Glycine From India, Japan, and Korea

Investigation Nos. 731-TA-1111-1113 (Preliminary)

Publication 3921 May 2007

Washington, DC 20436
U.S. International Trade Commission

COMMISSIONERS

Daniel R. Pearson, Chairman

Shara L. Aranoff, Vice Chairman

Deanna Tanner Okun

Charlotte R. Lane

Irving A. Williamson

Dean A. Pinkert

Robert A. Rogowsky

Director of Operations

Staff assigned

Russell Duncan, Investigator 

Philip Stone, Commodity-Industry Analyst

Amelia Preece, Economist

Justin Jee, Accountant

Charles St. Charles, Attorney

Mara Alexander, Statistician

Diane Mazur, Supervisory Investigator

Address all communications to

Secretary to the Commission

United States International Trade Commission

Washington, DC 20436
U.S. International Trade Commission

Washington, DC 20436

www.usitc.gov

Glycine From India, Japan, and Korea

Investigation Nos. 731-TA-1111-1113 (Preliminary)

Publication 3921 May 2007
 
i

CONTENTS

Page

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

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

Separate and Additional Views of Chairman Daniel R. Pearson and Commissioner Deanna Tanner 

Okun Concerning Bratsk Aluminum v. United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

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

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

Statutory criteria and organization of report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

U.S. market summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

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

Previous and related investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Nature and extent of alleged sales at LTFV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

The subject product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

U.S. tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

The domestic like product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

Physical characteristics and uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Manufacturing processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8

Interchangeability and customer and producer perceptions . . . . . . . . . . . . . . . . . . . . . . . . . . I-9

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9

Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9

Issues in a semi-finished product analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10

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

Market characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Supply and demand considerations ................................................ II-2

U.S. supply ............................................................... II-2

U.S. demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-3

Substitutability issues .......................................................... II-4

Comparisons of domestic product, subject imports, and nonsubject imports ............. II-5

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

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

U.S. capacity, production, and capacity utilization ................................... III-1

U.S. producers’ shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-3

U.S. producers’ imports and purchases ............................................. III-5

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-5

U.S. producers’ employment, wages, and productivity ................................ III-6

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

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

U.S. imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2

U.S. shipments of imports by grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-6

Negligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-6

Apparent U.S. consumption, U.S. market shares, and ratio of imports to U.S. production . . . . . IV-6
ii

CONTENTS--Continued

Page

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

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

Transportation costs to the U.S. market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

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

Exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3

Pricing methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3

Sales terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-4

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

Price comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-4

Lost sales and lost revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-5

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

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

Operations on glycine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Capital expenditures, R&D expenses, and investment in productive facilities . . . . . . . . . . . . . . VI-2

Assets and return on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-3

Capital and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-3

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

The industry in India ........................................................... VII-2

The industry in Japan .......................................................... VII-5

The industry in Korea .......................................................... VII-6

U.S. importers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-6

U.S. importers’ current orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-6

Antidumping and countervailing duty orders in third-country markets .................... VII-7

Information on nonsubject sources ................................................ VII-7

“Bratsk” considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-7

Nonsubject source information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-7

Appendixes

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

B. Conference witnesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

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

 The imported products subject to investigation also include sodium glycinate which is provided for in

subheading 2922.49.80 of the HTS.

1

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 731-TA-1111-1113 (Preliminary)

GLYCINE FROM INDIA, JAPAN, AND KOREA

DETERMINATIONS

On the basis of the record1

 developed in the subject investigations, the United States International

Trade Commission (Commission) determines, pursuant to section 733(a) of the Tariff Act of 1930 (19

U.S.C. § 1673b(a)) (the Act), that there is a reasonable indication that an industry in the United States is

materially injured by reason of imports from India, Japan, and Korea of glycine, provided for in statistical

reporting number 2922.49.4020 of the Harmonized Tariff Schedule of the United States (HTS),2

 that are

alleged to be sold in the United States at less than fair value (LTFV).

BACKGROUND

On March 30, 2007, a petition was filed with the Commission and Commerce by GEO Specialty

Chemicals, Inc., Lafayette, IN, alleging that an industry in the United States is materially injured by

reason of LTFV imports of glycine from India, Japan, and Korea. Accordingly, effective March 30,

2007, the Commission instituted antidumping duty investigation Nos. 731-TA-1111-1113 (Preliminary).

 1

 19 U.S.C. § 1673b(a); see also, e.g., Co-Steel Raritan, Inc. v. United States, 357 F.3d 1294 (Fed. Cir. 2004);

American Lamb Co. v. United States, 785 F.2d 994, 1001-1004 (Fed. Cir. 1986); Aristech Chemical Corp. v. United

States, 20 CIT 353, 354 (1996). No party argued that the establishment of an industry is materially retarded by

reason of the allegedly unfairly traded imports.

 2

 American Lamb, 785 F.2d at 1001 (Fed. Cir. 1986); see also Texas Crushed Stone Co. v. United States, 35 F.3d

1535, 1543 (Fed. Cir. 1994). 

 3

 CR at I-7, PR at I-6. 

 4

 CR at I-8 - I-9, PR at I-6, I-7; CR/PR at Tables I-2, III-4, IV-3.

 5

 CR/PR at Tables III-4, IV-3. 

 6

 CR at I-8, PR at I-6 - I-7; CR/PR at Tables III-4, IV-3. 

 7

 CR at I-8 - I-9, PR at I-6, I-7. Metal complexing is the preparation of metal to permit better binding with other

compounds, such as a silicon coat. 

 8

 CR/PR at Tables III-4, IV-3.

3

VIEWS OF THE COMMISSION

Based on the record in the preliminary phase of these investigations, we find that there is a

reasonable indication that an industry in the United States is materially injured by reason of glycine

imported from India, Japan, and Korea that is allegedly sold in the United States at less than fair value

(“LTFV”).

I. THE LEGAL STANDARD FOR PRELIMINARY DETERMINATIONS

 The legal standard for preliminary antidumping and countervailing duty determinations requires

the Commission to determine, based upon the information available at the time of the preliminary

determination, whether there is a reasonable indication that a domestic industry is materially injured,

threatened with material injury, or whether the establishment of an industry is materially retarded, by

reason of the allegedly unfairly traded imports.1

 In applying this standard, the Commission weighs the

evidence before it and determines whether “(1) the record as a whole contains clear and convincing

evidence that there is no material injury or threat of such injury; and (2) no likelihood exists that contrary

evidence will arise in a final investigation.”2

II. BACKGROUND

Glycine, also known as aminoacetic acid, is a naturally occurring amino acid that is manufactured

and commercially sold as a free-flowing crystalline solid.3

 Glycine is typically sold in three grades: 

pharmaceutical, United States Pharmacopeia (“USP”), and technical. Most glycine is manufactured as

USP grade material for use in consumable or cosmetic applications as a sweetener/taste enhancer and

buffering agent. The primary markets for USP grade glycine are as an additive in pet food, animal feed,

and antiperspirants.4

 USP grade sales account for approximately 80 to 85 percent of the U.S. market for

glycine.5

 Pharmaceutical grade glycine is produced for use in some pharmaceutical applications, such as

intravenous injections, where the customer’s purity requirements often exceed the minimum required

under the USP grade designation. Pharmaceutical grade glycine is often produced to proprietary

specifications and is typically sold at a premium over USP grade glycine.6

 Technical grade glycine,

which may or may not meet USP grade standards, is sold for use in industrial applications; e.g., as an

agent in metal complexing and finishing.7

 Technical grade glycine is typically sold at a discount to USP

grade glycine.8

 

Precursors of dried crystalline glycine, including glycine slurry (i.e., glycine in a non-crystallized

form) and sodium glycinate (i.e., glycine salt), are covered by these investigations although there are
 9

 CR at I-5 - I-6, 1-15; PR at I-4, I-11; Conference Transcript at 29-30.

 10 19 U.S.C. § 1677(4)(A).

 11 19 U.S.C. § 1677(4)(A).

 12 19 U.S.C. § 1677(10).

 13 See, e.g., 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: (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).

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

 15 Nippon Steel, 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.”).

 16 See, e.g., USEC, Inc. v. United States, Slip Op. 01-1421 (Fed. Cir. April 25, 2002) at 9 (“The ITC may not

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

(continued...)

4

currently no commercial markets for these products in the United States. Glycine and glycine slurry are

provided for under statistical reporting number 2922.49.4020 in the Harmonized Tariff Schedule of the

United States (“HTS”) and sodium glycinate is properly classified under subheading 2922.49.80 of the

HTS.9

The petition in these investigations was filed on March 30, 2007, by GEO Specialty Chemicals,

Inc. of Lafayette, Indiana (“Petitioner” or “GEO”), a U.S. producer of glycine. Chattem Chemicals, Inc.

(“Chattem”), the only other U.S. producer of glycine, and CAF International (“CAF”), a U.S. importer of

glycine, participated in the staff conference and filed postconference submissions. 

III. DOMESTIC LIKE PRODUCT

A. In General

In determining whether there is a reasonable indication that 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 “domestic like product” and the “industry.”10 Section 771(4)(A) of the

Tariff Act of 1930, as amended (“the Act”), defines the relevant domestic industry as the “producers as a

[w]hole 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.”11 In turn, the 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 . . . .”12

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.13 No single factor is dispositive, and the Commission

may consider other factors it deems relevant based on the facts of a particular investigation.14 The

Commission looks for clear dividing lines among possible like products and disregards minor variations.15

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

(“Commerce”) as to the scope of the imported merchandise allegedly sold at LTFV,16 the Commission
 16 (...continued)

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).

 17 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); Torrington, 747 F. Supp. at

748-752 (affirming Commission determination of six like products in investigations where Commerce found five

classes or kinds).

 18 Acciai Speciali Terni S.p.A. v. United States, 118 F. Supp. 2d 1298, 1304-05 (Ct. Int’l Trade 2000); Nippon

Steel Corp. v. United States, 19 CIT at 455; Asociacion Colombiana de Exportadores de Flores v. United States, 693

F. Supp. 1165, 1169 n.5 (Ct. Int’l Trade 1988) (particularly addressing like product determination); Citrosuco

Paulista, S.A. v. United States, 704 F. Supp. 1075, 1087-88 (Ct. Int’l Trade 1988).

 19 Glycine from India, Japan, and the Republic of Korea: Initiation of Antidumping Duty Investigations, 72 Fed.

Reg. 20816, 20817 (April 26, 2007). 

 20 The domestic producers indicate that the variable cost of producing glycine is less with the HCN process than

with the MCA process, although capital costs are greater for the HCN process. E.g., Conference Transcript at 60

(Kedrowski). 

5

determines what domestic product is like the imported articles Commerce has identified.17 The

Commission must base its domestic like product determination on the record in these investigations. The

Commission is not bound by prior determinations, even those pertaining to the same imported products,

but may draw upon previous determinations in addressing pertinent like product issues.18

B. Product Description

Commerce’s notice of initiation defines the imported merchandise within the scope of these

investigations as follows – 

glycine, which in its solid (i.e., crystallized) form is a free-flowing crystalline material. 

Glycine is used as a sweetener/taste enhancer, buffering agent, reabsorbable amino acid,

chemical intermediate, metal complexing agent, dietary supplement, and is used in

certain pharmaceuticals. The scope of each of these investigations covers glycine in any

form and purity level. Although glycine blended with other materials is not covered by

the scope of each of these investigations, glycine to which relatively small quantities of

other materials have been added is covered by the scope. Glycine’s chemical composition

is C2H5NO2 and is normally classified under subheading 2922.49.4020 of the Harmonized

Tariff Schedule of the United States (HTSUS). 

The scope of each of these investigations also covers precursors of dried crystalline

glycine, including, but not limited to, glycine slurry (i.e., glycine in a non–crystallized

form) and sodium glycinate. Glycine slurry is classified under the same HTSUS

subheading as crystallized glycine (2922.49.4020) and sodium glycinate is classified

under subheading HTSUS 2922.49.8000.19

There are two known processes for the commercial production of glycine: the hydrogen cyanide

(“HCN”) process and the monochloroacetic acid (“MCA”) process. The petitioner, GEO, uses the HCN

process, whereas the other domestic producer, Chattem, uses the MCA process.20 Glycine produced by

the two methods is chemically identical. Sodium glycinate, which is within Commerce’s scope, is a

precursor of glycine in the HCN process, but not in the MCA process. Glycine slurry, the undried form

of glycine, is the prior step to production of dried, crystalline glycine under both production methods.
 21 The scope of these investigations differs from the scope of the outstanding antidumping duty order on imports

of glycine from China, which does not include glycine slurry and sodium glycinate. CR at I-5 n.11; see, e.g.,

Continuation of Antidumping Duty Orders: Glycine from China, 65 Fed. Reg. 45752 (July 25, 2000), and 70 Fed.

Reg. 69316 (Nov. 15, 2005).

 22 The Commission “‘normally does not find separate like products based on different grades of chemicals or

mineral products.’” Liquid Sulfur Dioxide from Canada, Inv. No. 731-TA-1098 (Preliminary), USITC Pub. 3826

(December 2005) at 6, quoting Bulk Acetylsalicylic Acid (Aspirin) from China, Inv. No. 731-TA-828 (Final),

USITC Pub. 3314 at 5-6 (June 2000); Sulfanilic Acid from Hungary and Portugal, Inv. Nos. 701-TA-426 and 731-

TA-984-985 (Final), USITC Pub. 3554 (November 2002) at 7 n. 34; Barium Carbonate from China, Inv. No. 731-

TA-1020 (Preliminary), USITC Pub. 3561 (November 2002) at 7, n.28.

 23 CR at I-8, PR at I-6.

 24 CR at I-8 - I-9, PR at I-6 - I-7.

 25 CR at I-8 - I-9, PR at I-6 - I-7.

 26 CR at I-12, PR at I-9. 

 27 CR at I-10 - I-11, PR at I-8 - I-9. 

 28 CR at I-8 - I-9, PR at I-6 - I-7.

6

 C. Domestic Like Product

Petitioner argues that the Commission should define a single domestic like product, coextensive

with the scope of these investigations; namely, glycine in all its forms and purity levels, including glycine

slurry and sodium glycinate. No party objects to this proposed domestic like product definition. At issue

are: (1) whether all grades, or purity levels, of dried, crystalline glycine are a single domestic like

product, (2) whether sodium glycinate is a separate domestic like product, and (3) whether glycine slurry

is a separate domestic like product.21

1. Purity and grade differences

We apply our traditional six-factor analysis in assessing whether different grades or purity levels

of glycine are a single domestic like product or separate domestic like products.22

Physical Characteristics and End Uses. All glycine, regardless of grade, has the same chemical

structure, differing only by the amount of impurities in the product.23 Because of glycine's chemical

structure, it has a number of distinctive physical qualities, making it useful as a flavor enhancer, nutrient,

buffer, and intermediate in certain production processes.24

Interchangeability. While purity requirements will determine the applications in which the

particular glycine grade may be used, glycine meeting higher purity standards can be used in applications

with lower purity requirements. Thus, there is some degree of interchangeability among purity levels.25

Channels of Distribution. Channels of distribution are similar for all domestically produced

glycine: the vast majority of domestic producers’ shipments, *** percent, are sold to end users, with the

remainder sold to distributors.26

Manufacturing Facilities, Production Processes, and Employees. The two domestic glycine

producers use different production processes. However, each uses the same production process, facilities,

and employees for all grades of glycine, with the glycine to be used for some pharmaceutical applications

undergoing additional purifying steps in both processes.27

Producer and Customer Perceptions. All forms of glycine are generally perceived to be the same

products. Nevertheless, depending on the application, a purchaser will prefer or require one grade to

another.28
 29 E.g., CR/PR at Tables V-1, V-2. 

 30 E.g., CR at I-8, PR at I-6.

 31 E.g., Artists’ Canvas from China, Inv. No. 731-TA-1091 (Final), USITC Pub. 3853 (May 2006) at 6; Live

Swine from Canada, Inv. No. 731-TA-1076 (Final), USITC Pub. 3766 (April 2005) at 8, n. 40; Certain Frozen Fish

Fillets from Vietnam, Inv. No. 731-TA-1012 (Preliminary), USITC Pub. 3533 (August 2002) at 7; Low Enriched

Uranium from France, Germany, the Netherlands, and the United Kingdom, Inv. Nos. 701-TA-409-412

(Preliminary) and 731-TA-909-912 (Preliminary), USITC Pub. 3388 (January 2001) at 5-6; Uranium from

Kazakhstan, Inv. No. 731-TA-539-A (Final), USITC Pub. 3213 (July 1999) at 6, n.23. 

 32 CR at I-15, PR at I-11. 

 33 CR at I-15, PR at PR at I-11.

 34 CR at I-15, I-16, PR at PR at I-11. GEO explained that it would be possible to use sodium glycinate in some of

the same applications as glycine; e.g., for enhancing/masking flavor, pH buffering and stabilizing, and metal

finishing. However, the performance of sodium glycinate may be inferior to glycine in those applications and, as

noted, there are ***. GEO’s Postconference Brief, Response to Staff Questions at 1-3.

 35 Id. at I-15. Chattem uses a different production process, the MCA process, in which sodium glycinate is not an

intermediate product. Id.

7

Price. As a result of additional purification standards and production operations, pharmaceutical

grade glycine generally sells for a higher price than USP grade glycine,29 and USP grade glycine

generally sells for a higher price than technical grade glycine.30

Conclusion. Because all grades of glycine have common physical characteristics and end uses,

share common channels of distribution, and generally share common production processes, facilities, and

employees, we find that all grades of glycine are encompassed in a single domestic like product. 

2. Sodium glycinate

We find that sodium glycinate is part of the single domestic like product. Because sodium

glycinate, within the scope of the subject merchandise, is an upstream product in the production of

glycine, we apply the semi-finished product analysis in considering whether it is part of the same

domestic like product as glycine. Under that analysis, we examine: (1) whether the upstream article is

dedicated to the production of the downstream article or has independent uses; (2) whether there are

perceived to be separate markets for the upstream and downstream articles; (3) differences in the physical

characteristics and functions of the upstream and downstream articles; (4) differences in the costs or

value of the vertically differentiated articles; and (5) the significance and extent of the processes used to

transform the upstream into the downstream articles.31 

Dedicated production. Sodium glycinate is an intermediate product in the production of glycine

using the HCN production process. The record does not indicate any use for sodium glycinate other than

as an upstream product in the production of glycine.32

Separate markets. Sodium glycinate has no known markets.33

Differences in characteristics and functions. Sodium glycinate is chemically closely related to

glycine. Specifically, sodium glycinate (NaC2H4NO2) contains glycine (C2H5NO2) in its chemistry. 

While it may be possible to use sodium glycinate in some of the same applications as glycine, sodium

glycinate is primarily or exclusively used to produce glycine.34

Differences in costs or value. Sodium glycinate is not commercially traded and is only consumed

in the production of glycine; therefore, market prices do not exist for this product. GEO estimates that the

conversion of sodium glycinate into glycine accounted for approximately *** percent of GEO’s total cost

of glycine production.35
 36 Conference Transcript at 30 (Kedrowski). 

 37 CR at I-16, PR at PR at I-11.

 38 Conference Transcript at 29-30 (discussion of drying generally). The record does not include specific

information on the cost of drying slurry. 

 39 19 U.S.C. § 1677(4)(A).

 40 United States Steel Group v. United States, 873 F. Supp. 673, 681-84 (Ct. Int’l Trade 1994), aff’d, 96 F.3d

1352 (Fed. Cir. 1996).

 41 19 U.S.C. § 1677(4)(B). 

 42 GEO argues, however, that assessment of the financial condition of the industry should include separate

consideration of data for GEO and Chattem. GEO Postconference Brief, Economic Analysis attachment at 4.

 43 Conference Transcript at 19-21 (Kedrowski); CR/PR at Table III-6. 

8

Significance of tranformation. Conversion of sodium glycinate into glycine appears not to be a

complicated process. The conversion involves simply “washing the sodium out,”36 through a process in

which ***.37

Conclusion. We define the single domestic like product as including sodium glycinate, given its

dedication to production of glycine, the absence of a separate market for sodium glycinate, and the

relatively small cost and significance of converting sodium glycinate into glycine. 

3. Slurry

We also find that glycine slurry is part of the single domestic like product under the semi-finished

product analysis. Slurry is glycine in a liquid form, with a chemical formula identical to that of the dried,

crystalline form. Slurry is consumed entirely in production of the marketed, dried glycine. Its conversion

to dried glycine simply requires drying, which could be energy intensive but is not otherwise a complex

process.38 Therefore, we find that the single domestic like product includes glycine slurry. 

Accordingly, we define the domestic like product as encompassing all glycine, coterminous with

the scope, and thus including glycine in all its forms (slurry and crystalline) and purity levels (USP grade,

technical grade, and pharmaceutical grade), and sodium glycinate. 

IV. DOMESTIC INDUSTRY

The domestic industry is defined as the “producers as a [w]hole 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.”39 In defining the domestic industry, the Commission’s general

practice has been to include in the industry all domestic production of the domestic like product, whether

toll-produced, captively consumed, or sold in the domestic merchant market.40 Based on our finding that

the domestic like product is glycine, we find that the domestic industry consists of the two known

domestic producers of glycine: GEO and Chattem. 

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

the domestic industry pursuant to section 19 U.S.C. § 1677(4)(B). Subsection 1677(4)(B) 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.41 Exclusion

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

investigation. 

No party argues for exclusion of any related producers from the domestic industry.42 However,

Chattem imported *** pounds of subject merchandise from Japan in 2005 and *** pounds in 2006,43 and,

therefore, we must consider whether “appropriate circumstances” exist to exclude Chattem from the

domestic industry on the basis of those importations.
 44 Conference Transcript at 19-21 (Kedrowski); CR at III-3 - III-5, PR at III-2. 

 45 Conference Transcript at 21-22, 36 (Kedrowski), CR at III-15, PR at III-5.

 46 CR/PR at Tables III-1, III-2.

 47 CR/PR at Tables III-6, IV-4. 

 48 Id.

 49 Chattem opposes the petition in these investigations. CR/PR at Table III-1. The Commission may consider

whether a producer supports or opposes the petition as one factor in deciding whether appropriate circumstances

exist to exclude that producer as a related party, but support or opposition to the petition is not dispositive of the

question. See e.g., Allied Mineral Products, Inc. v. United States, Slip Op. 04-139 (Ct. Int’l Trade Nov. 12, 2004) at

9-10 & n. 5. Under these facts, we do not believe Chattem’s position on the petition outweighs other factors

considered. 

 50 CR/PR at Table VI-2. 

 51 Consistent with her practice in past investigations and reviews, Vice Chairman Aranoff does not rely on

individual-company income margins in assessing whether a related party has benefitted from importation of subject

merchandise. Rather, she determines whether to exclude a related party based principally on its ratio of subject

imports to domestic shipments and whether its primary interests lie in domestic production or importation.

 52 19 U.S.C. § 1677(7)(G)(i).

9

 Chattem explains that it reduced its overall glycine production between 2001 and 2004 in

response to market prices driven down by imports to levels below Chattem’s raw material costs.44 In

early 2005, Chattem became a distributor of technical grade glycine produced by Showa Denko K.K., a

Japanese producer.45

Chattem accounted for *** percent of domestic production in 2004, *** percent in 2005 and ***

percent in 2006.46 The volume of Chattem’s imports of subject merchandise from Japan in 2005 was

small as a share of total glycine imports from Japan that year, *** percent, and relative to Chattem’s

production that year, *** percent.47 In 2006, however, Chattem’s imports grew to *** percent of total

subject imports from Japan that year, and to *** percent relative to Chattem’s 2005 production.48

Nonetheless, Chattem’s domestic production continued to *** the volume of its subject import shipments

over the period of investigation. Therefore, Chattem’s interests appear to be primarily those of a domestic

producer.49 

Chattem’s financial performance *** in terms of its ratio of operating income to net sales in 2005

and 2006.50 This suggests that Chattem’s domestic operations did not derive benefits from importation

such that inclusion of its data would inappropriately skew the data of the domestic industry.51 For these

preliminary determinations, because Chattem did not become a significant importer until 2006, and

because its inclusion will not skew the data, we find that appropriate circumstances do not exist to

exclude Chattem from the domestic industry. However, we will continue to examine this issue in any

final phase investigations. 

V. CUMULATION

A. In General

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 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.52 In assessing whether subject imports compete with each other and with the domestic

like product, the Commission has generally considered four factors, including:
 53 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).

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

 55 The SAA (at 848) 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.”).

 56 Petition at 40-41.

 57 See 19 U.S.C. § 1677(7)(G) (ii).

 58 The responding importers generally did not compare imports from the subject countries with each other (the

only exception being one importer who reported only that subject imports from India and Japan were

interchangeable). CR/PR at Table II-2. We intend in any final phase investigations to gather more comprehensive

information in this regard. 

 59 *** that there are no differences that would significantly limit interchangeability within USP grade glycine or

technical grade glycine, given that glycine is easily qualified for technical grade applications and, by definition, USP

grade glycine meets USP standards. CR at II-7, PR at II-5. *** that interchangeability is limited in the

(continued...)

10

(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.53

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 compete with each other and with the domestic like product.54 Only a “reasonable overlap” of

competition is required.55

B. Analysis

Petitioner, GEO, argues that, based on the four factors customarily considered by the

Commission, subject imports compete with one another and with domestic glycine, and that, therefore,

the Commission should cumulate subject imports.56 The threshold requirement for cumulation is satisfied

because GEO filed a petition with respect to each of the three subject countries on the same day. None of

the statutory exceptions to cumulation is applicable.57

1. Fungibility. 

All responding importers reported that domestic glycine and subject imported product were

always interchangeable.58 Domestic producers indicated that, whereas USP grade and technical grade

glycine are easily interchangeable within the grade among sources, pharmaceutical grade glycine must

meet higher purity and consistency requirements of individual customers and, therefore, pharmaceutical

grade glycine is less interchangeable among sources.59 We note that USP and technical grades of glycine
 59(...continued)

pharmaceutical grade, which is tailored to individual customers’ specific requirements. CR at II-7, PR at II-5. On

that basis, ***. CR at II-7, PR at II-5. For purposes of these preliminary determinations, we attach greater weight to

***. 

 60 Only *** percent of domestic producer shipments, *** percent of U.S. shipments of subject imports from

Japan, and *** of the U.S. shipments of subject imports from India and Korea were of pharmaceutical grade glycine. 

CR/PR at Table IV-11. Accordingly, limits on interchangeability among sources within the pharmaceutical grade

has only limited significance in assessing fungibility, particularly for purposes of determining overlap of

competition. More important in that regard, in 2006, *** percent of the domestic like product, *** percent of U.S.

shipments of subject imports from India, *** percent of U.S. shipments of subject imports from Japan, and ***

percent of U.S. shipments of subject imports from Korea were of the more highly interchangeable USP grade

glycine. CR/PR at Table III-4, IV-3. Moreover, *** percent of the domestic like product and *** percent of U.S.

shipments of the subject imports *** were of technical grade glycine (id.), which also appears to be highly

interchangeable among sources. 

 61 E.g., CR/PR at Table V-2.

 62 CR/PR at Table IV-2.

 63 CR at I-12, PR at I-12.

11

accounted for *** percent of domestic producer shipments and *** percent of subject imports in 2006,

and therefore find that subject imports are generally interchangeable with the domestic like product and

with each other.60 

2. Same Geographical Markets. 

There was geographical overlap among the subject merchandise from each subject country and

the domestic like product during the period of investigation. The domestic, Indian, and Japanese products

overlapped with each other in all regions and with the Korean product in the ***.61

3. Simultaneous Presence. 

Imports from each of the subject countries have been present in the U.S. market throughout the

period of investigation.62

4. Channels of Distribution. 

The domestic like product and subject imports are sold through common channels of distribution,

that is, through distributors and to end users, with the majority sold to end users.63 

5. Conclusion 

The record in these preliminary phase investigations consequently indicates that the domestic like

product and imports from each of the three subject countries are sufficiently similar in characteristics to

satisfy the fungibility criterion. The criteria concerning channels of distribution, geographic overlap, and

simultaneous presence are clearly satisfied. Accordingly, we cumulate imports from all three subject

countries for our analysis of reasonable indication of material injury by reason of subject imports.
 64 Negligibility is not an issue in this investigation under 19 U.S.C. § 1677(24). The petition was filed on March

30, 2007. Subject imports from India accounted for 22.7 percent, subject imports from Japan for 29.6 percent, and

subject imports from Korea for 12.4 percent of total imports of glycine for the most recent 12-month period (March

2006 to February 2007) for which data were available that preceded the filing of the petition. CR at IV-12.

 65 19 U.S.C. §§ 1671b(a) and 1673b(a).

 66 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 . . . [a]nd explain in full its relevance to the determination.” 19

U.S.C. § 1677(7)(B). See also Angus Chemical Co. v. United States, 140 F.3d 1478 (Fed. Cir. 1998).

 67 19 U.S.C. § 1677(7)(A).

 68 19 U.S.C. § 1677(7)(C)(iii).

 69 19 U.S.C. § 1677(7)(C)(iii).

 70 CR at II-5; PR at II-3.

12

I. REASONABLE INDICATION OF MATERIAL INJURY BY REASON OF ALLEGEDLY

LESS THAN FAIR VALUE IMPORTS FROM INDIA, JAPAN, AND KOREA64

In the preliminary phase of antidumping or countervailing duty investigations, the Commission

determines whether there is a reasonable indication that an industry in the United States is materially

injured by reason of the imports under investigation.65 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.66 The statute defines “material injury” as “harm which is not inconsequential, immaterial, or

unimportant.”67 In assessing whether there is a reasonable indication that 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.68 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.”69

For the reasons stated below, we determine that there is a reasonable indication that the domestic

industry producing glycine is materially injured by reason of subject imports from India, Japan, and

Korea.

A. Conditions of Competition and the Business Cycle

The following conditions of competition inform our analysis of whether there is a reasonable

indication of material injury by reason of subject imports.

1. Demand Conditions

Glycine is an input into the production of many other products, and thus its demand is derived

from the demand for those end-use products.70 Glycine is used as a sweetener in foods, pharmaceuticals,

personal care products, and animal feed and pet food; as a buffering agent in antacids, analgesics,

antiperspirants, cosmetics, and toiletries, and in production of rubber sponge products and fertilizers; as a

re-absorbable amino acid to treat diarrhea; as a chemical intermediate in a variety of chemical products;

as a metal complexing and finishing agent; as a dietary supplement; to improve gastric absorption of

certain drugs; and in some intravenous uses. The principal end uses of glycine are as an additive in
 71 CR/PR at Table I-2 (as revised by INV-EE-047 (May 9, 2007)). Data on the five largest end users of glycine

indicate that *** firms that use glycine as an additive in pet food or animal feed accounted for an estimated ***

percent of reported U.S. shipments of glycine in 2006, and that *** firms that use glycine as a buffering agent in

antiperspirants accounted for an estimated *** percent of reported U.S. shipments of glycine in 2006. Id. These

percentages are based on data in U.S. producers’ and U.S. importers’ questionnaire responses in these preliminary

phase investigations. The Commission will collect end use data also from U.S. purchasers in any final phase

investigations. 

 72 Id.

 73 CR/PR at Tables IV-4, C-1. Views of producers and importers of demand trends over the period of

investigation were mixed, with GEO and two of the responding importers reporting that demand had increased,

Chattem and three of the importers reporting that demand had not changed, and three importers reporting that

demand had declined. Conference Transcript at 63 (Eckman), 64 (Kendrowski); CR at II-5 - II-6, PR at II-4. 

 74 CR at II-5, PR at II-3.

 75 CR at III-1, PR at II-1. Data reported by GEO included data for Hampshire/DOW for the portion of the period

of investigation prior to GEO’s purchase. 

 76 CR/PR at Table C-1. The industry’s capacity declined from *** pounds in 2004 to *** pounds in 2006. 

CR/PR at Tables III-2, C-1. Domestic production, after increasing from *** pounds in 2004 to *** pounds in 2005,

decreased to *** pounds in 2006. CR/PR at Tables III-6, C-1.

 77 CR/PR at Table III-2; CR at III-5, PR at III-2.

 78 Conference Transcript at 19-21 (Kedrowski); CR at III-3 - III-5, PR at III-2. 

 79 Conference Transcript at 21-22, 36 (Kedrowski); CR at III-15, PR at III-5.

 80 CR/PR at Table III-4. Chattem currently opposes the petition, explaining that imposition of antidumping duties

will improve GEO’s performance and permit GEO to modify their facility to serve the pharmaceutical grade sector,

which Chattem contends would force Chattem to withdraw from the U.S. glycine business and leave GEO as the

(continued...)

13

pet food and animal feed, and as a buffering agent in antiperspirants. 71 A small number of purchasers

account for a large share of apparent U.S. consumption.72 

Apparent U.S. consumption of glycine increased from *** million pounds in 2004 to *** million

pounds in 2005, then decreased to *** million pounds in 2006, reflecting a *** percent overall increase in

apparent U.S. consumption over the period of investigation.73

Price changes for glycine will likely have only a small effect on consumption given that

substitutes for glycine are limited to a few applications and glycine tends to account for a small share of

the cost of products in which it is used.74

2. Supply Conditions

During the period of investigation, two domestic producers, GEO and Chattem, accounted for

100 percent of U.S. production of glycine. GEO produces glycine using the HCN process at its Deer

Park, TX facility, while Chattem produces glycine using the MCA process at its Chattanooga, TN facility. 

GEO purchased the Deer Park facility from Hampshire Chemical Corporation (“Hampshire”), a

subsidiary of DOW Chemicals, Inc. (“DOW”), on November 1, 2005.75

The domestic industry’s capacity to produce glycine declined by *** percent during the period of

investigation, while production declined by *** percent.76 GEO accounted for *** of the reduction of

capacity over the period of investigation.77 As noted above, Chattem reported that it scaled back

production of the technical and USP grades of glycine between 2001 and 2004 in response to pricing

pressures from imports.78 In early 2005, Chattem became a distributor of subject technical grade glycine

produced by Showa Denko K.K., a Japanese producer.79 During the period of investigation, Chattem’s

domestic shipments of technical- and pharmaceutical grade glycine *** while its shipments of USP grade

glycine ***.80
 80 (...continued)

sole domestic producer. CR/PR at Table III-1 n.2. Correspondence from ***, Chattem, May 2, 2007. However, at

the public conference Chattem had indicated that it supported the petition in relation to glycine imported from India,

Japan, and Korea from producers using the MCA process, and that it supported the petition to the extent that these

investigations take into account that Chattem’s business partner, Showa Denko K.K., uses the HCN production

process and thus has a lower cost structure for the production of its glycine. Conference Transcript at 22

(Kedrowski).

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

 82 CR/PR at Table III-7 (domestic producers’ inventories as a share of U.S. production increased from *** percent

in 2004 to *** percent in 2005, then increased to *** percent in 2006; inventories as a share of U.S. shipments

increased from *** percent in 2004 to *** percent in 2005, then increased to *** percent in 2006).

 83 CR/PR at Table C-1.

 84 CR/PR at Table IV-6.

 85 CR/PR at Tables IV-5, C-1. 

 86 CR/PR at Table IV-5.

 87 CR at II-7, PR at II-4. 

 88 CR at II-7, PR at II-5. 

 89 CR at II-7, PR at II-5. In any final phase investigations, we will ask parties to comment on the appropriate

definition of pharmaceutical grade glycine. We intend to gather information on the condition of the pharmaceutical

(continued...)

14

Chattem reported selling *** percent of its product from inventories and the remainder produced

to order, and GEO reported selling *** percent of its product from inventories and the remainder

produced to order. Five of the 11 responding importers reported selling all product from inventories, with

two others selling 80 percent or more from inventories. Two importers reported selling all product

produced to order and two others selling 80 percent or more produced to order.81 The domestic industry’s

inventories were relatively low as a ratio to production and shipments in 2004 and 2005, then increased in

2006 due to ***.82

The domestic industry supplied only a portion of the U.S. market for glycine during the period of

investigation with the remainder supplied by imports. Domestic producers’ share of the U.S. market

declined steadily from *** percent in 2004 to *** percent in 2006.83 Subject imports’ share of the U.S.

market increased from *** percent in 2004 to *** percent in 2006.84 Finally, the U.S. market share held

by nonsubject imports fluctuated during the period examined, and increased modestly from *** percent in

2004 to *** percent in 2006.85 Glycine from China, which is subject to an antidumping duty order,

accounted for a substantial majority of nonsubject imports in 2005 and 2006.86

3. Substitutability and Other Conditions

The degree of substitution between domestic and imported glycine depends on factors such as the

certified grades produced in each country and relative price, as well as non-price factors such as product

quality, consistency, and conditions of sale such as reliability of supply, reliability of delivery, payment

terms, and delivery/lead time.87

As noted above, the record supports the conclusion that glycine is generally interchangeable

within form or grade, regardless of where it is produced. However, ease of substitution between suppliers

may differ greatly between grades. Non-pharmaceutical grades of glycine could be substituted among

producers with a fair amount of ease once a producer meets the standard for the specific grade required.88

On the other hand, because pharmaceutical grade glycine requires extremely high purity, consistency, and

plant verifications, it may be challenging for purchasers to shift from one supplier to another, at least in

the short term. As a result, Chattem reported that competition from imports in pharmaceutical grade

glycine was not significant.89
 89 (...continued)

segment of the market, and the performance of domestic producers in that segment. 

 90 CR at V-4, PR at V-3. GEO reported that its contracts contain meet-or-release provisions, while the importer,

CAF, contends that its contracts do not contain meet-or-release provisions. Conference Transcript at 17, 37

(Jackson), 86 (Frey). We intend to gather additional information on the durations and terms of domestic producers’

and importers’ contracts in any final phase investigations. 

 91 The Commission has made two modifications to official Commerce import statistics using proprietary Customs

data to account for misclassification of certain entries. First, material imported from the United Kingdom under the

statistical reporting number 2922.49.4020 was reclassified as subject imports from Japan to reflect the fact that this

material was improperly classified as having actually been produced in the United Kingdom. Second, glycine

imported *** from India that had been improperly classified under statistical reporting number 2922.49.1000 in

each year of the period of investigation was included in the import totals. CR at IV-3 - IV-4, PR at IV-2.

We note that Chattem alleges that imports included in Commerce data as being of subject-country origin

may, in fact, have been of Chinese origin. Conference transcript, pp. 71-72 (Kedrowski). See Chattem’s

postconference submission at 2 (providing estimates of U.S. imports from the subject countries and the United

Kingdom during the first quarter of 2007 that were alleged to be transshipped glycine of Chinese origin). However,

unlike the adjustments noted above, we have no information other than Chattem’s allegations that would allow us to

confirm transshipments of Chinese-origin glycine during the period of investigation or to adjust the Commerce data

in that regard.

If information about other possible revisions to the Commerce statistics comes to light in any final phase

investigations, we will consider those adjustments at the appropriate time. 

 92 19 U.S.C. § 1677(7)(C)(i).

 93 CR/PR at Tables IV-2, C-1. Chattem’s imports of subject merchandise accounted for *** percent of total

subject imports in 2004 and *** percent in 2005. CR/PR at Tables III-6, IV-2.

 94 CR/PR at Tables IV-5, C-1. Subject imports as a ratio to U.S. production increased from 36.2 percent in 2004

to 56.9 percent in 2005, and then to 77.5 percent in 2006. CR/PR at Table IV-6. 

15

GEO reported selling *** percent of its product using long-term contracts and *** percent on a

spot basis. Chattem reported that it does not sell on a contract basis but that it typically had a long-term

relationship with many of its purchasers. Of 11 responding importers, three reported selling mostly under

long-term contracts, three sold mainly using short-term contracts, and five sold all product in spot sales.90

B. Volume of Subject Imports 91

Section 771(7)(C)(i) of the 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.”92

The volume of cumulated subject imports of glycine increased significantly over the period of

investigation, both in absolute terms and relative to consumption and production in the United States. 

The volume of subject imports, measured by quantity, doubled over the period of investigation, increasing

from 3.2 million pounds in 2004 to 5.6 million pounds in 2005, then to 6.4 million pounds in 2006.93 The

share of the quantity of U.S. apparent consumption held by subject imports also increased over the period

of investigation, from *** percent in 2004 to *** percent in 2005, and then to *** percent in 2004.94 

The volume of nonsubject imports increased overall during the period of investigation, both in

absolute terms and relative to U.S. consumption, but those increases were much smaller than those of the
 95 The volume of nonsubject imports, measured by quantity, increased by 25.4 percent over the period of

investigation, from 2.0 million pounds in 2004 to 2.2 million pounds in 2005, then to 2.6 million pounds in 2006. 

CR/PR at Table IV-4, C-1. The share of the quantity of U.S. apparent consumption held by nonsubject imports

increased irregularly from *** percent in 2004, to *** percent in 2005, then to *** percent in 2006. CR/PR at

Tables IV-5, C-1. 

 96 There is limited information on the record regarding the role of nonsubject imports of glycine in the U.S.

market. In any final phase investigations, we will seek information on the role of nonsubject imports of glycine in

the U.S. market. We invite parties to comment in any final phase investigations on whether the recent decision by

the U.S. Court of Appeals for the Federal Circuit, Bratsk Aluminum Smelter v. United States, 444 F.3d 1369 (Fed.

Cir. 2006), is applicable to the facts of these investigations. The Commission also invites parties to comment on

what additional information the Commission should collect to address the issues raised by the Court and how that

information should be collected, and to identify which of the various nonsubject sources should be the focus of

additional information gathering by the Commission in any final phase investigations.

 97 Chairman Pearson and Commissioner Okun do not join the preceding footnote. The U.S. Court of Appeals for

the Federal Circuit did not address the application of its mandate in Bratsk Aluminum Smelter v. United States, 444

F.3d 1369 (Fed. Cir. 2006), to preliminary investigations. In that case the Court indicated that, in cases involving

commodity products in which imports from non-subject countries are price-competitive and are a significant factor

in the U.S. market, in order to establish a causal link between subject imports and material injury the Commission

must evaluate whether the non-subject imports would replace subject imports and thereby eliminate the benefit to the

domestic industry of an antidumping or countervailing duty order.

The legal standard for preliminary antidumping and countervailing duty determinations requires the

Commission to determine, based upon the information available at the time of the preliminary determination,

whether there is a reasonable indication that a domestic industry is materially injured or threatened with material

injury by reason of the allegedly unfairly traded imports. 19 U.S.C. §§ 1671b(a), 1673b(a) (2000). Thus, Chairman

Pearson and Commissioner Okun conclude that they must conduct a Bratsk analysis as they would any other type of

causation analysis in a preliminary investigation. See Separate and Additional Views of Chairman Daniel R.

Pearson and Commissioner Deanna Tanner Okun Concerning Bratsk Aluminum v. United States.

 98 The share of the quantity of U.S. apparent consumption held by the domestic industry decreased steadily from

*** percent in 2004 to *** percent in 2005, then to *** percent in 2006. CR/PR at Tables IV-5, C-1.

 99 19 U.S.C. § 1677(7)(C)(ii).

16

subject imports.95 96 97 In addition, the absolute and relative increase in non-subject import volume over

the period of investigation was small relative to the decline in U.S. producer’s U.S. shipments.98 Thus,

subject imports gained market share largely at the expense of the domestic industry. 

For the foregoing reasons, we find for the purposes of the preliminary phase of these

investigations that both the volume and increase in volume of subject imports were significant during the

period of investigation, both in absolute terms and relative to consumption and production in the United

States.

C. Price Effects of the Subject Imports

Section 771(7)(C)(ii) of the Act provides that, in evaluating the price effects of the subject

imports, 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.99
 100 See CR at II-7 - II-11, PR at II-5 - II-7. 

 101 CR at V-4, PR at V-4.

 102 ***. In total, 11 importers provided price data. Four of the importers reported price data for product 2 from

India. Seven importers reported price data for product from Japan--four of these imported product 2, two imported

product 3, and one imported product 1. One importer provided price data for product 2 from Korea. CR at V-5, PR

at V-4.

 103 CR/PR at Tables IV-3 and V-1 - V-3. For product 2, the subject imports undersold the domestic like product

in 30 of 36 quarterly comparisons. CR/PR at Table V-2. Products 1 and 3 accounted for considerably smaller

volumes of subject imports. The subject imports undersold the domestic like product in none of the 9 quarterly

comparisons for product 1, and in 3 of 7 quarterly comparisons for product 3. CR/PR at Tables V-1, V-3. 

 104 We note that the price levels of the two domestic producers differed substantially. In any final phase

investigations we intend to explore the significance of these differences for price competition in the U.S. glycine

market.

 105 CR/PR at Tables V-1 - V-3.

 106 CR/PR at Table V-2. 

 107 CR/PR at Tables VI-1, C-1.

 108 During a time of significantly increasing subject import levels in 2005 at prices that significantly undersold the

domestic product, the domestic industry was able to lower its costs. Direct labor unit costs declined from $*** per

pound in 2004 to $*** per pound in 2005; factory overhead costs declined from $*** per pound in 2004 to $*** per

pound in 2005; and SG&A expenses declined from $*** per pound in 2004 to $*** per pound in 2005. These cost

improvements were offset somewhat in 2005 by increasing raw materials costs, which rose from $*** per pound in

2004 to $*** per pound in 2005. These overall cost declines directly contributed to an improvement in the domestic

industry’s financial performance in 2005, as reflected in its operating income to net sales ratio of *** percent, as

compared with *** percent in 2004. CR/PR at Tables VI-3, C-1.

However, as raw materials costs increased even further in 2006, up $*** per pound to $*** per pound, and

as the domestic industry was unable to continue lowering its direct labor costs, factory overhead costs, and SG&A

expenses, which only cumulatively declined $*** per pound in 2006, the domestic industry was unable to compete

(continued...)

17

As explained in the discussion of cumulation and conditions of competition, there is a moderate

to high degree of substitutability between the domestic like product and subject imports, though factors

other than price enter into purchasing decisions.100

In these investigations, U.S. producers and importers provided quarterly pricing data for three

grades of glycine: pharmaceutical grade (product 1), USP grade (product 2), and technical grade (product

3).101 By quantity, pricing data reported by responding firms accounted for *** percent of reported U.S.

producers’ shipments of glycine, *** percent of subject imports of glycine from India, *** percent of

subject imports from Japan, and *** percent of subject imports from Korea for the January 2004 to

December 2006 period.102 

Subject imports undersold the domestic like product in 33 of 52 quarterly comparisons, with

margins of underselling ranging from 0.1 percent to 20.3 percent.103 For purposes of these preliminary

determinations, we find that there has been significant underselling of the domestic like product by

subject imports.104

We have also considered movements in glycine prices over the period of investigation. The

Commission’s pricing data show an overall increase in prices for the three domestic products over the

period of investigation.105 However, U.S. prices for product 2, which accounts for 80 to 85 percent of the

U.S. market, declined from 2005 to 2006.106 Additionally, the domestic industry’s unit cost of goods sold

(“COGS”) increased over the period of investigation, and the ratio of COGS to net sales, while

fluctuating during the period, rose between 2005 and 2006 by *** percent.107 These data indicate that,

although the domestic industry’s prices increased, the domestic producers ***, particularly in 2006. This

evidence indicates price suppression in the form of a cost-price squeeze due in part to the subject imports

in 2006.108 Evidence of some confirmed lost sales provides additional support for our finding that subject
 108 (...continued)

with the ever-increasing levels of lower-priced subject imports in 2006 by continuing to lower costs and was unable

to raise its prices to cover its increased costs because of the significant underselling. CR/PR at Table VI-3. As a

result, the domestic industry’s operating income to net sales ratio worsened, to *** percent in 2006. CR/PR at Table

C-1.

 109 The petitioner provided lost sales allegations totalling $***. CR at V-14, PR at V-5. The Commission

confirmed $*** of the alleged lost sales over the period of investigation. CR at V-14-V-17, PR at V-5 - V-6; CR/PR

at Table V-6. The alleged lost sale regarding *** was not confirmed, but ***. CR at V-17, PR at V-6. We note

conflicting reporting on the country of origin of glycine relating to one lost sales allegation. CR at V-16 n.3, PR at

V-6. We intend to seek more information to resolve this and any related inconsistencies in any final phase of these

investigations. 

 110 CR/PR at Table V-2. 

 111 In its notice of initiation, Commerce estimated the dumping margins for imports of subject glycine at between

5.67 to 121.62 percent for India, 70.21 to 280.57 percent for Japan, and 138.37 to 138.83 percent for Korea. 72 Fed.

Reg. 20816, April 26, 2007.

 112 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.”). SAA at 885.

 113 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 (Feb. 1999) at 25 n.148.

 114 U.S. production increased from *** in 2004 to *** in 2005 and then declined to *** in 2006. CR/PR at Tables

III-2 and C-1. 

18

imports have suppressed prices to a significant degree.109 Also, there is some evidence of price depression

as domestic prices for the main glycine product (USP grade, product 2) fell substantially during 2005 and

2006, as subject imports were increasing in those years.110 For purposes of the preliminary phase of these

investigations, however, we have not found that subject imports have depressed domestic prices to a

significant degree. 

For the foregoing reasons, we find for purposes of the preliminary phase of these investigations

that there has been significant underselling by subject imports and that such imports have prevented price

increases, which otherwise would have occurred, to a significant degree. Thus, we find that subject

imports have had significant adverse effects on prices for the domestic like product.

D. Impact of the Subject Imports on the Domestic Industry111

Section 771(7)(C)(iii) of the Act provides that the Commission, in examining the impact of the

subject imports on the domestic industry, “shall evaluate all relevant economic factors which have a

bearing on the state of the industry.”112 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 are considered “within the context of the business cycle and conditions of

competition that are distinctive to the affected industry.”113

We have examined the performance indicators in the trade and financial data for the domestic

industry producing glycine. These data indicate declining overall trends, although some indicators have

fluctuated during the period examined. U.S. production, production capacity, capacity utilization,

shipments, and net sales quantity and value all declined from 2004 to 2006. U.S. production of glycine

increased from 2004 to 2005, but declined *** percent in 2006 for an overall decline of *** percent from

2004 to 2006.114 Industry capacity declined from 2004 to 2005 and was unchanged from 2005 to 2006,

for an overall decline of *** from 2004 to 2006. Capacity utilization increased from *** percent in 2004
 115 CR/PR at Tables III-2 and C-1.

 116 U.S. shipments declined from *** in 2004 to *** in 2005 and to *** in 2006. CR/PR at Table C-1.

 117 CR/PR at Table C-1.

 118 CR/PR at Tables IV-6 and C-1.

 119 CR/PR at Table IV-6.

 120 CR/PR at Table C-1. It is not clear whether the this inventory buildup was *** (GEO’s Postconference Brief,

Responses to Staff Questions at 21), or the result of other factors. We intend to consider this issue further in any

final phase investigations. 

 121 CR/PR at Table C-1. However, ***, unit labor costs ***. Id. 

 122 Unit sales values increased from $*** in 2004 to $*** in 2006, and productivity (pounds per hour) increased

from *** in 2004 to *** in 2006. CR/PR at Table C-1. 

 123 CR/PR at Tables VI-3, C-1.

 124 CR/PR at Table C-1. 

 125 U.S. importers asserted that, during the period of investigation, GEO and/or its predecessor firm,

Hampshire/DOW, lost business because they were unable to meet customer demand due to plant shutdowns, quality

problems, and problems such as short shipping, unreliable deliveries, allocation, and denial of supply (abrogated

contracts). It was also alleged that GEO’s customers are hesitant to concentrate all their business through a sole

supplier of glycine. GEO *** contracts over the period of investigation and contends that, while Hampshire/DOW

had a poor record regarding reliability of service, GEO has significantly improved customer service since it

purchased the Hampshire/DOW facility in November 2005. CR at III-12, PR at III-4 - III-5. We note that negative

trends in the data occurred even after GEO replaced Hampshire/DOW as a producer, even though deliveries and

shipments became much more reliable. CR/PR at Table III-5, Figure III-5.

We note that an importer reported that GEO, more recently, in 2007, has asked its customers to wait three

months for product. GEO responded that ***. GEO’s Postconference Brief, Responses to Staff Questions at 21. In

any final phase investigations, we will gather further information on the domestic industry’s delivery performance,

especially in 2007. 

19

to *** percent in 2005, then decreased to *** percent in 2006.115 Domestic producers’ U.S. shipments of

glycine increased from 2004 to 2005, but declined *** in 2006 for an overall decline of *** percent from

2004 to 2006.116 Net sales volume followed production and shipment trends, increasing from 2004 to

2005, but declining *** in 2006, for an overall decline of *** percent from 2004 to 2006.117

As apparent U.S. consumption increased overall by *** from 2004 to 2006, imported subject

product gained U.S. market share at the expense domestic producers.118 Domestic producers’ share of the

U.S. market declined from *** percent in 2004 to *** percent in 2006, while subject imports’ share

increased from *** percent in 2004 to *** percent in 2006.119 Domestic producers’ inventories increased

by *** percent over the period of investigation and rose as a share of U.S. shipments from *** percent in

2004 to *** percent in 2006.120

The average number of the industry’s production related workers declined *** percent over the

period of investigation, from *** in 2004 to *** in 2006 and hours worked declined *** percent, from

*** in 2004 to *** in 2006, while hourly wages increased *** percent, from $*** in 2004 to $*** in

2006.121

Despite increased prices and improvements in the industry’s productivity over the period of

investigation,122 unit raw material costs rose sharply, from $*** in 2004 to $*** in 2005 and then to $***

in 2006, pushing total unit costs upward.123 The industry reported *** in each year of the period

examined. The operating *** were $*** in 2004, $*** in 2005, and $*** in 2006. The industry’s ratio

of operating *** to net sales was *** percent in 2004, *** percent in 2005, and *** percent in 2006.124 125

 For purposes of the preliminary phase of these investigations, we conclude that subject imports

had an adverse impact on the condition of the domestic industry during the period of investigation. In

particular, we find that the absolute and relative volume of subject imports are significant, that subject
20

imports have gained market share at the expense of the domestic industry, that they have undersold the

domestic product, and have suppressed domestic prices to a significant degree. The suppressed domestic

prices, combined with the pattern of consistent underselling, have led to declines in the domestic

industry’s financial performance over the period of investigation. 

CONCLUSION

For the reasons stated above, we find that there is a reasonable indication that the domestic

industry producing glycine is materially injured by reason of subject imports of glycine from India, Japan,

and Korea that allegedly are sold in the United States at less than fair value.
 1

 No. 05-1213 (Fed. Cir. Apr. 10, 2006), Slip Op. at 6, quoting Gerald Metals, Inc. v. United States, 132 F.3d 716,

722 (Fed. Cir. 1997). The Commission filed a petition for rehearing en banc, which the Court denied on July 24,

2006. The Court’s mandate was issued on August 7, 2006.

 2

 Commissioner Okun did not participate in the underlying investigation nor the subsequent litigation.

 3

 Slip Op. at 2, 9-11. 

 4

 H.R. Doc. No. 103-316, Vol. I (1994) at 851-52 (“SAA”); Taiwan Semiconductor Industry Ass’n v. United

States, 266 F.3d at 1339, 1345 (Fed. Cir. 2001).

 5

 Slip op. at 9, 12.

21

SEPARATE AND ADDITIONAL VIEWS OF CHAIRMAN DANIEL R.

PEARSON AND COMMISSIONER DEANNA TANNER OKUN CONCERNING

BRATSK ALUMINUM V. UNITED STATES

I. Legal Issues Concerning Bratsk Aluminum Smelter v. United States

In the recent case of Bratsk Aluminum Smelter et al. v. United States, 444 F.3d 1369 (Fed. Cir.

2006) (“Bratsk”), the Court of Appeals for the Federal Circuit reaffirmed that the requisite causal link to

subject imports is not demonstrated if such imports contributed only “‘minimally or tangentially to the

material harm.’”1 2

 Applying that standard to an investigation involving a commodity product, i.e.,

silicon metal, and the significant presence of non-subject imports, the Court held that the Commission had

not sufficiently explained whether non-subject imports simply would have replaced subject imports

during the period of investigation had an antidumping order been in place and continued to cause injury

to the domestic industry.3

As a threshold matter, it is not immediately clear how the Commission should interpret the Bratsk

opinion in terms of its effect on our analysis of causation in Title VII investigations. At a minimum, we

can discern at least two possible interpretations which differ substantially: (1) that Bratsk mandates

application of an additional test apparently not contemplated by the statute (the so-called

“replacement/benefit test”), and (2) that Bratsk is a further development of the causation approach

prescribed by Gerald Metals. 

A. Separate Causation Analysis – Replacement/Benefit Test

The statute sets forth specific factors for the Commission to consider in analyzing the volume,

price effects and impact of subject imports. 19 U.S.C. § 1677(7). The Uruguay Round Agreements Act

Statement of Administrative Action (“SAA”) explains further that in analyzing causation the Commission

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

sources to the subject imports, but is not required to isolate the injury caused by other factors from injury

caused by unfair imports.4

 Beyond this, the statute does not provide any further limitations on how the

Commission’s causation analysis shall be conducted.

The Court’s decision, however, states that the Commission must perform an additional “specific”

causation analysis in the form of a replacement/benefit test. Using somewhat varying phrasing, the Court

stated that the Commission must determine “whether non-subject imports would have replaced subject

imports without any beneficial effect on domestic producers,” must “explain why the elimination of

subject imports would benefit the domestic industry instead of resulting in the non-subject imports’

replacement of the subject imports’ market share without any beneficial impact on domestic producers,”

and must explain “why the non-subject imports would not replace the subject imports and continue to

cause injury to the domestic industry.”5
 6

 SAA at 851-52, 885, 889-90. The Commission has indicated that the possibility that an order might not be

effective does not preclude a finding of present material injury. The Commission also has concluded that the statute

does not provide for the Commission to perform an additional injury test to predict the future effectiveness of import

relief:

{W}e note that nothing in the statute or case law requires (or allows) us to consider the likely

effectiveness of a dumping order in making our injury determination. The possibility that nonsubject imports will increase in the future after an antidumping order is imposed is . . . not relevant

to our analysis of whether subject imports are currently materially injuring the industry.

Wooden Bedroom Furniture From China, Inv. No. 731-TA-1058 (Final), USITC Pub. 3743, n.222 (Dec. 2004). 

 7

 Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369, 1380 (Fed. Cir. 2003).

 8

 The Commission set out in detail its objections to the Court’s decision in its petition for rehearing to the Federal

Circuit. See Petition for Rehearing en Banc (May 25, 2006), Bratsk Aluminum Smelter et al. v. United States, 444

F.3d 1369 (Fed. Cir. 2006)(No. 05-1213) (petition denied July 24, 2006). As noted above, Commissioner Okun did

not participate in that proceeding.

 9

 While it is not an issue in these investigations, it is unclear whether the Court intended its approach to apply to

analyses of threat of material injury, or only to analyses of present material injury. Given that one of the Court’s

formulations of the standard is framed in terms of likely future events, we have interpreted the Court’s decision as

applying both to the context of present injury and threat of injury.

 10 Gerald Metals, 132 F.3d at 722.

 11 Slip op. at 5.

22

Such a “replacement/benefit” test is not among the statutory factors Congress has required the

Commission to consider. The statutory scheme contemplates that subject imports may remain in the U.S.

market after an order is imposed and even that the industry afterward may continue to suffer material

injury.6

 Thus, the decision in Bratsk misconstrues the purpose of the antidumping and countervailing

duty laws, which is not to bar subject imports from the U.S. market or award subject import market share

to U.S. producers, but instead to “level competitive conditions” by imposing a duty on subject imports at

a level to offset the amount of dumping or subsidization and thus enabling the industry to compete against

fairly traded imports.7

 It is not uncommon for subject imports to remain in the U.S. market in significant

quantities even after the issuance of an antidumping or countervailing duty order, as shown by the

hundreds of millions of dollars in antidumping and countervailing duties collected every year. 

Bratsk, therefore, appears to require that the Commission apply an extra-statutory causation test

with respect to non-subject imports and to determine that the domestic industry will benefit from the

antidumping duty or countervailing duty order. We respectfully disagree with the Court that such a

causation analysis is legally required.8

 However, given that the Federal Circuit’s mandate has now been

issued and the decision has become binding precedent, we discuss infra our interpretation of the Bratsk

standard and perform the analysis based on the record in these preliminary investigations.9

B. Gerald Metals Causation Analysis

Alternatively, we also find support for interpreting the Bratsk decision to be reminding the

Commission of its obligation under Gerald Metals that the Commission may not satisfy the “by reason of”

causation requirement by showing that subject imports contributed only “minimally or tangentially to the

material harm.”10

This may be a reasonable interpretation of the Bratsk decision as the Court noted that the “sole

point of contention in this appeal is whether the Commission established that the injury to the domestic

industry was ‘by reason of’ the subject imports.”11 In explaining its conclusion, the Court emphasized
 12 Slip op. at 5.

 13 Slip op. at 6-9.

 14 Slip op. at 9.

 15 Slip op. at 10.

 16 Slip op. at 9.

 17 19 U.S.C. § 1673d(b).

 18 S. Rep. No. 249, 96th Cong., 1st Sess. 46-47 (1979). 

 19 S. Rep. No. 249, 96th Cong., 1st Sess. 74 (1979); H.R. Rep. No. 317, 96th Cong., 1st Sess. 46-47.

23

that the Commission had “dismissed” Gerald Metals as being factually distinguishable,12 extensively

explained its holdings in Gerald Metals and Taiwan Semiconductor,

13 and noted that the underlying

investigation in Bratsk “revealed the same conditions that triggered the additional causation inquiry in

Gerald Metals and Taiwan Semiconductor.”14 Further, the Court noted that

Gerald Metals thus requires the Commission to explain why – notwithstanding the

presence and significance of the non-subject imports – it concluded that the subject

imports caused material injury to the domestic industry. While there may be support for

the Commission’s ultimate determination of material injury in the record here, we find

that the Commission did not sufficiently explain its decision in this regard.15

Therefore, the Court may not have been creating a new extra-statutory causation test, but rather

was simply reminding the Commission of its existing obligation under Federal Circuit precedent. In other

words, the Bratsk Court’s relatively short discussion of the underlying determination may not have

established a new and rigid replacement/benefit test. Rather, the Court may have discussed the triggering

factors (i.e., commodity product and price-competitive non-subject imports) and the replacement/benefit

factors (i.e., whether non-subject imports would have replaced the subject imports without any beneficial

effect on domestic producers)16 as a reminder that the Commission, before it makes an affirmative

determination, must satisfy itself that it has not attributed material injury to factors other than subject

imports.

The statute requires the Commission to determine whether the domestic industry is “materially

injured by reason of” the unfairly traded imports.17 Thus, the Commission must evaluate the effects of the

unfairly traded imports on the domestic industry in order to determine if those imports are causing

material injury. In most investigations, there are other economic factors that also may be causing injury

to the domestic industry. The statute’s legislative history states that the Commission “will consider

information which indicates that harm is caused by factors other than less-than-fair-value imports.”18

While the statute is clear that the Commission is not to weigh or prioritize the factors that are

independently causing material injury,19 the Commission cannot assign the cause of material injury to

factors other than subject imports. Under this interpretation, the reference in Bratsk to “whether nonsubject imports would have replaced subject imports without any beneficial effect on domestic producers”

could be asking the Commission to interpret “benefit” to mean that if the subject imports are indeed

causing harm, then the removal of the unfairly traded imports should “benefit” the domestic industry, but

if the removal of the unfairly traded imports would not benefit the domestic industry, the injury must be

attributable to other factors. Thus, the Commission must analyze the effects of the unfairly traded imports

in a way that enables the Commission to conclude that it has not attributed the effects of other factors to

the subject imports. 

If this interpretation of Bratsk is correct, then we concur with the Federal Circuit that the

Commission is required to identify and assess the competitive effects of subject imports to ensure that
 20 GEO postconference brief at 1 and conference transcript at 13, 14 (Mr. Reilly) and 16 (Ms. Jackson).

 21 GEO postconference brief at 2.

 22 CR at II-8, PR at II-5.

 23 CR/PR at Table III-4 and Table IV-3.

 24 CR/PR at Table IV-2. 

 25 CR/PR at Table IV-2.

 26 The major sources of non-subject imports are Belgium and China. Imports from China are currently subject to

an antidumping duty order. 

 27 Calculated from CR/PR at Table IV-2.

24

they contribute more than “minimally or tangentially to the material harm” of the domestic industry. To

the extent that we had the relevant information, this analysis was included in the Commission’s causation

analysis. We will re-examine this in any final phase of these investigations once the Commission has

collected further relevant information (e.g., information about the market from purchasers).

II. Under the Bratsk Replacement/Benefit Test, Non-subject Imports Likely Would Not Negate

the Beneficial Effect of an Order on Subject Imports from India, Japan, and Korea

Having found that there is a reasonable basis to determine that an industry in the United States is

materially injured by reason of subject imports from India, Japan, and Korea we now must assess whether

the facts of these investigations trigger a Bratsk analysis under the “replacement/benefit test”

interpretation of Bratsk. Based on the record, we conclude that Bratsk is triggered, but that non-subject

imports likely would not negate the beneficial effect of the orders on subject imports from India, Japan,

and Korea.

A. Analysis

1. Triggering Factors

The petitioner asserts that glycine is a commodity product.20 Petitioner further contends that

within each grade, glycine is fungible regardless of where the product is manufactured.21 Pharmaceutical

grade glycine is produced to customer specifications which may limit the interchangeability between

pharmaceutical grade glycine and other grades of glycine.22 However, technical and USP grade glycine

account for the vast majority of the U.S. production and virtually all reported imports.23 Thus, based on

the information available in these preliminary investigations, we find that the domestic like product,

subject imports, and non-subject imports of glycine are generally commodity products.

With respect to the second factor, whether price competitive non-subject imports are a significant

factor in the U.S. market, the record in these preliminary investigations indicates that non-subject imports

were present throughout the period of investigation and that the volume of non-subject imports has

increased. Non-subject import volume was approximately 2.0 million pounds in 2004, 2.2 million pounds

in 2005, and 2.6 million pounds in 2006.24 Non-subject imports accounted for 39.2 percent of total

imports in 2004, 28.5 percent in 2005, and 28.6 percent in 2006.25 Thus, the volume of non-subject

imports exceeded the volume of subject imports from Korea in 2006 and was comparable to the volume

of subject imports from India and Japan, respectively.26 

Non-subject imports from China represent an increasing share of non-subject import volume.

China’s share of non-subject imports increased from approximately 27.1 percent in 2004 to 84.7 percent

in 2006.27 China’s share of total imports also increased from 10.6 percent in 2004 to 24.3 percent in 2005
 28 CR/PR at Table IV-2.

 29 Conference transcript at 9 (Mr. Eckman), 66 (Mr. Eckman and Mr. Kedrowski), and 68 (Ms. Johnson). 

 30 Although Petitioner has argued that non-subject import volume may not be a significant factor, it did so based

on inaccurate data for the volume of non-subject imports which significantly understated the volume and market

share of non-subject imports. GEO’s postconference brief, response to staff questions at 10 and 11. 

 31 CR/PR at Tables III-4, IV-3.

 32 CR/PR at Table V-2.

 33 CR/PR at Table IV-5.

 34 CR/PR at Table IV-5.

 35 GEO’s postconference brief, response to staff questions at 10. 

 36 GEO’s postconference brief, response to staff questions at 10.

 37 GEO’s postconference brief, response to staff questions at 11.

 38 GEO’s postconference brief, response to staff questions at 11.

25

and 2006.28 China’s share of total imports in 2006 exceeded that of subject imports from Korea and was

only slightly lower than subject imports from India and Japan, respectively. Moreover, both domestic

producers have cited the negative impact that imports from China have had on the domestic industry.29

Thus, for purposes of these preliminary determinations, we find that non-subject imports of glycine are at

significant levels and are a “significant factor” in the U.S. market.30

As to whether non-subject imports are price competitive, the Commission requested productspecific price data on imports from China in its importers’ questionnaires. The Commission received

price data that accounted for approximately 60.7 percent of non-subject imports from China in 2006. ***

of these price data are for Product 2, USP grade glycine. USP grade glycine accounts for approximately

80 to 85 percent of the total U.S. glycine market.31 Based on these data, non-subject imports from China

undersold the domestic like product in seven out of the eight possible comparisons.32 Further, the prices

of non-subject imports from China were lower than the prices of subject imports from India and Japan in

twelve out of sixteen possible comparisons. The prices of non-subject imports from China exceeded the

prices of subject imports from Korea in every comparison. The average unit value of non-China, nonsubject imports exceeded the average unit value of domestic shipments in each year of the period

examined, although average unit values are impacted by differences in product mix. Thus, for purposes of

these preliminary determinations, we determine that non-subject imports of glycine are price-competitive. 

2. Replacement/Benefit Factors

Having determined that the Bratsk test is triggered, we now analyze whether non-subject imports

are likely to replace subject imports and continue to cause injury to the domestic industry. The record in 

these preliminary investigations indicates that the market share of non-subject imports increased

irregularly from *** percent in 2004 to *** percent in 2006.33 The market share of non-subject imports

from China increased steadily from *** percent in 2004 to *** percent in 2006.34 As noted above, nonsubject imports from China accounted for a substantial majority of total non-subject imports in 2006.

Petitioner contends that issuance of the orders would have little impact on the role that non-subject

imports play in the market.35 Petitioner contends that since the issuance of the antidumping duty order on

China the volume of imports from China in the U.S. market has diminished. However, Petitioner’s

arguments are premised on inaccurate data with regard to the volume of imports from China.36 Petitioner

further contends that the discipline of the existing antidumping duty order on imports from China will

limit the impact those imports have on the U.S. market.37 Petitioner additionally argues that Baoding

Mantong, one of the two main suppliers of imports from China, is ***.38 Petitioner asserts that the other
 39 GEO’s postconference brief, response to staff questions at 11.

 40 CR at VII-13, PR at VII-8.

 41 CR at VII-13, PR at VII-8.

 42 CR at VII-13, PR at VII-8.

26

main supplier of imports from China, Nantong Dongchang now faces an antidumping duty margin of

75.82 percent, which will force it to increase prices to a point where it cannot increase its market share.39

China is believed to be the largest producer of glycine in the world. The most recent estimates

available to the Commission indicate that China has the capacity to produce 50 million pounds of glycine

per year.40 Imports from the Chinese producer Nantong Dongchang accounted for *** of the volume of

imports from China during the 2004-06 period. Imports from Nantong Dongchang had been subject to a

duty deposit rate of 18.6 percent from 2001 through 2006.41 In April 2007, the Department of Commerce

published a preliminary revised antidumping duty deposit rate for Nantong Dongchang of 75.82 percent.42

Thus, the competitive conditions faced by the largest supplier of imports from China may change

significantly. The Commission lacks current data on the capacity and capacity utilization for all but one

producer in China.

Although non-subject imports from China have increased both absolutely and relative to

consumption, total non-subject import volume and market share has increased only slightly. The average

unit value of all non-subject imports exceeded the average unit value of domestic shipments and the price

of imports from China exceeded the price of subject imports from Korea. The largest supplier of imports

from China may face significantly different conditions in the U.S. market and the only current

information available to the Commission on capacity and capacity utilization in China shows that it has

little ability to increase production. Therefore, for purposes of these preliminary determinations we

determine that non-subject imports would not negate any benefit to the domestic industry from the

imposition of the orders. 
 1 Federal Register notices cited are presented in app. A.

I-1

PART I: INTRODUCTION

BACKGROUND

These antidumping duty investigations result from a petition filed by GEO Specialty Chemicals,

Inc. (“GEO”), Lafayette, Indiana, on March 30, 2007, alleging that an industry in the United States is

materially injured and threatened with material injury by reason of less-than-fair-value (“LTFV”) imports

of glycine from India, Japan, and Korea. Information relating to the background of these investigations is

provided below.1

 

Effective date Action

March 30, 2007 Petition filed with Commerce and the Commission;

institution of the Commission's investigations (72 FR

17580, April 9, 2007)

April 20, 2007 Commission’s conference1

April 26, 2007 Commerce’s notice of initiation (72 FR 20816, April

26, 2007)

May 11, 2007 Commission’s vote

May 14, 2007 Commission’s determinations transmitted to

Commerce

May 21, 2007 Commission’s views transmitted to Commerce

 1 A list of witnesses appearing at the conference is presented in app. B.

STATUTORY CRITERIA AND 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.

. . .
I-2

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.

Part I of this report presents information on the subject merchandise, alleged dumping margins,

and domestic like product. Part II of this report presents information on conditions of competition and

other relevant economic factors. Part III presents information on the condition of the U.S. industry,

including data on capacity, production, shipments, inventories, and employment. Parts IV and V present

the volume and pricing of imports of the subject merchandise, respectively. Part VI presents information

on the financial experience of U.S. producers. Part VII presents the statutory requirements and

information obtained for use in the Commission’s consideration of the question of threat of material

injury.

U.S. MARKET SUMMARY

Trade for glycine totaled approximately $*** million (*** million pounds) in the U.S. market in

2006. Currently, only two firms produce glycine in the United States: GEO and Chattem Chemicals, Inc.

(“Chattem”). 

U.S. producers’ U.S. shipments of glycine totaled $*** million (*** million pounds) in 2006, and

accounted for *** percent of apparent U.S. consumption by value. U.S. imports from subject sources

totaled $8.1 million (6.4 million pounds) in 2006 and accounted for *** percent of apparent U.S.

consumption by value. U.S. imports from nonsubject sources totaled $3.5 million (2.6 million pounds) in

2006 and accounted for *** percent of apparent U.S. consumption by value. Glycine is used as a food

additive (e.g. sweetener and buffering agent in pet foods), as a cosmetic additive (e.g. buffering agent in

antiperspirant actives), in pharmaceutical applications (e.g. within intravenous liquid drug applications, or

in the manufacture of pills), and in metal finishing (e.g. reactant used in bath to prepare metal for

adhesion with silicone), among others. 
 2 See Part IV of this report for a complete discussion of the treatment of U.S. import data.

 3 Aminoacetic Acid (G1ycine) fiom France, Inv. No. AA1921-61, Pub. 313 (Feb. 1970), 34 F.R. 18559 (1969); 35

F.R. 4676 (1970); 35 F.R. 5009 (1970); 44 F.R. 12417 (1979). 

 4

 60 FR 16116, March 29, 1995. 

 5 Continuation of Antidumping Duty Orders: Glycine from China, 65 FR 45752, July 25, 2000, and 70 FR 69316,

November 15, 2005.

 6

 70 FR 54012, September 13, 2005.

 7

 66 FR 13204, March 5, 2001.

 8

 70 FR 54012, September 13, 2005. Baoding Mantong had been subject to the all other companies rate of 155.89

percent ad valorem prior to requesting an administrative review of its shipments. The preliminary administrative

review for Baodink Mantong was published in April 2005. 70 FR 17649, April 7, 2005.

I-3

SUMMARY DATA AND DATA SOURCES

Appendix C presents a summary of data collected in these investigations. In this report, data on

the U.S. industry are based on responses to the Commission’s questionnaires from the U.S. producers of

glycine. U.S. imports are based on official Commerce statistics with modifications.2

 Additional data on

U.S. importers’ shipments are based on responses to the Commission’s questionnaires from U.S.

importers of glycine. Data on the glycine industries in India, Japan, and Korea are based on responses to

the Commission's questionnaires from producers of glycine in those countries.

PREVIOUS AND RELATED INVESTIGATIONS

Chattem Drug and Chemical Co., the forerunner of today’s Chattem, filed an antidumping

petition in 1968 against imports of glycine from Japan, France, the Federal Republic of Germany, and the

Netherlands. The Department of Treasury found no sales at LTFV from the Federal Republic of Germany

or the Netherlands, and issued a negative determination concerning Japan on the basis of the Japanese

exporter’s agreement to discontinue LTFV sales. Antidumping duties were imposed on imports of

glycine from France following an affirmative injury determination by the Commission. That finding was

revoked in 1979.3

In 1994, Hampshire Chemical Corp. (predecessor company to GEO) and Chattem Inc., filed an

antidumping petition against imports of glycine from China. Following affirmative determinations of

LTFV sales and injury to the domestic industry, antidumping duties were imposed on March 29, 1995.4

In the 2000 and 2005 five-year reviews of the dumping order, the Commission determined that revocation

of the antidumping duty order would be likely to lead to continuation or recurrence of material injury to

an industry in the United States within a reasonably foreseeable time, and Commerce published notices of

continuation of the antidumping duty order.5

 The antidumping duty rates for imports from China during

the period of this investigation were as follows: 18.60 percent ad valorem for Nantong Dongchang

Chemical Industry Corp.,6

 2.95 percent ad valorem for Baoding Mantong Fine Chemistry Co., Ltd. after

September 13, 2005,7

 and 155.89 percent ad valorem all other companies.8

NATURE AND EXTENT OF ALLEGED SALES AT LTFV

On April 26, 2007, the Commission received notification of Commerce’s initiation of

antidumping duty investigations concerning glycine from India, Japan, and Korea. The alleged dumping
 9 Glycine from India, Japan, and the Republic of Korea: Initiation of Antidumping Duty Investigations, 72 FR

20816, April 26, 2007.

 10 Ibid.

 11 The scope of these investigations differs from the scope of the current antidumping duty order on imports of

glycine from China, as the precursors of dried crystalline glycine (e.g., glycine slurry and sodium glycinate) are not

included in that order. Continuation of Antidumping Duty Orders: Glycine from China, 65 FR 45752, July 25,

2000, and 70 FR 69316, November 15, 2005.

 12 Staff telephone interview with ***, April 24, 2007. Materials properly classified under statistical reporting

number 2922.49.1000 of the HTS are certain aromatic oxygen-function amino-compounds other than those

containing more than one kind of oxygen function, and their esters, such as (i) m-Aminobenzoic acid, technical; (ii)

p-Aminobenzoic acid; (iii) 1,5-Diaminobenzoic acid; (iv) 2-Ethylamino-5-sulfobenzoic acid; (v) 3-(N-Ethylanilino)

propionic acid, methyl ester; (vi) ß-(ß-Methoxy- ethoxyethyl)-4-aminobenzoate; (vii) Myethyl anthranilate; and (viii)

I-Phenylalanine.

I-4

margins for subject producers are 5.67 to 121.62 percent for producers in India, 70.21 to 280.57 percent

for producers in Japan, and 138.37 to 138.83 percent for producers in Korea.9

THE SUBJECT PRODUCT

Commerce’s Scope

Commerce has defined the imported product subject to these investigations as:10

{G}lycine, which in its solid (i.e., crystallized) form is a free–flowing crystalline material. 

Glycine is used as a sweetener/taste enhancer, buffering agent, reabsorbable amino acid,

chemical intermediate, metal complexing agent, dietary supplement, and is used in

certain pharmaceuticals. The scope of each of these investigations covers glycine in any

form and purity level. Although glycine blended with other materials is not covered by

the scope of each of these investigations, glycine to which relatively small quantities of

other materials have been added is covered by the scope. Glycine’s chemical composition

is C2H5NO2 and is normally classified under subheading 2922.49.4020 of the

Harmonized Tariff Schedule of the United States (HTSUS). 

The scope of each of these investigations also covers precursors of dried crystalline

glycine, including, but not limited to, glycine slurry (i.e., glycine in a non–crystallized

form) and sodium glycinate. Glycine slurry is classified under the same HTSUS

subheading as crystallized glycine (2922.49.4020) and sodium glycinate is classified

under subheading HTSUS 2922.49.8000.11

U.S. Tariff Treatment

Imports of glycine are entered under statistical reporting number 2922.49.4020 of the

Harmonized Tariff Schedule of the United States (“HTS”). Commerce’s scope includes sodium glycinate

which is properly classified under statistical reporting number 2922.49.8000, which is a residual or

“basket” category of merchandise. As such, official Commerce statistics for that HTS reporting number

were not used for data compilation purposes in this report. During the course of these investigations, it

was found that one U.S. importer reported importing subject merchandise inappropriately, under the

statistical reporting number 2922.49.1000 of the HTS.12 Table I-1 presents data on the current tariff rates

of the subheadings identified above.
 13 Petition, pp. 15-16. In its original and review investigations of glycine from China, the Commission defined

the domestic like product as glycine of all purity levels, coextensive with Commerce’s scope. Glycine from China,

Inv. No 731-TA-718 (Final), USITC Publication 2863, March 1995, p. I-6; Glycine from China, Inv. No 731-TA-718

(Review), USITC Publication 3315, June 2000, p. 4; and Glycine from China, Inv. No 731-TA-718 (Second Review),

USITC Publication 3810, October 2005, p. 4.

I-5

Table I-1

Glycine: HTS rates, 2006

HTS provision Article description

General Special Column 2

Rates (percent ad valorem)

2922

2922.49

2922.49.40

 2922.49.4020

Oxygen-function amino-compounds:

 Amino-acids, other than those containing

 more than one kind of oxygen function, and

 their esters; salts thereof (con.):

 Other:

 Other:

 Amino acids . . . . . . . . . . . . . . . . . 

 Glycine (aminoacetic acid)

4.2 (1

) 25

2922

2922.49

 2922.49.8000

Oxygen-function amino-compounds:

 Amino-acids, other than those containing

 more than one kind of oxygen function, and

 their esters; salts thereof (con.):

 Other:

 Other:

 Other:

 Other . . . . . . . . . . . . . . . . . . . . 3.7 (1

) 25

 1

 Certain nonsubject countries qualify for duty free rates either within the U.S. Generalized System of

Preferences (“GSP”) program or as negotiated in a free trade agreement with the United States. 

Source: HTS (2006).

THE DOMESTIC LIKE PRODUCT

The Commission’s determination regarding the appropriate domestic product that is “like” the

subject imported product is based on a number of factors, including (1) physical characteristics and uses;

(2) common manufacturing facilities and production employees; (3) interchangeability; (4) customer and

producer perceptions; (5) channels of distribution; and, where appropriate, (6) price.

Petitioner contends that there is a single domestic like product consisting of glycine, regardless of

grade.13 No parties have challenged petitioner’s definition of the domestic like product.
 14 Petition, p. 10.

 15 Ibid.

 16 Ibid.

 17 The United States Pharmacopeia (“USP”) is the official public standards-setting authority for all prescription

and over-the-counter medicines, dietary supplements, and other healthcare products manufactured and sold in the

United States. USP grade glycine conforms to the standards set by USP. Petition, p. 4 and

http://www.usp.org/aboutUSP/ (retrieved April 24, 2007).

 18 Petition, p. 5.

 19 Petition, pp. 5-6.

 20 Conference transcript, p. 50 (Eckman) and staff field trip notes, GEO, April 12, 2007.

I-6

Physical Characteristics and Uses

Glycine, also know as aminoacetic acid, is an organic chemical with the chemical formula

NH2CH2COOH. The Chemical Abstract Service (“CAS”) number for glycine is 56-40-6. Figure I-1

presents the chemical structure of the glycine molecule.

Figure I-1

Glycine: Chemical structure

 Source: www.daviddarling.info/encyclopedia/G/glycine.html

Glycine is a nonessential amino acid that is produced naturally by humans and other organisms as

a building block for proteins. Commercial production of glycine uses traditional chemical synthesis.14 In

its dried form, which is the form that it is most often sold in, glycine is a white, free-flowing powder.15

Glycine is odorless and sweet to the taste.16

Glycine is typically sold in three main grades: pharmaceutical, USP,17 and technical. The glycine

in these grades is chemically identical; the grades differ by the kind and amounts of impurities in the

product. Pharmaceutical grade is sold for uses where the highest purity is required, such as in intravenous

injections.18 The USP grade standard is stricter than the technical grade standard. USP grade sets

maximum allowable concentration for impurities, such as arsenic, heavy metals, and chlorides, that are

either less strict or not specified for technical grade glycine.19 USP grade glycine is typically used for

cosmetic and food applications, while technical grade glycine is used for industrial applications. Some

customers have even stricter requirements for the purity of glycine than those included in the USP

standard. A typical product that requires greater purity than the USP grade is glycine used in intravenous

injections, which requires lower levels of chlorides and metals such as aluminum.20 These higher purity
 21 Petition, p. 5, and staff field trip notes, GEO, April 12, 2007.

 22 Petition, p. 11.

 23 Ibid.

 24 Staff field trip notes, GEO, April 12, 2007.

 25 Petition, p. 11.

 26 pH is a measure of the acidity or alkalinity of a substance.

 27 Petition, p. 11.

 28 Ibid.

 29 Petition, p. 12.

 30 Conference transcript, p. 64 (Eckman).

 31 Petition, p. 12.

 32 Petition, pp. 12-13.

 33 Conference transcript, pp. 13-14 (Reilly).

 34 Conference transcript, p. 14 (Reilly). Although *** reported that lysine could be used as a substitute in pet

food applications. *** questionnaire response, question IV-13.

 35 ***. Staff field trip notes, GEO, April 12, 2007.

I-7

products are often referred to as “pharmaceutical grade” glycine, but the purity standards for these

products are set by individual customers, not by government or industry organizations.21

Because of the sweetness of glycine, it is used as a sweetener and flavor enhancer in food,

beverage, and pharmaceutical products. Glycine is used to sweeten soft drinks, juice concentrates, and

other beverages.22 Manufacturers of medicaments and personal care products, such as mouthwash and

toothpaste, use glycine to mask the bitter taste of some active ingredients.23 Glycine is used to enhance

the flavor of animal feeds, both those for household pets and those for livestock.24 USP grade glycine is

required for products made for human or animal consumption.25 

Glycine is used as a buffering agent in certain products and manufacturing processes to maintain

a stable pH.26 In antacids and analgesics, glycine helps to reduce the acidity of the digestive tract.27 In

personal care products, such as antiperspirants and cosmetics, glycine is used to reduce the acidity of

other ingredients.28 Technical grade glycine is used as buffer in the production of foam rubber sponges.29

Glycine can be used as a starting material for producing other organic chemicals or in metal

finishing. USP grade glycine is typically used in the production of other amino acids and

pharmaceuticals. Technical grade glycine is used in metal finishing to brighten metal surfaces or to

enhance the adhesion of rubber to a surface.

USP grade glycine can be used in over-the-counter dietary supplements, also called

nutraceuticals.30 Promoters of these supplements claim that glycine can increase the strength and

flexibility of connective tissue, regulate blood sugar levels, and stimulate muscle growth.31

Pharmaceutical manufacturers use USP grade glycine to promote the gastric absorption of certain drugs

such as aspirin, and to treat diarrhea in humans and animals.32

According to conference testimony, there are no ready substitutes for glycine in any of its

applications.33 Glycine typically accounts for a small amount of the price of the final product.34

Glycine is typically packaged and sold in plastic bags weighing from 50 to 2,000 pounds. These

bags are placed on pallets and shipped by truck. Each package of glycine is accompanied by a certificate

of analysis that gives the levels of moisture and impurities in the product.35
 36 Conference transcript, pp. 18-19 (Kedrowski).

 37 Staff field trip notes, GEO, April 12, 2007.

 38 Ibid.

 39 Ibid.

 40 Conference transcript, p. 29 (Husisian).

 41 Staff field trip notes, GEO, April 12, 2007.

 42 Ibid.

 43 Glycine from The People’s Republic of China, Inv. No. 731-TA-718 (Preliminary), USITC Publication 2804,

August 1994, p. II-4.

 44 Conference transcript, p. 60 (Kedrowski).

 45 Ibid.

 46 Conference transcript, p. 62 (Kedrowski).

I-8

Manufacturing Processes

There are two known processes for the commercial production of glycine: the hydrogen cyanide

(“HCN”) process and the monochloroacetic acid (“MCA”) process. Both of these processes can be used

to produce both technical and USP grades of glycine. The petitioner uses the HCN process, while the

other domestic producer, Chattem, uses the MCA process. The process used by producers in India, Japan,

and Korea is not definitely known, but according to conference testimony, most producers in these

countries likely use the MCA process, with the known exception being Showa Denko in Japan that uses

the HCN process.36

The HCN process uses hydrogen cyanide and formaldehyde (H2CO) as the primary starting

materials. These chemicals are mixed with aqueous ammonia (NH4OH) in the first reaction step of the

process. The reaction product from this first step is then reacted with caustic soda (NaOH) to produce

sodium glycinate.37 A co-product, ammonia, is boiled off during this latter step and is recovered as

aqueous ammonia in a scrubber. Most of the aqueous ammonia is recycled to feed the first reaction step,

but a small amount is available to be sold.38

To convert sodium glycinate to glycine, the sodium glycinate is first mixed with an acid, such as

sulfuric acid (H2SO4). In addition to glycine, this step produces the sodium salt of the acid that is used. 

For example, if sulfuric acid is used, sodium sulfate (Na2SO4) is produced.39 The removal of the sodium

sulfate, or other salt, to produce pure glycine is an energy intensive process but does not require great

technical expertise.40 The aqueous solution containing glycine and sodium sulfate is heated to the boiling

point of water. This step concentrates the solution and causes the sodium sulfate to crystalize. The

sodium sulfate crystals are filtered out of the glycine solution and ***.41 The glycine solution then goes

through one or more crystallization and filtration steps to produce a pure white, glycine powder.42

For the MCA process, the primary feedstocks are monochloroacetic acid (ClCH2COOH) and

ammonia. These feedstocks are mixed together in the presence of a catalyst to produce glycine.43

According to conference testimony, the MCA process is the less economical process in terms of operating

cost due to higher raw material cost.44 However, the capital costs for the HCN process are higher than for

the MCA process.45 Sodium glycinate is not produced as a precursor to glycine in the MCA process.46

Operators of both processes strive to make USP grade material at all times. However, during

startup, and occasional upsets in the process, the purity of the product may fall below the standard for

USP grade glycine. This material is set aside for sale to technical grade end users. To make the highly

pure glycine used in intravenous injections and other pharmaceutical applications, even stricter operating

requirements and monitoring are necessary than for the USP grade. For example, any water used in the
 47 Conference transcript, pp. 27 and 62 (Kedrowski).

 48 Conference transcript, p. 14 (Reilly) and p. 101 (Husisian).

I-9

process must be purified and tested to ensure that it does not contain any toxins from microorganisms that

might induce a fever in a patient.47 ***.

Interchangeability and Customer and Producer Perceptions

U.S. producers of glycine generally report that the U.S.-produced and imported product were

frequently or sometimes interchangeable and that interchangeability was greater for technical and USP

grades than for the pharmaceutical grade. In contrast, all importers reported U.S.-produced glycine and

subject imports were always interchangeable. More detailed information on interchangeability can be

found in Part II of this report, Conditions of Competition in the U.S. Market.

Channels of Distribution

Both U.S. producers and U.S. importers reported selling most of their product to end users of

glycine. In 2006, U.S. producers reported selling approximately *** percent of their product to end users

while importers reported selling approximately 85 percent of their product to end users. Additional

information on channels of distribution can be found in Part II of this report, Conditions of Competition in

the U.S. Market.

The petitioner indicated that the market for glycine is concentrated among a few high volume end

users.48 While data are not gathered directly from purchasers in preliminary phase antidumping

investigations, some data on the concentration of U.S. purchasers were available in responses to the

Commission’s U.S. producers’ and U.S. importers’ questionnaires. Table I-2 presents these data on the

concentration of purchasers in the U.S. glycine market. 

Table I-2

Glycine: U.S. producers’ and importers’ five largest customers, 2006

Firm End use1

Share of U.S. shipments in 2006

(percent)

*** Animal feed ***

*** Antiperspirants ***

*** Pet food ***

*** Antiperspirants ***

*** Antiperspirants ***

 Subtotal 75.8

 1 In a submission from ***, on May 2, 2007, U.S. producer Chattem estimates that total U.S. demand for glycine

is *** pounds per year, of this *** for pet food, *** percent for antiperspirants, *** percent for animal feed, *** percent

for pharmaceuticals, and *** percent for either industrial applications or resale through distributors.

Source: Compiled from data submitted in response to Commission questionnaires and from public sources.

Price

Table I-3 and figure I-2 present average unit values for U.S. shipments of glycine in the United

States from various sources. Pricing practices and prices reported for glycine in response to the

Commission’s questionnaires are presented in Part V of this report, Pricing and Related Information.
 49 Petition, pp. 15-16 and petitioner’s postconference brief, response to staff questions, pp. 1-3.

I-10

Table I-3

Glycine: Average unit values of U.S. shipments, by source, 2004-06

Item

Calendar year

2004 2005 2006

Unit value (per pound)

U.S. producers’ U.S. shipments $*** $*** $***

U.S. importers’ U.S. shipments of glycine

imported from--

 India *** *** ***

 Japan *** *** ***

 Korea *** *** ***

 Average, subject sources 1.38 1.55 1.46

 All other sources *** *** ***

 Average, all sources *** *** ***

Note.--Data coverage of U.S. shipments of glycine imported from subject sources is very high (at 91.6 percent of

imports from India, 90.9 percent from Japan, and 98.6 percent from Korea), while data coverage on U.S. shipments

of glycine imported from nonsubject sources is much lower (between 37 and 39 percent).

Source: Compiled from data submitted in response to Commission questionnaires.

Figure I-2

Glycine: Average unit values of U.S. shipments, by source, 2004-06

* * * * * * *

Issues in a Semi-Finished Product Analysis

As defined by Commerce’s scope, the petitioner contends that glycine’s precursor products

should be included within a single domestic like product definition based on a semi-finished product

analysis.49 In a semi-finished product analysis, the Commission examines the following factors: (1)

whether the upstream article is dedicated to the production of the downstream article or has independent

uses; (2) whether there are perceived to be separate markets for the upstream and downstream articles; 

(3) differences in the physical characteristics and functions of the upstream and downstream articles; (4)

differences in the costs or value of the vertically differentiated articles; and (5) significance and extent of

the processes used to transform the upstream into the downstream articles. 

No data were reported in response to Commission questionnaires with respect to trade or

shipments of sodium glycinate. Further, because imports of sodium glycinate are properly entered under

a residual or “basket” HTS number, no additional information is available from official Commerce

statistics.
 50 Petition, pp. 13-14.

 51 Petition, p. 10 and staff field trip notes, GEO, April 12, 2007.

 52 Petition, p. 10 and conference transcript, p. 28 (Husisian).

 53 GEO’s U.S. producers’ questionnaire response, question II-18.

 54 Chattem’s U.S. producers’ questionnaire response, question II-18.

 55 Conference transcript, p. 30 (Kedrowski).

 56 GEO’s U.S. producers’ questionnaire response, question II-18.

I-11

Dedicated Production

Sodium glycinate is an intermediate product in the production of glycine using the HCN

production process.50 No respondent to Commission questionnaires, whether U.S. producer, U.S.

importer, or foreign manufacturer, indicated a use other than as a precursor in the production of glycine,

the downstream article. 

Separate Markets

Sodium glycinate has no known markets. No firm responding to Commission questionnaires,

either producer, importer, or foreign manufacturer, reported any trade or market for sodium glycinate. 

Differences in Characteristics and Functions

Sodium glycinate, which has the chemical formula NH2CH2COO-

 Na+, is closely related to

glycine and is the precursor to glycine in at least one of the commercial production processes.51 It may be

possible to use sodium glycinate in some of the same applications as glycine, but sodium glycinate is

primarily used to produce glycine.52

Differences in Costs or Value

Since sodium glycinate is not commercially traded and is only “internally consumed” in the

production of glycine, market prices do not exist for this product. U.S. producers, however, provided

estimates of the percentage of their total costs for the production of glycine of which the conversion of

sodium glycinate to glycine accounted. The conversion of sodium glycinate into glycine accounted for

approximately *** percent of GEO’s total cost of glycine production.53 Chattem uses the MCA

production process and, as such, sodium glycinate is not an intermediate product in their production of

glycine.54

Significance of Transformation

Sodium glycinate already contains within its chemical composition (NaC2H4NO2) the glycine

amino acid (C2H5NO2). Testimony at the staff conference indicated that the conversion of sodium

glycinate into glycine is not a complicated process and would amount to essentially “washing the sodium

out.”55 GEO in its U.S. producers’ questionnaire response indicated in more technical terms what the

conversion involves: ***.56

II-1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

MARKET CHARACTERISTICS

U.S. producers sell glycine to three main markets, based on the level of purity required. The

highest purity form and smallest share of the U.S. market is pharmaceutical grade, which is required for

intravenous injections. Pharmaceutical grade is a subset of the USP grade. USP grade other than

pharmaceutical has the largest share of the U.S. market and is used in most other medical, food, or

cosmetic uses. Technical grade is used in the production of sponges, and for metallurgical and chemical

applications. Glycine is mainly sold directly to end users although some is also sold to distributors. In

2006, U.S. producers reported that *** percent of their glycine was sold directly to end users and the

remainder was sold to distributors. U.S. importers of glycine sold 85 percent to end users.

Table II-1

Glycine: Channels of distribution, 2004-06

Item

Calendar year

2004 2005 2006

Share of total (percent)

U.S. producers’ U.S. shipments to--

 Distributors *** *** ***

 End users *** *** ***

Indian product U.S. importers’ U.S.

shipments to --

 Distributors 21.2 48.4 38.9

 End users 78.8 51.6 61.1

Japanese product U.S. importers’ U.S.

shipments to --

 Distributors 10.0 32.5 8.6

 End users 90.0 67.5 91.4

Korean product U.S. importers’ U.S.

shipments to --

 Distributors *** *** ***

 End users *** *** ***

Total subject product U.S. importers’ U.S.

shipments to --

 Distributors *** *** ***

 End users *** *** ***

Source: Compiled from data submitted in response to Commission questionnaires.

Both responding U.S. producers reported selling to all regions ***. Three importers reported

selling to all regions; and these firms sold Indian and/or Japanese glycine. Ten importers reported selling

to the Midwest, seven to the Northeast, eight to the Pacific Coast, five to the Southeast, four to the South

Central, and three to the Mountain region. ***. *** and all 10 responding importers reported that they

arrange transportation to their customers’ facilities. *** of its glycine to locations less than 100 miles

from its facilities; *** of its glycine to locations between 101 and 1,000 miles from their facilities; and

*** of its glycine to locations more than 1,000 miles from its facilities. Of the 10 responding importers,

six reported selling most of their imported glycine within 100 miles of their facilities, two reported selling
 1

 Conference transcript, pp. 84, 86 (Frey).

 2

 One importer did not report lead times but reported deliveries were “prompt.”

II-2

most of their glycine between 100 and 1,000 miles of their facilities, one reported selling all of its glycine

over 1,000 miles from its facility, and one reported selling half within 100 miles and half between 100

miles and 1,000 miles. 

SUPPLY AND DEMAND CONSIDERATIONS

U.S. Supply

Domestic Supply

Based on available information, staff believes that U.S. glycine producers are likely to respond to

changes in demand with moderate changes in shipments of U.S.-produced glycine to the U.S. market. 

Factors contributing to this degree of responsiveness are discussed below.

Industry capacity

Domestic capacity for producing glycine declined *** from *** million pounds in 2004 to ***

million pounds in 2006. U.S. producers’ reported capacity utilization for glycine increased from ***

percent in 2004 to *** percent in 2005 as production increased and capacity declined but then declined to

*** percent in 2006 as production fell.

This moderate level of capacity utilization of U.S. producers of glycine indicates that they have

available some capacity with which they could increase (or decrease) production of glycine in the event

of a price change. Capacity utilization in chemical industries is typically high because this tends to

reduce the cost per unit dramatically.

Lead times

Chattem reported selling *** percent of its product from inventories and the remainder produced

to order with lead times of *** days from inventories and *** days for produced to order. GEO reported

selling *** percent of its product from inventories and *** percent to order. Its lead times were *** days

from inventories and *** days to order. One importer, however, reported hearing that a U.S. producer

was requesting that its customers accept a 3-month delay for orders of U.S.-produced product.1

Five of the 11 responding importers reported selling all product from inventories, with two others

selling 80 percent or more from inventories. Two importers reported selling all product produced to order

and two others selling 80 percent or more produced to order. Lead times for product sold from

inventories ranged from 2 to 7 days with five firms reporting lead times from 5 to 7 days and two

reporting shorter lead times.2

 Lead times for made-to-order product ranged from 5 days to 8 weeks, with

three of the six responding firms reporting lead times of 8 weeks. 

Alternative markets

Domestic producers’ exports, as a percentage of total shipments, ranged between *** percent and

*** percent between 2004 and 2006. The relatively low level of exports indicates that U.S. producers

would have little ability to increase domestic shipments by shifting exports to the U.S. market.
II-3

Inventory levels

Inventories of glycine tend to be low to moderate in spite of many firms reportedly selling from

inventories. U.S. producers’ inventories, as a share of U.S. producers’ total shipments, increased from

*** percent in 2004 to *** percent in 2006. These low to moderate inventory levels suggest that U.S.

producers have a somewhat limited ability to respond to changes in demand with product shipped from

inventories.

Production alternatives

*** production from other products to glycine. 

Supply of Subject Imports to the U.S. Market

India

Glycine imports from India increased from 1.1 million pounds in 2004 to 2.7 million pounds in

2006. Commercial shipments reported to the Commission by U.S. importers rose from *** pounds in

2004 to *** pounds in 2006, while imports for internal consumption fell unsteadily from *** pounds in

2004 to *** pounds in 2006. Most Indian product (*** percent) was USP grade glycine, and none was

reported to be pharmaceutical grade.

Japan

Glycine imports from Japan increased from 1.0 million pounds in 2004 to 2.6 million pounds in

2006. Commercial shipments reported to the Commission rose from *** pounds in 2004 to *** pounds

in 2006, while internal consumption increased from *** pounds in 2004 to *** pounds in 2006. Most

Japanese product (*** percent) was reported to be USP grade glycine, *** percent was reported to be

technical grade, and *** percent was reported to be pharmaceutical grade. Importers of glycine from

Japan were the only importers of subject product that reported imports of pharmaceutical grade glycine. 

Imports of pharmaceutical grade from Japan decreased from *** pounds in 2004 to *** pounds in 2005

and then increased to *** pounds in 2006.

Korea

Glycine imports from Korea increased irregularly from 1,060,000 pounds in 2004 to 1,124,000

pounds in 2006. All Korean product reported to the Commission was commercial shipments and USP

grade.

U.S. Demand

U.S. demand for glycine depends on its end-use markets. Glycine is used as a sweetener in foods,

pharmaceuticals, personal care products, and animal feed; as a buffering agent in antacids, analgesics,

antiperspirants, cosmetics, toiletries, and in production of rubber sponge products and fertilizers; as a reabsorbable amino acid to treat diarrhea; as a chemical intermediate in a variety of chemical products; as a

metal complexing and finishing agent; as a dietary supplement; to improve gastric absorption of certain

drugs; and in some intravenous uses. The grade of glycine required differs among the end uses. 

Price changes for glycine will likely have only a small effect on consumption. First, the

substitutes for glycine are limited to a few applications. Second, the cost share of glycine tends to be a

small portion of the cost of products in which it is used.
 3

 Conference transcript, p. 14 (Reilly).

 4

 Petitioner’s postconference brief, p. 8.

 5

 Staff telephone interview, April 27, 2007.

 6

 Staff telephone interview, April 30, 2007.

II-4

Demand Characteristics

Estimated U.S. consumption of glycine increased irregularly from *** million pounds in 2004 to

*** million pounds in 2006, based on U.S. importers’ U.S. shipments. Overall, U.S. consumption in

2006 was *** percent higher than in 2004. Pharmaceutical-grade glycine accounted for *** percent of

apparent consumption in 2004, *** percent in 2005, and *** percent in 2006; USP grade accounted for

*** percent of apparent consumption in 2004, *** percent in 2005, and *** percent in 2005; and

technical grade accounted for *** percent of apparent consumption in 2004, *** percent in 2005, and ***

percent in 2006.

Producers and importers were asked to discuss trends in demand in the United States since 2004.

*** two of the eight responding importers reported that demand within the United States had increased. 

***. The two importers that reported that demand for their product had increased noted plant shutdowns,

contract abrogations, and the local producer not delivering on time or not delivering as reasons for

increased demand. *** three importers reported demand had not changed. ***. Three importers

reported that demand had declined; reasons given include lower sales, end users had gone out of business,

and consumption of products using glycine had fallen.

*** seven of the eight importers reported no changes in the product range and marketing of

glycine since January 2004. ***.

Substitute Products

Substitutes for glycine are very limited. *** reported that ***, while *** reported that ***. No

importer reported any substitute for glycine.

Cost Share

Glycine’s share of the total costs of end use products was requested from the importers and the

producers. Five importers provided a meaningful response; three reported that glycine was 1 percent or

less of the cost of their food additives, cosmetic additives, chemical processing, pharmaceutical additive

(pills), pet food, industrial uses, and metal complexing and finishing uses, one reported it was 5 percent of

the cost of ***, and one reported glycine was 10 percent of the total cost of ***. *** three importers

reported that they did not know glycine’s cost share in its downstream uses. GEO reported that glycine’s

share of total costs of end products was low,3

 less than 1 percent of the cost of production in the

“overwhelming majority” of these end products.4

 ***.5 ***. ***.6

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported glycine depends on factors such as the

certified grades produced in each country, product quality, consistency, relative price, and on conditions

of sale such as reliability of supply, reliability of delivery, payment terms, and delivery/lead time. Ease of

substitution between suppliers may differ greatly between grades.
 7

 Conference transcript, pp. 54-55 (Kedrowski).

 8

 Conference transcript, p. 55 (Kedrowski).

 9

 *** questioned whether other suppliers had undergone the same inspections.

II-5

Non-pharmaceutical grades of glycine could be substituted among producers with a fair amount

of ease once a producer meets the standard for the specific grade required. On the other hand,

pharmaceutical grade requires extremely high purity, consistency, and record keeping, as well as frequent

 plant tours, making shifting between producers difficult.7

 As a result, Chattem reported that it

was not experiencing a lot of competition from imports in the pharmaceutical grades.8

Comparisons of Domestic Products, Subject Imports, and Nonsubject Imports

Interchangeability and Reasons for Non-interchangeability

Producers and importers were asked to report how frequently glycine from different countries

was interchangeable (table II-2). ***. *** In contrast, ***.9

 All responding importers reported that U.S.

and subject imported product were always interchangeable. One importer reported U.S. and nonsubject

product were frequently interchangeable.

Table II-2

Glycine: U.S. firms’ perceived degree of interchangeability of products produced in the United

States, subject, and nonsubject countries1

Country comparison

U.S. producers U.S. importers

A F S N AFS N

U.S. vs. India 0 1 1 0 4 0 0 0

U.S. vs. Japan 0 1 0 1 3 0 0 0

U.S. vs. Korea 0 1 1 0 1 0 0 0

India vs. Japan 0 1 0 0 1 0 0 0

India vs. Korea 0 1 0 0 0 0 0 0

Japan vs. Korea 0 1 0 0 0 0 0 0

U.S. vs. nonsubject 0 1 0 0 0 1 0 0

India vs. nonsubject 0 1 0 0 0 0 0 0

Japan vs. nonsubject 0 1 0 0 0 0 0 0

Korea vs. nonsubject 0 1 0 0 0 0 0 0

 1

 Producers and importers were asked if glycine produced in the United States and in other countries is used

interchangeably.

Note.--“A” = Always, “F” = Frequently, “S” = Sometimes, “N” = Never.

Source: Compiled from data submitted in response to Commission questionnaires.
 10 ***.

II-6

Importance of Differences Other Than Price

Producers and importers were asked to assess how often differences other than price between

product from country pairs were a significant factor in sales of glycine (table II-3). Six importers ***

answered this question, although the importers only compared U.S. product with imported product rather

than comparing imported product from different import sources. ***. All responding importers reported

that there were always differences other than price between U.S. product and product from subject

countries. One of the firms comparing Indian and U.S. product reported that purchasers had difficulties

obtaining the U.S. product and the purchasers were at times put on allocation because of maintenance or

plant shutdowns. The three firms comparing U.S. and Japanese product reported differences including: 

differences between USP product and lower grades; and the Japanese advantage in cost, performance, and

schedule and that the services from U.S. sources were poor; and the purchasers were at times put on

allocation by the U.S. producer because of maintenance or plant shutdowns. The firm comparing U.S.

and Korean product reported that technical support was not readily available from Korea.10 One firm

compared U.S. and nonsubject product, reporting differences that included longer lead times and

inconsistent quality.

Table II-3

Glycine: U.S. firms’ perceived significance of differences other than price between U.S.-produced

and imported product1

Country comparison

U.S. producers U.S. importers

A F S N A FS N

U.S. vs. India 0 0 0 1 2 0 1 0

U.S. vs. Japan 0 0 0 1 3 0 0 0

U.S. vs. Korea 0 0 0 1 1 0 0 0

India vs. Japan 0 0 0 1 0 0 0 0

India vs. Korea 0 0 0 1 0 0 0 0

Japan vs. Korea 0 0 0 1 0 0 0 0

U.S. vs. nonsubject 0 0 0 1 0 1 0 0

India vs. nonsubject 0 0 0 1 0 0 0 0

Japan vs. nonsubject 0 0 0 1 0 0 0 0

Korea vs. nonsubject 0 0 0 1 0 0 0 0

 1

 Producers and importers were asked if differences other than price between glycine produced in the United

States and in other countries were a significant factor in their sales of the products.

Note.--“A” = Always, “F” = Frequently, “S” = Sometimes, “N” = Never.

Source: Compiled from data submitted in response to Commission questionnaires.
 11 Conference transcript, p. 82 (Frey).

 12 E-mail from David Schwartz, Thompson Hine, May 1, 2007.

 13 This customer is ***. *** U.S. importers’ questionnaire responses, question III-19.

 14 Conference transcript, p. 83 (Frey).

 15 Petitioner’s postconference brief, responses to staff questions, p. 9.

 16 Conference transcript, p. 84 (Frey).

 17 Petitioner’s postconference brief, responses to staff questions, p. 21.

II-7

An importer of glycine from India reported that there has been a pattern of problems with the

plant and services of the U.S. producer (GEO/Hampshire/Dow). In 2004 the plant was shut down. In

2005, GEO/Hampshire/Dow allegedly abrogated two major contracts.11 However, the petitioner denies

this allegation.12 This importer testified that his main customer,13 accounting for the sales of 98 percent of

his imports, prefers imported product because of problems with the service and other business dealings of

the U.S. producer.14 GEO, however, reports that it has improved on Dow’s poor record for reliability of

on time delivery from *** percent in the year before acquisition to *** percent in the year following the

acquisition.15 The same U.S. importer has also alleged that GEO, more recently in 2007, has asked its

customers to wait three months for product.16 In response to this allegation, GEO indicated that ***.17

 1

 Petition, pp. 4-7. 

 2 Petition, p. 4.

III-1

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, 

AND EMPLOYMENT

U.S. PRODUCERS

The petition identified two U.S. producers of glycine.1

 The Commission received completed

questionnaire responses from GEO and Chattem. GEO produces glycine using the HCN process at its

Deer Park, TX facility, while Chattem produces glycine using the MCA process at its Chattanooga, TN

facility. GEO purchased the Deer Park facility from Hampshire Chemical Corporation (“Hampshire”), a

subsidiary of DOW Chemicals, Inc. (“DOW”), on November 1, 2005.2

 Prior to November 2005,

Hampshire/DOW was a U.S. producer of glycine. GEO officials were able to provide consolidated data

for Hampshire/DOW and GEO, such that GEO’s questionnaire response included data on the operations

at the Deer Park facility under both GEO and Hampshire/DOW. 

Table III-1 presents U.S. producers’ positions on the petition, ownership, plant locations, and

shares of total reported U.S. production in 2006. 

Table III-1

Glycine: U.S. producers, positions on the petition, ownership, plant locations, and shares of total

reported U.S. production, 2006

Firm 

Position on

petition Firm ownership

U.S. plant 

location(s)

U.S. production

Quantity

(1,000

pounds)

Share 

(percent)

GEO Supports

(petitioner)

Privately owned corporation

(U.S.)1

Deer Park, TX *** ***

Chattem Opposes2 Owned by Elcat, Inc. (U.S.),

a privately owned company3

Chattanooga, TN *** ***

 1 GEO’s website http://www.geosc.com.

 2

 In correspondence from ***, May 2, 2007, Chattem indicated that it seems “***”. This final position is in contrast

to testimony given at the public conference in which Chattem indicated that it supported the petition in relation to

glycine imported from India, Japan, and Korea from producers using the MCA process. Chattem testified that it

supported the petition to the extent that these investigations take into account that Chattem’s business partner,

Showa Denko, uses the HCN production process and thus has a lower cost structure for the production of its

glycine. Conference transcript, p. 22 (Kedrowski). 

 3

 Chattem’s website http://www.chattemchemicals.com.

Source: Compiled from data submitted in response to Commission questionnaires and from public sources.

U.S. CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

Table III-2 presents data on individual and overall U.S. producers’ capacity, production, and

capacity utilization between 2004 and 2006. Figure III-1 graphically presents data on overall U.S.

producers’ capacity, production, and capacity utilization between 2004 and 2006. Figure III-2 graphically

presents data on U.S. producers’ share of U.S. capacity and U.S. production in 2006.
 3

 GEO’s U.S. producers’ questionnaire response, question II-2.

 4 GEO’s U.S. producers’ questionnaire response, question II-2.

 5 Conference transcript, pp. 19-21 (Kedrowski). Although Chattem still supplies some glycine to certain

customers who use it in USP- or technical-grade applications. Conference transcript, pp. 36-37 (Kedrowski).

 6 Petition, p. 39, and conference transcript, p. 10 (Eckman) and pp. 78-79 (Kedrowski). ***.

 7 Conference transcript, pp. 24-26 (Husisian).

 8 GEO’s U.S. producers’ questionnaire response, question II-2.

III-2

Table III-2

Glycine: U.S. capacity, production, and capacity utilization, 2004-06

* * * * * * *

Figure III-1

Glycine: U.S. capacity, production, and capacity utilization, 2004-06

* * * * * * *

Figure III-2

Glycine: Shares of U.S. capacity and U.S. production, 2006

* * * * * * *

Regardless of grade, U.S. production of glycine increased from approximately *** pounds of

glycine in 2004 to approximately *** pounds in 2005. The increase in production in 2005 was mainly the

result of the reintroduction of U.S.-produced glycine that had exited the U.S. market in 2004 due to ***.3

With the reintroduction of this production in 2005, Hampshire/DOW operated at *** percent capacity

utilization, pushing up the average capacity utilization for U.S. producers to *** percent in 2005 from the

*** percent average in 2004. In 2006, overall U.S. production of glycine decreased to *** pounds, which

was again mostly the result of the glycine operations at the Deer Park facility, now owned by GEO whose

production decreased by *** pounds. In 2006, Chattem also reported a decrease in its production of

glycine by *** pounds. GEO attributes its reduced production in 2006 to ***.4

Due to the concentration of production in the U.S. industry, GEO’s operations generally influence

the overall supply of U.S.-produced glycine. Chattem exited the U.S. market for USP and technical grade

glycine between 2001 and 2004 due to competition from low-priced nonsubject imports, namely Chinese

glycine, which had apparently dictated a U.S. market price for glycine at that time below Chattem’s raw

material costs.5

 Both petitioner and Chattem agree that USP and technical grade glycine are commodity

products, and that pharmaceutical grade glycine, which is often made to customer specifications (i.e.

purity), is not a commodity product.6

 Since Chattem’s withdrawal from the USP and technical grade

markets, GEO has been the sole supplier of U.S.-produced glycine made specifically for USP and

technical grade end uses in the U.S. market. GEO alleges that it cannot continue to supply the U.S.

market for these grades of glycine if it cannot operate its facility at full capacity.7

While overall production by U.S. producers was changing due to raw material availability,

demand conditions, and corporate strategy, U.S. producers’ capacity to produce glycine remained

relatively stable at approximately *** pounds. GEO reported for Hampshire/DOW *** in the Deer Park

facility’s capacity to produce glycine due to *** in May 2004.8

 According to officials at GEO, it was
 9

 Additionally, ***. Staff field trip report, GEO, April 12, 2007.

 10 Conference transcript, pp. 25 and 70 (Husisian).

 11 Conference transcript, p. 22 (Kedrowski).

 12 Conference transcript, p. 61 (Eckman).

III-3

decided *** in May 2004 instead of ***.9

 The petitioner indicated a willingness to invest in capital

projects to expand capacity if the Deer Park facility begins operating at full existing capacity and it makes

economic sense to do so.10 

U.S. PRODUCERS’ SHIPMENTS

Table III-3 presents information on U.S. producers’ shipments of glycine between 2004 and

2006. ***. 

Table III-3

Glycine: U.S. producers’ shipments, 2004-06

* * * * * * *

Neither of the two U.S. producers ***, therefore, the figures reported for total U.S. shipments

***. 

U.S. producers’ U.S. shipments of glycine increased by *** percent by quantity from 2004 to

2005, despite ***, and such shipments decreased by *** percent between 2005 and 2006. Both GEO and

Chattem reported a drop in U.S. shipments of glycine in 2006 compared to 2005; GEO accounted for ***

percent, of the decrease in U.S. shipments. 

Table III-4 and figures III-3 and III-4 present information and graphic depictions of U.S.

producers’ U.S. commercial shipments of glycine by grade. 

Table III-4

Glycine: U.S. producers’ U.S. shipments, by grade, 2004-06

* * * * * * *

Figure III-3

Glycine: U.S. producers' U.S. commercial shipments, by grade, 2004-06

* * * * * * *

Figure III-4

Glycine: Share of quantity of U.S. producers’ U.S. shipments, by grade, 2006

* * * * * * *

In *** the unit values reported by Chattem are *** than those reported by GEO. Chattem

reportedly has a higher cost structure for producing glycine11 than GEO12 due to its MCA manufacturing

process, and that has forced Chattem into primarily supplying the pharmaceutical grade market for
 13 Conference transcript, p. 21 (Kedrowski).

 14 Conference transcript, p. 73 (Kedrowski).

 15 Staff telephone interview with ***.

 16 Conference transcript, p. 21 (Kedrowski).

 17 Conference transcript, p. 81 (Frey); ***’s importer questionnaire response, section III-14; and letter dated

April 17, 2007, attached to *** importer questionnaire response.

 18 Conference transcript, pp. 86-87 (Frey).

 19 E-mail correspondence with ***, May 1, 2007.

III-4

glycine within the United States.13 Chattem no longer attempts to compete in the high volume USP and

technical grade markets for glycine,14 *** than are available for similar product through imports or other

U.S. producers.15

GEO accounts for the *** of U.S. shipments by virtue of its presence in the USP and technical

grade markets for glycine (figure III-3), while Chattem accounts for the *** of U.S. shipments of glycine

in the pharmaceutical grade market.16

USP grade is the predominant grade of U.S. producers’ U.S. shipments (figure III-4). The

average unit value of the three grades of U.S. producers’ U.S. shipments of glycine increased generally

over the period of investigation except, notably, for the high-volume USP grade glycine sold by GEO,

which first increased in 2005 and then decreased in 2006. Since GEO’s shipments of USP grade glycine

account for *** percent of U.S. producers’ U.S. shipments, the decreasing average unit value of GEO’s

shipments of USP grade glycine in 2006 is, in turn, reflected the flattening of the overall average unit

value of U.S. shipments between 2005 and 2006. 

U.S. importers asserted that, during the period of this investigation, GEO and/or its predecessor

firm, Hampshire/Dow, lost business because they were unable to meet customer demand due to plant

shutdowns, quality problems, and problems such as short shipping, unreliable deliveries, allocation, and

denial of supply (abrogated contracts).17 It was also alleged, that despite an improved record of customer

service and no documented supply disruptions under GEO’s ownership since November 2005, GEO’s

ultimate end customers are hesitant to concentrate all their business through a sole supplier of U.S.-

produced glycine.18

Table III-5 and figure III-5 present information of GEO’s shipment delays between November

2004 and December 2006. 

Table III-5

Glycine: Hampshire/DOW/GEO’s shipments, by service levels and months, November 2004-

December 2006

* * * * * * *

Figure III-5

Glycine: Hampshire/DOW/GEO’s total shipments and delayed shipments, by months, November

2004-December 2006

* * * * * * *

GEO *** contract over the period of investigation.19 With respect to service issues, GEO

reported that, while it recognizes that Hampshire/Dow had a poor record of reliability, GEO has

significantly improved the customer service record of its glycine facility with a “direct customer-focused
 20 Conference transcript, p. 69 (Eckman) and petitioner’s postconference brief, response to staff questions, p. 9.

 21 Petitioner’s postconference brief, response to staff questions, p. 9, and table III-5.

 22 Conference transcript, pp. 21-22 (Kedrowski).

 23 Conference transcript, pp. 21-22 (Kedrowski).

 24 Chattem’s U.S. producers’ questionnaire response, questions II-6b and III-19.

 25 Petitioner’s postconference brief, economic analysis attachment, p. 4.

III-5

approach.”20 GEO asserted that, in contrast to Hampshire/Dow’s on-time delivery of *** percent of its

shipments by quantity during November 2004-October 2005, GEO achieved on-time delivery of ***

percent during November 2005-December 2006.21

U.S. PRODUCERS’ IMPORTS AND PURCHASES

During the period of investigation, Chattem imported glycine from Showa Denko in Japan. ***

imports of glycine from any source. *** purchases of glycine. Chattem entered into its relationship with

Showa Denko so as to continue to supply certain customers with glycine at a cost lower than Chattem’s

U.S.-produced material.22 Table III-6 presents information on U.S. producer’s imports and ratio of

imports to production of glycine. 

Table III-6

Glycine: U.S. producer’s imports and ratio of imports to production, 2004-061

* * * * * * *

Chattem stated at the conference that it imported a small volume of glycine from Japan in 2005

after developing its relationship with Showa Denko, but then increased such imports in 2006 when it was

able to quote competitive prices.23 The data submitted in these investigations reflect this testimony. 

Chattem’s imports accounted for only *** percent of its production in 2005, but then increased to ***

percent of its production in 2006. ***.24 The quantity of glycine imported by Chattem in 2006 was equal

to *** percent of all U.S.-produced glycine that year. 

No party has argued for the exclusion of Chattem from the domestic industry, although the

petitioner believes that any analysis of the financial health of the industry should be conducted by looking

separately at the financial data provided by both GEO and Chattem.25

U.S. PRODUCERS’ INVENTORIES

Table III-7, which presents end-of-period inventories for glycine during the period of

investigation, shows that inventories were relatively low as a ratio to production and shipments in 2004

and 2005, and increased in 2006 due to ***. 

Table III-7

Glycine: U.S. producers’ inventories, 2004-06

* * * * * * *
 26 Conference transcript, pp. 41-42 (Eckman).

III-6

U.S. PRODUCERS’ EMPLOYMENT, WAGES, AND PRODUCTIVITY

Table III-8 presents data on U.S. producers’ employment-related indicia.

Table III-8

Glycine: U.S. producers’ employment-related data, 2004-06

* * * * * * *

Employment of production related workers (“PRWs”) in the U.S. glycine industry declined from

*** individuals over the period of investigation. Corresponding to its share of production, ***. GEO

testified that, in addition to the PRWs directly responsible for glycine, 50 employees and 20 contractor

jobs (of which glycine PRWs are a subset) are affected by the operations of the Deer Park facility, and

that, if glycine production is stopped at the Deer Park facility, the remaining production of naphthalene

sulfonate might not be able to bear the burden of all of the indirect plant costs.26 The decrease in the

number of PRWs in the U.S. glycine industry between 2004 and 2006 ***. 
 1

 ***.

 2

 CAF is an importer of glycine from AICO Laboratories, India. Mr. Chris Frey founded CAF in 1994.

Conference transcript, pp. 81-82 (Frey). ***.

 3

 ***.

 4

 ***.

 5

 ***.

 6

 ***. 

 7

 Chattem’s import operations are located in Warren, NJ. Http://www.chattemchemicals.com.

 8

 ***.

 9

 ***.

 10 ***.

 11 ***.

 12 ***.

 13 ***.

 14 ***.

 15 ***.

 16 *** U.S. importers’ questionnaire response, question III-19. To avoid double counting, *** data were removed

from the compilations for U.S. shipments of imports from Japan. 

IV-1

PART IV: U.S. IMPORTS, APPARENT U.S. CONSUMPTION, 

AND MARKET SHARES

U.S. IMPORTERS

Table IV-1 presents information on U.S. importers.

Table IV-1

Glycine: U.S. importers and imports, by source, 2004-06

* * * * * * *

Five of the importers that submitted data in response to the Commission’s U.S. importers’

questionnaire indicated that they imported glycine from India, including: ***,1

 CAF International Corp.

(“CAF”),2

 ***,3 ***,4 and ***.5 These five firms’ imports of glycine from India account for the vast

majority (*** percent) of total U.S. imports from India by quantity in the period 2004 to 2006. U.S.

importer ***, which has not provided the Commission a completed U.S. importers’ questionnaire

response and whose main business telephone number is no longer in service, accounted for *** percent of

the total quantity of U.S. imports of glycine from India between 2004 and 2006, all of which ***.6

Eight of the importers that submitted data in response to the Commission’s U.S. importers’

questionnaire indicated that they imported glycine from Japan, including: U.S. producer Chattem,7

 ***,8

***,9 ***,10 ***,11 ***,12 ***,13 and ***.14 These eight firms’ imports of glycine from Japan account for

the vast majority (*** percent) of total U.S. imports from Japan by quantity in the period 2004 to 2006. 

The Commission also received a completed U.S. importers’ questionnaire response from ***,15 which is

***.16 All imports of glycine from the United Kingdom in 2004 and 2005 were misclassified as country-
 17 Staff telephone interview with ***, April 18, 2007.

 18 ***.

 19 Letter from Mark Altenstadter, Chief, Trade Operations Branch, Customs, January 22, 2002.

 20 Staff telephone interview with ***, April 18, 2007. 

 21 Staff telephone interview with ***, April 24, 2007. 

 22 The exact quantity of imports from Korea in 2006 was slightly higher that in 2004.

IV-2

of-origin United Kingdom in official import statistics when, in fact, they were of Japanese origin in their

entirety.17

Only one of the importers that completed and submitted data requested in the Commission’s U.S.

importers’ questionnaire indicated that it imported glycine from Korea: ***.18 *** imports of glycine

from Korea accounted for the *** (*** percent) of total U.S. imports from Korea by quantity in the

period 2004 to 2006 as reported in table IV-1. *** imports glycine produced by Korea Bio-Gen Co., Ltd.

(“Bio-Gen”). Bio-Gen was subject to a Customs transshipment investigation in 2001-02 and was found

to be an actual producer of glycine in Korea.19 

U.S. IMPORTS

Table IV-2 and figures IV-1 and IV-2 present and depict U.S. imports of glycine during 2004 to

2006. U.S. import data are based on official Commerce statistics with adjustments using proprietary

Customs data to account for the misclassification of certain entries. Specifically, two major modifications

were made. First, material imported from the United Kingdom under the statistical reporting number

2922.49.4020 was reclassified as subject imports from Japan to reflect the fact that this material was

improperly classified as having actually been produced in the United Kingdom.20 U.S. imports of glycine

from the United Kingdom totaled 233,690 pounds in 2004 and 33,069 pounds in 2005. Second, glycine

imported *** from India was improperly classified under statistical reporting number 2922.49.1000 in

each year of the period of investigation.21 The quantities misclassfied totaled *** pounds in 2004, ***

pounds in 2005, and *** pounds in 2006. 

Subject imports increased by 76.8 percent between 2004 and 2005 and 13.8 percent between

2005 and 2006, for a doubling of the presence of subject imports in the U.S. market comparing 2006 data

with 2004 data. Subject imports from Japan and India account for most of the increase in subject imports

over the period of investigation. Imports from Japan increased from 1.0 million pounds in 2004 to 2.1

million pounds in 2005 and 2.6 million pounds in 2006. Imports from India increased from 1.1 million

pounds in 2004 to 2.6 million pounds in 2005 and 2.7 million pounds in 2006. Imports from Korea first

decreased from 1.1 million pounds in 2004 to 1.0 million pounds in 2005 and then increased back to 1.1

million pounds in 2006.22

According to the import data presented in table IV-2, subject imports from Korea had the lowest

average unit value, followed by imports from Japan, then India. Imports from China (nonsubject) are

approximately at the same average unit value as imports from Korea. 
IV-3

Table IV-2

Glycine: U.S. imports, by sources, 2004-06

Source

Calendar year

2004 2005 2006

Quantity (1,000 pounds)

India 1,133 2,555 2,668

Japan 989 2,080 2,610

Korea 1,060 992 1,124

 Subtotal, subject 3,182 5,627 6,402

China 555 1,915 2,177

Belgium 1,151 238 347

All other 343 88 45

 Subtotal, nonsubject 2,049 2,241 2,570

 Total 5,231 7,868 8,971

Landed, duty-paid value (1,000 dollars)

India 1,800 3,679 3,547

Japan 1,253 2,852 3,334

Korea 1,107 1,278 1,300

 Subtotal, subject 4,161 7,809 8,181

China 599 2,397 2,598

Belgium 1,643 374 607

All other 793 415 329

 Subtotal, nonsubject 3,036 3,186 3,534

 Total 7,196 10,996 11,715

Unit value (per pound)

India $1.59 $1.44 $1.33

Japan 1.27 1.37 1.28

Korea 1.04 1.29 1.16

 Average, subject 1.31 1.39 1.28

China 1.08 1.25 1.19

Belgium 1.43 1.57 1.75

All other 2.31 4.72 7.28

 Average, nonsubject 1.48 1.42 1.38

 Average, all imports 1.38 1.40 1.31

Table continued on next page. 
IV-4

Table IV-2--Continued

Glycine: U.S. imports, by sources, 2004-06

Source

Calendar year

2004 2005 2006

Share of quantity (percent)

India 21.7 32.5 29.7

Japan 18.9 26.4 29.1

Korea 20.3 12.6 12.5

 Subtotal, subject 60.8 71.5 71.4

China 10.6 24.3 24.3

Belgium 22.0 3.0 3.9

All other 6.6 1.1 0.5

 Subtotal, nonsubject 39.2 28.5 28.6

 Total 100.0 100.0 100.0

Share of value (percent)

India 25.0 33.5 30.3

Japan 17.4 25.9 28.5

Korea 15.4 11.6 11.1

 Subtotal, subject 57.8 71.0 69.8

China 8.3 21.8 22.2

Belgium 22.8 3.4 5.2

All other 11.0 3.8 2.8

 Subtotal, nonsubject 42.2 29.0 30.2

 Total 100.0 100.0 100.0

Source: Compiled from official Commerce statistics with adjustments based on proprietary Customs data.
IV-5

Figure IV-1

Glycine: Quantity of subject and nonsubject U.S. imports, 2004-06

Source: Table IV-2.

Figure IV-2

Glycine: Quantity of U.S. imports, by principal sources, 2004-06 aggregated

Source: Table IV-2.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

India Japan Korea China Belgium All other

Source

Quantity 

(million pounds )

3.2

5.6

6.4

2.0 2.2

2.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2004 2005 2006

Quantity

(million pounds )

Subject

Nonsubject
 23 *** U.S. importers’ questionnaire response, question II-6c.

 24 19 U.S.C. § 1677(24)(A)(ii).

 25 Calculated from official Commerce statistics. 

IV-6

U.S. SHIPMENTS OF IMPORTS BY GRADE

Table IV-3 presents data on the U.S. shipments of imports from subject sources by grade during 

2004 to 2006. 

Table IV-3

Glycine: U.S. importers’ U.S. shipments of imports, by grades, 2004-06

* * * * * * *

U.S. importers of glycine from India reported that all their imports were USP grade material,

except for some technical grade imports in 2004 ***. In other words, 100 percent of U.S. importers’ U.S.

shipments of glycine from India reported in table IV-3 in 2005 and 2006 were USP grade material, while

*** percent of U.S. importers’ U.S. shipments of glycine reported in 2004 were USP grade material, and

the remainder technical grade. 

U.S. importers of Japanese glycine reported that the majority (*** percent in 2006) of their U.S.

commercial shipments of imports from Japan were USP grade material. *** U.S. commercial shipments

were pharmaceutical grade glycine; however, they accounted for only *** percent of the U.S. shipments

of Japanese glycine in 2006. Likewise, *** U.S. commercial shipments were technical grade glycine, and

accounted for *** percent of reported U.S. commercial shipments of Japanese glycine in 2006. ***,

which were consumed internally, were all USP grade material. 

*** U.S. shipments of glycine imported from Korea were ***.23 These data indicate that the vast

majority of U.S. imports from subject sources were USP- grade glycine.

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.24 Subject imports accounted for 64.7

percent of total imports of glycine by quantity between March 2006 and February 2007, of which 22.7

percent were imports from India, 29.6 percent were imports from Japan, and 12.4 percent were imports

from Korea.25 

APPARENT U.S. CONSUMPTION, U.S. MARKET SHARES, AND 

RATIO OF IMPORTS TO U.S. PRODUCTION

 Table IV-4 presents data on apparent U.S. consumption of glycine. Table IV-5 presents data on

market shares. Figure IV-3 and figure IV-4 graphically present data on U.S. apparent consumption and

U.S. market shares. 
IV-7

Table IV-4

Glycine: Apparent U.S. consumption, by sources, 2004-06

Item

Calendar year

2004 2005 2006

Quantity (1,000 pounds)

U.S. producers' U.S. shipments *** *** ***

U.S. imports:

 India 1,133 2,555 2,668

 Japan 989 2,080 2,610

 Korea 1,060 992 1,124

 Subtotal, subject sources 3,182 5,627 6,402

 China 555 1,915 2,177

 All other sources 1,494 326 392

 Subtotal, nonsubject sources 2,049 2,241 2,570

 Total imports 5,231 7,868 8,971

Apparent U.S. consumption *** *** ***

Value (1,000 dollars)

U.S. producers' U.S. shipments *** *** ***

U.S. imports:

 India 1,800 3,679 3,547

 Japan 1,253 2,852 3,334

 Korea 1,107 1,278 1,300

 Subtotal, subject sources 4,161 7,809 8,181

 China 599 2,397 2,598

 All other sources 2,436 789 936

 Subtotal, nonsubject sources 3,036 3,186 3,534

 Total imports 7,196 10,996 11,715

Apparent U.S. consumption *** *** ***

Unit value (per pound)

U.S. producers' U.S. shipments $*** $*** $***

U.S. imports:

 India 1.59 1.44 1.33

 Japan 1.27 1.37 1.28

 Korea 1.04 1.29 1.16

 Subject average 1.31 1.39 1.28

 China 1.08 1.25 1.19

 All other sources 1.63 2.42 2.39

 Nonsubject average 1.48 1.42 1.38

 Import average 1.38 1.40 1.31

Apparent U.S. consumption average *** *** ***

Source: Compiled from data submitted in response to Commission questionnaires, official Commerce statistics, and

proprietary Customs data.
 22 The petitioner described the merchant market for glycine as having some pockets of growth, such as in the pet

food and nutriceutical markets. Conference transcript, p. 63 (Eckman).

 23 Conference transcript, p. 81 (Frey); ***’s importer questionnaire response, section III-14; and letter dated April

17, 2007, attached to *** importer questionnaire response.

IV-8

Table IV-5

Glycine: Market shares, by sources, 2004-06

* * * * * * *

Figure IV-3

Glycine: Apparent U.S. consumption, by sources, 2004-06

* * * * * * *

Figure IV-4

Glycine: Market shares, by sources, 2004-06

* * * * * * *

Over the period of investigation, total apparent U.S. consumption first increased then decreased.22

Increases in imports, both subject and nonsubject, and in U.S. producers’ U.S. shipments account for the

increase in apparent U.S. consumption between 2004 and 2005. While U.S. producers increased their

U.S. shipments in 2005, they lost market share because of the large increase in subject imports (primarily

from India and Japan). Between 2005 and 2006, imports of subject merchandise increased from both

subject (primarily Japan) and some nonsubject sources, while U.S. producers’ total U.S. shipments

decreased, resulting in a further decline in U.S. producers’ market share. The average unit values of

imports from India, Japan, and Korea were lower than the average unit values for U.S. producers’ U.S.

shipments in each comparison, except for ***. The average unit values of nonsubject imports from

China, currently subject to a U.S. antidumping duty order, are also lower than the average unit values of

U.S. producers’ U.S. shipments, while the average unit values of nonsubject imports from sources other

than China are higher than the average unit values of U.S. producers’ U.S. shipments. 

Table IV-6 presents information on the ratio of subject and nonsubject imports to U.S. production

of glycine. 

Table IV-6

Glycine: Ratios of U.S. imports to U.S. production, by sources, 2004-06

* * * * * * *

Over the period of investigation, subject imports increased from approximately *** of U.S.

production in 2004 to *** of U.S. production in 2006. As a ratio to U.S. production, imports from India

and Japan increased by a larger degree than imports from Korea. As a ratio to U.S. production,

nonsubject imports also increased over the period of investigation. 

As discussed in Part III, U.S. importers assert that increases in imports are due to Hampshire/Dow

and GEO’s inability to meet customer demand due to plant shutdowns, quality problems, and problems

such as short shipping, unreliable deliveries, allocation, and denial of supply.23 Figures IV-5 and IV-6

graphically depict the relationship between Hampshire/Dow/GEO’s level of missed deliveries and U.S.
IV-9

imports of glycine from the subject countries, on a monthly basis by source, for the period November

2004-December 2006.

Figure IV-5

Glycine: Hampshire/DOW/GEO’s delayed shipments and U.S. imports, by subject sources and

months, November 2004-December 2006

* * * * * * *

Figure IV-6

Glycine: Hampshire/DOW/GEO’s delayed shipments and U.S. imports from subject sources, by

months, November 2004-December 2006

* * * * * * *
 
V-1

PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

The cost of glycine depends largely on the costs of chemicals and energy. Glycine is produced

using two basic methods, the hydrogen cyanide method which is used by GEO, and the MCA method

which is used by Chattem. Chattem reports that production using the hydrogen cyanide method is less

expensive but requires a larger investment.

Transportation Costs to the U.S. Market

Transportation costs as a share of customs value for glycine from subject countries to the United

States (excluding U.S. inland costs) in 2006 were equivalent to 6.5 percent for India, 5.6 percent for

Japan, and 5.2 percent for Korea. These estimates are derived from official Commerce statistics and

represent the transportation and other charges on imports valued on a c.i.f. basis, as compared with

customs value.

U.S. Inland Transportation Costs

Both U.S. producers reported their U.S. inland transportation costs for glycine, reporting that

such costs accounted for from *** percent of the total delivered cost of the product. All eight of the

responding importers reported inland transportation of glycine to their customers’ location ranged from

0.5 percent to 2 percent.

Exchange Rates

Quarterly real and nominal exchange rates reported by the International Monetary Fund for the

currencies of India, Japan, and Korea relative to the U.S. dollar during the period January 2004 to

December 2006 are shown in figure V-1.
V-2

Figure V-1

Exchange rates: Indices of the nominal and real exchange rates between the currencies of India,

Japan, and Korea relative to the U.S. dollar, by quarters, January 2004-December 2006

Figure continued on next page.
 1

 Conference transcript, p. 52 (Kendrowski).

V-3

Figure V-1--Continued

Exchange rates: Indices of the nominal and real exchange rates between the currencies of India,

Japan, and Korea relative to the U.S. dollar, by quarters, January 2004-December 2006

Source: International Monetary Fund, International Financial Statistics,

http://ifs.apdi.net/imf/ifsbrowser.aspx?branch=ROOT retrieved April 6, 2007. 

PRICING PRACTICES

***. Seven of the 10 responding importers reported no discount policy, one reported quantity

discounts, one reported annual volume discounts, and one reported discounts on a case by case basis.

***. Nine of the 11 responding importers reported transaction by transaction prices; three of

these also reported contract prices, and the other two importers reported only contract prices.

Pricing Methods

Chattem reported that it does not sell on a contract basis but that it typically had a long term

relationship with many of its purchasers.1

 ***. Importers were asked to provide shares of contract and

spot sales for their sales of glycine from subject countries, and 11 responded; three reported selling most

using long-term contracts, three sold mainly using short-term contracts, and five sold all product in spot

sales.

Sales Terms

***. Eight of the 11 responding importers reported selling on a delivered basis while the other

three reported selling on an f.o.b. basis. *** and 10 of the 11 responding importers reported sales terms

of net 30 days. The remaining importer reported selling both cash on delivery and net 30 day sales.
 2

 ***.

V-4

PRICE DATA

The Commission requested U.S. producers and importers of glycine to provide quarterly quantity

and f.o.b. value data for shipments of the following products to unrelated U.S. customers during January

2004-December 2006:

Product 1: Pharmaceutical-grade glycine -- A white, odorless, crystalline powder with a sweet

taste, having an assay (glycine content) of 98.5 percent to 101.5 percent (dry basis), and with no

more than 7 ppm chloride, no more than 65 ppm sulfate, and no more than 1 ppm heavy metals.

Product 2: USP-grade glycine -- A white, odorless, crystalline powder with a sweet taste, having

an assay (glycine content) of 98.5 percent to 101.5 percent (dry basis), and with no more than 70

ppm chloride, no more than 65 ppm sulfate, no more than 20 ppm heavy metals, and not

otherwise qualifying as pharmaceutical-grade glycine.

Product 3: Technical-grade glycine -- A white, off-white, or slightly yellow crystalline powder,

having an assay (glycine content) of 98.5 percent to 101.5 percent (dry basis), with maximum

chlorides of 0.4 percent, and not otherwise qualifying as USP-grade glycine.

***.2

 Eleven importers provided price data; four reported price data for product 2 from India;

seven importers reported prices for product from Japan--four of these imported product 2, two imported

product 3, and one imported product 1; and one importer reported importing product 2 from Korea. Two

importers also reported imports from nonsubject countries China and Hungary. By quantity, pricing data

reported by responding firms for January 2004-December 2006 accounted for *** percent of reported

U.S. producers’ shipments of glycine, *** percent of Indian, *** percent of Japanese, and *** percent of

Korean product. Data for the United States, India, Japan, and Korea are presented in tables V-1 through

V-3 and figure V-2.

Price Trends

U.S. producer prices increased by *** to *** percent during the period for which data were

collected. Indian price changes ranged from a decrease of *** percent to an increase of *** percent. 

Japanese price changes ranged from a decrease of *** percent to an increase of *** percent. Korean

prices increased by *** percent.

Price Comparisons

Overall, there were 52 quarterly price comparisons between U.S.-produced glycine and imports

from India, Japan, and Korea. For those quarters for which data were reported, subject imports undersold

domestic products in 33 quarters and oversold domestic products in 19 quarters. Tables V-4 and 

V-5 provide summaries of underselling/overselling by country. 
V-5

Table V-1

Glycine: Weighted-average f.o.b. prices and quantities of domestic and imported product 1, and

margins of (overselling)/underselling by quarters, January 2004-December 2006

* * * * * * *

Table V-2

Glycine: Weighted-average f.o.b. prices and quantities of domestic and imported product 2, and

margins of (overselling)/underselling by quarters, January 2004-December 2006

* * * * * * *

Table V-3

Glycine: Weighted-average f.o.b. prices and quantities of domestic and imported product 3, and

margins of (overselling)/underselling by quarters, January 2004-December 20062

* * * * * * *

Figure V-2

Glycine: Weighted-average f.o.b. prices of domestic and subject imported products 1-3, January

2004-December 2006

* * * * * * *

Table V-4

Glycine: Summary of weighted-average f.o.b. prices, by product and by country

* * * * * * *

Table V-5

Glycine: Summary of underselling/(overselling)

* * * * * * *

LOST SALES AND LOST REVENUES

Petitioners provided *** allegations of lost sales (table V-6) and no allegations of lost revenue. 

The total value of lost sales allegations was $***. *** agreed with *** lost sales allegation, ***

disagreed, ***, and *** have not responded. 

Table V-6

Glycine: U.S. producers’ lost sales allegations

* * * * * * *

*** reported that it “has lost Glycine sales due to imports from Korea, India and Japan ***.” It

provided *** instances of *** lost sales or revenue in its *** questionnaire. However, *** it reported

losing a sale of *** pounds to ***. It did not provide the information necessary to confirm this or

estimate the value of ***.

*** was cited in one lost sales allegation with a value of $***. *** disagreed with the allegation,

reporting that *** did not purchase any glycine from the subject countries in 2006. *** also reported that
 3

 The information *** provides is contradicted in ***. *** reported that in 2006, it sold *** percent of its

imported product to ***, approximately *** pounds. ***. 

 4

 *** provides is contradicted in ***. *** reported it sold *** percent of its 2006 sales, approximately ***

pounds.

V-6

it had not switched from U.S.-produced product to subject imported product and the U.S. producers had

not reduced price because of competition from importers.3

*** was cited in one lost sales allegation with a value of $***. *** agreed with the allegation. 

He reported that the offered U.S. price was $*** not $*** (***) and the competing import price was

$***, not $***. He stated, however, that *** sales did not shift away from a U.S. producer, because ***

had also purchased imported product in 2004 and 2005. *** also reported that it had shifted purchases

from U.S.-produced product to imported Korean product since January 2004 because of price. He also

noted that the U.S. producer had *** prices of because imported product from India, Japan, and Korea. In

particular, he stated that “***.”

*** was cited in one allegation of a lost sale with a value of $***. *** disagreed with the

allegation, reporting that for the last year and a half to two years *** had purchased from GEO, which

offered ***. He also reported that the *** pounds quantity is ***; in fact *** consumes in 10 years. ***

also reported that it had not switched from U.S. producer to subject imported product because of price,

since the U.S. price ***. *** also reported that U.S. producers had not reduced their price because of

competition from subject imports, since the price of imports ***.4

*** was cited in one lost sales allegation with a value of $***. *** disagreed with the allegation,

reporting that ***.

*** was cited in one lost sales allegation with a value of $***. *** disagreed with the allegation,

however, it reported purchasing subject Indian product from ***, an importer of glycine, thus indicating

that there was a lost sale. *** reported it purchased *** pounds of glycine, not *** pounds as reported in

the allegation and the price it paid for the Indian glycine was $*** per pound, not $*** per pound as

reported in the allegation. *** also reported that it had not switched from U.S. producer to subject

imported product because of price. *** also reported that U.S. producers had not reduced their price

because of competition from subject imports.
 1

 ***.

 2

 ***.

 3

 ***.

VI-1

PART VI: FINANCIAL CONDITION OF U.S. PRODUCERS

BACKGROUND

Two producers provided financial results for their operations on glycine. The responding

producers are believed to represent all of U.S. production.1

 None of the sales of glycine were either

internally consumed or transferred to related companies. 

OPERATIONS ON GLYCINE 

Results of operations of the U.S. producers on their glycine operations are presented in table VI-1

which includes data on a per-pound basis as well as operating income (loss) to net sales ratios. 

The financial results of the producers fluctuated from 2004 to 2006, but the industry reported ***

each period.2

 The quantity and value sold increased, and the *** decreased between 2004 and 2005, due

to the increase in per-unit sale values combined with decreased per-unit total costs (cost of goods sold

(“COGS”) and selling, general, and administrative (“SG&A”) expenses) during the period.

Sales quantity and value both decreased from 2005 to 2006 and the *** increased between the

two periods, as average unit sales values only increased *** while the average per-unit total cost

increased by ($*** per pound). The increase in total costs was attributable to the increase of raw

materials cost during this period. While the operating *** decreased from 2004 to 2005 (from ***

percent in 2004 to *** percent in 2005), the operating *** increased in 2006 ***. 

Table VI-1

Glycine: Results of operations of U.S. producers, fiscal years 2004-06

* * * * * * *

The results of operations of the two firms are presented in table VI-2. The table presents selected

financial data on a company-by-company basis for net sales (quantity and value), operating income/(loss),

the ratio of operating income/(loss) to net sales value, and average unit sales values, COGS, and SG&A

expenses. These average unit financial data are quite different for the two producers, due primarily to

differences in product mix. There are three grades of glycine: pharmaceutical, USP, and technical. In

2006, *** percent of GEO’s sales (in terms of sales value), but *** percent of Chattem’s sales were USP

grade glycine; during the same period, approximately *** percent of Chattem’s sales were the higher-cost

and higher-priced pharmaceutical grade glycine. Therefore, average unit selling prices and COGS as well

as average unit total costs of Chattem for all periods were *** than those of GEO. These comparable data

are presented in table VI-2. In fact, in 2006, GEO’s raw materials cost per pound was ***, while

Chattem’s was *** and GEO’s conversion cost (direct labor and factory overhead combined) per pound

was *** compared with Chattem’s ***. GEO’s depreciation expense per pound was ***, while

Chattem’s was ***. Even in 2004, when Dow operated the production facility and before they wrote-off

the production facility in 2004 and 2005, Dow’s depreciation expense per pound was ***, while

Chattem’s was ***. 

*** for 2004 and 2006 while *** experienced an operating ***.3

 Corporate interest expenses of

both producers were allocated based on the ratio of the subject merchandise sales value to total corporate

sales value. Other expenses reported by ***.
 4

 ***.

 5

 ***.

 6

 The amount of capital expenditures of GEO for 2005 was derived from *** reported when GEO purchased these

facilities from Dow in November 2005.

VI-2

Table VI-2

Glycine: Results of operations of U.S. producers, by firms, fiscal years 2004-06

* * * * * * *

Selected aggregate per-unit cost data of the producers on their operations, i.e., unit COGS and

unit SG&A expenses, are presented in table VI-3. Total unit cost decreased from 2004 to 2005 and

increased from 2005 to 2006. While raw materials cost continuously increased between 2004 and 2006,

factory overhead decreased from 2004 to 2005. ***.4

 ***.5 The combined effects for both producers

resulted in a decrease in factory overhead in 2005.

Table VI-3

Glycine: Unit costs (per pound) of U.S. producers, fiscal years 2004-06

* * * * * * *

As indicated in table VI-3, while unit raw materials cost increased by $*** from 2004 to 2006,

during the same period the two producers reduced their conversion costs and SG&A expenses by a total

of $***.

A variance analysis showing the effects of prices and volume on the producers’ sales of glycine,

and of costs and volume on their total cost, is shown in table VI-4. The analysis is summarized at the

bottom of the table. The analysis indicates that the increase in operating *** between 2005 and 2006 was

attributable mainly to the *** of increased costs and expenses, combined with the *** of increased sales

prices (i.e., per-unit total cost increased *** than the increase of per-unit selling price), while the decrease

in operating loss from 2004 to 2006 was largely attributable to an increase in selling price. 

Table VI-4

Glycine: Variance analysis of operations of U.S. producers, fiscal years 2004-06

* * * * * * *

CAPITAL EXPENDITURES, R&D EXPENSES, 

AND INVESTMENT IN PRODUCTIVE FACILITIES

U.S. producers’ capital expenditures and R&D expenses, by firm, are presented in table VI-5. 

Capital expenditures increased *** from 2004 to 2005, due mainly to the acquisition of glycine

production facilities by GEO in November 2005,6

 and decreased subsequently in 2006. *** reporting

R&D expenses.

Table VI-5

Glycine: Capital expenditures and R&D expenses, by firms, of U.S. producers, fiscal years 2004-06

* * * * * * *
VI-3

ASSETS AND RETURN ON INVESTMENT

U.S. producers were requested to provide data on their assets used in the production and sales of

glycine during the period for which data were collected, to assess their return on investment (“ROI”). 

Although ROI can be computed in different ways, a commonly used method is income earned during the

period divided by the total assets utilized for the operations. Therefore, staff calculated ROI as operating

income (loss) divided by total assets used in the production and sales of glycine. Data on the U.S.

producers’ total assets and their ROI are presented in table VI-6. 

Table VI-6

Gycine: Value of assets and return on investment of U.S. producers, fiscal years 2004-06

* * * * * * *

The value of total assets, especially for the original cost and net book value of property, plant,

and equipment (“PPE”) decreased *** from 2004 to 2005, because GEO purchased these assets at ***

when these assets were purchased from the Hampshire Chemical Company (which formerly had been a

subsidiary of Dow Chemical Company) on November 1, 2005. GEO’s original cost of PPE decreased by

***, while net book value decreased from ***. The *** return on investment decreased from 2004 to

2005 (from *** percent), then increased from 2005 to 2006 ***. The trend of ROI over the period was

the same as the trend of the operating *** margin shown in table VI-1.

CAPITAL AND INVESTMENT

The Commission requested U.S. producers to describe any actual negative effects on their return

on investment, or on growth, investment, ability to raise capital, existing development and production

efforts, or the scale of capital investments as a result of imports of glycine from India, Japan, and Korea. 

The firms’ comments are as follows:

Chattem ***

GEO ***

In addition, the firms were asked, “Does your firm anticipate any negative impact of imports of glycine

from India, Japan, or Korea?” Their comments are as follows:

Chattem *** 

GEO ***

 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

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
 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

 Calculated from proprietary Customs data.

VII-2

agricultural product or the processed agricultural product (but not

both),

(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 volume and pricing of imports of the subject merchandise is presented in Parts

IV and V. 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 INDIA

 The petition identified 12 alleged producers of glycine in India, as presented in the following

tabulation: 

Aditya Chemicals (“Aditya”)

Amishi Drugs & Chemicals, Ltd. (“Amishi”)

Ashok Alco-Chem, Ltd. (“Ashok:”)

Bimal Pharma, Pvt. Ltd. (“Bimal”)

Euro Asian Industrial Co. (“EA Industrial”)

EPIC Enzymes Pharmaceuticals & Industrial Chemicals, Ltd. (“EPIC”)

Indian Chemical Industries (“IC Industries”)

Frezco Corporation (“Frezco”)

Salvi Chemical Industries (“Salvi”)

Kumar Industries (“Kumar”)

Paras Intermediates Pvt. Ltd. (“Paras”)

Sisco Research Laboratories Pvt., Ltd. (“Sisco”)

Suru Chemicals and Pharmaceuticals, Pvt. Ltd. (“Suru”)

An additional three firms were identified as potential foreign manufacturers of glycine in India using

proprietary Customs data, including: ***. Four firms accounted for *** percent of U.S. imports of

glycine from India between 2004 and 2006 as presented in table IV-1: ***.3

 The Commission received
 4

 AICO has a business relationship with the U.S. importer CAF. Conference transcript, p. 81 (Frey).

 5

 Staff telephone interview, ***, April 17, 2007 and *** foreign producers’ / exporters’ questionnaire response,

question II-2: 

***.

 6

 Conference transcript, p. 88 (Frey).

 7

 Staff telephone interview with ***, April 17, 2007.

 8

 Chattem’s postconference submission, p. 2.

VII-3

completed questionnaire responses from AICO,4

 Kumar, and Paras. Various U.S. importers’

questionnaire responses also identified ***, in addition to the firms that the Commission received foreign

producers data from, as producers of glycine in India. 

Table VII-1 presents information on Indian producers’ glycine operations. Indian producers

increased production of glycine between 2004 and 2006, with most of the increase occurring between

2004 and 2005 ***. *** indicated that AICO operations were in fact re-export operations of Chineseproduced glycine,5

 while officials at CAF testified that AICO actually has Indian glycine production

facilities.6

 Over the period of investigation, exports to the United States accounted for the vast majority

of all reporting Indian producers’ shipments. *** indicated that there was not a large domestic Indian

market for glycine.7

 Chattem alleges that most, *** percent, of U.S. imports from India are

transshipments of glycine produced in China.8

 Exports to the United States reported in table VII-1

account for an estimated *** percent of U.S. imports from India reported in table IV-1.
VII-4

Table VII-1

Glycine: Indian producers’ operations, 2004-06, and projected 2007-08

Item

Actual experience Projections

2004 2005 2006 2007 2008

Quantity (1,000 pounds)

Capacity 3,412 3,412 3,412 3,412 3,412

Production 1,425 2,349 2,378 2,202 2,455

Shipments: 

 Internal consumption *** *** *** *** ***

 Home market *** *** *** *** ***

 Exports to--

 The United States 1,034 1,871 2,126 1,753 1,890

 European Union *** *** *** *** ***

 Asia *** *** *** *** ***

 All other markets *** *** *** *** ***

 Total exports *** *** *** *** ***

 Total shipments 1,465 2,262 2,498 2,238 2,500

Ratio (percent)

Capacity utilization 41.8 68.9 69.7 64.5 72.0

Share of quantity (percent)

Shipments: 

 Internal consumption *** *** *** *** ***

 Home market *** *** *** *** ***

 Exports to--

 The United States 70.6 82.7 85.1 78.3 75.6

 European Union *** *** *** *** ***

 Asia *** *** *** *** ***

 All other markets *** *** *** *** ***

 Total exports *** *** *** *** ***

 Total shipments 100.0 100.0 100.0 100.0 100.0

Source: Compiled from data submitted in response to Commission questionnaires.
 9

 Staff worksheet of proprietary Customs data. ***. *** foreign producers’/exporters’ questionnaire response. 

 10 *** U.S. importers’ questionnaire response, question II-5b. *** claims its exports to the United States from

*** were produced by Showa Denko and Yuki Gosei.

 11 Conference transcript, p. 77 (Duncan & Kedrowski).

 12 For purposes of table VII-2, Yuki Gosei’s home market shipments were adjusted to remove shipments reported

in the Japanese exporters’ questionnaire responses (i.e., ***). 

 13 E-mail from ***, April 20, 2007.

VII-5

THE INDUSTRY IN JAPAN

 The petition identified five alleged producers of glycine in Japan as identified in the following

tabulation: 

Ajinomoto Co., Inc. (“Ajinomoto”)

Hayashi Pure Chemical Industries Co., Ltd. (“Hayashi Pure”)

Kyowa Hakko Kogyo Co., Ltd. (“Kyowa Hakko”)

Showa Denko K.K. (“Showa Denko”)

Yuki Gosei Kogyo Co., Ltd. (“Yuki Gosei”)

An additional five firms were identified as potential foreign manufacturers of glycine in Japan using

proprietary Customs data, including: ***. Five firms accounted for *** percent of U.S. imports of

glycine from Japan between 2004 and 2006 as presented in table IV-1: ***.9

 As a distributor of glycine

***. In its U.S. importers’ questionnaire response, *** identified Showa Denko and Yuki Gosei as the

actual foreign manufacturers of their shipments of glycine to the United States.10 In fact, a review of U.S.

importers’ questionnaires submitted in these investigations indicate that all U.S. imports of glycine from

Japan were produced by ***. Of the Japanese firms contacted, five provided completed foreign

producers’ / exporters’ questionnaire responses, including: ***. Of the five responding firms, only Yuki

Gosei was an actual producer of glycine; the other four firms were exporters of glycine from Japan. 

Showa Denko has not provided the Commission with a completed foreign producers’ questionnaire

response, despite requests made to U.S. producer Chattem with whom Showa Denko has a business

relationship.11

Table VII-2 presents information on Japanese producers’ and exporters’ glycine operations. 

Table VII-2

Glycine: Japanese producers’ and exporters’ operations, 2004-06, and projected 2007-08

* * * * * * *

Yuki Gosei first increased its production of glycine between 2004 and 2005 and then decreased

its production of glycine between 2005 and 2006, resulting in a period low capacity utilization rate of ***

percent in 2006. Yuki Gosei projects *** production levels going forward into 2007 and 2008. Over the

period of investigation, home market sales accounted for the majority of reported shipments of glycine in

Japan; however, reported home market shipments might be over-reported for Japanese glycine to the

degree that some of the remaining home market shipments might have been exported by firms other than

those reporting to the Commission’s inquiry.12 Reported export shipments to the United States were

minimal and accounted for a high of *** percent of total reported shipments of glycine from Japan in

2005. Reported export shipments to the European Union primarily represent exports by ***;13 therefore,

actual shipments to the United States were higher than reported in table VII-2 due to their channels of
 14 Staff telephone interview with ***, April 16, 2007.

 15 Chattem’s postconference submission, p. 2.

 16 Letter from Mark Altenstadter, Chief, Trade Operations Branch, Customs, January 22, 2002.

 17 Staff telephone interview with ***, April 17, 2007.

VII-6

distribution. Exports to the United States in table VII-2 and *** collectively account for an estimated ***

percent of U.S. imports from Japan reported in table IV-2.

THE INDUSTRY IN KOREA

 The petition identified three alleged producers of glycine in Korea as identified in the following

tabulation: 

Korea Bio-Gen Co., Ltd. (“Bio-Gen”)

DHOW International (“DHOW”)

Haerim Industrial Co. Ltd. (“Haerim”)

Proprietary Customs data identified *** as the foreign manufacturer for the vast majority (*** percent) of

U.S. imports from Korea. The other firm identified in proprietary Customs data was ***. No Korean

firms provided the Commission with a completed foreign producers’/exporters’ questionnaire response. 

Officials at *** indicated that its supplier in Korea, Bio-Gen, would not be cooperating by providing data

in the Commission’s investigations.14 Chattem alleges that all U.S. imports from Korea are

transshipments of glycine produced in China.15 *** provided documentation from a U.S. Customs

determination in 2002 indicating that Bio-Gen does have glycine production facilities in Korea.16 

U.S. IMPORTERS’ INVENTORIES

Table VII-3 presents information on U.S. importers’ inventories. The majority of U.S. importers’

inventories in 2005 relate to inventories *** imported by *** in 2005 but sold in 2006, while the majority

of inventories in 2006 relate to inventories of *** imported by *** in 2006 which ***.17 

Table VII-3

Glycine: U.S. importers’ inventories, 2004-06

* * * * * * *

U.S. IMPORTERS’ CURRENT ORDERS

Eight U.S. importers reported that they had placed orders for glycine from India, Japan, or Korea,

totaling 5.3 million pounds, scheduled for entry into the United States in 2007. Table VII-4 presents U.S.

importers’ 2007 orders for glycine.

Table VII-4

Glycine: U.S. importers’ current orders, 2007

* * * * * * *
 18 Glycine from China, Inv. No. 731-TA-718 (Second Review), USITC Publication 3810, October 2005, p. I-4 and

e-mail from ***, May 2, 2007.

 19 Silicon Metal from Russia, Inv. No. 731-TA-991 (Second Remand), USITC Publication 3910, March 2007, p. 2;

citing Bratsk Aluminum Smelter v. United States, 444 F.3d at 1375. 

 20 In the silicon metal remand, Chairman Pearson noted “consistent with his views in Lined Paper School

Supplies From China, India, and Indonesia, Inv. Nos. 701-TA-442-443 and 731-TA-1095-1097 (Final), USITC Pub.

3884 (Sept. 2006) at 51, that while he agrees with the Commission that the Federal Circuit’s opinion suggests a

replacement/benefit test, he also finds that the Federal Circuit’s opinion could be read, not as requiring a new test,

but rather as a reminder that the Commission, before it makes an affirmative determination, must satisfy itself that it

has not attributed material injury to factors other than subject imports.” Silicon Metal from Russia, Inv. No. 731-TA991 (Second Remand), USITC Publication 3910, March 2007, p. 2, fn. 17. Commissioner Okun joined in those

separate and dissenting views in Lined Paper. 

VII-7

ANTIDUMPING AND COUNTERVAILING DUTY ORDERS 

IN THIRD-COUNTRY MARKETS

 There are no known antidumping or countervailing duty orders on glycine in third-country

markets. The EU had instituted preliminary antidumping duties on imports of glycine into the EU from

China on May 19, 2000 but then removed the provisional duties on November 16, 2000 following a

negative final determination.18

INFORMATION ON NONSUBJECT SOURCES

“Bratsk” Considerations

As a result of the Court of Appeals for the Federal Circuit (“CAFC”) decision in Bratsk

Aluminum Smelter v. United States (“Bratsk”), the Commission is directed to:19 20

undertake an “additional causation inquiry” whenever certain triggering factors are

met: “whenever the antidumping investigation is centered on a commodity product, and

price competitive non-subject imports are a significant factor in the market.” The

additional inquiry required by the Court, which we refer to as the Bratsk

replacement/benefit test, is “whether non-subject imports would have replaced the

subject imports without any beneficial effect on domestic producers.

Nonsubject Source Information

During the preliminary phase of this investigation, the Commission sought pricing data from U.S.

importers of glycine from China. Those data are presented in Part V of this report. With respect to

foreign industry data, the Commission sought publicly available information regarding producers of
 21 Conference testimony indicated that Hungary was an additional source of glycine in the U.S. market. 

Conference transcript, p. 71 (Johnson). Official Commerce statistics indicate that there have been no U.S. imports of

glycine from Hungary since 2004. Available information indicates that in 2002 Nitrokemia had the capacity to

produce 6,000 metric tons per year of monochloroacetic acid (MCA), the key feedstock for the production of glycine

in one commercial process. ICIS, “Product Profile: MCAA,” April 29, 2002,

http://www.icis.com/Articles/2002/06/12/170939/Product-profile-MCAA.html (retrieved April 30, 2007). Assuming

that Nitrokemia uses its own MCA feedstock to make glycine, its glycine capacity would be at most 5,000 metric

tons per year. Nitrokemia’s glycine plant may no longer be in production given Tessenderlo’s assertion in 2005 that

it was the only European glycine producer. In addition, Hungary has not reported any exports of glycine since 2004.

Global Trade Atlas, http://www.gtis.com/gta (retrieved April 30, 2007). 

 22 Glycine from China, Inv. No. 731-TA-718 (Second Review), USITC Publication 3810, October 2005, pp I-20 to

I-21. 

 23 66 FR 13204, March 5, 2001.

 24 70 FR 54012, September 13, 2005.

 25 72 FR 18457, April 12, 2007.

VII-8

glycine in Belgium (accounting for 4.1 percent of total U.S. imports of glycine during 2006), China (25.5

percent), France (0.3 percent), and Germany (0.2 percent).21 The information obtained is presented below.

China

China is the largest producer of glycine in the world. In 1995, it was estimated that China had the

capacity to produce 22 to 33 million pounds of glycine, while it was estimated that in 2002 China had a

capacity to produce 50 million pounds of glycine.22 While most firms in China are currently subject to

the discipline of antidumping duties at 155.89 percent ad valorem, two firms received lower rates: in

2001, Nantong Dongchang Chemical Industry Corp. (“Nantong Dongchang”) received a 18.60 percent

antidumping duty rate following an amended new shipper review at Commerce;23 and Baoding Mantong

Fine Chemistry Co., Ltd. (“Baoding”) received a 2.95 percent antidumping duty rate following an

amended administrative review at Commerce in 2005.24 The increase in U.S. imports from China in 2005

relates to imports from ***, while the increase in U.S. imports from China in 2006 relates to imports from

***. Table VII-5 presents information on the quantity of U.S. imports from China by exporting firm

between 2004 and 2006.

Table VII-5

Glycine: U.S. imports from China, by exporter, 2004-06

* * * * * * *

On April 12, 2007, Commerce published a preliminary revised antidumping dumping duty rate

for Nantong Dongchang at 75.82 percent, while it rescinded its review of Baoding since Baoding did not

report any shipments of glycine in the period being reviewed.25 
 26 Tessenderlo Group, “Locations,”

http://www.tessenderlogroup.com/S02_Markets%20&%20Applications/S05_Fine%20Chemicals/S07_Locations/

(retrieved April 30, 2007).

 27 Tessenderlo Group, “Annual Report 2005,” p. 35,

http://www.tessenderlogroup.com/S01_Corporate/S04_Publications/S01_Annual%20reports/S02_Annual%20report

%202005/content.asp# (retrieved April 30, 2007).

 28 CAF’s postconference brief, p. 1.

 29 E-mail ***, May 2, 2007.

 30 Ibid.

 31 Ibid.

 32 Ibid.

 33 Ibid.

 34 This is ***. It does not appear to be producing glycine, but it is possible that this firm may use glycine in its

***. The company is owned by the ***. 

 35 This firm appears to be ***. Available information does not indicate that this firm produces glycine.

 36 This firm is ***. Available information does not indicate that this firm produces glycine. It is possible that this

firm uses glycine as an inactive ingredient in their ***. 

 37 This company became part of ***. Available information does not indicate that this firm produces glycine. 

This firm ***, but not glycine.

VII-9

Belgium

The Tessenderlo Group operates a glycine plant in Limburg, Belgium.26 The 2005 annual report

of the Tessenderlo Group states that it is the only European manufacturer of glycine.27 ***.28 Tessenderlo

has a capacity to produce *** of glycine and is currently operating at *** percent capacity utilization.29

Tessenderlo, ***.30 Tessenderlo is the only known producer of glycine in Europe.31 The quantity of U.S.

imports from Belgium decreased from 1.2 million pounds in 2004 to 0.2 million pounds in 2005 and 0.4

million pounds in 2006 (see table IV-2). Tessenderlo attributes this decrease in its exports to the United

States to ***.32 Tessenderlo also claims that, in the case of antidumping duties on imports from India,

Japan, and Korea in the United States, ***.33

France and Germany

The following firms in France and Germany were identified in proprietary Customs data as

exporters of glycine during the period of investigation: ***;34 ***;35 ***;36 and ***.37 Based on a review

of secondary source information, these firms do not appear to be actual producers of glycine.

A-1

APPENDIX A

FEDERAL REGISTER NOTICES

17580 Federal Register / Vol. 72, No. 67 / Monday, April 9, 2007 / Notices 

1The imported product covered by these 

investigations is glycine, which in its solid (i.e., 

crystallized) form is a free-flowing crystalline 

material, like salt or sugar. These investigations 

cover glycine in any form and purity level, 

regardless of additives. Glycine’s chemical 

composition is C2H5NO2 and generally is classified 

under subheading 2922.49.4020 of the Harmonized 

Tariff Schedule of the United States (‘‘HTSUS’’). 

In addition, precursors of dried crystalline 

glycine, including, but not limited to, glycine slurry 

(i.e., glycine in a non-crystallized form) and sodium 

glycinate are included in these investigations. 

Glycine slurry is classified under the same HTSUS 

as crystallized glycine (2922.49.4020) and sodium 

glycinate is classified under HTSUS 2922.49.8000. 

While HTSUS subheadings are provided for 

convenience and Customs purposes, our written 

description of the scope of this investigation is 

dispositive. 

of the rules requires that a signed 

original (or copy designated as an 

original) and fourteen (14) copies of 

each document be filed. In the event 

that confidential treatment of the 

document is requested, at least four (4) 

additional copies must be filed, in 

which the confidential business 

information must be deleted (see the 

following paragraph for further 

information regarding confidential 

business information). The 

Commission’s rules do not authorize the 

filing of submissions with the Secretary 

by facsimile or electronic means, except 

to the extent permitted by section 201.8 

of the rules (see Handbook for 

Electronic Filing Procedures, http:// 

www.usitc.gov/secretary/ 

fed_reg_notices/rules/documents/ 

handbook_on_electronic_filing.pdf). 

Persons with questions regarding 

electronic filing should contact the 

Secretary (202–205–2000 or 

edis@usitc.gov). 

Any submissions that contain 

confidential business information must 

also conform with the requirements of 

section 201.6 of the Commission’s Rules 

of Practice and Procedure (19 CFR 

201.6). Section 201.6 of the rules 

requires that the cover of the document 

and the individual pages be clearly 

marked as to whether they are the 

‘‘confidential’’ or ‘‘nonconfidential’’

version, and that the confidential 

business information be clearly 

identified by means of brackets. All 

written submissions, except for 

confidential business information, will 

be made available in the Office of the 

Secretary for inspection by interested 

parties. 

The Commission may include some or 

all of the confidential business 

information submitted in the course of 

this investigation in the report it sends 

to the President. After transmitting its 

report, the Commission intends to 

publish a public version of its report, 

with any confidential business 

information deleted. Any confidential 

business information received by the 

Commission in this investigation and 

used in preparing the report will not be 

published in the public version of the 

report in a manner that would reveal the 

operations of the firm supplying the 

information. 

Issued: April 3, 2007. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E7–6600 Filed 4–6–07; 8:45 am] 

BILLING CODE 7020–02–P

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 731–TA–1111–1113 

(Preliminary)] 

Glycine from India, Japan, and Korea 

AGENCY: United States International 

Trade Commission. 

ACTION: Institution of antidumping 

investigations and scheduling of 

preliminary phase investigations. 

SUMMARY: The Commission hereby gives 

notice of the institution of investigations 

and commencement of preliminary 

phase antidumping investigations Nos. 

731–TA–1111–1113 (Preliminary) under 

section 733(a) of the Tariff Act of 1930 

(19 U.S.C. 1673b(a)) (the Act) to 

determine whether there is a reasonable 

indication that 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 imports from India, Japan, and 

Korea of glycine,1 provided for in 

subheading 2922.49.4020 of the 

Harmonized Tariff Schedule of the 

United States, that are alleged to be sold 

in the United States at less than fair 

value. Unless the Department of 

Commerce extends the time for 

initiation pursuant to section 

732(c)(1)(B) of the Act (19 U.S.C. 

1673a(c)(1)(B)), the Commission must 

reach a preliminary determination in 

antidumping investigations in 45 days, 

or in this case by May 14, 2007. The 

Commission’s views are due at 

Commerce within five business days 

thereafter, or by Monday, May 21, 2007. 

For further information concerning 

the conduct of these investigations 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 B (19 CFR part 207). 

EFFECTIVE DATE: March 30, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Russell Duncan (202–708–4727, 

russell.duncan@usitc.gov), Office of 

Investigations, U.S. International Trade 

Commission, 500 E Street, SW., Room 

615–U, Washington, DC 20436. Hearingimpaired 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. These investigations are 

being instituted in response to a petition 

filed on March 30, 2007, by GEO 

Specialty Chemicals, Inc., Lafayette, IN. 

Participation in the investigations and 

public service list. Persons (other than 

petitioners) wishing to participate in the 

investigations as parties must file an 

entry of appearance with the Secretary 

to the Commission, as provided in 

§§ 201.11 and 207.10 of the 

Commission’s rules, not later than seven 

days after publication of this notice in 

the Federal Register. Industrial users 

and (if the merchandise under 

investigation is sold at the retail level) 

representative consumer organizations 

have the right to appear as parties in 

Commission antidumping 

investigations. The Secretary will 

prepare a public service list containing 

the names and addresses of all persons, 

or their representatives, who are parties 

to these investigations upon the 

expiration of the period for filing entries 

of appearance. 

Limited disclosure of business 

proprietary information (BPI) under an 

administrative protective order (APO) 

and BPI service list. Pursuant to 

§ 207.7(a) of the Commission’s rules, the 

Secretary will make BPI gathered in 

these investigations available to 

authorized applicants representing 

interested parties (as defined in 19 

U.S.C. 1677(9)) who are parties to the 

investigations under the APO issued in 

the investigations, provided that the 

application is made not later than seven 

days after the publication of this notice 

in the Federal Register. A separate 

service list will be maintained by the 

Secretary for those parties authorized to 

receive BPI under the APO. 

Conference. The Commission’s 

Director of Operations has scheduled a 


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1The record is defined in § 207.2(f) of the 

Commission’s Rules of Practice and Procedure (19 

CFR 207.2(f)). 

conference in connection with these 

investigations for 9:30 a.m. on Friday, 

April 20, 2007, at the U.S. International 

Trade Commission Building, 500 E 

Street, SW., Washington, DC. Parties 

wishing to participate in the conference 

should contact Russell Duncan (202–

708–4727) not later than April 18, 2007, 

to arrange for their appearance. Parties 

in support of the imposition of 

antidumping duties in these 

investigations and parties in opposition 

to the imposition of such duties will 

each be collectively allocated one hour 

within which to make an oral 

presentation at the conference. A 

nonparty who has testimony that may 

aid the Commission’s deliberations may 

request permission to present a short 

statement at the conference. 

Written submissions. As provided in 

§§ 201.8 and 207.15 of the 

Commission’s rules, any person may 

submit to the Commission on or before 

April 25, 2007, a written brief 

containing information and arguments 

pertinent to the subject matter of the 

investigations. Parties may file written 

testimony in connection with their 

presentation at the conference no later 

than three days before the conference. If 

briefs or written testimony contain BPI, 

they must conform with the 

requirements of §§ 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 § 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). 

In accordance with §§ 201.16(c) and 

207.3 of the 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 § 207.12 of the Commission’s 

rules. 

Issued: April 2, 2007. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E7–6601 Filed 4–6–07; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation No. 731–TA–1110 

(Preliminary)] 

Sodium Hexametaphosphate (SHMP) 

From China 

Determination 

On the basis of the record 1 developed 

in the subject investigation, the United 

States International Trade Commission 

(Commission) determines, pursuant to 

section 733(a) of the Tariff Act of 1930 

(19 U.S.C. 1673b(a)) (the Act), that there 

is a reasonable indication that an 

industry in the United States is 

materially injured by reason of imports 

from China of sodium 

hexametaphosphate, provided for in 

subheadings 2835.39.50 and 3823.90.39 

of the Harmonized Tariff Schedule of 

the United States, that are alleged to be 

sold in the United States at less than fair 

value (LTFV). 

Commencement of Final Phase 

Investigation 

Pursuant to § 207.18 of the 

Commission’s rules, the Commission 

also gives notice of the commencement 

of the final phase of its investigation. 

The Commission will issue a final phase 

notice of scheduling, which will be 

published in the Federal Register as 

provided in section 207.21 of the 

Commission’s rules, upon notice from 

the Department of Commerce 

(Commerce) of an affirmative 

preliminary determination in the 

investigation under section 733(b) of the 

Act, or, if the preliminary determination 

is negative, upon notice of an 

affirmative final determination in that 

investigation under section 735(a) of the 

Act. Parties that filed entries of 

appearance in the preliminary phase of 

the investigation need not enter a 

separate appearance for the final phase 

of the investigation. Industrial users, 

and, if the merchandise under 

investigation is sold at the retail level, 

representative consumer organizations 

have the right to appear as parties in 

Commission antidumping and 

countervailing duty investigations. The 

Secretary will prepare a public service 

list containing the names and addresses 

of all persons, or their representatives, 

who are parties to the investigation. 

Background 

On February 8, 2007, a petition was 

filed with the Commission and 

Commerce by ICL Performance 

Products, LP, St. Louis, MO, and 

Innophos, Inc., Cranbury, NJ, alleging 

that an industry in the United States is 

materially injured or threatened with 

material injury by reason of LTFV 

imports of sodium hexametaphosphate 

from China. Accordingly, effective 

February 8, 2007, the Commission 

instituted antidumping duty 

investigation No. 731–TA–1110 

(Preliminary). 

Notice of the institution of the 

Commission’s investigation and of a 

public conference 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 of 72 FR 7458, 

February 15, 2007. The conference was 

held in Washington, DC, on March 1, 

2007, and all persons who requested the 

opportunity were permitted to appear in 

person or by counsel. 

The Commission transmitted its 

determination in this investigation to 

the Secretary of Commerce on March 26, 

2007. The views of the Commission are 

contained in USITC Publication 3912 

(April 2007), entitled Sodium 

Hexametaphosphate from China: 

Investigation No. 731–TA–1110 

(Preliminary). 

Issued: April 3, 2007. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission.

[FR Doc. E7–6599 Filed 4–6–07; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Notice of Lodging of Consent Decree 

Under the Clean Air Act 

Notice is hereby given that on March 

14, 2007, a proposed Consent Decree in 

United States of America v. William 

Montgomery, et al, Civil Action No. 

2:05–CV–0131 was lodged with the 

United States District Court for the 

Western District of Michigan. 

In this action, pursuant to Sections 

309(b) and (g), 33 U.S.C. §§ 1319(b) and 

(g) of the Clean Water Act, the United 

States sought judicial enforcement of an 

administrative Consent Agreement and 

Final Order (‘‘CAFO’’) that William 

Montgomery (‘‘Montgomery’’) and 

CCMS Associates, Inc. (‘‘CCMS’’) 

entered into on September 17, 2003. The 

CAFO resolved violations by 

Montgomery and CCMS of the Clean 

Water Act, requiring them to pay a 

$30,000 civil penalty and restore 18.51 

acres of wetlands. The complaint also 


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Scope of the Order 

This order covers cold–rolled (cold–

reduced) carbon steel flat–rolled carbon 

steel products, of rectangular shape, 

either clad, plated, or coated with 

corrosion–resistant metals such as zinc, 

aluminum, or zinc-, aluminum-, nickelor iron–based alloys, whether or not 

corrugated or painted, varnished or 

coated with plastics or other 

nonmetallic substances in addition to 

the metallic coating, in coils (whether or 

not in successively superimposed 

layers) and of a width of 0.5 inch or 

greater, or in straight lengths which, if 

of a thickness less than 4.75 millimeters, 

are of a width of 0.5 inch or greater and 

which measures at least 10 times the 

thickness or if of a thickness of 4.75 

millimeters or more are of a width 

which exceeds 150 millimeters and 

measures at least twice the thickness, as 

currently classifiable in the Harmonized 

Tariff Schedule of the United States 

(HTSUS) under item numbers 

7210.30.0030, 7210.30.0060, 

7210.41.0000, 7210.49.0030, 

7210.49.0090, 7210.61.0000, 

7210.69.0000, 7210.70.6030, 

7210.70.6060, 7210.70.6090, 

7210.90.1000, 7210.90.6000, 

7210.90.9000, 7212.20.0000, 

7212.30.1030, 7212.30.1090, 

7212.30.3000, 7212.30.5000, 

7212.40.1000, 7212.40.5000, 

7212.50.0000, 7212.60.0000, 

7215.90.1000, 7215.90.3000, 

7215.90.5000, 7217.20.1500, 

7217.30.1530, 7217.30.1560, 

7217.90.1000, 7217.90.5030, 

7217.90.5060, 7217.90.5090. Included in 

this order are corrosion–resistant flat–

rolled products of non–rectangular 

cross-section where such cross-section 

is achieved subsequent to the rolling 

process (i.e., products which have been 

‘‘worked after rolling’’) – for example, 

products which have been beveled or 

rounded at the edges. Excluded from 

this order are flat–rolled steel products 

either plated or coated with tin, lead, 

chromium, chromium oxides, both tin 

and lead (‘‘terne plate’’), or both 

chromium and chromium oxides (‘‘tin–

free steel’’), whether or not painted, 

varnished or coated with plastics or 

other nonmetallic substances in 

addition to the metallic coating. Also 

excluded from this order are clad 

products in straight lengths of 0.1875 

inch or more in composite thickness 

and of a width which exceeds 150 

millimeters and measures at least twice 

the thickness. Also excluded from this 

order are certain clad stainless flat–

rolled products, which are three–

layered corrosion–resistant carbon steel 

flat–rolled products less than 4.75 

millimeters in composite thickness that 

consist of a carbon steel flat–rolled 

product clad on both sides with 

stainless steel in a 20%-60%-20% ratio. 

These HTSUS item numbers are 

provided for convenience and customs 

purposes. The written descriptions 

remain dispositive. 

Amended Final Results of Review 

After analyzing U.S. Steel’s 

comments, we have determined, in 

accordance with section 751(h) of the 

Act and 19 CFR 351.224, that the 

Department has made a ministerial error 

in the final results calculation for Union 

in this administrative review. For a 

detailed discussion of the ministerial 

error, see Memorandum from Jolanta 

Lawska to James Terpstra, re: Amended 

Final Results in the 04/05 

Administrative Review on Corrosion–

Resistant Carbon Steel Flat Products 

from Korea, at page 2, dated April 4, 

2007 (Ministerial Error Memo). 

Therefore, in accordance with section 

751(h) of the Act, we are amending the 

final results of the antidumping duty 

administrative review of CORE from 

Korea for the period August 1, 2004, to 

July 31, 2005. As a result of correcting 

the ministerial error discussed in the 

Ministerial Error Memo, Union’s 

weighted–average dumping margin 

increased from 1.45 percent to 1.46 

percent. For the remaining respondents, 

the weighted–average dumping margins 

remain the same. See Final Results. 

Duty Assessment and Cash Deposit 

Requirements 

The Department will determine, and 

U.S. Customs and Border Protection 

(CBP) shall assess, antidumping duties 

on all appropriate entries. The 

Department intends to issue assessment 

instructions directly to CBP 15 days 

after the date of publication of the 

amended final results of this review, 

where injunctions are not in place. 

Further, the following cash–deposit 

requirements will be effective upon 

publication of these final amended 

results of the administrative review for 

shipments of the subject merchandise 

entered, or withdrawn from warehouse, 

for consumption on or after the 

publication date of these final amended 

results, as provided by section 

751(a)(2)(C) of the Act: (1) for subject 

merchandise exported by Union, the 

cash–deposit rate will be 1.46 percent 

(2) for Dongbu Steel Co., Ltd., Hyundai 

HYSCO, and Pohang Iron & Steel 

Company, Ltd., the cash deposit rate 

will remain as established in the Final 

Results. These deposit requirements 

shall remain in effect until further 

notice. 

These amended final results of 

administrative review and notice are 

issued and published in accordance 

with sections 751(a)(1) and (h), and 

777(i)(1) of the Act, and 19 CFR 

351.224. 

Dated: April 19, 2007. 

Joseph A. Spetrini, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–8016 Filed 4–25–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–533–845, A–580–858, A–588–868] 

Glycine from India, Japan, and the 

Republic of Korea: Initiation of 

Antidumping Duty Investigations 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: April 26, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Scott Lindsay (India), Toni Page (Japan), 

or Dmitry Vladimirov and Janis Kalnins 

(Republic of Korea), AD/CVD 

Operations, Office 6 and Office 5, 

Import Administration, International 

Trade Administration, U.S. Department 

of Commerce, 14th Street and 

Constitution Avenue, NW, Washington, 

DC 20230; telephone: (202) 482–0780, 

(202) 482–1398, (202) 482–0665, or 

(202) 482–1392 respectively. 

SUPPLEMENTARY INFORMATION: 

The Petitions 

On March 30, 2007, the Department of 

Commerce (the Department) received 

petitions concerning imports of glycine 

from India (Indian Petition), Japan 

(Japanese Petition), and the Republic of 

Korea (Korea) (Korean Petition) 

(collectively, the Petitions), filed in 

proper form by Geo Specialty 

Chemicals, Inc. (Petitioner). See the 

Petitions for the Imposition of 

Antidumping Duties on Imports of 

Glycine from India, Japan, and the 

Republic of Korea filed on March 30, 

2007. On April 5, 2007, the Department 

issued a request for additional 

information and clarification of certain 

areas of the Petitions. Based on the 

Department’s request, Petitioner filed 

Petition Supplements on April 3, 12, 13, 

17, and 18, 2007. In the April 18, 2007, 

Petition Supplement, Petitioner 

confirmed the final scope language. In 

addition, Petitioner submitted certain 

revisions to their cost calculations for 

India, Japan and Korea. We note that, 

although this revised cost data 


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1See USEC, Inc. v. United States, 25 CIT 49, 55- 

56 (January 24, 2001) (citing Algoma Steel Corp. v. 

United States, 12 CIT 518 (June 8, 1988)). 

contained minor errors, Petitioner’s 

revisions to that data were generally 

consistent with the revisions made by 

the Department. See ‘‘Cost of Production 

and Constructed Value section,’’ below. 

Also based on the Department’s request, 

the Petitioner refiled certain 

submissions to correct (1) the 

designation of information that may not 

be released under APO and (2) their 

request for business proprietary 

treatment of certain information on 

April 10 and 13, 2007. 

In accordance with section 732(b) of 

the Tariff Act of 1930, as amended (the 

Act), Petitioner alleges that imports of 

glycine from India, Japan, and Korea are 

being, or are likely to be, sold in the 

United States at less than fair value, 

within the meaning of section 731 of the 

Act, and that such imports are 

materially injuring, or threatening 

material injury to, an industry in the 

United States. 

Period of Investigation (POI) 

In accordance with section 351.204(b) 

of the Department’s regulations, because 

the petition was filed on March 30, 

2007, the proposed period of 

investigation for India, Japan and Korea 

is January 1, 2006 through December 31, 

2006, as this includes the four most 

recently completed fiscal quarters as of 

February 2007. 

Scope of the Investigations 

The merchandise covered by each of 

these three investigations is glycine, 

which in its solid (i.e., crystallized) form 

is a free–flowing crystalline material. 

Glycine is used as a sweetener/taste 

enhancer, buffering agent, reabsorbable 

amino acid, chemical intermediate, 

metal complexing agent, dietary 

supplement, and is used in certain 

pharmaceuticals. The scope of each of 

these investigations covers glycine in 

any form and purity level. Although 

glycine blended with other materials is 

not covered by the scope of each of 

these investigations, glycine to which 

relatively small quantities of other 

materials have been added is covered by 

the scope. Glycine’s chemical 

composition is C2H5NO2 and is 

normally classified under subheading 

2922.49.4020 of the Harmonized Tariff 

Schedule of the United States (HTSUS). 

The scope of each of these 

investigations also covers precursors of 

dried crystalline glycine, including, but 

not limited to, glycine slurry (i.e., 

glycine in a non–crystallized form) and 

sodium glycinate. Glycine slurry is 

classified under the same HTSUS 

subheading as crystallized glycine 

(2922.49.4020) and sodium glycinate is 

classified under subheading HTSUS 

2922.49.8000. 

While HTSUS subheadings are 

provided for convenience and Customs 

purposes, our written description of the 

scope of these investigations is 

dispositive. 

Comments on the Scope of the 

Investigations 

During our review of the Petitions, we 

discussed the scope with Petitioner to 

ensure that it is an accurate reflection of 

the products for which the domestic 

industry is seeking relief. Moreover, as 

discussed in the preamble to the 

regulations (Antidumping Duties; 

Countervailing Duties; Final Rule, 62 FR 

27296, 27323 (May 19, 1997)), we are 

setting aside a period for interested 

parties to raise issues regarding product 

coverage. The Department encourages 

all interested parties to submit such 

comments within 20 calendar days of 

the publication of this notice. 

Comments should be addressed to 

Import Administration’s Central 

Records Unit (CRU), Room 1870, U.S. 

Department of Commerce, 14th Street 

and Constitution Avenue, NW, 

Washington, DC 20230. The period of 

scope consultations is intended to 

provide the Department with ample 

opportunity to consider all comments 

and to consult with parties prior to the 

issuance of the preliminary 

determinations. 

Determination of Industry Support for 

the Petitions 

Section 732(b)(1) of the Act requires 

that a petition be filed by an interested 

party on behalf of the domestic 

industry. Section 732(c)(4)(A) of the Act 

provides that a petition meets this 

requirement if (1) the domestic 

producers or workers who support the 

petition account for at least 25 percent 

of the total production of the domestic 

like product and (2) the domestic 

producers or workers who support the 

petition account for more than 50 

percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for or opposition to the petition. 

Section 771(4)(A) of the Act defines 

the ‘‘industry’’ as the producers as a 

whole of a domestic like product. Thus, 

to determine whether the petition has 

the requisite industry support, the 

statute directs the Department to look to 

producers and workers who produce the 

domestic like product. The International 

Trade Commission (ITC) is responsible 

for determining whether ‘‘the domestic 

industry’’ has been injured and must 

also determine what constitutes a 

domestic like product in order to define 

the industry. While the Department and 

the ITC must apply the same statutory 

definition regarding the domestic like 

product, they do so for different 

purposes and pursuant to separate and 

distinct authority. See section 771(10) of 

the Act. In addition, the Department’s 

determination is subject to limitations of 

time and information. Although this 

may result in different definitions of the 

domestic like product, such differences 

do not render the decision of either 

agency contrary to law.1

Section 771(10) of the Act defines the 

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 under this title.’’ Thus, the 

reference point from which the 

domestic like product analysis begins is 

‘‘the article subject to an investigation,’’

i.e., the class or kind of merchandise to 

be investigated, which normally will be 

the scope as defined in the petition. 

With regard to domestic like product, 

Petitioner does not offer a definition of 

domestic like product distinct from the 

scope of each investigation. Based on 

our analysis of the information 

submitted in the petitions, we have 

determined that the domestic like 

product consists of all grades of glycine, 

as well as sodium glycinate, which is 

defined in the ‘‘Scope of the 

Investigations’’ section above, and we 

have analyzed industry support in terms 

of the domestic like product. 

We received no expression of 

opposition to these petitions from any 

member of the domestic industry. 

Petitioner accounts for a sufficient 

percentage of the total production of the 

domestic like product, and the 

requirements of section 732(c)(4)(A) are 

met. Accordingly, the Department 

determines that the Petitions were filed 

on behalf of the domestic industry 

within the meaning of section 732(b)(1) 

of the Act. See ‘‘Office of AD/CVD 

Operations Initiation Checklist for the 

Antidumping Duty Petition on Glycine 

from India,’’ at Attachment II (April 19, 

2007) (India AD Initiation Checklist), 

‘‘Office of AD/CVD Operations Initiation 

Checklist for the Antidumping Duty 

Petition on Glycine from Japan,’’ at 

Attachment II (April 19, 2007) (Japan 

AD Initiation Checklist), and ‘‘Office of 

AD/CVD Operations Initiation Checklist 

for the Antidumping Duty Petition on 

Glycine from Korea,’’ at Attachment II 

(April 19, 2007) (Korea AD Initiation 

Checklist), on file in the CRU. 


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Allegations and Evidence of Material 

Injury and Causation 

Petitioner alleges that the U.S. 

industry producing the domestic like 

product is materially injured, or is 

threatened with material injury, by 

reason of the individual and cumulated 

imports of the subject merchandise sold 

at less than normal value (NV). 

Petitioner contends that the industry’s 

injured condition is illustrated by the 

decline in customer base, market share, 

domestic shipments, prices, financial 

performance, and lost sales. We have 

assessed the allegations and supporting 

evidence regarding material injury and 

causation, and we have determined that 

these allegations are properly supported 

by adequate evidence and meet the 

statutory requirements for initiation. See 

the country–specific Initiation 

Checklists at Attachment III. 

Allegations of Sales at Less Than Fair 

Value 

The following is a description of the 

allegations of sales at less than fair value 

upon which the Department based its 

decision to initiate these investigations 

on imports of glycine from India, Japan, 

and Korea. The sources of data for the 

deductions and adjustments relating to 

the U.S. price as well as NV for India, 

Japan, and Korea are also discussed in 

the country–specific Initiation 

Checklists. Should the need arise to use 

any of this information as facts available 

under section 776 of the Act in our 

preliminary or final determinations, we 

will reexamine the information and 

revise the margin calculations, if 

appropriate. 

Export Price (EP) 

Petitioner calculated EP using 

information from sales the company lost 

to Indian, Japanese, and Korean 

exporters. When based on lost sale 

prices, Petitioner adjusted U.S. prices 

for home market inland freight, 

international freight, U.S. inland freight, 

distributor mark–up, and credit 

expenses. See Indian Petition at page 28, 

Japanese Petition at page 30, and Korean 

Petition at pages 31–32. 

Petitioner also calculated EP from 

Korea using the free–on-board (FOB) 

foreign–port average unit customs 

values (AUVs) for 2006 for import data 

obtained from the U.S. International 

Trade Commission data website. 

Petitioner used the HTSUS subheading 

under which all three grades of subject 

merchandise (pharmaceutical, technical, 

and food) are imported (2922.49.4020). 

Petitioner provided shipment data from 

PIERS Global Intelligence Services for 

the same HTSUS subheading to 

demonstrate that most entries of glycine 

from Korea during 2006 were of ‘‘pure 

food grade’’ glycine. See Volume II of 

the Petitions at Exhibit DOC–15. 

Petitioner made an adjustment to the 

AUV–based EP from Korea for foreign 

inland freight. 

Revisions to Export Price (EP) 

Based on our review of the 

information contained in the Petitions, 

we recalculated net EP (when based on 

a price quotation) by excluding an 

adjustment to EP for U.S. credit 

expenses. We also recalculated net EP 

(when based on a price quotation) by 

revising the reported amount associated 

with a distributor’s mark–up to reflect 

the percentage mark–up. Petitioner 

stated that this mark–up was an average 

mark–up for glycine sales in the United 

States. See Volume II of the Petitions at 

Exhibits DOC–27 through DOC–29; also 

April 13, 2007, Petition Supplement at 

Exhibits L, M, and N. See Initiation 

Checklists. 

Normal Value (NV) 

India and Japan 

Petitioner stated that, since it does not 

sell glycine in the Indian, Japanese, or 

Korean markets, it does not have 

specific knowledge of how glycine is 

sold, marketed, or packaged in those 

domestic markets. Petitioner was able to 

determine domestic Indian and Japanese 

prices for glycine by obtaining price 

quotations, through an economic 

consultant, from Indian and Japanese 

manufacturers of glycine. See 

memoranda ‘‘Telephone Call to Market 

Research Firm Regarding the 

Antidumping Petition on Glycine from 

India,’’ and ‘‘Telephone Call to Market 

Research Firm Regarding the 

Antidumping Petition on Glycine from 

Japan,’’ dated April 19, 2007. These 

price quotations identified specific 

terms of sale and payment terms. 

Petitioner made adjustments for home 

market credit for Indian sales. Petitioner 

did not make adjustment for home 

market credit to Japanese prices. See 

Volume II of the Petitions at Exhibits 

DOC–17–18 and 22–23. 

Revisions to Normal Value 

Based on our review of the 

information contained in the Petitions, 

we recalculated NV for India and Japan 

(when based on price quotations) by 

excluding the adjustment for home 

market and U.S. credit expenses. See 

India AD Initiation Checklist and Japan 

AD Initiation Checklist. 

Sales Below Cost Allegation for India 

and Japan 

Petitioner has provided information 

demonstrating reasonable grounds to 

believe or suspect that certain sales of 

glycine in India and Japan were made at 

prices below the fully absorbed cost of 

production (COP), within the meaning 

of section 773(b) of the Act, and has 

requested that the Department conduct 

country–wide sales below COP 

investigations. An allegation of sales 

below COP in a petition need not be 

specific to individual exporters or 

producers. See Statement of 

Administrative Action accompanying 

the Uruguay Round Agreements Act, 

H.R. Doc. No. 103–316, Vol. 1 (1994) at 

833. Thus, Commerce will consider 

allegations of below–cost sales in the 

aggregate for a foreign country. Id. 

Further, section 773(b)(2)(A) of the Act 

requires that the Department have 

‘‘reasonable grounds to believe or 

suspect’’ that below–cost sales have 

occurred before initiating such an 

investigation. Reasonable grounds exist 

when an interested party provides 

specific factual information on costs and 

prices, observed or constructed, 

indicating that sales in the foreign 

market in question are at below–cost 

prices. Id. 

As described in the section below on 

‘‘Cost of Production and Constructed 

Value,’’ the Department calculated a 

country–specific COP for a certain grade 

of glycine for India and Japan. Based 

upon a comparison of price quotations 

for sales of that same grade glycine in 

India and Japan and the country–

specific COP of the product, we find 

reasonable grounds to believe or suspect 

that sales of glycine in India and Japan 

were made below the COP, within the 

meaning of section 773(b)(2)(A)(i) of the 

Act. Accordingly, the Department is 

initiating country–wide cost 

investigations with regard to both India 

and Japan. Because it alleged sales 

below cost, pursuant to sections 

773(a)(4), 773(b) and 773(e) of the Act, 

Petitioner also based NV for Indian and 

Japanese sales of a certain grade glycine 

on constructed value (CV). 

Korea 

Petitioner claimed that, despite 

extensive efforts to determine prices in 

Korea, it was not able to obtain usable 

price information for calendar year 2006 

either for sales of glycine in Korea or for 

sales of glycine by Korean producers/ 

exporters in third countries. See e.g., 

Korean Petition at pages 27 and 35 and 

April 19, 2007; as well as Memorandum 

to File, ‘‘Telephone Call to Market 

Research Firm Regarding the 


rwilkins on PROD1PC63 with NOTICES
Federal Register / Vol. 72, No. 80 / Thursday, April 26, 2007 / Notices 20819 

Antidumping Petition on Glycine from 

Korea’’ (April 19, 2007). Consequently, 

Petitioner relied on COP and CV 

information in determining NV for 

Korea. See ‘‘Cost of Production and 

Constructed Value,’’ section below. 

Cost of Production and Constructed 

Value 

As noted above, Petitioner was unable 

to obtain usable price information for 

Korea; therefore, the appropriate basis 

for normal value for comparison to EP 

from Korea is CV. Also, as discussed 

above, Petitioner has established that 

certain sales of glycine in India and 

Japan were made at prices below the 

fully absorbed COP, within the meaning 

of section 773(b) of the Act. As such, CV 

was used for India and Japan when the 

home market prices for a certain grade 

glycine used in the cost comparisons 

fell below the COP. The calculation of 

COP and CV for each of the three 

countries is set forth below. 

India 

Pursuant to section 773(b)(3) of the 

Act, COP consists of the cost of 

manufacturing (COM); selling, general 

and administrative (SG&A) expenses; 

financial expenses; and packing 

expenses. To calculate the COM, 

Petitioner multiplied the usage quantity 

of each input needed to produce one 

metric ton (MT) of glycine by the value 

of that input. Petitioner obtained all of 

the quantity and value data it used to 

calculate the COM from public sources. 

Petitioner obtained the input usage 

factors from the public record of the 

1997–1998 administrative review of 

glycine from the People’s Republic of 

China (PRC). The producer in the 1997–

1998 review produced glycine by the 

same production method that producers 

in India use. The petitioner obtained the 

values for the inputs from various 

public sources. Petitioner calculated 

factory overhead, SG&A and the 

financial expense rate based on the 

Indian surrogate ratios that the 

Department used in the preliminary 

results of the 2005–2006 administrative 

review of glycine from the PRC. Where 

we used CV to determine NV, Petitioner 

added an amount for profit from the 

same financial statements. 

We adjusted Petitioner’s calculation 

of SG&A to apply the rate to COM 

inclusive of factory overhead. We did 

not include a separate financial expense 

amount as petitioner did because the 

SG&A ratio already included financial 

expense. See the India AD Initiation 

Checklist for a full description of 

Petitioner’s methodology and the 

adjustments the Department made to 

those calculations. 

Japan 

Pursuant to section 773(b)(3) of the 

Act, COP consists of COM; SG&A 

expenses; financial expenses; and 

packing expenses. To calculate the 

COM, Petitioner multiplied the usage 

quantity of each input needed to 

produce one MT of glycine by the value 

of that input. Petitioner obtained all of 

the quantity and value data it used to 

calculate the COM from public sources. 

As it did for the allegation involving 

India, Petitioner obtained the input 

usage factors from the public record of 

the 1997–1998 administrative review of 

glycine from the PRC. The producer in 

the 1997–1998 review produced glycine 

by the same production method that 

producers in Japan use. Petitioner 

obtained the values for the inputs from 

various public sources. Petitioner 

calculated average factory overhead, 

SG&A and the financial expense rate 

based on current financial statements of 

a Japanese producer of glycine. Where 

we used CV to determine NV, Petitioner 

added an amount for profit from the 

same financial statements. 

We adjusted Petitioner’s calculation 

of SG&A to apply the rate to COM 

inclusive of factory overhead. See Japan 

AD Initiation Checklist for a full 

description of Petitioner’s methodology 

and the adjustments the Department 

made to those calculations. 

Korea 

Petitioner calculated the Korean COP 

using the same methodology to calculate 

COM as it used for Japan and India. 

That is, Petitioner calculated the Korean 

COM by multiplying the usage quantity 

of each input needed to produce one 

MT of glycine by the value of that input. 

Petitioner obtained all of the quantity 

and value data it used to calculate the 

COM from public sources. Petitioner 

obtained the input usage factors from 

the public record of the 1997–1998 

administrative review of glycine from 

the PRC. The respondent in the 1997–

1998 Chinese review produced glycine 

by the same production method that 

producers in Korea use. Petitioner 

obtained the values for the inputs from 

various public sources. Petitioner 

calculated factory overhead, SG&A and 

the financial expense rate based on the 

financial statements of a Korean 

producer of lysine and threonine, amino 

acids which use production methods 

similar to glycine. Because Petitioner 

used CV for NV for Korea, it added an 

amount for profit in accordance with 

section 773(e)(2) of the Act. The profit 

rate was based on the financial 

statements of the same Korean producer 

of lysine and threonine. See Korea AD 

Initiation Checklist. 

We adjusted Petitioner’s calculated 

factory overhead to eliminate double 

counting of depreciation and 

amortization. We applied the SG&A rate 

to COM inclusive of factory overhead. 

We also adjusted Petitioner’s calculation 

of the financial expense ratio to include 

interest income as a reduction to 

financial expense. See Korea AD 

Initiation Checklist for a full description 

of Petitioner’s methodology and the 

adjustments the Department made to 

those calculations. 

Fair Value Comparisons 

Based on the data provided by 

Petitioner, and adjusted by the 

Department as described above, there is 

sufficient basis to find that imports of 

glycine from India, Japan, and Korea are 

being, or are likely to be, sold in the 

United States at less than fair value. 

Based on comparisons of EP to home 

market prices and CV in India and 

Japan, and to CV for Korea, which were 

calculated in accordance with section 

773(a)(4) of the Act, the dumping 

margins for glycine range from 5.67 to 

121.62 percent for India, 70.21 to 280.57 

percent for Japan, and 138.37 to 138.83 

for Korea. 

Initiation of Antidumping Duty 

Investigations 

Based upon the examination of the 

Petitions on glycine from India, Japan, 

and Korea, the Department finds that 

the Petitions meet the requirements of 

section 732 of the Act. Therefore, we are 

initiating antidumping duty 

investigations to determine whether 

imports of glycine from India, Japan, 

and Korea are being, or are likely to be, 

sold in the United States at less than fair 

value. In accordance with section 

733(b)(1)(A) of the Act, unless 

postponed, we will make our 

preliminary determinations no later 

than 140 days after the date of this 

initiation. 

Distribution of Copies of the Petitions 

In accordance with section 

732(b)(3)(A) of the Act, copies of the 

public versions of the Petitions have 

been provided to the representatives of 

the Governments of India, Japan, and 

Korea. We will attempt to provide a 

copy of the public version of the 

Petitions to the foreign producers/ 

exporters named in the Petitions. 

International Trade Commission 

Notification 

We have notified the International 

Trade Commission of our initiations, as 

required by section 732(d) of the Act. 


rwilkins on PROD1PC63 with NOTICES
20820 Federal Register / Vol. 72, No. 80 / Thursday, April 26, 2007 / Notices 

1Section A of the questionnaire requests general 

information concerning a company’s corporate 

structure and business practices, the merchandise 

under investigation that it sells, and the manner in 

which it sells that merchandise in all of its markets. 

Section B requests a complete listing of all home 

market sales, or, if the home market is not viable, 

of sales in the most appropriate third-country 

market (this section is not applicable to respondents 

in non-market economy (NME) cases). Section C 

requests a complete listing of U.S. sales. Section D 

requests information on the cost of production 

(COP) of the foreign like product and the 

constructed value (CV) of the merchandise under 

investigation.

Preliminary Determination by the 

International Trade Commission 

The International Trade Commission 

will preliminarily determine, no later 

than May 14, 2007, whether there is a 

reasonable indication that imports of 

glycine from India, Japan, and/or Korea 

are materially injuring, or threatening 

material injury to, a U.S. industry. A 

negative ITC determination with respect 

to any of the investigations will result 

in that investigation being terminated; 

otherwise, these investigations will 

proceed according to statutory and 

regulatory time limits. 

This notice is issued and published 

pursuant to section 777(i) of the Act. 

Dated: April 19, 2007. 

Joseph A. Spetrini, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–8017 Filed 4–25–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–357–818] 

Lemon Juice from Argentina: 

Preliminary Determination of Sales at 

Less Than Fair Value and Affirmative 

Preliminary Determination of Critical 

Circumstances 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: In response to a petition filed 

by Sunkist Growers, Inc. (Petitioner), 

the U.S. Department of Commerce (the 

Department) is conducting an 

antidumping duty investigation of sales 

to the United States of lemon juice from 

Argentina for the period July 1, 2005 

through June 30, 2006. See Notice of 

Initiation of Antidumping Duty 

Investigations: Lemon Juice from 

Argentina and Mexico, 71 FR 61710 

(October 19, 2006) (Initiation Notice). 

The Department preliminarily 

determines that lemon juice from 

Argentina is being, or is likely to be, 

sold in the United States at less than fair 

value (LTFV), as provided in section 

733(b) of the Tariff Act of 1930, as 

amended (the Act). The estimated 

margins of sales at LTFV are listed in 

the ‘‘Suspension of Liquidation’’ section 

of this notice. Moreover, we 

preliminarily determine that critical 

circumstances exist with regard to 

imports of lemon juice from Argentina. 

See the ‘‘Critical Circumstances’’ section 

below. Interested parties are invited to 

comment on this preliminary 

determination. 

EFFECTIVE DATE: April 26, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Mark Hoadley or Joshua Reitze, 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) 482–3148, or (202) 

482–0666, respectively. 

SUPPLEMENTARY INFORMATION: 

Case History 

This investigation was initiated on 

October 19, 2006. See Initiation Notice. 

Since the initiation of the investigation, 

the following events have occurred. On 

November 6, 2006, the United States 

International Trade Commission (ITC) 

preliminarily determined that there is a 

reasonable indication that imports of the 

products subject to this investigation are 

materially injuring an industry in the 

United States producing the domestic 

like product. See Lemon Juice from 

Argentina and Mexico, 71 FR 66795 

(November 16, 2006) (ITC Preliminary 

Determination). 

On November 7, 2006, the Department 

selected Citrusvil, S.A. (Citrusvil) and 

S.A. San Miguel A.G.I.C.y F. (San 

Miguel) as the respondents in this 

investigation. See ‘‘Respondent 

Selection’’ section below. On November 

7, 2006, the Department issued a letter 

providing interested parties an 

opportunity to comment on a proposed 

set of model–match criteria. We 

received comments in response to this 

letter from Petitioner, Citrusvil, and San 

Miguel on November 13, 2006. Based on 

our analysis of these submissions, we 

determined the appropriate model–

match characteristics. See Memorandum 

to Barbara E. Tillman, Director, Office 6, 

and Laurie Parkhill, Director, Office 5, 

‘‘Antidumping Duty Investigations of 

Lemon Juice from Argentina and 

Mexico: Selection of Model Matching 

Criteria’’ (November 20, 2006). 

The Department issued sections A - D 

of the questionnaire to Citrusvil and San 

Miguel on November 20, 2006.1

Citrusvil submitted its response to 

section A on December 18, 2007. 

Citrusvil submitted its response to 

sections B and C on January 17, 2007, 

and its section D response on January 

22, 2007. San Miguel submitted its 

response to section A on December 14, 

2006, responses to sections B and C on 

January 16, 2007, and its response to 

section D on March 12, 2007. 

On January 5, 2007, Petitioner 

submitted comments on Citrusvil’s 

section A response. The Department 

issued a supplemental section A 

questionnaire to Citrusvil on January 16, 

2007. We received Citrusvil’s 

supplemental section A response on 

January 26, 2007. On January 31, 2007, 

Petitioner submitted a German–specific, 

sales–below-cost allegation. Citrusvil 

did not rebut this allegation. On 

February 1, 2007, we issued a 

supplemental section D questionnaire to 

Citrusvil, to which Citrusvil responded 

on February 23, 2007. On February 9, 

2007, and again on March 6, 2007, 

Petitioner submitted comments on 

Citrusvil’s section D response. On 

January 30, 2007, Petitioner submitted 

comments on Citrusvil’s section B and 

C response. The Department issued a 

supplemental section B and C 

questionnaire to Citrusvil on February 5, 

2007. We received Citrusvil’s 

supplemental section B and C response 

on March 9, 2007. Citrusvil submitted 

corrections to its section B and C 

response on April 4, 2007. On February 

9, 2007, Petitioner submitted comments 

concerning possible affiliation issues 

between Citrusvil and its German sales 

agent. On February 16, 2007, the 

Department sent a general supplemental 

questionnaire to Citrusvil, to which 

Citrusvil responded on March 12, 2007. 

On March 15, we sent Citrusvil a second 

supplemental section D questionnaire, 

to which Citrusvil responded on April 

5, 2007. On March 23, 2007, we sent 

Citrusvil a request for additional sales 

information, to which Citrusvil partially 

responded on April 9, 2007. 

Petitioner submitted its comments on 

San Miguel’s section A response on 

January 29, 2007. On January 12, 2007, 

the Department issued a supplemental 

section A questionnaire to San Miguel. 

Petitioner filed a sales–below-cost 

allegation on January 24, 2007 with 

respect to San Miguel’s sales in 

Argentina. On February 23, 2007, 

Petitioner submitted comments to San 

Miguel’s section B and C response. The 

Department issued a supplemental 

section A to San Miguel on January 16, 

2007, supplemental sections B and C on 

January 31, 2007, and a supplemental 

section D on March 16, 2007. San 

Miguel responded to the supplemental 

section A on January 23, 2007, 

supplemental sections B and C on 


rwilkins on PROD1PC63 with NOTICES

B-1

APPENDIX B

CONFERENCE WITNESSES

Contain Business Proprietary Information

CALENDAR OF THE PUBLIC CONFERENCE

Those listed below appeared as witnesses at the United States International Trade Commission’s

conference held in connection with the following investigations:

Subject: Glycine from India, Japan, and Korea

Inv. No.: 731-TA-1111-1113 (Preliminary)

Date and Time: April 20, 2007 - 9:30 a.m.

Sessions took place in the Commission’s Main Hearing (Room 101), 500 E Street, SW,

Washington, D.C.

OPENING REMARKS:

Petitioner (Greg Husisian, Thompson Hine, LLC)

IN SUPPORT OF THE IMPOSITION OF ANTIDUMPING DUTIES:

Thompson Hine, LLC

Washington, DC

on behalf of GEO Specialty Chemicals, Inc. (“GEO”)

Bill Eckman, Chief Financial Officer, GEO

Judy Jackson, Sales Representative, GEO

John Reilly, Economist, Nathan Associates

David Schwartz )

Greg Husisian ) – OF COUNSEL

Jason Hungerford )

Jennifer Stein )

Chattem Chemicals, Inc. (“Chattem”)

Jim Kedrowski, VP Sales and Marketing, Chattem

IN OPPOSITION TO THE IMPOSITION OF ANTIDUMPING DUTIES:

CAF International, Inc. (“CAF”)

Chris Frey, President, CAF

CLOSING REMARKS:

Petitioner (Greg Husisian, Thompson Hine, LLC)

Respondents (Chris Frey, President, CAF)

Contains Confidential Business Information

C-1

APPENDIX C

SUMMARY DATA

Contains Business Proprietary Information

Table C-1

Glycine: Summary data concerning the U.S. market, 2004-06

(Quantity=1,000 pounds, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per pound; 

period changes=percent, except where noted)

Reported data Period changes

Item 2004 2005 2006 2004-06 2004-05 2005-06

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . . . *** *** *** *** *** ***

 Importers' share (1):

 India . . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Japan . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Korea . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 All other sources . . . . . . . . . . . . *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . . *** *** *** *** *** ***

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . . . *** *** *** *** *** ***

 Importers' share (1):

 India . . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Japan . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Korea . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 All other sources . . . . . . . . . . . . *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . . *** *** *** *** *** ***

U.S. imports from:

 India:

 Quantity . . . . . . . . . . . . . . . . . . 1,133 2,555 2,668 135.5 125.5 4.4

 Value . . . . . . . . . . . . . . . . . . . . 1,800 3,679 3,547 97.1 104.4 -3.6

 Unit value . . . . . . . . . . . . . . . . . $1.59 $1.44 $1.33 -16.3 -9.4 -7.7

 Ending inventory quantity . . . . . *** *** *** *** *** ***

 Japan:

 Quantity . . . . . . . . . . . . . . . . . . 989 2,080 2,610 163.9 110.3 25.5

 Value . . . . . . . . . . . . . . . . . . . . 1,253 2,852 3,334 166.1 127.6 16.9

 Unit value . . . . . . . . . . . . . . . . . $1.27 $1.37 $1.28 0.8 8.2 -6.8

 Ending inventory quantity . . . . . *** *** *** *** *** ***

 Korea:

 Quantity . . . . . . . . . . . . . . . . . . 1,060 992 1,124 6.0 -6.4 13.3

 Value . . . . . . . . . . . . . . . . . . . . 1,107 1,278 1,300 17.4 15.4 1.7

 Unit value . . . . . . . . . . . . . . . . . $1.04 $1.29 $1.16 10.7 23.4 -10.2

 Ending inventory quantity . . . . . *** *** *** *** *** ***

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . . . 3,182 5,627 6,402 101.2 76.8 13.8

 Value . . . . . . . . . . . . . . . . . . . . 4,160 7,809 8,181 96.7 87.7 4.8

 Unit value . . . . . . . . . . . . . . . . . $1.31 $1.39 $1.28 -2.3 6.2 -7.9

 Ending inventory quantity . . . . . *** *** *** *** *** ***

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . 2,049 2,241 2,570 25.4 9.4 14.7

 Value . . . . . . . . . . . . . . . . . . . . 3,036 3,186 3,534 16.4 4.9 10.9

 Unit value . . . . . . . . . . . . . . . . . $1.48 $1.42 $1.38 -7.2 -4.1 -3.3

 Ending inventory quantity . . . . . *** *** *** *** *** ***

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . 5,231 7,868 8,972 71.5 50.4 14.0

 Value . . . . . . . . . . . . . . . . . . . . 7,196 10,995 11,715 62.8 52.8 6.5

 Unit value . . . . . . . . . . . . . . . . . $1.38 $1.40 $1.31 -5.1 1.6 -6.6

 Ending inventory quantity . . . . . *** *** *** *** *** ***

Table continued on next page.

C-3
Contains Business Proprietary Information

Table C-1--Continued

Glycine: Summary data concerning the U.S. market, 2004-06

(Quantity=1,000 pounds, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per pound; 

period changes=percent, except where noted)

Reported data Period changes

Item 2004 2005 2006 2004-06 2004-05 2005-06

U.S. producers':

 Average capacity quantity . . . . . *** *** *** *** *** ***

 Production quantity . . . . . . . . . . . *** *** *** *** *** ***

 Capacity utilization (1) . . . . . . . . *** *** *** *** *** ***

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Ending inventory quantity . . . . . . *** *** *** *** *** ***

 Inventories/total shipments (1) . . *** *** *** *** *** ***

 Production workers . . . . . . . . . . *** *** *** *** *** ***

 Hours worked (1,000s) . . . . . . . . *** *** *** *** *** ***

 Wages paid ($1,000) . . . . . . . . . *** *** *** *** *** ***

 Hourly wages . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Productivity (pounds per hour) . . *** *** *** *** *** ***

 Unit labor costs . . . . . . . . . . . . . . *** *** *** *** *** ***

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Cost of goods sold (COGS) . . . . *** *** *** *** *** ***

 Gross profit or (loss) . . . . . . . . . . *** *** *** *** *** ***

 SG&A expenses . . . . . . . . . . . . . *** *** *** *** *** ***

 Operating income or (loss) . . . . . *** *** *** *** *** ***

 Capital expenditures . . . . . . . . . *** *** *** *** *** ***

 Unit COGS . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 Unit SG&A expenses . . . . . . . . . *** *** *** *** *** ***

 Unit operating income or (loss) . *** *** *** *** *** ***

 COGS/sales (1) . . . . . . . . . . . . . *** *** *** *** *** ***

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***

 (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 statistics of the U.S. Department of Commerce.

C-4