 5 

through Thursday, October 7, 2010. See 

SUPPLEMENTARY INFORMATION for specific 

dates and times. 

ADDRESSES: The meeting will be held at 

the Embassy Suites Historic Charleston, 

337 Meeting Street, Charleston, SC 

29403. telephone: (843) 723–6900. 

FOR FURTHER INFORMATION CONTACT: John 

Carmichael, SEDAR Program Manager, 

SEDAR/SAFMC, 4055 Faber Place, Suite


srobinson on DSKHWCL6B1PROD with NOTICES
29364 Federal Register / Vol. 75, No. 100 / Tuesday, May 25, 2010 / Notices 

1For purposes of these investigations, the 

Department of Commerce has defined the subject 

merchandise as ‘‘certain coated paper and 

paperboard in sheets suitable for high quality print 

graphics using sheet-fed presses; coated on one or 

both sides with kaolin (China or other clay), 

calcium carbonate, titanium dioxide, and/or other 

inorganic substances; with or without a binder; 

having a GE brightness level of 80 or higher; 

weighing not more than 340 grams per square 

meter; whether gloss grade, satin grade, matte grade, 

dull grade, or any other grade of finish; whether or 

not surface-colored, surface decorated, printed 

(except as described below), embossed, or 

perforated; and irrespective of dimensions (‘‘certain 

coated paper’’). Certain coated paper includes (a) 

coated free sheet paper and paperboard that meets 

this scope definition; (b) coated groundwood paper 

and paperboard produced from bleached chemithermo-mechanical pulp (‘‘BCTMP’’) that meets this 

scope definition; and (c) any other coated paper and 

paperboard that meets this scope definition. Certain 

coated paper is typically (but not exclusively) used 

for printing multicolored graphics for catalogues, 

books, magazines, envelopes, labels and wraps, 

greeting cards, and other commercial printing 

applications requiring high quality print graphics. 

Specifically excluded from the scope are imports of 

paper and paperboard printed with final content 

printed text or graphics.’’ 

LOUISIANA 

Ascension Parish 

St. Joseph School, LA 22 and 44 Burnside, 

88002651 

[FR Doc. 2010–12480 Filed 5–24–10; 8:45 am] 

BILLING CODE 4312–51–P 

DEPARTMENT OF THE INTERIOR 

Bureau of Land Management 

[LLCO922000–L13100000–FI0000; 

COC63019] 

Notice of Proposed Reinstatement of 

Terminated Oil and Gas Lease 

COC63019 

AGENCY: Bureau of Land Management, 

Interior. 

ACTION: Notice of proposed 

reinstatement of terminated oil and gas 

lease. 

SUMMARY: Under the provisions of 30 

U.S.C. 188(d) and (e), and 43 CFR 

3108.2–3(a) and (b)(1), the Bureau of 

Land Management (BLM) received a 

petition for reinstatement of oil and gas 

lease COC63019 from Maverick 

Whitewater, LLC and PHT Whitewater, 

LLC, for lands in Delta County, 

Colorado. The petition was filed on time 

and was accompanied by all the rentals 

due since the date the lease terminated 

under the law.

FOR FURTHER INFORMATION CONTACT: 

BLM, Milada Krasilinec, Land Law 

Examiner, Branch of Fluid Minerals 

Adjudication, at (303) 239–3767. 

SUPPLEMENTARY INFORMATION: The lessee 

has agreed to the amended lease terms 

for rentals and royalties at rates of $10 

per acre or fraction thereof, per year and 

16 2⁄3 percent, respectively. The lessee 

has paid the required $500 

administrative fee and $163 to 

reimburse the Department for the cost of 

this Federal Register notice. The lessee 

has met all the requirements for 

reinstatement of the lease as set out in 

Section 31(d) and (e) of the Mineral 

Lands Leasing Act of 1920 (30 U.S.C. 

188), and the BLM is proposing to 

reinstate lease COC63019 effective 

January 1, 2009, under the original 

terms and conditions of the lease and 

the increased rental and royalty rates 

cited above. 

Helen M. Hankins, 

State Director. 

[FR Doc. 2010–12460 Filed 5–24–10; 8:45 am] 

BILLING CODE 4310–JB–P

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–470–471 and 

731–TA–1169–1170 (Final)] 

Certain Coated Paper Suitable for 

High-Quality Print Graphics Using 

Sheet-Fed Presses From China and 

Indonesia 

AGENCY: United States International 

Trade Commission. 

ACTION: Scheduling of the final phase of 

countervailing duty and antidumping 

investigations. 

SUMMARY: The Commission hereby gives 

notice of the scheduling of the final 

phase of countervailing duty 

investigation No. 701–TA–470–471 

(Final) under section 705(b) of the Tariff 

Act of 1930 (19 U.S.C. 1671d(b)) (the 

Act) and the final phase of antidumping 

investigation No. 731–TA–1169–1170 

(Final) under section 735(b) of the Act 

(19 U.S.C. 1673d(b)) to determine 

whether an industry in the United 

States is materially injured or 

threatened with material injury, or the 

establishment of an industry in the 

United States is materially retarded, by 

reason of subsidized and less-than-fairvalue imports from China and Indonesia 

of certain coated paper, provided for in 

subheadings 4810.14.11, 4810.14.1900, 

4810.14.2010, 4810.14.2090, 

4810.14.5000, 4810.14.6000, 4810.14.70, 

4810.19.1100, 4810.19.1900, 

4810.19.2010, 4810.19.2090, 

4810.22.1000, 4810.22.50, 4810.22.6000, 

4810.22.70, 4810.29.1000, 4810.29.5000, 

4810.29.6000, 4810.29.70 of the 

Harmonized Tariff Schedule of the 

United States.1

For further information concerning 

the conduct of this phase of the 

investigations, hearing procedures, and 

rules of general application, consult the 

Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A and C (19 CFR part 207). 

DATES: Effective Date: May 6, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Christopher J. Cassise (202–708–5408), 

Office of Investigations, U.S. 

International Trade Commission, 500 E 

Street SW., Washington, DC 20436. 

Hearing-impaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202– 

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

these investigations may be viewed on 

the Commission’s electronic docket 

(EDIS) at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background.—The final phase of 

these investigations is being scheduled 

as a result of affirmative preliminary 

determinations by the Department of 

Commerce that certain benefits which 

constitute subsidies within the meaning 

of section 703 of the Act (19 U.S.C. 

1671b) are being provided to 

manufacturers, producers, or exporters 

in China and Indonesia of certain coated 

paper, and that such products are being 

sold in the United States at less than fair 

value within the meaning of section 733 

of the Act (19 U.S.C. 1673b). The 

investigations were requested in a 

petition filed on September 23, 2009, by 

Appleton Coating, LLC, Kimberly, WI; 

NewPage Corp., Mianisburg, OH; Sappi 

Fine Paper North America, Boston, MA; 

and the United Steel, Paper and 

Forestry, Rubber Manufacturing, Energy, 

Allied Industrial and Service Workers 

International Union (‘‘USW’’). 

Participation in the investigations and 

public service list.—Persons, including 

industrial users of the subject 

merchandise and, if the merchandise is 

sold at the retail level, representative 

consumer organizations, wishing to 

participate in the final phase of these 

investigations as parties must file an 

entry of appearance with the Secretary 

to the Commission, as provided in 

section 201.11 of the Commission’s 

rules, no later than 21 days prior to the 

hearing date specified in this notice. A 

party that filed a notice of appearance 

during the preliminary phase of the 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 100 / Tuesday, May 25, 2010 / Notices 29365 

investigations need not file an 

additional notice of appearance during 

this final phase. The Secretary will 

maintain a public service list containing 

the names and addresses of all persons, 

or their representatives, who are parties 

to the investigations. 

Limited disclosure of business 

proprietary information (BPI) under an 

administrative protective order (APO) 

and BPI service list.—Pursuant to 

section 207.7(a) of the Commission’s 

rules, the Secretary will make BPI 

gathered in the final phase of these 

investigations available to authorized 

applicants under the APO issued in the 

investigations, provided that the 

application is made no later than 21 

days prior to the hearing date specified 

in this notice. Authorized applicants 

must represent interested parties, as 

defined by 19 U.S.C. 1677(9), who are 

parties to the investigations. A party 

granted access to BPI in the preliminary 

phase of the investigations need not 

reapply for such access. A separate 

service list will be maintained by the 

Secretary for those parties authorized to 

receive BPI under the APO. 

Staff report.—The prehearing staff 

report in the final phase of these 

investigations will be placed in the 

nonpublic record on September 2, 2010, 

and a public version will be issued 

thereafter, pursuant to section 207.22 of 

the Commission’s rules. 

Hearing.—The Commission will hold 

a hearing in connection with the final 

phase of these investigations beginning 

at 9:30 a.m. on September 16, 2010, at 

the U.S. International Trade 

Commission Building. Requests to 

appear at the hearing should be filed in 

writing with the Secretary to the 

Commission on or before September 10, 

2010. A nonparty who has testimony 

that may aid the Commission’s 

deliberations may request permission to 

present a short statement at the hearing. 

All parties and nonparties desiring to 

appear at the hearing and make oral 

presentations should attend a 

prehearing conference to be held at 9:30 

a.m. on September 14, 2010, at the U.S. 

International Trade Commission 

Building. Oral testimony and written 

materials to be submitted at the public 

hearing are governed by sections 

201.6(b)(2), 201.13(f), and 207.24 of the 

Commission’s rules. Parties must submit 

any request to present a portion of their 

hearing testimony in camera no later 

than 7 business days prior to the date of 

the hearing. 

Written submissions.—Each party 

who is an interested party shall submit 

a prehearing brief to the Commission. 

Prehearing briefs must conform with the 

provisions of section 207.23 of the 

Commission’s rules; the deadline for 

filing is September 10, 2010. Parties 

may also file written testimony in 

connection with their presentation at 

the hearing, as provided in section 

207.24 of the Commission’s rules, and 

posthearing briefs, which must conform 

with the provisions of section 207.25 of 

the Commission’s rules. The deadline 

for filing posthearing briefs is 

September 23, 2010; witness testimony 

must be filed no later than three days 

before the hearing. In addition, any 

person who has not entered an 

appearance as a party to the 

investigations may submit a written 

statement of information pertinent to 

the subject of the investigations, 

including statements of support or 

opposition to the petition, on or before 

September 23, 2010. On October 13, 

2010, the Commission will make 

available to parties all information on 

which they have not had an opportunity 

to comment. Parties may submit final 

comments on this information on or 

before October 15, 2010, but such final 

comments must not contain new factual 

information and must otherwise comply 

with section 207.30 of the Commission’s 

rules. All written submissions must 

conform with the provisions of section 

201.8 of the Commission’s rules; any 

submissions that contain BPI must also 

conform with the requirements of 

sections 201.6, 207.3, and 207.7 of the 

Commission’s rules. The Commission’s 

rules do not authorize filing of 

submissions with the Secretary by 

facsimile or electronic means, except to 

the extent permitted by section 201.8 of 

the Commission’s rules, as amended, 67 

FR 68036 (November 8, 2002). Even 

where electronic filing of a document is 

permitted, certain documents must also 

be filed in paper form, as specified in II 

(C) of the Commission’s Handbook on 

Electronic Filing Procedures, 67 FR 

68168, 68173 (November 8, 2002). 

Additional written submissions to the 

Commission, including requests 

pursuant to section 201.12 of the 

Commission’s rules, shall not be 

accepted unless good cause is shown for 

accepting such submissions, or unless 

the submission is pursuant to a specific 

request by a Commissioner or 

Commission staff. 

In accordance with sections 201.16(c) 

and 207.3 of the Commission’s rules, 

each document filed by a party to the 

investigations must be served on all 

other parties to the investigations (as 

identified by either the public or BPI 

service list), and a certificate of service 

must be timely filed. The Secretary will 

not accept a document for filing without 

a certificate of service. 

Authority: These investigations are being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.21 of the 

Commission’s rules. 

By order of the Commission. 

Issued: May 19, 2010. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. 2010–12496 Filed 5–24–10; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF LABOR 

Office of the Secretary 

Job Corps: Final Finding of No 

Significant Impact (FONSI) for Small 

Wind Turbine Installation at the Pine 

Ridge Job Corps Center Located at 

15710 Highway 385, Chadron, NE 

69337 

AGENCY: Office of the Secretary (OSEC), 

Department of Labor. 

Recovery: This project will be wholly 

funded under the American Recovery 

and Reconstruction Act of 2009. 

ACTION: Final Finding of No Significant 

Impact (FONSI) for Small Wind Turbine 

Installation at the Pine Ridge Job Corps 

Center located at 15710 Highway 385, 

Chadron, NE 69337. 

SUMMARY: Pursuant to the Council on 

Environmental Quality Regulations (40 

CFR part 1500–08) implementing 

procedural provisions of the National 

Environmental Policy Act (NEPA), the 

Department of Labor, Office of the 

Secretary (OSEC), in accordance with 29 

CFR 11.11(d), gives final notice of the 

proposed construction of a small wind 

turbine at the Pine Ridge Job Corps 

Center, and that this project will not 

have a significant adverse impact on the 

environment. In accordance with 29 

CFR 11.11(d) and 40 CFR 1501.4(e)(2), 

a preliminary FONSI for the project was 

published in the April 5, 2010 Federal 

Register (75 FR 17161). No comments 

were received regarding the preliminary 

FONSI. OSEC has reviewed the 

conclusion of the environmental 

assessment (EA), and agrees with the 

finding of no significant impact. This 

notice serves as the Final Finding of No 

Significant Impact (FONSI) for Small 

Wind Turbine Installation at the Pine 

Ridge Job Corps Center located at 15710 

Highway 385, Chadron, NE 69337. The 

preliminary FONSI and the EA are 

adopted in final with no change. 

DATES: Effective Date: These findings are 

effective as of May 25, 2010. 

FOR FURTHER INFORMATION CONTACT: 

William A Dakshaw, Department of 

Labor, US Department of Labor, 200 


srobinson on DSKHWCL6B1PROD with NOTICES

APPENDIX B

LIST OF HEARING WITNESSES

B-1

CALENDAR OF PUBLIC HEARING

Those listed below appeared as witnesses at the United States International Trade

Commission’s hearing:

Subject: Certain Coated Paper Suitable for High-Quality Print

Graphics Using Sheet-Fed Presses from China and Indonesia

Inv. Nos.: 701-TA-470-471 and 731-TA-1169-1170 (Final)

Date and Time: September 16, 2010 - 9:30 a.m.

Sessions were held in connection with these investigations in the Main Hearing Room (room

101), 500 E Street, S.W., Washington, D.C.

UNITED STATES SENATE APPEARANCES:

The Honorable John D. Rockefeller IV, United States Senator, West Virginia

The Honorable Herb Kohl, United States Senator, Wisconsin

The Honorable Russell D. Feingold, United States Senator, Wisconsin

The Honorable Olympia J. Snowe, United States Senator, Maine

The Honorable Susan M. Collins, United States Senator, Maine

The Honorable Debbie Stabenow, United States Senator, Michigan

The Honorable Amy Klobuchar, United States Senator, Minnesota

The Honorable Al Franken, United States Senator, Minnesota

STATE GOVERNOR APPEARANCE:

The Honorable Ted Strickland, Governor of Ohio

U.S. HOUSE OF REPRESENTATIVES APPEARANCES:

The Honorable James L. Oberstar, U.S. Representative, 8th District, Minnesota

The Honorable Thomas E. Petri, U.S. Representative, 6th District, Wisconsin

B-3
The Honorable Roscoe G. Bartlett, U.S. Representative, 6th District, Maryland

The Honorable Bart Stupak, U.S. Representative, 1st District, Michigan

The Honorable Ed Whitfield, U.S. Representative, 2st District, Kentucky

The Honorable Mike Ross, U.S. Representative, 4th District, Arkansas

The Honorable Michael H. Michaud, U.S. Representative, 2nd District, Maine

The Honorable Michael R. Turner, U.S. Representative, Ohio

The Honorable Steve L. Kagen, U.S. Representative, 8th District, Wisconsin

The Honorable Chellie Pingree, U.S. Representative, 1st District, Maine

OPENING STATEMENTS:

Petitioner: Terence P. Stewart, Stewart and Stewart

Respondents: James P. Durling, Winston & Strawn LLP

IN SUPPORT OF THE IMPOSITION OF ANTIDUMPING AND COUNTERVAILING

DUTY ORDERS:

Stewart and Stewart

Washington, D.C.

and

King & Spalding LLP

Washington, D.C.

on behalf of

Appleton Coated, LLC

New Page Corp.

Sappi Fine Paper North America

United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service

Workers International Union (“USW”)

George F. Martin, President and CEO, NewPage Corp.

B-4
Barry R. Nelson, Senior Vice President, Sales, NewPage Corp.

Steven DeVoe, General Manager, Sheet and Caliper, NewPage Corp.

Mark Gardner, President and CEO, Sappi Fine Paper North America

Jennifer Miller, Executive Vice President, Strategic Marketing and Chief

Sustainability Officer, Sappi Fine Paper North America

Anne Ayer, Vice President, Corporate Development and Chief Information

Officer, Sappi Fine Paper North America

Sandra Van Ert, President and CEO, Appleton Coated LLC

John Cappy, Former CEO, Appleton Coated LLC

Greg Savage, Vice President, Commercial Sales, Appleton Coated LLC

Leo Gerard, International President, United Steel, Paper and Forestry, Rubber,

Manufacturing, Energy, Allied Industrial and Service Workers

International Union

Jon Geenen, International Vice President, United Steel, Paper and Forestry,

Rubber, Manufacturing, Energy, Allied Industrial and Service Workers

International Union

David McGehee, President, Mac Papers, Inc.

Mike Freeland, President, Field Paper Co.

George Schoedinger, Vice President, Universal Printing Co.

Mike Marcian, President, Corporate Press

Dr. Seth Kaplan, Principal, The Brattle Group

Bonnie B. Byers, Trade Consultant, King & Spalding

B-5
Terence P. Stewart )

Eric P. Salonen )

Philip A. Butler )

Elizabeth A. Argenti ) – OF COUNSEL

)

Gilbert B. Kaplan )

Brian E. McGill )

IN OPPOSITION TO THE IMPOSITION OF ANTIDUMPING AND COUNTERVAILING

DUTY ORDERS:

Winston & Strawn LLP

Washington, D.C.

on behalf of

Gold East Paper (Jiangsu) Co., Ltd.

Gold Huasheng Paper Co., Ltd. (collectively, “APP–China”)

PT Pindo Deli Pulp and Paper Mills

PT Pabrik Kertas Tjimi Kimia Tbk (collectively, “APP–Indonesia”)

Rui Zheng, Senior Director and Head of Chairman’s Office, APP–China

Andrew Hanscom, Vice President, Eagle Ridge Paper

Ken Harris, Vice President of Operations and Sales, Eagle Ridge Paper

Anthony Atamimi, Sale Manager, Digital Products, Global Paper Solutions

Terry Hunley, Advisor, Global Paper Solutions

Mark Dragoo, Vice President of Paperboard Sales, Global Paper Solutions

Ian Lifshitz, North American Sustainability & Public Outreach Manager, 

Asia Pulp & Paper

Daniel W. Klett, Economist, Capital Trade, Inc.

Daniel L. Porter )

James P. Durling ) – OF COUNSEL

Matthew P. McCullough )

B-6
CLOSING STATEMENTS:

Petitioners (Gilbert B. Kaplan, King & Spalding LLP)

Respondents (Daniel L. Porter, Winston & Strawn LLP)

B-7

APPENDIX C

SUMMARY DATA

C-1

Table C-1

Certain coated paper (other than packaging paperboard): Summary data concerning the U.S. market, 2007-09, January-June 2009, and January-June 2010

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2007 2008 2009 2009 2010 2007-09 2007-08 2008-09 2009-10

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . . . . . . . 2,349,356 2,109,689 1,776,525 836,116 1,026,881 -24.4 -10.2 -15.8 22.8

 Producers' share (1) . . . . . . . . . . . . . . 52.1 52.9 56.3 51.3 61.8 4.2 0.8 3.4 10.4

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . . . . . 14.7 15.6 19.8 22.8 7.0 5.1 0.9 4.2 -15.8

 Indonesia . . . . . . . . . . . . . . . . . . . . . 2.2 2.5 3.4 2.4 1.3 1.2 0.3 0.9 -1.1

 Subtotal . . . . . . . . . . . . . . . . . . . . . 17.0 18.1 23.3 25.2 8.3 6.3 1.2 5.2 -16.9

 All other sources . . . . . . . . . . . . . . . 31.0 29.0 20.5 23.5 30.0 -10.5 -2.0 -8.5 6.5

 Total imports . . . . . . . . . . . . . . . . . 47.9 47.1 43.7 48.7 38.2 -4.2 -0.8 -3.4 -10.4

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . . . . . . 2,428,624 2,281,181 1,742,203 848,377 982,225 -28.3 -6.1 -23.6 15.8

 Producers' share (1) . . . . . . . . . . . . . . 54.7 55.4 58.8 54.4 63.2 4.1 0.7 3.4 8.8

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . . . . . 13.1 14.0 17.1 19.5 6.4 4.0 0.9 3.1 -13.0

 Indonesia . . . . . . . . . . . . . . . . . . . . . 1.9 2.1 3.0 1.9 1.2 1.1 0.3 0.9 -0.8

 Subtotal . . . . . . . . . . . . . . . . . . . . . 15.0 16.1 20.1 21.4 7.6 5.1 1.2 3.9 -13.8

 All other sources . . . . . . . . . . . . . . . 30.4 28.5 21.2 24.2 29.2 -9.2 -1.9 -7.3 5.0

 Total imports . . . . . . . . . . . . . . . . . 45.3 44.6 41.2 45.6 36.8 -4.1 -0.7 -3.4 -8.8

U.S. imports from:

 China:

 Quantity . . . . . . . . . . . . . . . . . . . . . . 345,768 329,307 352,555 190,622 71,706 2.0 -4.8 7.1 -62.4

 Value . . . . . . . . . . . . . . . . . . . . . . . . 318,066 319,306 297,527 165,213 63,243 -6.5 0.4 -6.8 -61.7

 Unit value . . . . . . . . . . . . . . . . . . . . . $920 $970 $844 $867 $882 -8.3 5.4 -13.0 1.8

 Ending inventory quantity . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Indonesia:

 Quantity . . . . . . . . . . . . . . . . . . . . . . 52,541 52,938 61,039 19,883 13,327 16.2 0.8 15.3 -33.0

 Value . . . . . . . . . . . . . . . . . . . . . . . . 45,543 48,765 52,384 16,458 11,536 15.0 7.1 7.4 -29.9

 Unit value . . . . . . . . . . . . . . . . . . . . . $867 $921 $858 $828 $866 -1.0 6.3 -6.8 4.6

 Ending inventory quantity . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . . . . . . . 398,309 382,245 413,593 210,506 85,033 3.8 -4.0 8.2 -59.6

 Value . . . . . . . . . . . . . . . . . . . . . . . . 363,609 368,071 349,911 181,670 74,779 -3.8 1.2 -4.9 -58.8

 Unit value . . . . . . . . . . . . . . . . . . . . . $913 $963 $846 $863 $879 -7.3 5.5 -12.1 1.9

 Ending inventory quantity . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . . . . . 727,306 611,626 363,472 196,512 307,612 -50.0 -15.9 -40.6 56.5

 Value . . . . . . . . . . . . . . . . . . . . . . . . 737,251 650,135 368,605 204,901 286,665 -50.0 -11.8 -43.3 39.9

 Unit value . . . . . . . . . . . . . . . . . . . . . $1,014 $1,063 $1,014 $1,043 $932 0.0 4.9 -4.6 -10.6

 Ending inventory quantity . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . . . . . 1,125,615 993,872 777,066 407,018 392,645 -31.0 -11.7 -21.8 -3.5

 Value . . . . . . . . . . . . . . . . . . . . . . . . 1,100,860 1,018,206 718,516 386,572 361,443 -34.7 -7.5 -29.4 -6.5

 Unit value . . . . . . . . . . . . . . . . . . . . . $978 $1,024 $925 $950 $921 -5.5 4.8 -9.7 -3.1

 Ending inventory quantity . . . . . . . . . *** *** *** *** *** *** *** *** ***

Table continued on next page.

C-3
Table C-1--Continued

Certain coated paper (other than packaging paperboard): Summary data concerning the U.S. market, 2007-09, January-June 2009, and January-June 2010

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2007 2008 2009 2009 2010 2007-09 2007-08 2008-09 2009-10

U.S. producers':

 Average capacity quantity . . . . . . . . . 1,395,457 1,266,051 1,354,352 669,847 770,217 -2.9 -9.3 7.0 15.0

 Production quantity . . . . . . . . . . . . . . 1,303,273 1,185,322 1,103,889 517,681 714,387 -15.3 -9.1 -6.9 38.0

 Capacity utilization (1) . . . . . . . . . . . . 93.4 93.6 81.5 77.3 92.8 -11.9 0.2 -12.1 15.5

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . . . . . 1,223,741 1,115,817 999,459 429,098 634,236 -18.3 -8.8 -10.4 47.8

 Value . . . . . . . . . . . . . . . . . . . . . . . . 1,327,764 1,262,975 1,023,688 461,806 620,782 -22.9 -4.9 -18.9 34.4

 Unit value . . . . . . . . . . . . . . . . . . . . . $1,085 $1,132 $1,024 $1,076 $979 -5.6 4.3 -9.5 -9.1

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . . . . . . 306,146 283,990 309,884 342,037 342,866 1.2 -7.2 9.1 0.2

 Inventories/total shipments (1) . . . . . . 23.3 23.5 28.7 37.2 25.2 5.4 0.2 5.2 -12.0

 Production workers . . . . . . . . . . . . . . 1,874 1,723 1,614 1,654 1,590 -13.9 -8.0 -6.3 -3.9

 Hours worked (1,000s) . . . . . . . . . . . . 3,491 3,099 2,894 1,453 1,528 -17.1 -11.2 -6.6 5.2

 Wages paid ($1,000s) . . . . . . . . . . . . 92,464 88,866 84,224 39,811 46,004 -8.9 -3.9 -5.2 15.6

 Hourly wages . . . . . . . . . . . . . . . . . . . $26.49 $28.67 $29.10 $27.40 $30.11 9.9 8.3 1.5 9.9

 Productivity (tons/1,000 hours) . . . . . 344.0 349.0 350.9 331.9 433.9 2.0 1.5 0.6 30.7

 Unit labor costs . . . . . . . . . . . . . . . . . $77.00 $82.15 $82.93 $82.56 $69.40 7.7 6.7 0.9 -15.9

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . . . . . 1,346,842 1,245,756 1,106,137 475,950 696,014 -17.9 -7.5 -11.2 46.2

 Value . . . . . . . . . . . . . . . . . . . . . . . . 1,439,201 1,374,311 1,124,728 503,326 676,989 -21.9 -4.5 -18.2 34.5

 Unit value . . . . . . . . . . . . . . . . . . . . . $1,069 $1,103 $1,017 $1,058 $973 -4.8 3.2 -7.8 -8.0

 Cost of goods sold (COGS) . . . . . . . . 1,229,514 1,190,043 1,047,690 474,327 636,470 -14.8 -3.2 -12.0 34.2

 Gross profit or (loss) . . . . . . . . . . . . . . 209,686 184,267 77,038 28,999 40,519 -63.3 -12.1 -58.2 39.7

 SG&A expenses . . . . . . . . . . . . . . . . . 95,667 100,709 84,322 42,225 43,622 -11.9 5.3 -16.3 3.3

 Operating income or (loss) . . . . . . . . 114,020 83,558 (7,284) (13,225) (3,102) (3) -26.7 (3) 76.5

 Capital expenditures . . . . . . . . . . . . . 43,275 46,011 28,100 12,650 13,792 -35.1 6.3 -38.9 9.0

 Unit COGS . . . . . . . . . . . . . . . . . . . . . $913 $955 $947 $997 $914 3.8 4.6 -0.8 -8.2

 Unit SG&A expenses . . . . . . . . . . . . . $71 $81 $76 $89 $63 7.3 13.8 -5.7 -29.4

 Unit operating income or (loss) . . . . . $85 $67 ($7) ($28) ($4) (3) -20.8 (3) 84.0

 COGS/sales (1) . . . . . . . . . . . . . . . . . 85.4 86.6 93.2 94.2 94.0 7.7 1.2 6.6 -0.2

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . . . . . 7.9 6.1 (0.6) (2.6) (0.5) -8.6 -1.8 -6.7 2.2

 (1) "Reported data" are in percent and "period changes" are in percentage points.

 (2) Not applicable.

 (3) Undefined.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis. Because of rounding,

figures may not add to the totals shown. Unit values and shares are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics.

C-4
Table C-2

Certain coated paper (packaging paperboard): Summary data concerning U.S. producers, 2007-09, January-June 2009, and January-June 2010

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2007 2008 2009 2009 2010 2007-09 2007-08 2008-09 2009-10

U.S. producers':

 Average capacity quantity . . . . . . . . . 668,754 676,762 662,891 320,291 277,185 -0.9 1.2 -2.0 -13.5

 Production quantity . . . . . . . . . . . . . . 641,740 671,261 561,132 277,639 278,967 -12.6 4.6 -16.4 0.5

 Capacity utilization (1) . . . . . . . . . . . . 96.0 99.2 84.6 86.7 100.6 -11.3 3.2 -14.5 14.0

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . . . . . 513,481 533,155 477,774 231,671 226,869 -7.0 3.8 -10.4 -2.1

 Value . . . . . . . . . . . . . . . . . . . . . . . . 391,568 431,578 411,627 201,694 193,543 5.1 10.2 -4.6 -4.0

 Unit value . . . . . . . . . . . . . . . . . . . . . $763 $809 $862 $871 $853 13.0 6.2 6.4 -2.0

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Inventories/total shipments (1) . . . . . . *** *** *** *** *** *** *** *** ***

 Production workers . . . . . . . . . . . . . . 1,157 1,183 1,083 1,101 1,055 -6.4 2.2 -8.5 -4.2

 Hours worked (1,000s) . . . . . . . . . . . . 2,113 2,199 1,937 1,010 912 -8.3 4.1 -11.9 -9.7

 Wages paid ($1,000s) . . . . . . . . . . . . 59,664 60,064 58,714 29,707 27,779 -1.6 0.7 -2.2 -6.5

 Hourly wages . . . . . . . . . . . . . . . . . . . $28.24 $27.31 $30.31 $29.41 $30.46 7.3 -3.3 11.0 3.6

 Productivity (tons/1,000 hours) . . . . . 213.0 213.7 195.6 188.6 208.8 -8.2 0.3 -8.4 10.7

 Unit labor costs . . . . . . . . . . . . . . . . . $132.54 $127.83 $154.94 $155.96 $145.88 16.9 -3.6 21.2 -6.5

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . . . . . 706,382 742,050 631,972 323,343 332,313 -10.5 5.0 -14.8 2.8

 Value . . . . . . . . . . . . . . . . . . . . . . . . 505,451 566,907 513,307 262,520 261,861 1.6 12.2 -9.5 -0.3

 Unit value . . . . . . . . . . . . . . . . . . . . . $716 $764 $812 $812 $788 13.5 6.8 6.3 -2.9

 Cost of goods sold (COGS) . . . . . . . . 450,076 528,161 421,513 214,282 223,016 -6.3 17.3 -20.2 4.1

 Gross profit or (loss) . . . . . . . . . . . . . . 55,375 38,746 91,794 48,238 38,845 65.8 -30.0 136.9 -19.5

 SG&A expenses . . . . . . . . . . . . . . . . . 25,366 27,234 22,745 12,579 11,830 -10.3 7.4 -16.5 -6.0

 Operating income or (loss) . . . . . . . . 30,009 11,512 69,049 35,659 27,015 130.1 -61.6 499.8 -24.2

 Capital expenditures . . . . . . . . . . . . . 7,915 6,415 5,748 3,045 5,009 -27.4 -19.0 -10.4 64.5

 Unit COGS . . . . . . . . . . . . . . . . . . . . . $637 $712 $667 $663 $671 4.7 11.7 -6.3 1.3

 Unit SG&A expenses . . . . . . . . . . . . . $36 $37 $36 $39 $36 0.2 2.2 -1.9 -8.5

 Unit operating income or (loss) . . . . . $42 $16 $109 $110 $81 157.2 -63.5 604.3 -26.3

 COGS/sales (1) . . . . . . . . . . . . . . . . . 89.0 93.2 82.1 81.6 85.2 -6.9 4.1 -11.0 3.5

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . . . . . 5.9 2.0 13.5 13.6 10.3 7.5 -3.9 11.4 -3.3

 (1) "Reported data" are in percent and "period changes" are in percentage points.

 (2) Not applicable.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis. Because of rounding,

figures may not add to the totals shown. Unit values and shares are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires.

C-5
Table C-3

Certain coated paper (All U.S. Integrated Producers): Summary data concerning the U.S. market, 2007-09, January-June 2009, and January-June 2010

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2007 2008 2009 2009 2010 2007-09 2007-08 2008-09 2009-10

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . . . 2,862,837 2,642,844 2,254,299 1,067,787 1,253,750 -21.3 -7.7 -14.7 17.4

 Producers' share (1) . . . . . . . . . 60.7 62.4 65.5 61.9 68.7 4.8 1.7 3.1 6.8

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . 12.1 12.5 15.6 17.9 5.7 3.6 0.4 3.2 -12.1

 Indonesia . . . . . . . . . . . . . . . . . 1.8 2.0 2.7 1.9 1.1 0.9 0.2 0.7 -0.8

 Subtotal . . . . . . . . . . . . . . . . . 13.9 14.5 18.3 19.7 6.8 4.4 0.6 3.9 -12.9

 All other sources . . . . . . . . . . . 25.4 23.1 16.1 18.4 24.5 -9.3 -2.3 -7.0 6.1

 Total imports . . . . . . . . . . . . . 39.3 37.6 34.5 38.1 31.3 -4.8 -1.7 -3.1 -6.8

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . . 2,820,192 2,712,759 2,153,830 1,050,071 1,175,768 -23.6 -3.8 -20.6 12.0

 Producers' share (1) . . . . . . . . . 61.0 62.5 66.6 63.2 69.3 5.7 1.5 4.2 6.1

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . 11.3 11.8 13.8 15.7 5.4 2.5 0.5 2.0 -10.4

 Indonesia . . . . . . . . . . . . . . . . . 1.6 1.8 2.4 1.6 1.0 0.8 0.2 0.6 -0.6

 Subtotal . . . . . . . . . . . . . . . . . 12.9 13.6 16.2 17.3 6.4 3.4 0.7 2.7 -10.9

 All other sources . . . . . . . . . . . 26.1 24.0 17.1 19.5 24.4 -9.0 -2.2 -6.9 4.9

 Total imports . . . . . . . . . . . . . 39.0 37.5 33.4 36.8 30.7 -5.7 -1.5 -4.2 -6.1

U.S. imports from:

 China:

 Quantity . . . . . . . . . . . . . . . . . . 345,768 329,307 352,555 190,622 71,706 2.0 -4.8 7.1 -62.4

 Value . . . . . . . . . . . . . . . . . . . . 318,066 319,306 297,527 165,213 63,243 -6.5 0.4 -6.8 -61.7

 Unit value . . . . . . . . . . . . . . . . . $920 $970 $844 $867 $882 -8.3 5.4 -13.0 1.8

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 Indonesia:

 Quantity . . . . . . . . . . . . . . . . . . 52,541 52,938 61,039 19,883 13,327 16.2 0.8 15.3 -33.0

 Value . . . . . . . . . . . . . . . . . . . . 45,543 48,765 52,384 16,458 11,536 15.0 7.1 7.4 -29.9

 Unit value . . . . . . . . . . . . . . . . . $867 $921 $858 $828 $866 -1.0 6.3 -6.8 4.6

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . . . 398,309 382,245 413,593 210,506 85,033 3.8 -4.0 8.2 -59.6

 Value . . . . . . . . . . . . . . . . . . . . 363,609 368,071 349,911 181,670 74,779 -3.8 1.2 -4.9 -58.8

 Unit value . . . . . . . . . . . . . . . . . $913 $963 $846 $863 $879 -7.3 5.5 -12.1 1.9

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . 727,306 611,626 363,472 196,512 307,612 -50.0 -15.9 -40.6 56.5

 Value . . . . . . . . . . . . . . . . . . . . 737,251 650,135 368,605 204,901 286,665 -50.0 -11.8 -43.3 39.9

 Unit value . . . . . . . . . . . . . . . . . $1,014 $1,063 $1,014 $1,043 $932 0.0 4.9 -4.6 -10.6

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . 1,125,615 993,872 777,066 407,018 392,645 -31.0 -11.7 -21.8 -3.5

 Value . . . . . . . . . . . . . . . . . . . . 1,100,860 1,018,206 718,516 386,572 361,443 -34.7 -7.5 -29.4 -6.5

 Unit value . . . . . . . . . . . . . . . . . $978 $1,024 $925 $950 $921 -5.5 4.8 -9.7 -3.1

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

Table continued on next page.

C-6
Table C-3--Continued

Certain coated paper (All U.S. Integrated Producers): Summary data concerning the U.S. market, 2007-09, January-June 2009, and January-June 2010

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2007 2008 2009 2009 2010 2007-09 2007-08 2008-09 2009-10

U.S. producers':

 Average capacity quantity . . . . . 2,064,211 1,942,813 2,017,243 990,138 1,047,402 -2.3 -5.9 3.8 5.8

 Production quantity . . . . . . . . . . 1,945,013 1,856,583 1,665,021 795,320 993,354 -14.4 -4.5 -10.3 24.9

 Capacity utilization (1) . . . . . . . . 94.2 95.6 82.5 80.3 94.8 -11.7 1.3 -13.0 14.5

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . 1,737,222 1,648,972 1,477,233 660,769 861,105 -15.0 -5.1 -10.4 30.3

 Value . . . . . . . . . . . . . . . . . . . . 1,719,332 1,694,553 1,435,315 663,500 814,325 -16.5 -1.4 -15.3 22.7

 Unit value . . . . . . . . . . . . . . . . . $990 $1,028 $972 $1,004 $946 -1.8 3.8 -5.5 -5.8

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 Inventories/total shipments (1) . *** *** *** *** *** *** *** *** ***

 Production workers . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Hours worked (1,000s) . . . . . . . *** *** *** *** *** *** *** *** ***

 Wages paid ($1,000s) . . . . . . . . *** *** *** *** *** *** *** *** ***

 Hourly wages . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Productivity (tons/1,000 hours) . *** *** *** *** *** *** *** *** ***

 Unit labor costs . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . 2,053,224 1,987,806 1,738,109 799,293 1,028,327 -15.3 -3.2 -12.6 28.7

 Value . . . . . . . . . . . . . . . . . . . . 1,944,652 1,941,218 1,638,035 765,846 938,850 -15.8 -0.2 -15.6 22.6

 Unit value . . . . . . . . . . . . . . . . . $947 $977 $942 $958 $913 -0.5 3.1 -3.5 -4.7

 Cost of goods sold (COGS) . . . . 1,679,590 1,718,204 1,469,203 688,609 859,486 -12.5 2.3 -14.5 24.8

 Gross profit or (loss) . . . . . . . . . 265,061 223,013 168,832 77,237 79,364 -36.3 -15.9 -24.3 2.8

 SG&A expenses . . . . . . . . . . . . 121,033 127,943 107,067 54,804 55,452 -11.5 5.7 -16.3 1.2

 Operating income or (loss) . . . . 144,029 95,070 61,765 22,434 23,913 -57.1 -34.0 -35.0 6.6

 Capital expenditures . . . . . . . . . 51,190 52,426 33,848 15,695 18,801 -33.9 2.4 -35.4 19.8

 Unit COGS . . . . . . . . . . . . . . . . . $818 $864 $845 $862 $836 3.3 5.7 -2.2 -3.0

 Unit SG&A expenses . . . . . . . . . $59 $64 $62 $69 $54 4.5 9.2 -4.3 -21.4

 Unit operating income or (loss) . $70 $48 $36 $28 $23 -49.3 -31.8 -25.7 -17.1

 COGS/sales (1) . . . . . . . . . . . . . 86.4 88.5 89.7 89.9 91.5 3.3 2.1 1.2 1.6

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . 7.4 4.9 3.8 2.9 2.5 -3.6 -2.5 -1.1 -0.4

 (1) "Reported data" are in percent and "period changes" are in percentage points.

 (2) Not applicable.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis. Because of rounding,

figures may not add to the totals shown. Unit values and shares are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics.

C-7
Table C-4

Certain coated paper: Summary data concerning U.S. converters, 2007-09, January-June 2009, and

January-June 2010

* * * * * * *

C-8
APPENDIX D

NONSUBJECT PRICING DATA

D-1

Weighted-average sales prices of products imported from nonsubject sources in Austria undersold

the U.S. producers in 28 of 29 quarterly comparisons. Prices of imports from nonsubject sources in

Austria undersold imports from China in 3 of 4 quarterly comparisons. Prices of imports from nonsubject

sources in Austria undersold imports from subject sources in Indonesia in both quarterly comparisons.

Weighted-average sales prices of products imported from nonsubject sources in France oversold

the U.S. producers in all 14 quarterly comparisons. There were no quarterly comparisons between

imports from nonsubject sources in France and imports from subject sources.

Weighted-average sales prices of products imported from nonsubject sources in Germany

undersold the U.S. producers in all 28 quarterly comparisons. There were no quarterly comparisons

between imports from nonsubject sources in Germany and imports from subject sources.

Weighted-average sales prices of products imported from nonsubject sources in India undersold

the U.S. producers in both quarterly comparisons. Prices of imports from nonsubject sources in India

undersold imports from China in 1 of 2 quarterly comparisons. Prices of imports from nonsubject sources

in India oversold imports from subject sources in Indonesia in 1 quarterly comparison.

Weighted-average sales prices of products imported from nonsubject sources in Korea undersold

the U.S. producers in 42 of 54 quarterly comparisons and oversold them in the remaining 12 quarterly

comparisons. Prices of imports from nonsubject sources in Korea oversold imports from China in 21 of

26 quarterly comparisons and oversold them in the remaining 5 quarterly comparisons. Prices of imports

from nonsubject sources in Korea oversold imports from subject sources in Indonesia in 10 of 12

quarterly comparisons and undersold them in the remaining 2 quarterly comparisons.

Weighted-average sales prices of products imported from nonsubject sources in Thailand

undersold the U.S. producers in 5 of 6 quarterly comparisons. Prices of imports from nonsubject sources

in Thailand oversold imports from China in 5 of 6 quarterly comparisons. Prices of imports from

nonsubject sources in Thailand undersold imports from subject sources in Indonesia in 4 of 6 quarterly

comparisons and oversold them in the remaining 2 quarterly comparisons.

Figure D-1

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and subject and

nonsubject imported product 1, by quarters, January 2007-June 2010

* * * * * * *

Figure D-2

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and nonsubject

imported product 2, by quarters, January 2007-June 2010

* * * * * * *

Figure D-3

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and subject and

nonsubject imported product 3, by quarters, January 2007-June 2010

* * * * * * *

Figure D-4

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and subject and

nonsubject imported product 4, by quarters, January 2007-June 2010

* * * * * * *

D-3
Figure D-5

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and nonsubject

imported product 5, by quarters, January 2007-June 2010

* * * * * * *

D-4