U.S. International Trade Commission

Publication 4108 November 2009

Washington, DC 20436

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

Presses from China and Indonesia

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

COMMISSIONERS

Shara L. Aranoff, Chairman

Daniel R. Pearson, Vice Chairman

Deanna Tanner Okun

Charlotte R. Lane

Irving A. Williamson

Dean A. Pinkert

Staff assigned

Address all communications to

Secretary to the Commission

United States International Trade Commission

Washington, DC 20436

Robert A. Rogowsky

Director of Operations

Christopher Cassise, Senior Investigator

Vincent Honnold, Industry Analyst

Nancy Bryan, Economist

David Boyland, Accountant

Gracemary Roth-Roffy, Attorney

Steve Hudgens, Senior Statistician

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

Washington, DC 20436

www.usitc.gov

Publication 4108 November 2009

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

Presses from China and Indonesia

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

i

C O N T E N T S

Page

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

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

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

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

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-4

Nature of alleged countervailable subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

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

The subject product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

Physical characteristics and uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9

Manufacturing processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12

Intermediate products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14

Sheeter rolls vs. Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14

Domestic like product issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-16

Certain coated paper vs. web rolls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-16

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

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

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Supply and demand considerations ................................................ II-3

Supply ................................................................... II-3

Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-5

Substitute products ......................................................... II-7

Substitutability issues .......................................................... II-7

Comparison of domestic product and subject imports ............................... II-8

Nonsubject country comparisons ............................................... II-10

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

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

U.S. capacity, production, and capacity utilization ................................... III-3

U.S. integrated producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-3

U.S. converters ............................................................ III-5

U.S. producers’ U.S. shipments and export shipments ................................. III-5

U.S. integrated producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-5

U.S. converters ............................................................ III-7

U.S. producers’ imports and purchases of imports .................................... III-7

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-7

U.S. employment, wages, and productivity ......................................... III-8
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Part IV: U.S. imports, apparent consumption, and market shares . . . . . . . . . . . . . . . . . . . . . . IV-1

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

U.S. imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

Missclassification issue regarding U.S. imports from Indonesia . . . . . . . . . . . . . . . . . . . . . . . IV-4

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

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

Apparent U.S. consumption and market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-8

Ratio of imports to U.S. production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-11

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

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

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

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

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Pricing methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

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

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

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

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

Lost sales and lost revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-10

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

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

Operations on certain coated paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Capital expenditures, research and development expenses, assets, and return on investment . . . VI-7

Capital and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-7

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

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

The industry in Indonesia ....................................................... VII-4

 U.S. importers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-5

U.S. importers’ current orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-5

Antidumping and countervailing duty orders in third-country markets .................... VII-5

Information on producers in nonsubject countries .................................... VII-6

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-6

Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-7

Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-8

Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-9
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Appendixes

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

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

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

D. Prices of nonsubject imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1

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

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

 1

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

1

UNITED STATES INTERNATIONAL TRADE COMMISSION

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

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

DETERMINATIONS

On the basis of the record1

 developed in the subject investigations, the United States International

Trade Commission (Commission) determines, pursuant to sections 703(a) and 733(a) of the Tariff Act of

1930 (19 U.S.C. §§ 1671b(a) and 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 and Indonesia of certain coated

paper suitable for high-quality print graphics using sheet-fed presses (“certain coated paper”), provided

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

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

4810.29.60, and 4810.29.70 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) and subsidized by the Governments of China and

Indonesia.

COMMENCEMENT OF FINAL PHASE INVESTIGATIONS

Pursuant to section 207.18 of the Commission’s rules, the Commission also gives notice of the

commencement of the final phase of its investigations. 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 affirmative

preliminary determinations in the investigations under sections 703(b) or 733(b) of the Act, or, if the

preliminary determinations are negative, upon notice of affirmative final determinations in those

investigations under sections 705(a) or 735(a) of the Act. Parties that filed entries of appearance in the

preliminary phase of the investigations need not enter a separate appearance for the final phase of the

investigations. 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 investigations.

BACKGROUND

On September 23, 2009, a petition was filed with the Commission and Commerce by Appleton

Coated, LLC, Kimberly, WI; NewPage Corp., Miamisburg, OH; Sappi Fine Paper North America,

Boston, MA; and the United Steel, Paper and Forestry, Rubber Manufacturing, Energy, Allied Industrial

and Service Workers International Union (“USW”), alleging that an industry in the United States is

materially injured or threatened with material injury by reason of LTFV and subsidized imports of certain

coated paper from China and Indonesia. Accordingly, effective September 23, 2009, the Commission

instituted countervailing duty investigation Nos. 701-TA-470-471 and antidumping duty investigation

Nos. 731-TA-1169-1170 (Preliminary).
2

Notice of the institution of the Commission’s investigations 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 September 30, 2009 (74 FR 50243). The conference was held in Washington, DC, on October 14,

2009, and all persons who requested the opportunity were permitted to appear in person or by counsel.
 1

 19 U.S.C. §§ 1671b(a), 1673b(a) (2000); see also American Lamb Co. v. United States, 785 F.2d 994, 1001-04

(Fed. Cir. 1986); Aristech Chem. Corp. v. United States, 20 CIT 353, 354-55 (1996). 

 2

 American Lamb Co., 785 F.2d at 1001; see also Texas Crushed Stone Co. v. United States, 35 F.3d 1535, 1543

(Fed. Cir. 1994).

 3

 Confidential Report (“CR”) and Public Report (“PR”) at III-1.

 4

 CR/PR at VII-2.

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 imports of

certain coated paper from China that are allegedly sold in the United States at less than fair value and

allegedly subsidized by the Government of China and by reason of imports of certain coated paper from

Indonesia that are allegedly sold in the United States at less than fair value and allegedly subsidized by

the Government of Indonesia. 

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 or

threatened with material injury, or that 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

Parties to the Proceeding. The petition in these investigations was filed on September 23, 2009,

by domestic producers Appleton Coated, LLC (“Appleton”); NewPage Corporation (“NewPage”); S.D.

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

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

Union (“collectively “Petitioners”). Petitioners appeared at the staff conference and filed a joint

postconference brief. 

Several respondents appeared at the preliminary staff conference and submitted a joint

postconference brief. A group of importers of subject merchandise, Gold East Paper (Jiangsu) Co., Ltd;

Gold Huasheng Paper Co., Ltd.; PT Pindo Deli Pump and Paper Mills’ and PT Pabrick Kertas Tjimi

Kimia Tbk (collectively “Respondents”), participated in the staff conference through company officials

and/or counsel. 

Data Coverage. The Commission received responses from six U.S. integrated producers of

certain coated paper which account for virtually all U.S. production of certain coated paper in 2008. The

Commission also received responses from four U.S. converters that are estimated to account for 15.1

percent of U.S. conversion activities in 2008.3

 The Commission received responses from three Chinese

producers that account for approximately *** percent of production of certain coated paper in China in

2008 and the vast majority of Chinese exports of certain coated paper to the United States.4

 The

Commission received responses from three producers of certain coated paper in Indonesia that account for
 5

 CR at VII-7, PR at VII-4.

 6

 19 U.S.C. § 1677(4)(A).

 7 19 U.S.C. § 1677(4)(A).

 8

 19 U.S.C. § 1677(10).

 9

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

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

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

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

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

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

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

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

Trade 1996).

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

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

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

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

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

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

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

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

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

4

approximately *** percent of production of certain coated paper in Indonesia in 2008 and all of the

Indonesian exports to the United States during the period of investigation.5

 

III. DOMESTIC LIKE PRODUCT

A. In General

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

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

“domestic like product” and the “industry.”6

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

(“the Tariff Act”), defines the relevant domestic industry as the “producers as a {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.”7

 In turn, the Tariff Act defines “domestic like

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

with, the article subject to an investigation ... .”8

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.9

 No single factor is dispositive, and the Commission

may consider other factors it deems relevant based on the facts of a particular investigation.10 The

Commission looks for clear dividing lines among possible like products and disregards minor variations.11

Although the Commission must accept the U.S. Department of Commerce’s (“Commerce”) 

determination as to the scope of the imported merchandise that is subsidized or sold at less than fair value

(“LTFV”),12 the Commission determines what domestic product is like the imported articles Commerce
 13 Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (the Commission may find a

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

n.1 (“Commerce’s {scope} finding does not control the Commission’s {like product} determination.”); Torrington,

747 F. Supp. at 748-52 (affirming the Commission’s determination defining six like products in investigations where

Commerce found five classes or kinds).

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

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

Trade 1988).

 15 CR/PR at I-8. As of 2009, imports of the subject merchandise are provided for under the following statistical

categories of the HTSUS: 4810.14.1100, 4810.14.1900, 4810.14.2010, 4810.14.2090, 4810.14.5000, 4810.14.6000,

4810.14.7000, 4810.19.1100, 4810.19.1900, 4810.19.2010, 4810.19.2090, 4810.22.1000, 4810.22.5000,

4810.22.6000, 4810.22.7000, 4810.29.1000, 4810.29.5000, 4810.29.6000, 4810.29.7000. CR at I-8.

 16 CR at I-11, I-12, PR at I-9-10. 

 17 CR at I-12, PR at I-10.

 18 CR at I-8, I-11, I-12, PR at I-7, I-9, I-10.

5

has identified.13 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 domestic

like product issues.14

B. Product Description

In its notices of initiation, Commerce defined the imported merchandise within the scope of these

investigations as follows: 

Certain coated paper and paperboard in sheets suitable for high quality print

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

clay), calcium carbonate, titanium dioxide, and/or other inorganic substances; with or

without a binder; having a GE brightness level of 80 or higher; weighing not more than

340 grams per square meter; whether gloss grade, satin grade, matte grade, dull grade, or

any other grade of finish; whether or not surface-colored, surface-decorated, printed

(except as described below), embossed, or perforated; and irrespective of dimensions

(“Certain Coated Paper”). 

Certain Coated Paper includes: (a) coated free sheet paper that meets this scope

definition; (b) coated groundwood paper produced from bleached chemi-thermomechanical pulp (“BCTMP”) that meets this scope definition; and (c) any other coated

paper that meets this scope definition.15

In general, certain coated paper is made from a coated free sheet paper which has been sheeted

(cut) in certain sheet sizes from sheeter rolls by integrated paper producers or independent converters for

use in sheet-fed presses.16 Certain coated paper’s high moisture content, high porosity, and mechanical

properties (such as flatness) allow it to be run through a sheet fed press without curling or losing print and

color fidelity.17 Typically, certain coated paper is used for printing multi-colored graphics catalogues,

books, magazines, envelopes, labels and wraps, greeting cards, and other commercial printing

applications requiring high quality print graphics.18 
 19 Petition at 16, Petitioners’ Postconference Brief, Answer to Question 9 at 2. 

 20 CR at I-8 n.13, PR at I-6 n.13.

 21 Coated Free Sheet Paper from China, Indonesia, and Korea, Inv. Nos, 701-TA-444-446 and 731-TA-1107-1109

(Final), USITC Pub. 3965 (Dec. 2007) (“2007 CFS investigations”).

 22 The Commission’s findings in prior investigations involving certain coated paper do not bind the Commission

here, as all Commission investigations are sui generis. As intended by Congress, the Commission make its

determinations based on the record of each case, including the arguments made by the parties. See Nippon Steel

Corp. v. United States, 19 CIT 450, 454-55 (1995); Citrosuco Paulista, S.A. v. United States, 704 F. Supp.

1075,1087-88 (CIT 1988); Asociacion Colombiana de Exportadores de Flores v. United States, 693 F. Supp. 1165,

1169 n.5 (1988). Ranchers-Cattlemen Action Legal Foundation v. United States, 74 F. Supp. 2d 1353, 1379 (Ct.

Int’l Trade 1999) (Commission determinations are sui generis; “‘a particular circumstance in a prior investigation

cannot be regarded by the Commission as dispositive of the determination in a later investigation,’” quoting

Citrosuco quoting Armstrong Bros. Tool Co. v. United States, 84 Cust. Ct. 102, 115, 489 F. Supp. 269, 279 (1980);

Polyethylene Retail Carrier Bags from Indonesia, Taiwan, and Vietnam, Inv. Nos. 701-TA-462 (Preliminary) and

731-TA-1156-1158 (Preliminary), USITC Pub. 4080 (May 2009) at 6 (rejecting the parties’ characterization of its

like production definition as a “reconsideration” of a like product definition involving the same product in an earlier

determination). Id.

 23 Coated Free Sheet Paper From China, Indonesia, and Korea, Inv. Nos. 701-TA-444-446 and 731-TA-1109

(Preliminary), USITC Pub. 3900 at 6-7 (Dec. 2006).

6

Notably, the scope in these investigations now differs from the scope set forth in the petition. 

The petition had included sheeter rolls, an upstream product, within the scope. A relatively small portion

of sheeter rolls is sold in the merchant market to unrelated converters who cut the rolls into sheet form.19

In its initiation of the investigations, Commerce removed sheeter rolls from the definition of the scope.20

C. Prior Commission Determinations

The product at issue in these investigations is a subset of paper products examined by the

Commission in Coated Free Sheet Paper From China, Indonesia, and Korea.

21 In the 2007 CFS

investigations, Commerce’s scope included sheets, sheeter rolls and web rolls.22 In its determination, the

Commission examined whether the domestic like product definition should include other types of graphic

paper but defined the domestic like product as corresponding to the scope. In so doing, the Commission

noted that no party in the investigations had advocated defining the domestic like product other than as a

single like product that is coextensive with the scope. It found that clear dividing lines in terms of

physical characteristics and uses, interchangeability, customer and producer perceptions, and price

distinguished CFS from other forms of graphic papers.23 The Commission reached negative

determinations in the 2007 investigations, notably in part due to the attenuated competition between web

rolls (which constituted most of domestic production) and sheets (which constituted most of the subject

imports). 
 24 Petitioners included both coated paper in sheet and sheeter rolls in their proposed scope language, and argued

that the Commission should define the domestic like product to include coated paper sheet and sheeter rolls as one

domestic like product. Commerce removed sheeter rolls from the scope. Petitioners do not object to a domestic like

product that includes sheeter rolls for purposes of these preliminary investigations but stated that “they reserve the

right to reconsider the issue in the final investigations given the Department’s rejection of use language that

previously included sheeter rolls in the scope of the investigation.” Petitioners’ Postconference Brief, Question 7 at

1, n.1. They do, however, object to the inclusion of web rolls (rolls of coated free sheet paper used in web roll

presses) in the definition of domestic like product and argue that certain coated paper and web rolls are distinct

products. Petitioners’ Postconference Brief at 4-15. 

 Respondents argue that, although the scope differs from that of the 2007 CFS investigations, the

Commission should again find a single domestic like product consisting of certain coated paper in sheet, sheeter

rolls, and web roll form. Respondents’ Postconference Brief at 5-10, Exhibit 1. 

 25 E.g., Glycine from India, Japan, and Korea, Inv. Nos. 731-TA-1111-1113 (Preliminary), USITC Pub. 3921

(May 2007) at 7; 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. 

7

D. Domestic Like Product Analysis

1. Domestic Like Product Issues

We consider whether the domestic like product should be broadened beyond Commerce’s scope

to include sheeter rolls as well as sheet, or sheeter rolls and web rolls together with sheet.24 For the

reasons discussed below, for purposes of these preliminary phase investigations, we define the domestic

like product as broader than the scope to include all domestically produced coated paper sheets and

sheeter rolls, but not to include web rolls. 

2. Whether the domestic like product should be defined to include all coated

paper sheets and sheeter rolls 

Sheeter rolls are an upstream product which is slit or sheeted into various sheet sizes by

integrated producers or independent converters. In addressing whether sheeter rolls should be included in

the definition of the domestic like product, Petitioners contend that the Commission should use the semifinished product analysis as sheeter rolls are a semi-finished product intended for further processing into

finished sheet product. Respondents do not expressly address the discrete issue of expanding the

definition of domestic like product to include sheeter rolls, although they advocate a like product

definition that would include sheeter rolls as well as sheet and web rolls. 

When an issue arises as to whether products at different stages of production should be included

in the same domestic like product, the Commission has employed a five-factor semi-finished product

analysis. In a semi-finished product analysis, the Commission currently examines the following: (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.25 The Commission has used
 26 See, e.g., Generic Cephalexin Capsules from Canada, Inv. No. 731-TA-423 (Final), USITC Pub. 2211 (August

1989).

 27 CR at I-18, PR at I-14. We note that Respondents provided anecdotal evidence that sheeter rolls could be used

in web roll presses. Transcript at 186 (Hunley). 

 28 CR at I-18, PR at I-14.

 29 Petitioners’ Postconference Brief at Answer to Question 7 at 2. 

 30 CR at I-18, PR at I-18.

 31 Petitioners’ Postconference Brief at Answer to Question 7 at 2.

 32 CR at I-19, PR at I-15.

 33 Petition at 15.

 34 CR at I-19 n.9, VI-14, I-15.

 35 CR at I-16-I-1, PR at I-13.

8

these factors to consider whether to expand the like product to include an article “upstream” in the

production process from the like product.26 

Dedicated production. Sheeter rolls are an intermediate product dedicated to the production of

coated paper sheets, with no other warranted uses.27 *** reported that all sheeter rolls are dedicated to the

production of the downstream product, certain coated paper.28

Separate markets. The vast majority of sheeter rolls is converted by integrated producers into

certain coated paper and only a small portion is sold in the merchant market to unrelated converters who

sheet the rolls into sheet form.29 Eight of 10 reporting U.S. producers (integrated producers and

converters) and 10 of 12 U.S. importers state that the market for sheeter rolls and the market for certain

coated paper are the same market.30

Differences in characteristics and functions. There are no significant differences in physical

characteristics and functions for the upstream and downstream articles. Petitioners report that the

performance characteristics of certain coated paper in sheet or sheeter roll form are established by the

production of certain coated paper and remain unchanged from sheeter roll to cutting into sheets (the

finished product). As such, certain coated paper, whether in sheet or sheeter roll form, possesses the same

essential characteristics, including fiber content, weight, and coating.31 Additionally, in their

questionnaire responses, eight of 10 reporting U.S. producers (integrated and converters) and 11 of 12

reporting importers agreed that there were no differences in physical characteristics between the two

products.32

Differences in costs or value. Petitioners note that while there is some difference in the prices of

the two products, a large proportion of the cost of production and the value of the downstream product is

already present in the semi-finished product, the sheeter roll.33 According to questionnaire responses of

three non-tolling U.S. converters, converting operations accounted for an average *** percent of the cost

to produce certain coated paper, excluding selling, general, and administrative costs.34

Significance of transformation. The transformation of sheeter rolls into the finished product

entails one additional production step, the sheeting or cutting of the sheeter roll into sheets.35

Conclusion. We define the domestic like product to include sheeter rolls for purposes of the

preliminary phase of these investigations. Virtually all sheeter rolls are used in the production of certain

coated paper, and there is at most a small market for sheeter rolls. Sheeter rolls represent a substantial

proportion of the cost and value of the finished product and undergo only one other production step

before transformation into certain coated paper. 
 36 CR at I-12, PR at I-10-11. Transcript at 28 (Miller).

 37 CR at I-12-13, PR at I-10-11.

 38 CR at I-11-13, PR at I-10-11.

 39 Transcript at 63 (Graff).

 40 Transcript at 16 (Dorn), 30 (Miller).

 41 Transcript at 82-83 (Graff).

 42 Transcript at 16 (Dorn). 

 43 Transcript at 29-30 (Miller), 84 (Sandstrom). 

 44 Transcript at 56-57 (Graff)

 45 Transcript at 28-29 (Miller).

 46 Transcript at 29-30 (Miller), 81-84 (Graff), 85 (Nelson), 186 (Hunley).

 47 Transcript at 81-84 (Graff).

 48 Transcript at 30 (Miller), 81-82 (Graff). 

9

3. Whether the definition of domestic like product should be expanded

beyond the scope to include web rolls 

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

printing machines designed to handle high volume printing runs at high speeds.36 Unlike sheeter rolls,

web rolls undergo no further processing prior to use in web presses.37 

 As noted above, Petitioners argue that application of the Commission’s traditional six factor test

shows that there is a clear dividing line between certain coated paper and web rolls. As noted above,

Respondents contend that the Commission should define the domestic like product to include coated

paper in sheet, sheeter roll, and web roll form. Our analysis of the six criteria is presented below. 

Consistent with our determination to include sheeter rolls in the definition of domestic like product, the

references to “certain coated paper” include both sheet and sheeter rolls. 

Physical Characteristics and Uses. Certain coated paper and web rolls are forms of coated free

sheet paper and are both used in printing applications.38 As such, they share many of the same physical

characteristics. Nevertheless, the record indicates that each product is produced to meet the requirements

of the particular press in which it is used. 

Certain coated paper is cut into sheet for use in a sheet fed press, which prints one sheet and on

one side of the sheet at a time.39 Sheets have high moisture levels to prevent the paper from curling and to

eliminate the build-up of static charges that cause paper jams in sheet fed presses.40 Certain coated paper

is less porous than web rolls to accommodate high tack inks used in sheet fed presses.41 As Petitioners’

witnesses testified, certain coated paper also must have certain mechanical properties, such as flatness

(meaning no waves in the paper) and stability, which permit the optimal running of the sheet fed press.42 

In contrast, web rolls are produced and sold in roll form, and are intended for use in web

presses.43 Web presses are large print machines designed to handle high volume print runs at high

speeds.44 Consequently, web rolls hold a substantial amount of paper; a single web roll may weigh

between one and five tons.45 Web rolls have a lower moisture content and higher porosity than certain

coated paper which permit the web roll to withstand the heat setting of the web press (usually 300

degrees) and not blister.46 Witnesses testified that certain coated paper is typically not suitable for web

roll usage due to temperature requirements for heat set web printing, as the paper would blister and fail.47

Web rolls also tend to be lighter in weight and thinner than certain coated paper and, as such, can move

through the web press at high speeds.48

Interchangeability. There appears to be limited interchangeability between certain coated paper

and web rolls. Web rolls cannot be used in sheet-fed presses, and certain coated paper (in finished sheet
 49 Transcript at 17 (Dorn).

 50 Transcript at 16 (Dorn), 30 (Miller), 82-83 (Graff), 85 (Nelson).

 51 Transcript at 50 (Crew).

 52 Transcript at 186 (Hunley), CR at I-22.

 53 Transcript at 188 (Hunley).

 54 CR at I-14-16, PR at I-12-I-13.

 55 CR at I-15-16, PR at I-13.

 56 CR at I-24, PR at I-18.

 57 Petitioners’ Postconference Brief at 15.

 58 Respondents’ Postconference Brief Ex. 1 at 25. 

 59 CR at I-24, PR at I-19.

10

form) cannot be used in web presses.49 Although certain coated paper in sheeter rolls in theory may be

used in web presses, according to witness testimony, web rolls’ lower moisture content and more porous

surface make them more suitable for web-fed presses.50 As sheeter rolls do not share these physical

characteristics, producers will not warrant their use for web presses.51 Although one of the Respondents

testified that sheeter rolls may be substituted for web rolls in web presses, it is rarely done.52 Indeed,

Respondents also testified that for printers with dual printing capability (sheet fed and web presses),

certain coated paper is used in the sheet press while web rolls are used in web presses.53

Common Manufacturing Facilities, Production Processes, and Production Employees. Although

certain adjustments are made to the manufacturing equipment and process in order to produce the

necessary physical and mechanical properties associated with each product, both certain coated paper and

web rolls generally are manufactured on the same equipment, by the same processes and with some of the

same employees.54 The record also shows that certain coated paper requires an additional production

step, sheeting, before it is a finished product. As such, the sheeting operations are either done on a

sheeting machine at the integrated producer’s mill or at the facilities of independent converters.55 

Channels of distribution. According to questionnaire responses, five of nine U.S. producers and

11 out of 14 U.S. importers reported that the channels of distribution for the two products were the

same.56 

Price. Petitioners maintain that certain coated paper “costs more to produce, has a higher value,

and carries a higher price in the market than web rolls.”57 Respondents maintain there is a minor price

difference of less than $10 per ton, which is in line with the difference in production costs for web rolls

and sheeter rolls.58 In 2008, the average unit value of U.S. shipments of certain coated paper from U.S.

integrated producers was $1,193 per ton, compared to $897 per ton for web rolls. 59 

Conclusion. On balance, the record supports a finding of a clear dividing line between certain

coated paper and web rolls, as there are more differences than similarities. Although both products are

considered to be coated free sheet paper and are used in similar printing applications, each product is

produced to meet distinct requirements of particular printing presses. As result, there is at best limited

interchangeability between the products. The products are reported to be sold in the same channels of

distribution, and both certain coated paper and web rolls generally are manufactured on the same

equipment, by the same processes and with some of the same employees. However, certain coated paper

requires an additional production step of sheeting before it is a finished product. As such, the sheeter

operations are either done on a sheeter at the integrated producers’ mill or at the facilities of independent

converters. Finally, certain coated paper is higher priced than web rolls. Taking all of these factors into

account, we do not include web rolls in the definition of the domestic like product. 

For the reasons discussed above, we define the domestic like product as certain coated paper,

broader than the scope of the investigation in that it includes sheeter rolls (but does not include web rolls). 
 60 19 U.S.C. § 1677(4)(A).

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

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

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

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

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

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

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

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

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

 62 Petitioners’ Postconference Brief at Answer to Staff Question 9 at 1-3.

 63 Transcript at 190 (Porter).

 64 CR/PR at Table VI-5. By contrast, the asset value of U.S. integrated producers was ***. Id.

 65 CR/PR at Table VI-5. By contrast, annual capital expenditures of U.S. integrated producers ranged from ***. 

Id. Although ***. 

 66 ***.

11

IV. DOMESTIC INDUSTRY

A. In General

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

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

proportion of the total domestic production of the product.”60 In defining the domestic industry, the

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

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

Based on our definition of the domestic like product, we define the domestic industry as all U.S.

producers of certain coated paper.

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

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

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

parties provision to exclude from the domestic industry a converter that also purchases subject

merchandise.

B. Sufficient Production-Related Activities

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

activities to be considered domestic producers.61 Converters perform the final finishing operation on

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

finished sheet product. 

Petitioners argue that, although the record has not been fully developed with respect to all factors,

converters should be considered part of the domestic industry.62 Respondents have indicated that they

have no objection to the inclusion of converters in the domestic industry as they “are not a big part of the

market.”63 Our analysis of the six factors is presented below.

Capital Investment. Capital investment by converters is substantial, although far less than is

required for integrated producers. At the conclusion of 2008, the value of assets of those converters that

responded to the Commission’s producer questionnaire was ***.64 Converters’ annual capital

expenditures ranged from ***.65 In response to Commission questionnaires, converters indicated that

***.66
 67 CR at I-17, PR at I-13. 

 68 CR at I-19; VI-15 n. 9, PR at I-15; VI-5, n. 9.

 69 CR/PR at Table III-10. 

 70 Calculated from CR/PR at Table III-4.

 71 19 U.S.C. § 1677(4)(B). 

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

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

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

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

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

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

e.g., Torrington Co. v. United States, 790 F. Supp. 1161 (Ct. Int’l Trade 1992), aff’d without opinion, 991 F.2d 809

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

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

latter two considerations were cited as appropriate factors in Allied Mineral Products, Inc. v. United States, —F.

Supp. 2d—, Slip Op. 04-139 (Ct. Int’l Trade November 12, 2004) at 5-6 (“The most significant factor considered by

(continued...)

12

Technical Expertise. There is limited information on the record regarding the technical expertise

involved in conversion operations, but sheeting appears to be a relatively simple process. Sheeter rolls

are processed on a sheeter, which cuts the rolls into sheets, performs a quality check of the surface of the

paper, removes faulty sheets, counts and packages the sheets in ream quantities, and stacks them on

pallets ready for delivery.67 

Value Added. Data submitted in response to the questionnaire by three non-tolling U.S.

converters indicate that converting operations accounted for an average *** percent of the cost to produce

certain coated paper, excluding selling, general, and administrative costs.68

Employment Levels. Converters that responded to the Commission’s questionnaire reported in

the aggregate *** production and related workers (PRWs) in 2006, *** in 2007 and *** in 2008.69 

Sourcing of Inputs. The principal input used in the conversion of coated paper is sheeter rolls. 

Responding converters reported that domestically sourced sheeter rolls accounted for the following

percentages of total sheeter rolls used in their U.S. production: *** percent in 2006, *** percent in 2007,

*** percent in 2008, and *** percent in interim 2008 and *** percent in interim 2009.70 

Other Costs and Activities in the United States Leading to Production of the Like Product. The

record has not been developed on this factor. 

Conclusion. Converters’ capital investment and technical expertise cannot rival that of integrated

producers of certain coated paper Viewed in isolation, however, capital expenditures of converters are

substantial. The value added by the conversion is modest, but converters employ a sizeable number of

production-related workers. Throughout the period of investigation, between approximately *** percent

of the sheeter rolls purchased by converters were sourced domestically. Although it is a close question

and the record has not been fully developed as to all factors, and absent argument to the contrary, we find

that converters engage in sufficient production related activities to be included in the domestic industry. 

C. Related Parties

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.71 Exclusion

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

investigation.72 The Commission has also concluded that a domestic producer that does not itself import
 72 (...continued)

the Commission in making the ‘appropriate circumstances’ determination is whether the domestic producer accrued

a substantial benefit from its importation of the subject merchandise.”); USEC, Inc. v. United States, 132 F. Supp. 2d

1, 12 (Ct. Int’l Trade 2001) (“the provision’s purpose is to exclude from the industry headcount domestic producers

substantially benefitting from their relationships with foreign exporters.”), aff’d, Slip Op. 01-1421 (Fed. Cir. April

22, 2002); S. Rep. No. 249, 96th Cong. 1st Sess. at 83 (1979) (“where a U.S. producer is related to a foreign exporter

and the foreign exporter directs his exports to the United States so as not to compete with his related U.S. producer,

this should be a case where the ITC would not consider the related U.S. producer to be a part of the domestic

industry”).

 73 See, e.g., Electrolytic Manganese Dioxide from Australia and China, Inv. Nos. 731-TA-1124-1125 (Final),

USITC Pub. 4036 (September 2008) at 6, n.26 (finding the firm’s purchases not to be sufficient for it to be

considered a related party); Foundry Coke from China, Inv. No. 731-TA-891 (Final), USITC Pub. 3449 (September

2001) at 8-9; Certain Cut-to-Length Steel Plate from the Czech Republic, France, India, Indonesia, Italy, Japan,

Korea, and Macedonia, Inv. Nos. 701-TA-387-392 and 731-TA-815-822 (Preliminary), USITC Pub. 3181 at 12

(April 1999); Certain Brake Drums and Rotors from China, Inv. No. 731-TA-744 (Final), USITC Pub. 3035 at 10

n.50 (April 1997). See also SAA at 858.

 74 CR/PR at Table III-8.

 75 CR/PR at Table III-8.

 76 CR/PR at Table III-8.

 77 CR/PR at Table III-1. 

 78 We note that *** failed to provide financial data to the Commission, which makes it difficult to discern

whether *** benefitted from its purchases. 

 79 CR/PR at Table III-1. 

13

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

deemed a related party if it controls large volumes of imports. The Commission may find control to exist

where the domestic producer was responsible for a predominant proportion of an importer's purchases and

the importer's purchases were substantial.73

***, a converter, purchased subject merchandise from China and Indonesia during the period of

investigation. Although its purchases appear to be small, we cannot determine whether *** was

responsible for a predominant proportion of the importer's purchases because *** did not identify the

importer in question. Nonetheless, we find appropriate circumstances do not exist to exclude *** data

from the industry even if it were to be deemed a related party by virtue of its purchases of subject

merchandise.

 *** purchased a total of *** short tons of subject merchandise in 2006, *** short tons in 2007,

and *** short tons in 2008.74 *** purchases of subject merchandise were lower in interim 2009 (***)

short tons than in interim 2008 (***).75 As its purchases of subject imports decreased, *** ratio of its

purchases of subject merchandise to its production fell from *** percent in 2006 to *** percent in 2007,

and to just *** percent in 2008.76 *** supports the petition.77 78 As is the case with all converters, ***

total share of domestic production is ***. *** accounting for approximately *** percent of converters’

reported production in 2008.79

Accordingly, we find that appropriate circumstances do not exist to exclude *** from the

domestic industry but intend to reexamine this issue in any final phase investigations.

Conclusion. Therefore, consistent with our definition of the domestic like product, we define the

domestic industry as all U.S. producers (integrated producers and converters) of certain coated paper.

V. NEGLIGIBLE IMPORTS

Pursuant to Section 771(24) of the Act, imports from a subject country of merchandise

corresponding to a domestic like product that account for less than 3 percent of all such merchandise
 80 19 U.S.C. §§ 1671b(a), 1673b(a), 1677(24)(A)(i). 

 81 19 U.S.C. § 1677(24)(A)(i)-(ii).

 82 19 U.S.C. § 1677(24)(B). 

 83 15 C.F.R. § 2013.1 (2009).

 84 19 U.S.C. §§ 1671b(a)(1), 1673b(a)(1).

 85 19 U.S.C. § 1677(24)(C); see also The Uruguay Round Agreements Act, Statement of Administrative Action,

H.R. Doc. No. 103-316, Vol. 1 at 186 (1994) (“SAA”).

 86 CR at IV-8, PR at IV-6. 

 87 CR/PR at Table IV-3.

 88 Respondents’ Postconference Brief at Exhibit 3.

 89 Petitioners’ Postconference Brief at 28.

 90 We note that one of the Respondents’ methodologies computes the denominator as total U.S. imports of all

products in Respondents’ preferred domestic like product definition, which would include sheets, sheeter rolls, and

web rolls. Respondents’ Postconference Brief at Exhibit 3. In their exhibit presented at the conference, Respondents

state that “[u]nder the statute, the denominator must include the entire like product . . . .” 

The Commission has found previously that, if the domestic like product is defined to be broader than the

scope, the statutory negligibility provision does not permit products outside the scope, corresponding to the broader

like product, to be included in “total imports.” Specifically, In Certain Wax and Wax/Resin Thermal Transfer

Ribbons from France and Japan, Inv. Nos. 731-TA-1039-1040 (Final), USITC Pub. 3683 (April 2004), the

Commission found as follows: 

We interpret the statute to require us to calculate negligibility by dividing the volume of subject

imports from each of the subject countries by the volume of all imports of merchandise defined by

the scope (not the domestic like product). 

(continued...)

14

imported into the United States during the most recent 12 months for which data are available preceding

the filing of the petition shall be deemed negligible.80 Imports that are individually negligible may not be

negligible if the aggregate volumes of imports from several countries with negligible imports exceeds 7

percent of all such merchandise imported into the United States in the statutory period for assessing

negligibility referenced above.81 In countervailing duty investigations involving developing countries, the

statute further provides that the negligibility thresholds are 4 percent and 9 percent, rather than 3 percent

and 7 percent.82 The statute defines “developing country” as any country so designated by the U.S. Trade

Representative (“USTR”). USTR has designated Indonesia as a developing country.83 

By operation of law, a finding of negligibility terminates the Commission’s investigation with

respect to such imports.84 The Commission is authorized to make “reasonable estimates on the basis of

available statistics” of pertinent import levels for purposes of deciding negligibility.85

The parties agree that the imports from China far exceed the negligibility threshold.86 The only

issue with respect to negligibility in these investigations concerns imports from Indonesia. Because

USTR has designated Indonesia as a developing country, the applicable negligibility threshold for the

countervailing duty investigation is 4 percent. 

Official import data statistics show that imports from Indonesia during the applicable period

exceeded the 4 percent threshold.87 Official import statistics, however, include product outside the scope

of subject imports as defined by Commerce. As a result, official import statistics may overstate both

imports from Indonesia and total imports from all countries. In addition, Respondents argue that official

import statistics overcount subject imports from Indonesia because a multi-ply board product has been

misclassified as being within the scope.88 Conversely, Petitioners claim that importer questionnaire data

show that official import statistics may actually ***.89 Both Petitioners and Respondents have presented

multiple methodologies for the adjustment of official import statistics.90 Given that there is some degree
 90 (...continued)

Id. at 16. Consequently, although we have expanded the definition of the domestic like product beyond the scope to

include sheeter rolls, we compute the denominator as total imports of subject merchandise. 

 91 19 U.S.C. § 1677(7)(G)(i).

 92 See Certain Cast-Iron Pipe Fittings from Brazil, the Republic of Korea, and Taiwan, Invs. 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).

15

of uncertainty regarding the accuracy of official imports statistics, the Commission generally would

consider data collected from importers to perform its negligibility analysis. The import data from

importers, however, did not cover the full twelve months preceding the filing of the petition. 

In light of the questions regarding the import data from Indonesia, and the fact that official

import data show subject imports exceed the 4 percent threshold for countervailing duty investigations,

we do not find that imports from Indonesia are negligible for purposes of the present material injury

investigations. We will reexamine this issue and seek to clarify the subject import data from Indonesia in

any final phase investigations. 

Accordingly, we determine that subject imports from China and Indonesia are not negligible for

purposes of these preliminary investigations. 

VI. 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 the domestic like product in the

U.S. market.91 In assessing whether subject imports compete with each other and with the domestic like

product, the Commission has generally considered four factors:

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

between imports and the domestic like product, including by reference to specific

customer requirements and other quality-related questions;

(2) the presence of sales or offers to sell subject imports from different countries and

the domestic like product in the same geographic markets;

(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 and domestic like product are simultaneously present

in the market.92

Although no single factor is necessarily determinative, and the list of factors is not exhaustive,

these factors are intended to provide the Commission with a framework for determining whether the
 93 See, e.g., Wieland Werke, AG v. United States, 718 F. Supp. 50 (Ct. Int’l Trade 1989).

 94 Commissioner Lane notes that, with respect to fungibility, her analysis does not require such similarity of

products that a perfectly symmetrical fungibility is required and that this factor would be better described as an

analysis of whether subject imports from each country and the domestic like product could be substituted for each

other. See Separate Views of Commissioner Charlotte R. Lane, Certain Lightweight Thermal Paper from China,

Germany, and Korea, Inv. Nos. 701-TA-451 and 731-TA-1126-1128 (Preliminary), USITC Pub. 3964 (Nov. 2007).

 95 The SAA 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); Goss Graphic

Systems, 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, 718 F. Supp. at 52 (“Completely overlapping markets are not required.”).

 96 See 19 U.S.C. § 1677(7)(G)(ii).

 97 Petitioners’ Postconference Brief at 19.

 98 CR/PR at Table II-2.

 99 CR/PR at II-1.

 100 CR at IV-7, PR at IV-5.

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

 102 CR at IV-7, PR at IV-5; Petitioners’ Postconference Brief at 18

16

subject imports compete with each other and with the domestic like product.93 94 Only a “reasonable

overlap” of competition is required.95

B. Analysis

In these investigations, the threshold criterion is satisfied because the antidumping duty petition

with respect to subject imports from both China and Indonesia was filed on the same day. Given our

negligibility determination with respect to subject imports from Indonesia, none of the exceptions to

cumulation applies.96 Subject imports from China and Indonesia are thus eligible for cumulation. We

consequently examine whether there is a reasonable overlap of competition between subject imports from

China and Indonesia, as well as between subject imports and the domestic like product. 

Petitioners contend that the Commission should cumulate subject imports from China and

Indonesia as there is a reasonable overlap of competition between the domestic like product and subject

imports and between subject imports.97 Respondents did not address cumulation at the conference or in

their postconference brief.

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

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

participants perceive domestic certain coated paper and the subject imports to be “always” or “frequently”

used interchangeably. Four of six U.S. integrated producers and three of the four responding converters

reported that they are always or frequently interchangeable. At the same time, a majority of importers

reported that they are always or frequently interchangeable.98 

Geographic Overlap. *** of the integrated producers reported that they serve a nationwide

market. *** of the converters reported that they serve a nationwide market, while *** reported sales only

to certain geographic regions of the United States.99 Official import statistics show that U.S. imports from

China and Indonesia entered the United States through geographically dispersed U.S. ports of entry.100

Channels of Distribution. The vast majority of U.S. producers’ shipments of certain coated paper

and the *** of importers’ shipments of subject imports were to merchant/distributors.101

Simultaneous Presence. Official import statistics show imports from each country have been

present in the U.S. market in each year of the period of investigation and in interim 2009.102 

Conclusion. For all of the above reasons, we conclude that there is a reasonable overlap of
 103 19 U.S.C. §§ 1671b(a), 1673b(a).

 104 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).

 105 19 U.S.C. § 1677(7)(A).

 106 19 U.S.C. § 1677(7)(C)(iii).

 107 19 U.S.C. § 1677(7)(C)(iii).

 108 19 U.S.C. §§ 1671b(a), 1673b(a).

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

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

1996).

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

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

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

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

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

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

tangential contribution to material harm caused by LTFV goods.’” See also Nippon Steel Corp. v. United States, 458

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

2001).

17

competition between subject imports from China and Indonesia and between subject imports from both

countries and the domestic like product. We therefore cumulatively assess the volume and effects of

subject imports for purposes of determining whether there is a reasonable indication of material injury to

the domestic industry by reason of subject imports.

VII. REASONABLE INDICATION OF MATERIAL INJURY BY REASON OF CUMULATED

IMPORTS OF SUBJECT MERCHANDISE FROM CHINA AND INDONESIA

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 or threatened with material injury by reason of the imports under investigation.103 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.104 The statute defines “material injury” as “harm which is not

inconsequential, immaterial, or unimportant.”105 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.106 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.”107

Although the statute requires the Commission to determine whether there is a reasonable

indication that the domestic industry is “materially injured by reason of” unfairly traded imports,108 it does

not define the phrase “by reason of,” indicating that this aspect of the injury analysis is left to the

Commission’s reasonable exercise of its discretion.109 In identifying a causal link, if any, between subject

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

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

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

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

sufficient causal, not merely a temporal, nexus between subject imports and material injury.110
 111 Statement of Administrative Action (“SAA”) on Uruguay Round Agreements Act (“URAA”), H.R. Rep. 103-

316, Vol. I at 851-52 (1994) (“{T}he Commission must examine other factors to ensure that it is not attributing

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

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

317 at 47 (1979) (“in examining the overall injury being experienced by a domestic industry, the ITC will take into

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

harmful effects on domestic market prices.”). 

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

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

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

injury.”).

18

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

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

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

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

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

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

statutory material injury threshold.111 In performing its examination, however, the Commission need not

isolate the injury caused by other factors from injury caused by unfairly traded imports.112 Nor does the

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

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

imports, which may be contributing to overall injury to an industry.113 It is clear that the existence of

injury caused by other factors does not compel a negative determination.114

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

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

injury to the domestic industry can reasonably be attributed to the subject imports” and the Commission
 115 Mittal Steel, 542 F.3d at 877-78; see also id. at 873 (“While the Commission may not enter an affirmative

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

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

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

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

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

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

present material injury in certain circumstances, to undertake a particular kind of analysis of nonsubject imports. 

Mittal explains as follows:

What Bratsk held is that “where commodity products are at issue and fairly traded, price-competitive, nonsubject imports are in the market,” the Commission would not fulfill its obligation to consider an important

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

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

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

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

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

that factor.

542 F.3d at 878.

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

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

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

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

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

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

19

“ensure{s} that it is not attributing injury from other sources to the subject imports.”115 116 Indeed, the

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

adherence to a specific formula.”117

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

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

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

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

imports.118 The additional “replacement/benefit” test looked at whether nonsubject imports might have

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

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

and Tobago determination that underlies the Mittal Steel litigation.

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

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

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

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

injury from nonsubject imports or other factors to subject imports.119 Accordingly, we do not consider

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

subsequent to Bratsk.

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

commodity products where price-competitive nonsubject imports are a significant factor in the U.S.
 120 Commissioner Lane also refers to her dissenting views in Polyethylene Terephthalate Film, Sheet, and Strip

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

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

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

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

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

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

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

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

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

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

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

matter for the judgment of the ITC.”).

 123 We provide in the discussion of impact in section VII.D. below an analysis of other factors alleged to have

caused any material injury experienced by the domestic industry. 

 124 CR/PR at II-1, CR/PR at Table C-1. 

 125 CR at II-9, PR at II-6.

 126 CR/PR at Table C-1. Apparent U.S. consumption decreased from 2.1 million short tons in 2006 to 2.0 million

short tons in 2007, and then decreased to 1.8 million short tons in 2008. CR/PR at Table C-1.

 127 CR/PR at Table C-1. Apparent U.S. consumption was lower in interim 2009 at 719,500 short tons compared

to 860,691 short tons in interim 2008. CR/PR at Table C-1. 

20

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

non-attribution issues when it performs its causation analysis.120 121

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

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

standard. Congress has delegated this factual finding to the Commission because of the agency’s

institutional expertise in resolving injury issues.122 123

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

industry producing certain coated paper is materially injured by reason of cumulated subject imports from

China and Indonesia that are allegedly sold at less than fair value and allegedly subsidized by their

respective governments.

A. Conditions of Competition

The following conditions of competition inform our analysis in the preliminary phase of these

investigations.

1. Demand Conditions 

Certain coated paper is used in printed material requiring high-gloss sheets, including annual

company reports, high end brochures, catalogues, magazines, direct mail advertisements, and labels.124

As such, the demand for certain coated paper is largely determined by the overall economy and demand

for high-end commercially printed advertisements, reports, and brochures.125

Apparent U.S. consumption of certain coated paper sheets and sheeter rolls by quantity decreased

by 17.7 percent from 2006 to 2008 overall; decreasing by 5.6 percent from 2006 to 2007 and by 12.8

percent from 2007 to 2008.126 Apparent U.S. consumption in interim 2009 was 16.4 percent lower than

apparent U.S. consumption in interim 2008.127 Market participants noted that demand for certain coated

paper decreased or fluctuated over the period of investigation, and they generally named the recession in

the U.S. economy as well as other competing forms of advertising as the reasons for the decline. When
 128 CR at II-9; PR at II-6.

 129 Respondents state that most of the decline in demand for certain coated paper in 2008 and interim 2009 is

permanent, due to a structural shift of printed materials to on-line content. Respondents’ Postconference Brief at 14-

15. Three importers and one converter reported that this shift has occurred. CR at II-10; PR at II-6. At the

conference, Petitioners testified that the coated paper sheet market is not as vulnerable as the web roll market to a

shift from printing materials to online content given that “it is a shorter run business segment that allows you to tailor

and have more variable data” and that digital presses, which are sheet presses, are an alternative to the internet

media. Transcript at 123-124 (Miller).

 130 CR/PR at Table C-1.

 131 CR/PR at Table C-1.

 132 CR/PR at Table C-1.

 133 CR/PR at Table III-1.

 134 CR/PR at Table III-1.

 135 CR at I-15, VI-2, PR at I-12-13, PR at VI-1.

 136 CR at VI-2, PR at VI-1.

 137 CR at VI-2-3, PR at VI-1-2.

 138 CR at III-3, PR at III-3. 

21

asked how demand for certain coated paper had changed since January 2006, all six responding U.S.

integrated producers and thirteen of 14 importers reported that demand had decreased or fluctuated, and

two of the four converters reported that demand had decreased.128 There is some evidence that the

increasing popularity of on-line media or electronic copy may partly account for the decline in apparent

U.S. consumption of certain coated paper during the period of investigation.129

2. Supply Conditions

 During the period of investigation, the domestic industry accounted for the largest share of

apparent U.S. consumption. From 2006 to 2008, the domestic industry’s market share based on quantity

remained steady, ranging from 46.2 percent in 2006 to 46.6 percent in 2008. In interim 2008, the

domestic industry’s market share was 47.1 percent, and it was 47.0 percent in interim 2009.130 

The next largest share of the U.S. market was supplied by producers in nonsubject countries,

whose market share decreased from 38.5 percent in 2006 to 34.7 percent in 2008. Nonsubject imports’

market share was lower, at 27.3 percent, in interim 2009 than in interim 2008, at 37.7 percent.131 

The remaining share of apparent U.S. consumption was supplied by subject imports which, unlike

the shares held by the domestic industry and nonsubject imports, increased throughout the period of

investigation. Subject imports’ market share increased by 3.3 percentage points from 15.3 percent in

2006 to 18.6 percent in 2008. In interim 2009, subject import market share was notably higher, at 25.7

percent, than in interim 2008, at 15.3 percent.132 

In 2008, five integrated producers accounted for most of U.S. production. The *** integrated

producers, ***, accounted for over *** of U.S. production of certain coated paper.133 U.S. converters,

who convert sheeter rolls purchased from integrated producers, account for the remainder of U.S.

production of certain coated paper.134 Many of the production facilities of U.S. integrated producers

produce certain coated paper in one continuous operation from the harvested log to the intermediate

product (pulp) to the final product.135 NewPage, Sappi, and MeadWestvaco are fully integrated

producers.136 A few of the smaller integrated producers purchase the pulp input from other sources.137

During the period of investigation, there were a number of changes in the domestic industry’s

organization and production operations, including a significant amount of restructuring. This included an

acquisition of Stora Enso North America by NewPage and the shutdown of several plants.138

Respondents indicate that the plant shutdowns reported by NewPage in these investigations reflect a
 139 Respondents’ Postconference Brief at 33-34. 

 140 CR/PR at Table II-1.

 141 Transcript at 119 (Nelson).

 142 Transcript at 120 (Dorn, Nelson).

 143 CR at VII-2, VII-7, PR at VII-2, VII-4.

 144 CR at IV-4, PR at IV-2.

 145 Petitioners’ Postconference Brief at 47. 

 146 In any final phase investigations, we will examine the role of the Eagle Ridge distribution network. In order to

determine whether the domestic industry is materially injured or threatened with material injury, we will also

examine whether Chinese producers recently have added or will add production capacity. The current record

contains conflicting evidence on this issue. See e.g., CR at VII-4 n.5 and VII-5 n.7, PR at VII-3 n.5 and n.7. 

 147 CR/PR at Table II-2.

 148 CR/Table II-3. 

 149 CR at II-13-15; PR at II-9-10. Responses are mixed on this issue. One half of responding integrated

producers and three of four responding converters reported that differences other than price were “frequently” or

“sometimes” a factor in purchasing decisions, while the other half of integrated producers reported that they were

never a significant factor. A majority of importers reported that differences other than price were “always” or

(continued...)

22

consolidation/rationalization as a result of its acquisition of Stora Enso’s U.S. plants in 2007, while

Petitioners attribute the shutdown to subject imports.139 

The vast majority of the U.S. integrated producers’ U.S. shipments of certain coated paper and

*** of importers’ shipments of subject imports were made to merchant/distributors. *** of U.S.

converters’ U.S. shipments were made to merchants/distributors.140 Two U.S. integrated producers

reported that they consider a variety of factors in selecting their distributors, including financial stability,

strength of sales force, level of commitment in terms of inventory, and relative performance in the

market.141 Petitioners also stated that they may choose to limit the number of distributors they supply in a

particular region in order to limit regional competition among distributors, stating that they “try to make

that balance between making sure we have sufficient distribution footprint and protecting those folks with

responsible distribution.”142 We intend to examine the selection of distributorships in any final phase

investigations.

During the period of investigation, the vast majority of subject merchandise was exported by

Chinese and Indonesian producers under the corporate umbrella of Asia Pulp & Paper Co., Ltd

(“APP”).143 In 2009, APP began to establish an e-commerce U.S. distribution network for its products,

called Eagle Ridge Paper.144 Petitioners claim that this distributorship is fully operational and is currently

underselling the domestic like product by wide margins.145 Respondents claim that Eagle Ridge Paper is

in the early stages of development and that it will take years before Eagle Ridge Paper is able to supply

large volumes of subject merchandise.146 

 

 3. Substitutability and Other Considerations

The record indicates that the domestic like product and subject imports are highly interchangeable

regardless of their country of origin. Most responding U.S. producers (integrated producers and

converters) and importers reported that the domestic like product, subject imports and nonsubject imports

were “always” or “frequently” interchangeable.147 

According to market participants, price is an important consideration, though not necessarily the

most important consideration, in purchasing decisions.148 Non-price factors cited by market participants

as important to purchasing decisions included quality, shorter lead times, distribution network, and

product range.149 
 149 (...continued)

“frequently” a significant factor in purchasing decisions. CR at II-13-15; PR at II-9-10.

 150 CR/PR at V-2.

 151 *** integrated producers, ***, reported that pulp accounts for between *** and *** percent and *** reported

that chemicals and dyes account for *** percent of the total cost of production. CR/PR at V-1.

 152 CR/PR at V-1.

 153 CR/PR at V-1 n.2 , VI-16, PR at VI-16. In interim 2009, NewPage and Sappi reported as “other income” a

combined allocated amount of $*** pursuant to the black-liquor tax credit.

 154 19 U.S.C. § 1677(7)(C)(i).

 155 CR/PR at Table C-1. 

 156 CR/PR at Table C-1.

 157 CR/PR at Table C-1.

23

In determining prices for sales of certain coated paper, *** the U.S. integrated producers reported

the use of price lists, *** reported ***, and *** reported also using transaction-by-transaction

negotiations. Converters reported the use of ***. Importers of subject imports reported that *** for

certain coated paper, as determined by ***, as well as ***.150

U.S. integrated producers of certain coated paper reported that pulp, chemicals and dyes, coating

additives, and packaging are the principal raw materials used in producing certain coated paper. *** of

the responding integrated producers reported that pulp accounts for between *** percent and *** percent

of the total cost of production and that chemicals and dyes account for between *** percent and ***

percent.151 Most of the integrated producers reported that the cost of pulp has increased by *** to ***

percent since 2006 and that the costs of chemicals and dyes have increased by *** to *** percent. 152

In early 2009, U.S. paper mills began applying for and receiving an alternative fuel tax credit

pursuant to Section 642 of the Internal Revenue Code. This tax credit went into effect in late 2007 and

reportedly expires at the end of 2009. The tax credit allows producers to receive $0.50 per gallon of kraft

pulp by-product (or “black liquor”) that they produce. Such kraft pulp by-product results from the

production of certain coated paper and other papers, including other coated free sheet papers and coated

groundwood paper.153 

B. Volume of Subject Imports

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.”154

The volume of subject imports increased from 327,421 short tons in 2006 to 355,399 short tons in

2007 and then decreased to 328,470 short tons in 2008.155 The volume of subject imports, however, was

40.7 percent higher in interim 2009 at 184,712 short tons than in interim 2008, at 131,263 short tons.156

 As noted above, apparent U.S. consumption declined from 2006 to 2008. Subject imports’

market share, however, increased from 15.3 percent in 2006 to 17.6 percent in 2007, and then to 18.6

percent in 2008. In interim 2009, apparent U.S. consumption was 10.4 percent lower than in interim

2008. Notably, subject imports’ market share, however, was higher in interim 2009 at 25.7 percent, than

in interim 2008, at 15.3 percent.157 

In contrast to subject imports’ increase in market share throughout the period of investigation

and, in particular, between the interim periods, the domestic industry’s market share remained relatively

steady. The domestic industry’s market share ranged from 46.2 percent in 2006 to 46.6 percent in 2008. 

In interim 2009, the domestic industry’s market share was lower, at 47.0 percent, than in interim 2008, at

47.1 percent. The market share of nonsubject imports decreased from 38.5 percent in 2006 to 36.0
 158 CR/PR at Table C-1.

 159 The ratio of subject imports to U.S. production increased from 28.6 percent in 2006 to 31.8 percent in 2007 to

33.5 percent in 2008. The ratio of subject imports to U.S. production was higher in interim 2009 at 42.3 percent

compared to 27.2 percent in interim 2008. CR/PR at Table IV-6. 

 160 Respondents Postconference Brief at 23.

 161 Moreover, if interim 2008 was affected by the ongoing 2007 CFS investigations, then subject import volume

for full year 2007 should presumably have been distorted as well. Yet subject import volume in 2007 increased from

2006, reaching its highest full-year level in the period of investigation even as consumption declined. 

 162 Respondents Postconference Brief at 23-24.

 163 Commissioner Pinkert observes that decreased demand due to recessionary conditions is the best explanation

for the reduction in prices between the interim periods. 

 164 The record indicates that purchasers Unisource and *** shifted away from subject imports to other sources of

supply very late in the period of investigation. CR at IV-3. While these changes may have an impact on the volume

of subject imports in the future, the most recent available quantitative data on the record demonstrates that the

volume of subject imports is significant. We will examine these shifts and any impact on the volume of subject

imports in any final phase investigations. 

 165 Commissioner Pinkert observes that the increase in subject import market share between the interim periods

was similar to the increases in subject import market share from 2006 to 2008 in that it (1) came almost entirely at

the expense of nonsubject import market share and (2) served to make the market more price competitive.

24

percent in 2007, and then to 34.7 percent in 2008.158 In interim 2008, nonsubject imports’ market share

was 37.7 percent, and it was 27.3 percent in interim 2009.159

Respondents argue that the significance of subject import volume in interim 2009 is less than it

appears for several reasons. First, they claim that the higher volume in interim 2009 than in interim 2008

was because the interim 2008 volume was suppressed by the 2007 CFS investigations that concluded at

the end of 2007, and that the apparent “increase” in subject imports in 2009 simply reflected subject

imports recovering to historical levels.160 We find this argument unpersuasive. In interim 2009 subject

imports from China, as well as cumulated subject imports, were at their highest absolute levels

(annualized) of the entire period examined. These import volumes were well in excess of “historical

levels.”161

Second, respondents claim that, because there is a delay of several months between the time U.S.

orders for subject imports are placed and the date that the imports arrive in the country, the higher import

volumes in interim 2009 merely reflected orders placed by U.S. customers in late 2008, prior to when the

economic crisis began in the United States.162 Although some imports in interim 2009 were likely based

on 2008 orders, we do not find that this mitigates the importance or the effects of the interim 2009

volumes, which, as noted above, were at their highest annualized level of the period in interim 2009.

Third, Respondents point out that subject imports took market share only from non-subject

imports and not from domestic producers. Respondents are correct that subject imports gained share only

from non-subject imports. As discussed further infra, however, it appears that domestic producers

lowered prices to maintain share in the face of low-priced subject imports, particularly in interim 2009.163

In sum, we do not find respondents’ assertions concerning the lack of significance of subject

imports to be persuasive on the current record. In any final phase of the investigations, we will closely

examine the circumstances relating to the trends of subject imports in the U.S. market.

Accordingly, for purposes of the preliminary phase of these investigations, we find that subject

import volume relative to consumption, in particular the higher volumes and market share in interim 2009

compared with interim 2008, to be significant.164 165
 166 19 U.S.C. § 1677(7)(C)(ii).

 167 See CR/PR at Tables II-2 and II-3.

 168 CR/PR at Table V-7.

 169 CR at V-5-V-6; PR at V-4 

 170 CR at V-5-V-6, PR at V-4.

 171 Commissioners Lane and Pinkert’s analyses differ from those of their colleagues in that they find evidence of

downward pressure on prices from the subject imports throughout the period under examination 

They find that lower-priced subject imports are taking sales from the domestic industry for price reasons

and that a sizeable number of purchasers stated that U.S. producers had reduced prices to compete with subject

imports. They note that *** of the *** in confirmed lost sales were from 2006 to 2008. *** of the *** confirmed

lost revenues *** were ***. Moreover, *** was named in a lost sales allegation in which it did not respond with

respect to the specific value cited but stated that it reduced its purchases from U.S. producers by ***. Staff estimates

(continued...)

25

C. Price Effects of the Subject Imports

Section 771(C)(ii) of the Act provides that, in evaluating the price effects of 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.166

As addressed in conditions of competition, the record indicates that subject imports and the

domestic like product are highly substitutable and that price is an important consideration in purchasing

decisions.167 

 In these investigations, the Commission collected pricing data for five pricing products. The

data show that prices of cumulated imports undersold the domestic like product in 59 of 71 quarterly

comparisons by margins ranging from 0.9 percent to 29.9 percent.168 Given the degree of substitutability

between the subject and domestic product, the importance of price in purchasing decisions, and the

prevalence of underselling in quarterly price comparisons, we find that there has been significant price

underselling by the subject imports. 

We have considered movements in the prices of certain coated paper over the period of

investigation. Although we collected prices for five products, we rely principally on reported prices for

Product 1 given that Product 1 accounted for nearly *** percent of domestic producers’ total sales of the

five pricing products, *** percent of importers’ reported U.S. sales of the five pricing products from

China and *** percent of importers’ U.S. sales of all pricing products from Indonesia.169 

Prices for domestically produced Product 1 increased from the first quarter of 2006 to the fourth

quarter of 2008 but then decreased by *** percent through the second quarter of 2009. At the same time,

prices for the Chinese product increased overall from the first quarter of 2006 to the second quarter of

2008, but then decreased by *** percent thereafter. Prices for the Indonesian product generally increased

from the first quarter of 2006 to the third quarter of 2008 but then decreased by *** percent.170

 Given that domestic prices for Product 1 increased from 2006 to 2008, there is no evidence that

the underselling of the domestic like product by subject imports resulted in price depression during that

three year period. Conditions appear to have changed, however, since the end of 2008. The large

increase in the supply of low-priced subject imports in the first half of 2009 was accompanied by a

decline in prices for the domestic product in the first half of 2009. Moreover, the record shows that the

domestic industry faced increasing pressure to lower prices or lose market share, particularly in the first

half of 2009 as a result of the pervasive underselling by subject imports.171 *** confirmed lost sales
 171 (...continued)

that the loss of the *** short tons would mean a monetary lost sale of *** and that the loss of the *** tons would

mean a loss of ***, in the 2007 to 2008 period. CR/PR at V-20-V-25, Table V-8 and n.9. 

Commissioners Lane and Pinkert find that lower-priced subject imports have taken market share from

nonsubject imports, which has made the market more price competitive and put downward pricing pressure on

domestic prices. This happened from 2006 to 2008, as well as in interim 2009. Subject AUVs were lower than

nonsubject AUVs throughout the period under examination, and nonsubject imports steadily lost market share to

subject imports. From 2006 to 2008, nonsubject imports lost *** percentage points of market share while subject

imports gained *** percentage points of market share.

 172 CR at V-19-20, PR at V-10-11, CR/PR at Tables V-8.

 173 CR at V-20-V-25, PR at V-11. See responses of ***. 

 174 Although we are aware that nonsubject AUVs may present product mix issues, we rely on nonsubject AUVs

rather than the nonsubject pricing data to compare nonsubjects against subject and domestic product, because the

nonsubject pricing data we collected offer very limited coverage of nonsubject imports. CR at Appendix D.

 175 CR/PR at Table C-1.

 176 Commissioner Pinkert does not join in this paragraph, noting once again that decreased demand due to

recessionary conditions is the best explanation for the reduction in prices between the interim periods – he points out

in this regard that apparent U.S. consumption was 16.4 percent lower in interim 2009 than in interim 2008, a much

more precipitous fall-off than that which occurred in 2006 or 2007. Although he thus discounts the probative value

of the trend in the interim price data, he finds that the downward pressure on prices that was exerted by the subject

imports from 2006 to 2008 continued into interim 2009. 

 177 In any final phase investigations, we will further examine the effects of the declining consumption of certain

coated paper on prices in the U.S. market.

 178 CR/PR at Table C-1.

26

allegations totaling $*** and *** purchasers confirmed lost revenues allegations totaling $*** million.172

Several of the confirmed lost sales and lost revenue allegations occurred in 2009. Additionally, a sizeable

number of the purchasers that responded to lost sales and lost revenues allegations stated that U.S.

producers have reduced their prices to compete with subject imports.173 Finally, the pricing pressure as a

result of the low-priced subject imports is indicated by the decreasing market share of nonsubject imports. 

Nonsubject imports average unit values remained steady and above those for subject imports, as they had

throughout the period of investigation, but their market share was 10.4 percentage points lower in interim

2009 than in interim 2008.174 In contrast, domestic producers fought to maintain market share between

the interim periods by decreasing domestic prices.175 

As discussed above, Respondents argue that the decline in prices in the first half of 2009 is due to

the declining consumption of certain coated paper. Although lower consumption would be expected to

place downward pressure on prices, the record indicates that the decline in domestic prices in the first half

of 2009 was due in part to low-priced subject imports.176 Despite the substantial decline in apparent U.S.

consumption from 2006 to 2008, and especially from 2007 to 2008, prices for both domestic and subject

import product increased. Thus on the current record, it appears that declining consumption in this

market does not necessarily result in falling prices.177 It was only when subject import volume and market

share grew substantially in interim 2009, to reach levels well above the levels of interim 2008, and (on an

annualized basis) above any of the full years we have examined, and the prices of subject imports

declined ***, that prices for the domestic like product decreased. As a result of the higher volume of

low-priced subject imports in interim 2009, domestic producers were forced to reduce their prices in order

to maintain market share.178 

As discussed in the conditions of competition section, Respondents also contend that domestic

producers are responsible for the price decline rather than subject imports because, they assert, the

alternative tax credit (the so-called black liquor subsidy) allowed integrated producers to lower their
 179 Petitioners’ Postconference Brief at Answer to Question 6.

 180 Respondents’ Postconference Brief at Exhibit 4. Additionally, the record indicates that the direct benefit of

the black liquor subsidies only accrues to producers of pulp who generate black liquor as a by-product. Accordingly,

NewPage, Sappi, and MeadWestvaco are the only integrated producers who can receive it. The payments, however,

***. CR at VI-16, PR at V-8. Although tax credits are awarded only to integrated producers, the program has

indirectly benefitted non-integrated producers as well. The program induced integrated producers to increase pulp

production which led to lower prices for pulp, which is purchased by non-integrated producers. CR at VI-16-17, PR

at V-8. 

 181 We intend to examine the price effects of subject imports based on the record in any final phase investigations,

including information of what, if any, changes resulted from the switch of purchasers Unisource and *** away from

subject imports to other sources of supply. 

 182 Commerce initiated the investigations based upon estimated dumping margins for subject imports from China

that range from 33 to 41 percent and dumping margins for subject imports from Indonesia that range from 25.7 to

135.8 percent. 74 Fed. Reg. 53710 (Oct. 20, 2009).

In its notice of initiation in the countervailing duty investigation of imports from China, Commerce

indicated that it would investigate numerous programs alleged in the petition to have provided countervailable

subsidies to producers of certain coated paper in China. The programs to be investigated are the following: (A) two

preferential lending programs (B) twelve income tax programs; (C) three indirect tax and import tariff programs;

(D) seven grant programs; (E) three provisions of goods or services for less than adequate remuneration; and (F) four

economic development zone programs. 74 Fed. Reg. 53703 (Oct. 20, 2009).

In its notice of initiation in the countervailing duty investigation of imports from Indonesia, Commerce

indicated that it would investigate numerous programs alleged in the petition to have provided countervailable

subsidies to producers of certain coated paper in Indonesia. The programs to be investigated are the following: (A)

one provision of standing timber for less than adequate remuneration program; (B) government prohibition of log

exports; (C) three debt forgiveness programs; and (D)) four tax incentive programs. 74 Fed. Reg. 53707 (Oct. 20,

2009).

 183 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.”)

 184 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 (Prelim.), USITC Pub. 3155 at 25 n.148 (Feb. 1999).

27

prices in 2009. Petitioners have stated, however, that they ***.179 The record, moreover, indicates that

any tax credit received by U.S. integrated producers had little or no effect on falling domestic prices in

the first half of 2009 given that the tax credits mostly were applied for and received by U.S. producers

late in or after the first half of 2009.180 We intend, however, to examine this issue further in any final

phase investigations. 

Accordingly, the record in these preliminary investigations indicates significant underselling and

suggests that this underselling led to price depression during the first half of 2009.181

D. Impact of the Subject Imports182

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.”183 These factors include output, sales, inventories, capacity

utilization, market share, employment, wages, productivity, profits, cash flow, return on investment,

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.”184
 185 CR/PR at Table C-1.

 186 CR/PR at Table C-1. 

 187 CR/PR at Table C-1. The aggregate capacity utilization figures were driven in large part by ***, whose

reported capacity was so large as to produce a company capacity utilization rate that was less than half the rate of

any other producer for every period except interim 2009. CR/PR at Table III-2. We intend to examine the

allocations of productive capacity in any final phase investigations. 

 188 CR/PR at Table C-1. 

 189 CR/PR at Table C-1. Hours worked (1,000) declined from 4,513 in 2006 to 4258 in 2007, and to 3,664 in

2008. Wages paid decreased from $122 million in 2006 to $119 million 2007, and then to $107 million in 2008. 

CR/PR at Table C-1. 

 190 CR/PR at Table C-1. 

 191

Commissioners Lane and Pinkert do not join in this paragraph. They find there is a reasonable indication that

subject imports had a negative effect on domestic industry performance during the period under examination,

including from 2006 to 2008 – to wit, in an increasingly price competitive U.S. market, in which subject imports

represented from 15.3 to 18.6 percent of apparent consumption and were sold at prices substantially below those

obtained by domestic producers, the domestic industry experienced closures, decreases in production and capacity

utilization, a reduction in PRWs, negative trends with respect to the volume of shipments and sales, and lackluster

profitability. Although they observe that restructuring appears to have enabled the domestic industry to improve

productivity, they aver that, as a result of the impact of the subject imports, the domestic industry was unable to

enjoy the intended benefits of such improvement. 

In any final phase investigation, Commissioners Lane and Pinkert intend to examine closely the relationship

between restructuring and domestic industry performance.

28

Many of the domestic industry’s performance based indicators declined from 2006 to 2008, by

amounts largely commensurate with declines in apparent U.S. consumption over the period of

investigation. The domestic industry’s average capacity fluctuated but decreased by 3.9 percent from

2006 to 2008, increasing from 2.86 million short tons in 2006 to 2.94 million short tons in 2007, and then

decreasing to 2.82 million short tons in 2008.185 The domestic industry’s production declined by 14.4

percent from 2006 to 2008, from 1.14 million short tons in 2006 to 1.11 million short tons in 2007 and to

980,751 short tons in 2008.186 The domestic industry’s declining production resulted in deceasing

capacity utilization rates, which fell from an already low 39.4 percent in 2006 to 37.4 percent in 2007 and

to 34.1 percent in 2008.187 The domestic industry’s U.S. shipments by quantity declined by 16.8 percent

from 2006 to 2008, from 987,704 short tons in 2006 to 937,430 short tons in 2007, and to 821,708 short

tons in 2008.188

As the domestic industry’s production decreased, so did the number of production related

workers (“PRWs”), hours worked, and wages paid. Between 2006 and 2008, the number of PRWs

declined by 21.2 percent, from 2,301 PRWs in 2006 to 2,192 PRWs in 2007 and 1,814 PRWs in 2008,

while hours worked declined by 18.8 percent, and wages paid declined by 12.2 percent.189 Productivity,

however, increased as the domestic industry became more efficient due to restructuring. Productivity

(tons/per hour)increased by 5.9 percent, from 258.9 short tons/per 1,000 hours in 2006 to 269.0 in 2007,

and to 274.1 in 2008.190

Although the domestic industry’s volume-based indicators declined from 2006 to 2008,

consistent with declining consumption, the domestic industry’s financial indicators were more positive

and the industry was profitable.191 This was due in large measure to reductions in the industry’s costs

during the period as a result of the restructuring of the industry. Although the domestic industry’s net

sales volume declined by 12.8 percent, decreasing from 1.1 million short tons in 2006 to 953,567 short

tons in 2008, the domestic industry’s net sales values fell at a lesser rate (10.1 percent) from $1.2 billion

in 2006 to $1.1 billion in 2008. COGS as a ratio of net sales decreased from 87.2 percent in 2006 to 86.1

percent in 2007, and to 85.7 percent in 2008. The domestic industry’s average unit values fluctuated,
 192 CR/PR at Table C-1. Average unit values were $1,119 in 2006, $1,104 in 2007, and $1,153 in 2008. Unit

COGs were $975 in 2006, $951 in 2007, and $989 in 2008 and SG&A expenses were $81 in 2006, $77 in 2007, and

$91 in 2008. CR/PR at Table C-1. 

 193 CR/PR at Table C-1. 

 194 CR/PR at Table C-1. Capital expenditures were $41 million in 2006, $35 million in 2007, and $43 million in

2008, CR/PR at Table C-1. 

 195 CR/PR at Table C-1. 

 196 CR/PR at Table C-1. Hours worked (1,000) were 1,622 in interim 2009 and 1,688 in interim 2008. Wages

paid was $45 million in interim 2009 and $48.4 million in interim 2008. CR/PR at Table C-1. 

 197 CR/PR at Table C-1. 

 198 Commissioner Pinkert does not join in this paragraph. He agrees with his colleagues that the domestic

industry experienced lower prices, production, shipments, and employment in interim 2009 than in interim 2008. He

finds, however, that tumbling apparent U.S. consumption due to recessionary conditions is the best explanation for

domestic industry deterioration between the interim periods. Although he thus discounts the probative value of the

trends from interim 2008 to interim 2009, he determines that the pressure on prices and performance that was exerted

by the subject imports from 2006 to 2008 continued into interim 2009. 

 199 CR/PR at Table C-1. 

 200 CR/PR at Table C-1. COGS as a ratio of net sales was higher in interim 2009 at 95.3 percent than in interim

2008 at 83.9 percent. Unit COGs and SG&A expenses were lower in interim 2009 than in interim 2008; however,

(continued...)

29

increasing overall and remained higher than unit COGS and SG&A expenses.192 As a result, the domestic

industry’s operating income fluctuated but increased overall from $69 million in 2006 to $82 million in

2007 and to $70 million in 2008. The domestic industry’s profit margin followed suit, increasing from

5.6 percent in 2006 to 6.9 percent in 2007 and then decreasing to 6.3 percent in 2008.193 Capital

expenditures fluctuated but increased by 3.2 percent overall.194 

 As discussed above, although apparent U.S. consumption was lower in interim 2009 than in

interim 2008, subject imports were substantially higher in both absolute volume and market share in

interim 2009 than in interim 2008, as a result of aggressive pricing in interim 2009. As in the 2006 to

2008 period, the domestic industry’s production, shipments, and employment indicators fell by amounts

relatively commensurate with the decline in consumption. In interim 2009, the domestic industry’s

production was 9.5 percent lower at 436,262 short tons than in interim 2008 at 481,873 short tons. 

Although production capacity was steady between the interim periods, the domestic industry’s capacity

utilization rate was lower at 30.6 percent in interim 2009 than in interim 2008 at 33.6 percent. The

domestic industry’s U.S. shipments were also lower in interim 2009 than in interim 2008 at 338,276 short

tons and 405,170 short tons, respectively.195

The number of PRWs, hours worked, and wages were also lower in interim 2009 than in interim

2008. The number of PRWs was 12.2 percent lower at 1,705 in interim 2009 than in interim 2008 at

1,950. Hours worked were 3.9 percent lower and wages paid were 7.4 percent lower in interim 2009 than

in interim 2008.196 Productivity (tons/per hour) was 5.9 percent lower in interim 2009 than in interim

2008.197

Although the industry’s lower production, shipment and employment indicators in interim 2009

as compared to interim 2008 reflected lower consumption in the same manner as these indicators did

between 2006 to 2008, the industry was not able to maintain positive financial performance in interim

2009 due to lower market prices. The domestic industry’s financial condition deteriorated in interim

2009 as the industry was forced to reduce prices in order to compete with substantially increasing subject

imports.198 The domestic industry’s net sales volume was 19.4 percent lower in interim 2009 than in

interim 2008 but the industry’s net sales value was 30.4 percent lower in interim 2009 than in interim

2008.199 The industry’s average unit sales values were 13.7 percent lower in interim 2009 at $1,022 than

in interim 2008 at $1,184.200 In line with the domestic industry’s movement in sales values and costs, the
 200 (...continued)

these expenses collectively were greater than average unit sales value and the domestic industry therefore was no

longer able to recoup costs. Average unit values were $1,022 in interim, while unit COGS were $973 and unit

SG&A were $94 ( a total of $1067).

 201 CR/PR at Table C-1. The domestic industry’s capital expenditures, however, were higher in interim 2009 at

$14 million compared to $11. 2 million in interim 2008. 

 202 Based on the record evidence in the preliminary phase of these investigations, Commissioner Pinkert finds that

subject certain coated paper is essentially a commodity product for purposes of his Bratsk analysis, and that price

competitive, non-subject imports were a significant factor in the U.S. market during the period of investigation. He

further finds, however, that non-subject imports would not have replaced subject imports during the period of

investigation without benefit to the domestic industry. Non-subject imports held a greater share of the U.S. market

than subject imports throughout the period of investigation and could have replaced the subject imports. CR/PR at

Table C-1. Even if they had done so, the record indicates that antidumping relief would nevertheless have benefitted

the domestic industry through higher prices. The average unit values of nonsubject imports were higher than those

of the subject imports throughout the period of investigation. CR/PR at Table C-1. 

 203 We have found that the domestic industry is experiencing material injury as of the date of our vote. In

considering the adverse impact of subject imports in any final phase investigations, we will examine further the

significance of the fact that purchasers Unisource and *** shifted away from subject imports to other sources of

supply in 2009.

30

domestic industry reported an operating loss of $17.2 million in interim 2009 compared with operating

income of $44.3 million in interim 2008. The domestic industry’s operating margin was a positive 7.9

percent in interim 2008 and a negative 4.4 percent in interim 2009.201

We have considered whether there are other factors that have had an impact on the domestic

industry. We recognize that apparent U.S. consumption was 16.4 percent lower in interim 2009 than in

interim 2008, and this may well have contributed to the domestic industry’s deteriorating performance

when comparing the interim periods. As discussed earlier, the parties dispute whether demand declined

due to a permanent shift from certain coated paper to online media and whether such a decline was

responsible for injury to the domestic industry in interim 2009. We intend to further examine the impact

of the recession and the effect of online media in any final phase of these investigations to ensure that we

do not attribute to subject imports the effects of any adverse demand conditions.

We also have considered the role of the nonsubject imports during the period of investigation. 

Although nonsubject imports were a substantial presence in terms of volume and market share throughout

the period, they declined in volume and market share, and were consistently priced higher than subject

imports. In the first half of 2009, nonsubject import volume was 39.3 percent lower and market share was

10.4 percentage points lower than in interim 2008. Thus, we do not find that the effects of cumulated

subject imports described above can be attributed in any significant way to nonsubject imports.202

Accordingly, the record in the preliminary phase of these investigations indicates an apparent

causal nexus between cumulated subject imports and the adverse condition of the domestic industry, thus

demonstrating a reasonable indication of material injury by reason of subject imports.203

Conclusion 

For the reasons discussed above, we find that there is a reasonable indication that an industry in

the United States is materially injured by reason of imports of certain coated paper from China that are

allegedly sold in the United States at less than fair value and allegedly subsidized by the Government of

China and by reason of imports of certain coated paper from Indonesia that are allegedly sold in the

United States at less than fair value and allegedly subsidized by the Government of Indonesia. 
 1

 A complete description of the imported product subject to these investigations is presented in The Subject

Product section located in Part I of this report.

 2 Federal Register notices cited in the tabulation are presented in app. A.

I-1

PART I: INTRODUCTION

BACKGROUND

These investigations result from a petition filed on September 23, 2009, by Appleton Coated,

LLC (“Appleton”), NewPage Corp. (“NewPage”), Sappi Fine Paper North America (“Sappi”), and the

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

International Union (“USW”), alleging that an industry in the United States is materially injured or is

threatened with material injury, by reason of imports from China and Indonesia of certain coated paper

suitable for high-quality print graphics using sheet-fed presses (“certain coated paper”)1

 that are allegedly

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

and Indonesia. Information relating to the background of these investigations is provided below.2

Effective date Action

September 23, 2009 Petition filed with Commerce and the Commission; Commission institutes investigation (74

FR 50243, September 30, 2009)

October 14, 2009 Commission’s conference1

October 20, 2009 Initiation of countervailing duty investigation on China by Commerce (74 FR 53703)

October 20, 2009 Initiation of countervailing duty investigation on Indonesia by Commerce (74 FR 53707)

October 20, 2009 Initiation of antidumping investigations by Commerce (74 FR 53710)

November 6, 2009 Commission’s vote

November 9, 2009 Commission’s determinations transmitted to Commerce

November 17, 2009 Commission’s views transmitted to Commerce

 1

 A list of witnesses that appeared at the conference is presented in app. B.

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--
 3

 These “integrated” firms produce all of the domestically-produced sheeter rolls, which is an upstream product

that is converted into a sheeted product. The scope of these investigations includes only sheeted product. Although

the U.S. integrated producers convert or “sheet” the vast majority of their own sheeter rolls, there are a number of

U.S. converters in the marketplace that sheet these rolls either on a toll basis or through arms length purchases of

sheeter rolls.

I-2

In evaluating the volume of imports of merchandise, the Commission shall consider

whether the volume of imports of the merchandise, or any increase in that volume,

either in absolute terms or relative to production or consumption in the United

States is significant.

. . . 

In evaluating the effect of imports of such merchandise on prices, the Commission

shall consider whether . . . (I) there has been significant price underselling by the

imported merchandise as compared with the price of domestic like products of the

United States, and (II) the effect of imports of such merchandise otherwise depresses

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

have occurred, to a significant degree.

. . .

In examining the impact required to be considered under subparagraph (B)(i)(III),

the Commission shall evaluate (within the context of the business cycle and

conditions of competition that are distinctive to the affected industry) all relevant

economic factors which have a bearing on the state of the industry in the United

States, including, but not limited to

. . . 

(I) actual and potential declines in output, sales, market share, profits, productivity,

return on investments, and utilization of capacity, (II) factors affecting domestic

prices, (III) actual and potential negative effects on cash flow, inventories,

employment, wages, growth, ability to raise capital, and investment, (IV) actual and

potential negative effects on the existing development and production efforts of the

domestic industry, including efforts to develop a derivative or more advanced

version of the domestic like product, and (V) in {an antidumping investigation}, the

magnitude of the margin of dumping.

Information on the subject merchandise, alleged margins of dumping and subsidies, and domestic

like product is presented in Part I. Information on conditions of competition and other relevant economic

factors is presented in Part II. Part III presents information on the condition of the U.S. industry,

including data on capacity, production, shipments, inventories, and employment. The volume of imports

of the subject merchandise is presented in Part IV and pricing of domestic and imported products is

presented in Part V. Part VI presents information on the financial experience of U.S. producers. 

Information obtained for use in the Commission’s consideration of the question of threat of material

injury is presented in Part VII.

U.S. MARKET SUMMARY

The U.S. market for certain coated paper totaled approximately $1.95 billion and 1.76 million

short tons in 2008. Currently, six integrated firms3

 produce certain coated paper in the United States,

Appleton, MeadWestvaco Corp. (“MeadWestvaco”), Mohawk Fine Papers, Inc. (“Mohawk”), NewPage,

Sappi, and Smart Papers, Inc. (“Smart”), which accounted for virtually all U.S. production of certain

coated paper in 2008. At least four firms have reported importing certain coated paper from subject
 4

 The term “integrated” producers is used to distinguish those producers who produce sheeter rolls from U.S.

converters, which process sheeter rolls into sheet, and is not used to indicate the level of vertical integration of those

producers.

 5

 Adjustments to Commerce statistics are based on assumptions made by the petitioners, which they have set forth

in their postconference brief. See Petitioners’ postconference brief, “Answers to Questions from Staff,” exh. 1 at

exh. Q1-1.

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

1109 (Final), USITC Publication 3965, December 2007.

 7

 Ibid. at pp. 42-43.

I-3

countries since 2006. One firm, Global Paper Solutions, Inc. (“GPS”), accounted for the majority of

reported imports from China. One firm, PaperMax Ltd. (“PaperMax”) accounted for the vast majority of 

imports from Indonesia during the period of investigation. 

U.S. producers’ U.S. shipments of certain coated paper totaled 821,708 short tons valued at

$980.4 million in 2008, and accounted for 46.6 percent of apparent U.S. consumption by quantity (50.3

percent by value). U.S. imports from China totaled 275,532 short tons in 2008, and accounted for 15.6

percent of apparent U.S. consumption by quantity (13.8 percent by value), while U.S. imports from

Indonesia totaled 52,938 short tons, and accounted for 3.0 percent of apparent consumption by quantity

(2.5 percent by value). U.S. imports from all other sources combined totaled 611,626 short tons, and

accounted for 34.7 percent of apparent consumption by quantity (33.4 percent by value). Certain coated

paper is generally used for printing multi-colored graphics for catalogues, books, magazines, envelopes,

labels and wraps, greeting cards, and other commercial printing applications requiring high quality print

graphics. 

SUMMARY DATA AND DATA SOURCES

A summary of data collected in these investigations is presented in appendix C, table C-1. U.S.

industry data are based on questionnaire responses of six U.S. integrated producers4

 and four U.S.

converters that accounted for virtually all of U.S. production of certain coated paper during the period of

investigation. Data for U.S. imports from China, Indonesia, and nonsubject countries are based on

adjusted Commerce statistics.5

 Foreign industry data are based on responses to the Commission’s U.S.

foreign producer’s questionnaires. Appendix C, table C-2 presents data submitted by U.S. integrated

producers regarding their web roll operations. Appendix C, table C-3 presents combined data for U.S.

certain coated paper operations and web roll operations (see Domestic Like Product Issues below). 

Finally, Appendix C, table C-4 presents U.S. apparent consumption and U.S. market shares using data

based on U.S. importers’ questionnaire responses concerning U.S. imports from Indonesia. 

PREVIOUS AND RELATED INVESTIGATIONS

Certain coated paper, as defined in the scope of these investigations, is a subset of the paper

products investigated by the Commission in its 2007 investigations on Coated Free Sheet from China,

Indonesia, and Korea.

6

 In the 2007 investigation, the scope definition included sheets, sheeter rolls, and

web rolls. In contrast, the current investigations’ scope definition includes only sheeted product. The

Commission in Coated Free Sheet determined that the U.S. industry was not materially injured or

threatened with material injury by reason of U.S. imports from China, Indonesia, and Korea.7

 

In 1991, the Commission conducted antidumping duty investigations on Coated Groundwood

Paper from Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Sweden, and the United
 8

 The product subject to investigation was defined by Commerce as “paper coated on both sides with kaolin

(China clay) or other inorganic substances (e.g., calcium carbonate), of which more than ten percent by weight of the

total fiber content consists of fibers obtained by mechanical process, regardless of (1) basis weight (e.g., pounds per

ream or grams per one square meter sheet); (2) GE brightness; or (3) the form in which it is sold (e.g., reels, sheets,

or other forms).” Paperboard was excluded from the scope of investigation. See Notice of Final Determination of

Sales at Less Than Fair Value: Coated Groundwood Paper from Germany, 56 FR 56385, November 4, 1991.

 9 Coated Groundwood Paper from Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Sweden,

and the United Kingdom, Inv. Nos. 731-TA-486-494 (Preliminary), USITC Publication 2359, February 1991, p. 3;

and Coated Groundwood Paper from Belgium, Finland, France, Germany, and the United Kingdom, Inv. Nos. 731-

TA-487-490 and 494 (Final), USITC Publication 2467, December 1991, p. 3.

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

the People’s Republic of China: Initiation of Antidumping Duty Investigations; 74 FR 53710, October 20, 2009.

 11 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from the People’s

Republic of China: Initiation of Countervailing Duty Investigation; 74 FR 53703, October 20, 2009.

I-4

Kingdom (Inv. Nos. 731-TA-486-494). The Commission determined that the subject imports did not

injure the domestic coated groundwood paper industry.8 9

NATURE AND EXTENT OF ALLEGED SALES AT LTFV

On October 20, 2009, Commerce published a notice in the Federal Register of the initiation of its

antidumping investigation on certain coated paper from China and Indonesia.10 The alleged estimated

weighted-average dumping margins (in percent ad valorem), as reported by Commerce are summarized in

the tabulation below:

Country Estimated dumping margin (percent ad valorem)

China 33.0 to 41.0

Indonesia 25.7 to 135.8

Source: Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from Indonesia

and the People’s Republic of China: Initiation of Antidumping Duty Investigations; 74 FR 53710, October 20, 2009,

p. 53714.

NATURE OF ALLEGED COUNTERVAILABLE SUBSIDIES

China

On October 20, 2009, Commerce published a notice in the Federal Register of the initiation of its

countervailing duty investigation on certain coated paper from China. In its notice, Commerce listed the

following programs alleged in the petition to have provided countervailable subsidies to producers of

certain coated paper in China:11

A. Preferential Lending to the Coated Paper Industry 

1. Policy Loans from State-Owned Commercial Banks and Government Policy Banks 

2. Fast-Growth High-Yield Forestry Program Loans 
I-5

B. Income Tax Programs 

1. Income Tax Exemption/Reduction under “Two-Free/Three Half” Program 

2. Local Income Tax Exemption and Reductions for “Productive” Foreign-Invested Enterprises

(“FIEs”) 

3. Income Tax Reduction for FIEs Purchasing Domestically-Produced Equipment 

4. Tax Subsidies to FIEs Based on Geographic Location 

5. Preferential Tax Policies for Technology or Knowledge-Intensive FIEs 

6. Tax Programs for FIEs that are High or New Technology Enterprises 

7. Income Tax Reductions for High-Technology Industries in Guangdong Province 

8. Preferential Tax Policies for Research and Development at FIEs 

9. Income Tax Credits for Domestically-Owned Companies Purchasing Domestically-Produced

Equipment 

10. Income Tax Exemption Program for Export-Oriented FIEs 

11. Corporate Income Tax Refund Program for Reinvestment of FIE profits in Export-Oriented

Enterprises 

12. Exemption from City Maintenance and Construction Taxes and Education Surcharges for

FIEs 

C. Indirect Tax and Import Tariff Programs 

1. Value Added Tax (“VAT”) and Tariff Exemptions on Imported Equipment 

2. VAT Rebates on Domestically Produced Equipment 

3. Domestic VAT Refunds for Companies Located in the Hainan Economic Development Zone 

D. Grant Programs 

1. Funds for Forestry Plantation Construction and Management 

2. The State Key Technologies Renovation Project Fund 

3. Loan Interest Subsidies for Major Industrial Technology Reform Projects in Wuhan 

4. Funds for Water Treatment Improvement Projects in the Songhuajiang Basin 

5. Special Fund for Energy Saving Technology Reform in Wuhan and Shouguang Municipality 

6. Clean Production Technology Fund 

7. Famous Brands Awards 

E. Provision of Goods or Services for Less Than Adequate Remuneration (“LTAR”) 

1. Papermaking Chemicals 

2. Electricity 

3. Land-Use Rights to State Owned Enterprises 

F. Economic Development Zone (“EDZ”) Programs 

1. Subsidies in the Nanchang EDZ 

2. Subsidies in the Wuhan EDZ 

3. Subsidies in the Yangpu EDZ 

4. Subsidies in the Zhenjiang EDZ 
 12 Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses from Indonesia: 

Initiation of Countervailing Duty Investigation; 74 FR 53707, October 20, 2009.

 13 The original definition of the scope of these investigations, as set forth in the petition, included sheeter rolls. 

After consultations with Commerce, petitioners removed sheeter rolls from the definition of the scope. See

Petitioners’ October 9, 2009 submission to Commerce. The altered scope language dropped references to unfinished

product and rolls as well as the corresponding HTS numbers that reference rolls.

I-6

Indonesia

On October 20, 2009, Commerce published a notice in the Federal Register of the initiation of its

countervailing duty investigation on certain coated paper from Indonesia. In its notice, Commerce listed

the following programs alleged in the petition to have provided countervailable subsidies to producers of

certain coated paper in Indonesia:12

1. Provision of Standing Timber for Less Than Adequate Remuneration

2. Government Prohibition of Log Exports

3. Government Provision of Interest-Free Reforestation Loans

4. Debt Forgiveness through the Indonesian Government's Acceptance of Financial Instruments

with No Market Value

5. Debt Forgiveness through APP/SMG's Buyback of its Own Debt from the Indonesian

Government

6. Government Forgiveness of Stumpage Obligations

7. Tax Incentives for Investment in Priority Business Lines and Designated Regions

a. Corporate Income Tax Deduction

b. Accelerated Depreciation and Amortization

c. Extension of Loss Carryforward

d. Reduced Withholding Tax on Dividends

THE SUBJECT PRODUCT

Commerce’s Scope

Commerce has defined the scope of these investigations as follows:13

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

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

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

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

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

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

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

Coated Paper”). 

Certain Coated Paper includes: (a) coated free sheet paper that meets this scope

definition; (b) coated groundwood paper produced from bleached chemi-thermomechanical pulp (“BCTMP”) that meets this scope definition; and (c) any other coated

paper that meets this scope definition. 
 14 Subsequent to petitioners alternation of the scope language on October 9, 2009, the following HTS statistical

reporting numbers were removed from the original scope: 4810.13.1100, 4810.13.1900, 4810.13.2010,

4810.13.2090, 4810.13.5000, 4810.13.6000, 4810.13.7000. These statistical reporting numbers reference coated

paper in roll form.

I-7

Certain Coated Paper is typically (but not exclusively) used for printing multi-colored

graphics for catalogues, books, magazines, envelopes, labels and wraps, greeting cards,

and other commercial printing applications requiring high quality print graphics. 

Specifically excluded from the scope are imports of paper or paperboard printed with

final content printed text or graphics. 

As of 2009, imports of the subject merchandise are provided for under the following

statistical categories of the HTSUS: 4810.14.1100, 4810.14.1900, 4810.14.2010,

4810.14.2090, 4810.14.5000, 4810.14.6000, 4810.14.7000, 4810.19.1100,

4810.19.1900, 4810.19.2010, 4810.19.2090, 4810.22.1000, 4810.22.5000,

4810.22.6000, 4810.22.7000, 4810.29.1000, 4810.29.5000, 4810.29.6000,

4810.29.7000. 

While HTSUS subheadings are provided for convenience and customs purposes, the

written description of the scope of these investigations is dispositive.

Tariff Treatment

Certain coated paper is generally imported under the Harmonized Tariff Schedule of the United

States (“HTS”) statistical reporting numbers 4810.14.1100, 4810.14.1900, 4810.14.2010, 4810.14.2090,

4810.14.5000, 4810.14.6000, 4810.14.7000, 4810.19.1100, 4810.19.1900, 4810.19.2010, 4810.19.2090,

4810.22.1000, 4810.22.5000, 4810.22.6000, 4810.22.7000, 4810.29.1000, 4810.29.5000, 4810.29.6000,

4810.29.7000, and is free of duty under the general duty rate.14 Table I-1 shows selected provisions of the

HTS that itemize the classification of certain coated paper. 
I-8

Table I-1

Certain coated paper: Tariff rates, 2009

Selected

HTS provisions Article description

Col. 1 

General1 Col. 2

Special Col. 22

Rates (percent ad valorem)

4810

4810.14 

4810.14.11

4810.14.19

4810.14.20

4810.14.2010

4810.14.2090

4810.14.50

4810.14.60

4810.14.70

Paper and paperboard, coated on one or both sides with kaolin

(China clay) or other inorganic substances, with or without a

binder, and with no other coating, whether or not surface-colored,

surface-decorated or printed, in rolls or rectangular (including square) sheets, of any size: Paper and paperboard of a kind used for writing, printing or

other graphic purposes, not containing fibers obtained by a mechanical or chemi-mechanical process or of which not more than 10 percent by weight of the total fiber content

consists of such fibers:

In sheets with one side not exceeding 435 mm and the

other side not exceeding 297 mm in the unfolded state: With one side exceeding 360 mm and the other

side exceeding 150 mm in the unfolded state: Weighing not more than 150 g/m2

 Basic paper to be sensitized for use 

 in photography . . . . . . . . .

 Other . . . . . . . . . . . . . . . . . .

Weighing more than 150 g/m2

Coated on one side only. . . .

Other . . . . . . . . . . . . . . . . . .

Other

Printed, embossed or perforated . . . Other

 Basic paper to be sensitized for use 

 in photography . . . . . . . . 

 Other . . . . . . . . . . . . . . . . . .

Free

Free

Free

Free

Free

Free

Free

5%

37%

42%

30%

5%

30%

4810.19

4810.19.11

4810.19.1900

4810.19.20

4810.19.2010

4810.19.2090

Other:

Weighing not more than 150 g/m2

: Basic paper to be sensitized for use 

 in photography . . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . 

Weighing more than 150 g/m2

Coated on one side only . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . 

Free

Free

Free

Free

5%

37%

42%

4810.22

4810.22.10

4810.22.50

4810.22.60

4810.22.70

 Light-weight coated paper:

 in strips or rolls of a width exceeding 15 cm or in 

 rectangular (including square) sheets with one side 

 exceeding 36 cm and the other side exceeding 15 

 cm in the unfolded state . . . . . . . . . . 

 Other

 Printed, embossed or perforated . . . . . . .

 Other

 Basic paper to be sensitized for use 

 in photography . . . . . . . . .

 Other . . . . . . . . . . . . . . . . .

Free

Free

Free

Free

37%

30%

5%

30%

4810.29

4810.29.10

4810.29.50

4810.29.60

4810.29.70

 Other

 in strips or rolls of a width exceeding 15 cm or in 

 rectangular (including square) sheets with one side 

 exceeding 36 cm and the other side exceeding 15 

 cm in the unfolded state . . . . . . . . . . 

 Other

 Printed, embossed or perforated . . . . . . .

 Other

 Basic paper to be sensitized for use 

 in photography . . . . . . . . .

 Other . . . . . . . . . . . . . . . 

Free

Free

Free

Free

37%

30%

5%

30%

1

 Normal trade relations.

2

 Applies to imports from a small number of countries that do not enjoy normal trade relations duty status.

Source: Harmonized Tariff Schedule of the United States (2009).
 15 Certain Coated Paper From Indonesia: Initiation of Countervailing Duty Investigation, 74 FR 53707, October

20, 2009. Bleached chemi-thermo-mechanical pulp is a type of mechanical pulp produced by chemicals, heat,

pressure, and grinding techniques, after which the pulp is bleached. According to petitioners, coated paper

containing more than 10 percent bleached chemi-thermo-mechanical pulp has all the quality attributes of coated free

sheet and consequently can be sold as such in the market. Conference transcript, p. 38 (Savage). 

 16 Coated Free Sheet Paper From China, Indonesia, and Korea, Inv. Nos. 701-TA-444-446 (Final) and 731-TA1107-1109 (Final), USITC Publication 3965, December 2007, pp. I-12-I-13. 

 17 Coated groundwood paper contains more than 10 percent mechanical pulp by weight.

I-9

Physical Characteristics and Uses

The imported merchandise included in the scope of these investigations consists of certain coated

paper and paperboard in sheets suitable for high quality print graphics using sheet-fed presses. Certain

coated paper includes coated free sheet paper and coated groundwood paper produced from bleached

chemi-thermo-mechanical pulp.15 According to the Commission’s recent report for investigations on

coated free sheet paper, the paper industry recognizes five broad grades of graphic papers, differentiated

by the surface characteristics of the paper and the processes by which their wood fibers are obtained.16

These five grades, ranked in descending order by overall quality and price, are described below:

Coated free sheet– clay coated paper predominately composed of chemically

obtained fibers (90 percent or more by weight), used primarily for permanent and

higher priced publications such as premium magazines, gift books, and art

reproductions.

Uncoated free sheet– similar in composition to coated free sheet but without

coating and used primarily for xerographic paper, printing, drawing, and writing

paper (e.g., letterhead, stationery).

Coated groundwood– clay coated paper made with substantial proportions of

mechanically derived pulp, generally used for multi-colored publications that

remain in use from several days to a month–primarily magazines, merchandising

catalogues, and better quality newspaper inserts.17

Uncoated groundwood– similar in composition to coated groundwood but

without the coating, used primarily for directory stock, lesser quality drawing and

writing paper, black and white publications, and relatively short-lived color

publications, such as newspaper inserts.

Newsprint– a low quality uncoated groundwood paper designed exclusively for

newspapers and similar publications commonly disposed of within a day. 
 18 Sheets are subject merchandise. Sheeter rolls and web rolls fall outside the scope of these investigations.

 19 Conference transcript, pp. 27-31 (Miller) and pp. 51-54 (Graff).

 20 Conference transcript, pp. 130-131and 186 (Hunley).

 21 Conference transcript, pp. 81-84 (Graff).

 22 Conference transcript, p. 186 (Hunley). Sheeter rolls are an intermediate product that requires further

processing into a final sheet product either by the U.S. integrated producers or a U.S. converter. (See Intermediate

Products)

I-10

Table I-2 presents data for U.S. shipments of these five grades during 2006-2008.

Table I-2

Graphic papers: U.S. shipments by grade, 2006-08

Item 2006 2007 2008

Shipments (1,000 short tons)

Coated free sheet 4,968 4,997 4,439

Uncoated free sheet 12,304 11,935 10,946

Coated groundwood 4,517 4,663 4,151

Uncoated groundwood 1,916 2,092 2,282

Newsprint 5,225 4,921 4,623

Source: 2008 Statistical Summary for Paper, Paperboard and Pulp, American Forest & Paper Association.

 

Coated free sheet paper is made and sold by U.S. producers in three forms – sheets, sheeter rolls,

and web rolls18 – as discussed below:

Sheets– coated free sheet paper that has been sheeted (cut) into certain sheet sizes from

sheeter rolls by paper producers or by independent converters for use in sheet-fed

presses. These presses generally print only one side of the sheet at a time and tend to

have smaller print runs. According to petitioners, sheets differ in certain physical

characteristics from web rolls. Sheets have higher moisture levels and different

mechanical properties that allow them to run through a sheet-fed press without curling or

losing print and color fidelity. Sheets also tend to be thicker than web rolls.19

Respondents state that sheets have a higher moisture content and slightly different

coating formulations and porosity than web rolls.20

Sheeter rolls– rolls of coated free sheet paper intended to be sheeted into various sheet

sizes by paper producers or independent converters. Sheeter rolls and sheets are identical

in physical characteristics but for the sheeting process. Petitioners note that certain

physical characteristics of sheeter rolls make them unsuitable for use in web presses.21

Respondents state that sheeter rolls can run successfully on older web presses that do not

run as fast or as hot as new web presses. Sheeter rolls run on new web presses, however,

would fail.22

Web rolls– rolls of coated free sheet paper intended for use in web presses. These

presses run faster than sheet-fed presses and print both sides of the paper at once, and

thus are used for high volume print runs. According to petitioners, web rolls, compared
 23 Conference transcript, pp. 27-31 (Miller), p. 50 (Crew), and pp. 51-54 (Graff).

 24 Conference transcript, p. 176 (Hunley). In fact, manufactures will not guarantee their web rolls to be used in

sheet-fed presses. In the 2007 Coated Free Sheet Paper investigation, the Commission noted that this lack of

warranty coverage by the paper manufacturers was further evidence of the limited competition between web rolls

and sheet. Coated Free Sheet Paper from China, Indonesia, and Korea, Inv. Nos. 701-TA-444-446 and 731-TA1107-1109 (Final), USITC Publication 3965, December 2007, p. 13.

 25 Conference transcript, pp. 132 and 186 (Hunley).

 26 Certain Coated Paper From Indonesia: Initiation of Countervailing Duty Investigation, 74 FR 53707, October

20, 2009.

 27 Petition, p. 7. 

 28 Ibid., p. 25.

 29 Product brochure for coated papers, NewPage. 

 30 Petition, p. 25.

 31 On a metric basis, the weight of paper is measured in grams per square meter.

 32 Sappi Limited Web site.

http://www.sappi.com/SappiWeb/Tools+and+resources/Paper_Print+information/Standard+weights+and... 

(accessed October 7, 2009).

 33 NewPage Corporation Web site. Product specifications for coated papers found at

http://www.newpagecorp.com (accessed October 7, 2009).

I-11

with sheets, have a lower moisture content, higher porosity, generally weigh less, and

tend to be thinner. These characteristics allow the web roll to withstand the heat setting

of the ink in the web press and avoid “blistering” of the paper. But these same

characteristics would make web rolls that have been sheeted unsuitable for sheet-fed

presses.23 Respondents note that web rolls can be sheeted and used in sheet-fed presses,

but this does not happen very often.24 They also indicate that web rolls are designed to

withstand the greater heat generated by the web printing presses. Printers that have dual

printing capacity (have both sheet-fed printing presses and web roll printing presses) will

use sheet in sheet-fed presses and web rolls in their web presses.25 

Certain coated paper is coated on one or both sides with kaolin (China or other clay), calcium

carbonate, titanium dioxide, and/or other inorganic substances.26 Paper coated with these substances has a

better printing surface than uncoated paper. 

Other important physical characteristics of certain coated paper include brightness, basis weight,

finish, opacity, and smoothness. Brightness is a measure of the paper’s ability to reflect light. The higher

the brightness, the greater the contrast between the paper and the colors printed upon it. Brightness ranges

from 1, a totally black grade, to 100, the brightest measured grade.27 U.S. producers typically sell certain

coated paper in one of three grades, with Grade No. 1 having the highest brightness levels, Grade No. 2

having the next highest brightness levels, and Grade No. 3 having the lowest brightness levels.28 One

U.S. producer of certain coated paper sells Premium No. 1 grades with a brightness level of 96, number 2

grades with brightness levels of 89 or 90, and number 3 grades with brightness levels of 87.29 The

brightness levels of certain coated papers and their classification into a particular grade, however, can

vary by producer.30

Basis weight, a traditional unit of measurement for the paper industry in the United States, is the

weight in pounds of a ream of paper (500 sheets of paper) of a given size (the basis).31 The basis for

cover grades of certain coated paper is 20" x 26", and the basis for text grades of certain coated paper is

25" x 38".32 Cover grades typically weigh from 65 pounds to 130 pounds, while text grades weigh from

60 pounds to 100 pounds.33 The finish of a sheet of paper refers to the characteristics of the surface of the

sheet. For certain coated paper, the most common finishes are gloss, dull, and matte. Paper with a gloss

finish has a very hard and smooth surface, which results in a printed image that is lustrous and shiny in
 34 Product brochure for coated papers, NewPage Corporation; Smook, Gary. 2nd Edition Handbook of Pulp &

Paper Terminology. Bellingham, Washington: Angus Wilde Publications Inc., 2001.

 35 Sappi Limited Web site.

http://www.sappi.com/SappiWeb/Tools+and+resources/Paper_Print+information/Specifying+paper/Paper+checklist.

htm (accessed October 7, 2009).

 36 Ibid.; Product brochure for coated papers, NewPage Corporation.

 37 Certain Coated Paper From Indonesia: Initiation of Countervailing Duty Investigation, 74 FR 53707, October

20, 2009.

 38 Some U.S. producers also repulp recycled paper and use this pulp with virgin pulp in the production of some of

their certain coated papers; they may also purchase chemical pulp (described infra) or bleached chemi-thermomechanical pulp on the open market to supplement their own pulp production.

 39 Petition, Volume II-a, pp. 4-7; Coated Free Sheet Paper From China, Indonesia, and Korea, Inv. Nos. 701-

TA-444-446 (Final) and 731-TA-1107-1109 (Final), USITC Publication 3965, December 2007, pp. I-15-I-17; Sappi

Limited Web site. http://www.sappi.com/SappiWeb/Tools+and+resources/How+paper+is+made/Papermaking.htm

(accessed October 8, 2009).

I-12

appearance. Paper with a dull finish has a smooth surface but lacks luster or gloss; paper with a matte

finish also has a smooth surface but lacks gloss.34 Opacity is a measure of the ability of a sheet of paper

to have a printed image on one side without the image showing through to the other side.35 Finally, 

smoothness is the even and consistent continuity of the surface of the sheet of paper. Paper with a gloss

finish has the smoothest surface.36 

Certain coated paper is generally used for printing multi-colored graphics for books, catalogues,

magazines, envelopes, greeting cards, labels and wraps, and any other commercial printing applications

requiring high quality print graphics.37

Manufacturing Processes

Many of the production facilities of U.S. producers of certain coated paper are integrated

operations, producing certain coated paper (as well as sheeter rolls and web rolls) in one continuous

operation from the harvested log to the intermediate product (pulp) to the final paper product.38 The

manufacturing process begins with the removal of the bark from the rough hardwood and softwood logs

in a debarking machine. The logs are then chipped into small uniformly sized chips in a chipper. The

wood chips next undergo a chemical pulping process whereby they are cooked under pressure with water

and chemicals in a digester cooking vessel to separate the cellulose fibers from the lignin, the glue that

holds the fibers together, and other impurities. The resulting wood pulp is washed and bleached to attain a

level of whiteness and brightness required for the grade of paper being produced and then refined to

enable the wood fibers to mesh together and to increase their bonding properties. (The paper is made

from both hardwood pulp and softwood pulp, with hardwood pulp predominating. The short hardwood

fibers help to provide a good printing surface for the paper, while the longer softwood fibers provide

strength to the paper sheet.) Different materials are added to the pulp, including kaolin clay and calcium

carbonate for brightness, opacity, and smoothness, dyes for shade control, optical brighteners for

whiteness, and sizing agents for moisture control. The exact proportions of these materials are

determined by the specifications for the particular type of coated paper that is being produced. A large

volume of water is also added.39 

At this stage of the manufacturing process, the pulp mixture is 99.5 percent water and it is ready

to be run continuously through a paper machine. A paper machine has three major parts–the base sheet

forming section, the press section, and the dryer section. The mixture is pumped out onto a continuously

moving wire web that is usually oriented horizontally and which loops around rollers at both ends. As the

wire web moves along, water drains through it, the fibers begin to bond, and a sheet (web) of paper

begins to form on the wire. The web at this point has an 80 percent water content. The web of paper
 40 Ibid.

 41 Ibid.

 42 Ibid.

 43 Ibid.

I-13

leaves the moving wire and enters the press section, where a set of steel rollers squeezes more water out

of the web, reducing its water content to about 65 percent. The web then proceeds into the dryer section

and passes over and under successive steam-heated drying cylinders. This drying process removes most

of the remaining water from the web of paper.40

At this point, the web is now ready for coating and also, if need be, calendering. Coating

equipment is either integrated in line with the paper machine (on-line coating) or separate from the paper

machine (off-line coating). For on-line coating, the paper enters the coating equipment after leaving the

dryer section. If the coating is to occur off-line, the paper is wound onto large reels after the drying

process and transported over to the off-line coating equipment. In either case, the coating and calendering

processes are the same. The coating to be applied to the paper consists of a variety of chemicals and other

materials mixed together in certain proportions according to the requirements of the paper being

produced. These chemicals and other materials may include kaolin clay, other types of clay, calcium

carbonate, titanium dioxide, latex, starches, dyes, lubricants, thickeners, plastic pigments, optical

brighteners, and biocides. These various items, among other things, brighten the paper, increase its

opacity and gloss, help bind the coating to the paper, and control the buildup of fungus and mold.41 

When the paper web enters the coating equipment, a thin coat is applied evenly to one side, which

is then dried, followed by the coating and drying of the other side of the web. One method of applying

the coating to the paper involves a blade coating process, whereby extra coating is applied to the paper

and then scraped off by a steel blade. The pressure of the steel blade against the surface results in a more

uniform surface. After the coating process, the paper is rewound onto large reels, in preparation for the

calendering process. A calendar is a set of steel rolls, stacked one on top of the other, through which the

paper web is passed. The rolls apply heat and pressure to the paper, increasing the smoothness and gloss

of the surface. Paper with a gloss or dull finish is typically calendered, while paper with a matte finish is

not. After calendering, the paper is rewound again onto large reels.42

The large reels of paper (jumbo rolls) are transported to the finishing department where a

slitter/rewinder unwinds and slits them into smaller width rolls and rewinds them onto narrower reels. The

various widths of these narrower rolls are dictated by the width of the presses for which they are intended. 

At this point in the production process, web rolls and sheeter rolls (to be sheeted by independent

converters) are wrapped and labeled for delivery to customers. U.S. producers sell certain coated paper in

the form of sheets. So the remaining sheeter rolls are processed on a sheeter, which cuts the rolls into

sheets, performs a quality check of the surface of the paper, removes faulty sheets, counts and packages

the sheets in ream quantities, and stacks them on pallets ready for delivery. Until the sheets, sheeter rolls,

and web rolls actually leave the paper mill for the customer, they are kept in climate-controlled areas and

monitored carefully via inventory control software.43 
 44 The original definition of the scope of these investigations, as set forth in the petition, included sheeter rolls. 

After consultations with Commerce, petitioners removed sheeter rolls from the definition of the scope. See

Petitioners’ October 9, 2009 submission to Commerce. Subsequent to the alteration of the scope language,

petitioners now argue that sheeter rolls should be included in the domestic like product by way of the Commission’s

semifinished product analysis. Ibid.

 45 Petitioners’ postconference brief, “Answers to Questions from Staff,” exh. 7. Petitioners have reserved the

right to reconsider their position on this issue in any final phase investigation. Ibid., at fn. 1; Respondents’

postconference brief, exh. 1, p. 20. Respondents did not include a specific “semifinished analysis” in their brief,

however, argued for a definition of the domestic like product that included sheets, sheeter rolls, and web rolls.

 46 Petitioners’ postconference brief, “Answers to Questions from Staff,” exh. 7, p. 2.

 47 U.S. producer’s questionnaire, responses to question II-12.

 48 U.S. importer’s questionnaire, responses to question II-7.

 49 Petitioners’ postconference brief, “Answers to Questions from Staff,” exh. 7, p. 2.

I-14

INTERMEDIATE PRODUCTS

Sheeter Rolls vs. Sheets

When an issue arises as to whether products at different stages of production should be included

in the same domestic like product, the Commission has employed a five-factor “semifinished/finished

products” analysis. In these investigations, certain coated paper (which as defined by the scope is in sheet

form) are downstream products of sheeter rolls (sheets in roll form), which are the upstream or

intermediate product. The issue then is whether sheeter rolls, although not in the definition of the scope

of these investigations, should be included in the definition of the domestic like product.44 

The five factors that the Commission has considered in analyzing semifinished products include: 

(1) uses (is the upstream product dedicated to the production of the downstream product or does it have

independent uses?); (2) markets (are there separate markets for the upstream and downstream products?); 

(3) characteristics and functions (are there differences in the physical characteristics and functions of the

upstream and downstream products?); (4) value (are there differences in the production costs and/or sales

values (transfer values or market prices as appropriate) of the upstream and downstream products?); and

(5) transformation processes (what is the significance and extent of the processes used to transform the

upstream product into the downstream product?). At this preliminary phase of these investigations, both

petitioners and respondents argued that sheeter rolls should be included into the Commission’s definition

of the domestic like product.45

Whether the Upstream Product is Dedicated to the Production of the Downstream Product 

Petitioners argue that sheeter rolls are not sold or warranted for use on web roll presses and are

produced for the sole purpose of being converted into sheet (certain coated paper).46 Market participants

agreed that sheeter rolls have no use but in the production of certain coated paper. *** reported that all

sheeter rolls are dedicated to the downstream sheeted product.47 Twelve out of 13 responding U.S.

importers stated that they believed 100 percent of imported sheeter rolls are dedicated to production of the

downstream product.48 

Whether There are Separate Markets for the Upstream and Downstream Products

Petitioners argue that the market for sheeter rolls is limited as the vast majority of sheeter rolls are

converted by the integrated producers and only a small portion of sheeter rolls are sold in the merchant

market to unrelated converters.49 Petitioners also state that the vast majority of U.S. imports are also in

sheet form and thus competition between domestic product and imported product occurs in the sheet
 50 Ibid.

 51 U.S. producer’s questionnaire, responses to question II-12; U.S. importer’s questionnaire, responses to question

II-7.

 52 Petitioners’ postconference brief, “Answers to Questions from Staff,” exh. 7, p. 2.

 53 U.S. producer’s questionnaire, responses to question II-12; U.S. importer’s questionnaire, responses to question

II-7.

 54 In 2008, the average unit value of U.S. shipments of sheeter rolls to converters was $*** while the average unit

value of U.S. shipments of sheeted product by U.S. converters was $***, or a premium of *** percent. Value added

computed in this manner also reflects the profit margins of U.S. converters.

I-15

market and not in a sheeter roll market.50 Eight of 10 reporting U.S. producers (integrated producers and

converters) and 10 out of 12 U.S. importers stated that they perceived the market for sheeter rolls and the

market for certain coated paper to be the same market.51

Whether There are Differences in the Physical Characteristics and Functions of the Upstream and

Downstream Products

Petitioners argue that there are no differences in physical characteristics between the sheeter roll

and certain coated paper (sheets). They maintain that the essential physical characteristics, such as

moisture content, fiber, weight, and coating remain unchanged from sheeter roll until finished sheet

product.52 Eight out of 10 reporting U.S. producers (integrated producers and converters) and 11 out of

12 reporting U.S. importers concurred and stated they believed that there are no differences in the

physical characteristics of the two products.53

Value Added by U.S. Converters

The Commission requested information from U.S. converters on the value added of their U.S.

converting operations. Data submitted in response to the questionnaire by four U.S. converters indicates

that converting operations accounted for an average *** percent of the cost to produce certain coated

paper excluding selling, general, and administrative costs (see Part VI, p. VI-14 fn. 9).54 
 55 Petitioners’ postconference brief, “Answers to Questions from Staff,” exh. 7.

 56 Respondents’ postconference brief, pp. 5-10 and exh. 1. Respondents have urged the Commission to define the

domestic like product in these investigations as it did in Coated Free Sheet Paper, and include sheets, sheeter rolls,

and web rolls. In that investigation, no domestic like product issues were advanced by any party and the scope

included all of those products. Coated Free Sheet Paper from China, Indonesia, and Korea, Inv. Nos. 701-TA-444-

446 and 731-TA-1107-1109 (Final), USITC Publication 3965, December 2007, pp. 3-5. Respondents argue that

because there have been no factual changes in the last two years, the Commission should use its prior domestic like

product definition in a subsequent investigation on a similar product. 

 57 Petitioners’ postconference brief, pp. 4-8.

 58 Respondents’ postconference brief, exh. 1, pp. 20-21 (Respondents argue that petitioners have conceded that

there is not a clear dividing line between sheet and rolls by petitioners advocating that sheeter rolls should be

included in the domestic like product. Therefore, respondents frame their domestic like product arguments as

whether web rolls should be included into a domestic like product definition that includes sheets and sheeter rolls).

I-16

DOMESTIC LIKE PRODUCT ISSUES

Certain Coated Paper vs. Web Rolls

The petitioners contend that the Commission should find one domestic like product that includes

the scope of the investigations as identified by Commerce plus the addition of sheeter rolls (see

Intermediate Products section above).55 Respondents argue that the Commission should find one

domestic like product that includes sheet (certain coated paper), sheeter rolls, and web rolls.56 This

section will discuss the factors pertaining to whether web rolls are appropriately included in the domestic

like product.

The Commission’s decision regarding the appropriate domestic products that are “like” the

subject imported products is based on a number of factors including: (1) physical characteristics and

uses; (2) common manufacturing facilities, production processes, and production employees; (3)

interchangeability; (4) customer and producer perceptions; (5) channels of distribution; and (6) price.

 

Physical Characteristics and Uses

Petitioners argue that certain coated paper and web rolls have very different physical

characteristics and end uses. They state the following differences between the two products: (1) ceratin

coated paper is in sheet form and web rolls are in roll form; (2) certain coated paper is used in sheet-fed

presses and web rolls are used in web roll presses; (3) certain coated paper is typically sold in smaller

quantities for smaller printing jobs (the thousands of pounds) whereas web rolls are typically sold in the

thousands of tons and used for larger printing jobs; (4) web rolls have a lower moisture content and

different coating formulas to withstand the greater heat generated in the web roll printing process; (5) the

speed of the web roll presses requires that a more solvent based, quicker drying, ink be used whereas

certain coated paper may use a more viscous ink; and (6) the range of the basis weights between the two

products does not completely overlap, meaning that in some higher basis weights web rolls are not

available whereas at some lower basis weights certain coated paper is not available.57

Respondents observe that all coated paper products start off as rolls and end up as sheets.

They argue that the sole difference in the physical characteristics of certain coated paper and web rolls is

the 2 percent disparity in the moisture level between the two products (4.5 percent for web rolls and 6.5

for sheeter rolls). Respondents contend that this minor physical difference does not constitute a “clear

dividing line” between sheeter rolls and web rolls.58

Market participants reported that they did not believe that web rolls and certain coated paper

shared the same physical characteristics and end uses. Eight out of 9 reporting U.S. producers (integrated

and converters) stated that they did not believe that the two products shared the same physical
 59 U.S. producer’s questionnaire, responses to question II-13.

 60 U.S. importer’s questionnaire, responses to question II-8.

 61 Petitioners’ postconference brief, pp. 11-12.

 62 Respondents’ postconference brief, exh. 1, pp. 24-25.

 63 Conference transcript, p. 174 (Hunley) (describing the respondent technology as “state of the art production

capability”). 

 64 Respondents’ postconference brief, p. 9.

 65 U.S. producer’s questionnaire, responses to question II-13.

 66 Petitioners’ postconference brief, p. 11.

 67 Petitioners’ postconference brief, p. 8 (Petitioner Sappi estimated that less than 8 percent of commercial

printers have dual web and sheet capability). 

 68 Respondents’ postconference brief, exh. 1, pp. 21-22.

I-17

characteristics and end uses.59 U.S. importer responses were mixed with 7 out of 13 importers reporting

that they believed that web rolls and certain coated paper did share the same physical characteristics.60

Common Manufacturing Facilities, Production Processes, and Production Employees

Petitioners state that certain coated paper and web rolls can be produced on the same

manufacturing equipment; however, in practice, many producers dedicate production equipment to one

product or another to maintain consistency of specifications. Even if the same equipment is used to

produce both products, petitioners maintain that the production process still differs as evidenced by

different fiber content, moisture content, porosity of paper, and coating formulations between certain

coated paper and web rolls. Petitioners also argue that the manufacturing processes differ between the

two products as web roll production does not involve any sheeting operations.61

Respondents state that sheeter rolls and web rolls are all produced on the same manufacturing

equipment, namely a pulp mill, paper machine, and coating machines.62 A witness testified at the

conference that coating machines in China and Indonesia may be adjusted to switch between the

production of sheeter rolls and web rolls “in a matter of minutes.”63 Respondents state that sheeting

operations are a minor operation accounting for no more than 5 percent of the total personnel, equipment,

and materials need to produce certain coated paper.64 

Market participants were mixed regarding whether web rolls and certain coated paper shared

common manufacturing facilities, processes, and employees. Five out of 9 reporting U.S. producers

(integrated and converters) and 9 out of 11 U.S. importers reported that they believe these products do

share common manufacturing facilities, processes, and employees.65

Interchangeability

Petitioners state that certain coated paper and web rolls are not interchangeable because certain

coated paper is used solely on sheet-fed presses and web rolls are used solely on web roll presses and that

the distinct physical characteristics of the products such as moisture content and form (sheet vs. roll)

disallow the interchangeability of the products. The issue of whether web rolls could be sheeted and then

used in a sheet-fed press was raised at the Staff Conference. Petitioners and respondents appeared to

agree that although it may be physically possible to convert web rolls into sheet, in practice, it rarely

occurs in the marketplace.66 Petitioners also contend that the vast majority of end users (printers) do not

employ both printing processes and therefore do not have the dual capability of printing on both certain

coated paper and web rolls.67 

Respondents argue that the end product, namely coated paper printed with high quality graphics,

produced using either certain coated paper or web rolls is interchangeable.68
 69 U.S. producer’s questionnaire, responses to question II-13; U.S. importer’s questionnaire, responses to question

II-8.

 70 Petitioners’ postconference brief, p. 14.

 71 Respondents’ postconference brief, exh. 1, pp. 23-24 (the product quality hierarchy cited by respondents

included: (1) coated freesheet, (2) uncoated freesheet, (3) coated groundwood, (4) uncoated groundwood, and (5)

newsprint).

 72 U.S. producer’s questionnaire, responses to question II-13; U.S. importer’s questionnaire, responses to question

II-8.

 73 Petitioners’ postconference brief, pp. 12-13.

 74 Respondents’ postconference brief, exh. 1, pp. 22-23.

 75 U.S. producer’s questionnaire, responses to question II-13; U.S. importer’s questionnaire, responses to question

II-8.

I-18

Market participants generally agreed that web rolls and certain coated paper are not

interchangeable. Nine out of 9 reporting U.S. producers (integrated and converters) and 10 out of 13 U.S.

importers reported that they believed that these two products were not interchangeable.69

Customer and Producer Perceptions

Petitioners state that customers and producers perceived certain coated paper and web rolls

differently because certain coated paper is used solely on sheet-fed presses and web rolls are used solely

on web roll presses.70

Respondents maintain that customers and producers view the paper market as a hierarchy of

products from high quality to low quality with coated freesheet at the top of this hierarchy. Respondents

state that certain coated paper and web rolls are perceived by customers and producers as coated freesheet

paper and that with changing technology and manufacturing techniques the form of this coated paper,

whether in roll or sheet, is less significant.71

Market participants were mixed in their perceptions of whether web rolls and certain coated paper

were similar or distinctive products. Six out of 9 reporting U.S. producers (integrated and converters)

stated that their perception was that the products are distinct, while 7 out of 12 U.S. importers reported

that they perceive the products to be similar.72

Channels of Distribution

Petitioners argue that the channels of distribution differ for certain coated paper and web rolls.

They stated that certain coated paper is generally sold to distributors (what the industry calls “paper

merchants”) and end users (printers) purchase from the merchants. Web rolls, on the other hand, are

generally sold directly from the U.S. producers to large printers and publishers.73

Respondents agreed that the channels of distribution consist of shipments to large distributors or

directly to large printers. Respondents, unlike petitioners however, argue that both certain coated paper

and web rolls go through both of these channels with only minor variations.74

Market participants generally reported that the channels of distribution for web rolls and certain

coated paper were similar. Five out of 9 U.S. producers (integrated and converters) and 11 out of 14 U.S.

importers reported that they believed that the channels of distribution for the two products were the

same.75
 76 Petitioners’ postconference brief, p. 15.

 77 Respondents’ postconference brief, exh. 1, p. 25 (citing Hearing transcript, October 22, 2007, p. 191

(Gallagher).

 78 U.S. producer’s questionnaire, responses to question II-13; U.S. importer’s questionnaire, responses to question

II-8.

 79 In the Commission’s 2007 Coated Free Sheet Paper investigation, this fact that the majority of U.S. shipments

of domestic producers were of web rolls and those of U.S. imports were of sheet contributed to the Commission’s

finding that the competition between U.S. shipments and U.S. imports was “attenuated.” Coated Free Sheet Paper

from China, Indonesia, and Korea, Inv. Nos. 701-TA-444-446 and 731-TA-1107-1109 (Final), USITC Publication

3965, December 2007, p. 12 (“We disagree with Petitioner and find that there is limited competition between web

rolls and sheet products, and that the limitations on competition show no signs of disappearing. . . Further, although

the evidence of the record is mixed with regard to competition between imported sheet and domestically produced

web rolls, we find that the weight of the evidence does not support Petitioner’s contentions.”) 

I-19

Price

Petitioners maintain that certain coated paper costs more to produce, has more value, and is

generally higher in price than web rolls.76 In 2008, the average unit value of U.S. shipments of certain

coated paper from U.S. integrated producers was $1,193 per short ton compared to $897 per short ton for

web rolls.

Respondents argue that the difference between the pricing of sheeter roll and web roll is minor

and is in line with the minor variation in the production cost between the two products. Respondents

stated that the difference between production costs of web roll and sheeter roll are less than $10/ton.77

All reporting market participants agreed that generally the prices of web rolls are lower than that

for certain coated paper.78

U.S. shipment data for sheet, sheeter rolls, and web rolls

Table I-3 shows U.S. domestic shipments as well as U.S. shipments of imports from China,

Indonesia, and nonsubject countries categorized by sheet, sheeter roll, and web roll. In 2008, U.S.

domestic shipment of web rolls accounted for 80.6 percent of total shipments by the U.S. industry

whereas U.S. shipments of sheet accounted for 15.5 percent and U.S. shipments of sheeter rolls accounted

for 3.9 percent. In contrast, U.S. shipment of imports from China and Indonesia were overwhelmingly

made up of sheet (96.8 percent for China and 99.1 percent for Indonesia).79 Of U.S. shipments of imports

from nonsubject countries, 66.2 percent were sheet, 33.0 percent were web rolls, and 0.9 percent were

sheeter rolls. 

Table I-3

Coated paper: U.S. shipments, by source and by product type, 2006-08, January-June 2008, and

January-June 2009

* * * * * * *

 1

 The importers that reported their top ten customers in 2008 were ***, which accounted for *** of the imports

from China in 2008 and *** of the imports from Indonesia in 2008.

 2

 Importer *** reported that it lost *** customer *** in *** with shipments ending in ***. Respondents’

postconference brief, pp. 45-46. 

II-1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET CHARACTERISTICS

Certain coated paper is used in printed materials requiring high-gloss sheets, including annual

company reports, high-end brochures, catalogues, magazines, direct mail advertisements, and labels.

U.S. integrated producers of certain coated paper reported that *** of their certain coated paper is

sold from inventory, with lead times ranging from ***. The lead times on U.S. integrated producers’

sales produced to order range from ***. Converters of certain coated paper reported a ***, with ***

reporting that *** of their sales are from inventory and *** reporting that most of their sales are produced

to order. Lead times on converters’ sales from inventory range from *** and lead times on converters’

sales produced to order range from ***. *** importers of certain coated paper reported that their sales are

produced to order in China or Indonesia. Lead times on sales produced to order in China range from ***

and lead times on sales produced to order in Indonesia range from ***.

When firms were asked to list the geographic regions of the United States where they sell certain

coated paper, *** of the integrated producers reported that they served a nationwide market, with most

sales in 2008 being shipped to the Midwest, followed by the Northeast and the Southwest. *** of the

converters reported that they served a nationwide market and the *** reporting selling to specific

geographic regions, with most sales in 2008 being shipped to the Central Southwest, followed by the

northeast, the Midwest, and the Southeast. One importer of certain coated paper from China reported

selling nationwide, *** reported selling to the ***, and one reported selling to ***. Most sales of imports

from China in 2008 were reportedly shipped to the Northeast, followed by the Southeast, the Midwest,

and the West Coast. *** importer of certain coated paper from Indonesia reported that it sells nationwide,

one reported selling to the ***, and one reported selling to the ***. Most sales of imports from Indonesia

were reportedly shipped to the West Coast, followed by the Northeast and the Southeast. 

CHANNELS OF DISTRIBUTION

As shown in table II-1, the vast majority of U.S. integrated producers’ U.S. shipments of certain

coated paper and the *** of subject imports were to merchants/distributors. A *** of converters’ U.S.

shipments of certain coated paper and *** of imports from nonsubject countries were to

merchants/distributors.

There was *** customer overlap among U.S. integrated producers, converters, and importers of

certain coated paper in 2008.1

 Specifically, among firms’ reported top five customers in 2008, ***

customers (***) were listed by U.S. integrated producers, converters, and importers.2

 *** U.S. integrated

producers listed *** as their *** in 2008 and *** converters listed *** as their *** customer. ***

converter and *** importer cited *** as among their top *** largest customers, and *** converter and

*** cited *** as among their top *** largest customers. *** of six responding U.S. integrated producers

reported that *** percent or more of their sales in 2008 were accounted for by their top *** largest

customers. Converters (***’s reported top ten customers together accounted for *** percent of total sales

in 2008 and converter ***’s top customer, ***, accounted for *** percent of its sales. Importers

generally reported that *** customers accounted for a *** of their sales in 2008.
 3

 Conference transcript, p. 119 (Nelson).

II-2

Table II-1

Certain coated paper: U.S. integrated producers’, converters’, and importers’ U.S. shipments of

certain coated paper, by sources and channels of distribution, 2006-08, and January-June 2009

Item

Period

2006 2007 2008

Jan.-June

2009

 Share of reported shipments1

 (percent)

Integrated producers’ U.S. shipments of certain coated paper to:

 Merchants/distributors 94.6 96.6 96.7 96.6

 End users 5.4 3.4 3.3 3.4

Converters’ U.S. shipments of certain coated paper to:

 Merchants/distributors *** *** *** ***

 End users *** *** *** ***

U.S. importers’ U.S. shipments of certain coated paper from China to:

 Merchants/distributors *** *** *** ***

 End users *** *** *** ***

U.S. importers’ U.S. shipments of certain coated paper from Indonesia to:

 Merchants/distributors *** *** *** ***

 End users *** *** *** ***

U.S. importers’ U.S. shipments of certain coated paper from all other countries to:

 Merchants/distributors *** *** *** ***

 End users *** *** *** ***

 1

 Percentages are calculated based on shipments of both sheets and sheeter rolls as reported in Commission

questionnaires.

Note.–Data for domestic producers include only U.S. commercial shipments.

Source: Compiled from data submitted in response to Commission questionnaires.

Two U.S. integrated producers reported that they consider a variety of factors to determine which

distributors will be a distributor for their products, including financial stability, strength of sales force,

level of commitment in terms of inventory, and relative performance in the market.3

 Petitioners also

stated that they may choose to limit the numbers of distributors they have in a particular region in order to

limit the regional competition facing their distributors, stating that they “try to make that balance between

making sure we have sufficient distribution footprint and protecting those folks with responsible
 4

 Conference transcript, p. 120 (Dorn, Nelson).

 5

 Conference transcript, p. 121 (Miller). 

 6

 Conference transcript, p. 122 (Miller). 

II-3

distribution.”4

 Furthermore, petitioners stated that they do not have exclusive relationships with

distributors and that the distributor ultimately chooses how much warehouse space to allot to each

supplier.5

 One integrated producer reported that it will continue to supply a distributor even if it does not

receive its ideal amount of shelf space with that distributor and that it has sacrificed on price, not volume,

in order to make sales.6

SUPPLY AND DEMAND CONSIDERATIONS

Supply

U.S. Supply

The supply response of U.S. producers to changes in price depends on such factors as the level of

excess capacity, the availability of alternate markets for U.S.-produced certain coated paper, inventory

levels, and the ability to shift production to the manufacture of other products. The evidence indicates

that the U.S. supply is likely to be relatively elastic, due primarily to ***. 

Industry capacity 

U.S. integrated producers’ annual capacity utilization rates for certain coated paper decreased

from *** percent in 2006 to *** percent in 2008 and to *** percent in the first half of 2009.

This level of capacity utilization indicates that the U.S. integrated producers have *** unused capacity

with which they could increase production of certain coated paper in the event of a price change.

Alternative markets

U.S. integrated producers’ exports, as a share of their total shipments, *** increased from ***

percent in 2006 to *** percent in 2008 before decreasing to *** percent in the first half of 2009. These

data indicate that the U.S. producers have a limited capability to divert shipments to or from alternative

markets in response to changes in the price of certain coated paper. 

Inventory levels

U.S. producers’ ratio of end-of-period inventories to total shipments *** from *** percent in

2006 to *** percent in 2008 and were *** percent in the first half of 2009. These data indicate that the

U.S. producers *** to use inventories as a means of increasing shipments of certain coated paper to the

U.S. market.

Production alternatives

*** of the U.S. integrated producers reported that they use the same manufacturing equipment

and the same workers used to make certain coated paper in the production of other products, including

uncoated free sheet paper, coated and uncoated groundwood paper, coated paper in web roll form, ***. 
II-4

Supply disruptions

*** U.S. integrated producers (***) reported having supply disruptions since 2006. *** reported

that it had supply disruptions ***. *** reported that it had corrected the supply disruptions ***. ***

reported that it had supply disruptions ***. A purchaser of certain coated paper (***) reported that ***. 

*** converters reported having supply disruptions since 2006. 

Subject Imports from China

The responsiveness of supply of imports from China to changes in price in the U.S. market is

affected by such factors as capacity utilization rates and the availability of home markets and other export

markets. Based on available information, producers in China have the capability to respond to changes in

demand with moderate changes in the quantity of shipments of certain coated paper to the U.S. market. 

The main contributing factors to the moderate degree of responsiveness of supply are the existence of

alternative markets combined with relatively high capacity utilization rates.

Industry capacity

During the period for which data were collected, the capacity utilization rate for reporting

producers in China of certain coated paper increased, from *** percent in 2006 to *** percent in 2008; it

is projected to be *** percent in 2009 and *** percent in 2010.

Alternative markets

Available data indicate that producers in China have some ability to divert shipments to or from

alternative markets in response to changes in the price of certain coated paper. The share of shipments by

producers in China that went to the United States decreased from *** percent in 2006 to *** percent in

2008; it is projected to be *** percent in 2009 and 2010. The share of shipments by producers in China

to export markets other than the United States increased from *** in 2006 to *** percent in 2008; it is

projected to be *** percent in 2009 and *** percent in 2010. The share of shipments by producers in

China going to the home market decreased from *** percent in 2006 to *** percent in 2008; it is

projected to be *** percent in 2009 and *** percent in 2010. The share of internal consumption by

producers in China decreased from *** percent in 2006 to *** percent in 2008; it is projected to be ***

percent in 2009 *** percent and 2010.

Inventory levels

Inventories of responding producers in China, as a share of total shipments, increased from ***

percent in 2006 to *** percent in 2008; they are projected to be *** percent in 2009 and *** percent

2010. 

Supply disruptions

*** importers of certain coated paper from China (***) reported ***. 

Subject Imports from Indonesia

The responsiveness of supply of imports from Indonesia to changes in price in the U.S. market is

affected by such factors as capacity utilization rates and the availability of home markets and other export

markets. Based on available information, producers in Indonesia have the capability to respond to
 7

 The largest sources of nonsubject imports include Canada, Germany, Finland, and Korea.

II-5

changes in demand with relatively large changes in the quantity of shipments of certain coated paper to

the U.S. market. The main contributing factors to the high degree of responsiveness of supply are the

existence of unused capacity and alternative markets.

Industry capacity

During the period for which data were collected, the capacity utilization rate for reporting

producers in Indonesia of certain coated paper increased, from *** percent in 2006 to *** percent in

2008; it is projected to be *** percent in 2009 and *** percent in 2010.

Alternative markets

Available data indicate that producers in Indonesia have some ability to divert shipments to or

from alternative markets in response to changes in the price of certain coated paper. The share of

shipments by producers in Indonesia that went to the United States decreased from *** percent in 2006 to

*** percent in 2008; it is projected to be *** percent in 2009 and *** percent in 2010. The share of

shipments by producers in Indonesia to export markets other than the United States increased from *** in

2006 to *** percent in 2008; it is projected to be *** percent in 2009 and *** percent in 2010. The share

of shipments by producers in Indonesia going to the home market increased from *** percent in 2006 to

*** percent in 2008; it is projected to be *** percent in 2009 and *** percent in 2009. The share of

internal consumption by producers in Indonesia increased from *** percent in 2006 to *** percent in

2008; it is projected to be *** percent in 2009 and *** percent in 2010.

Inventory levels

Responding Indonesia producers’ inventories, as a share of total shipments, decreased from ***

percent in 2006 to *** percent in 2008; they are projected to be *** percent in 2009 and *** percent in

2010. These data indicate that producers in Indonesia may be limited in their ability to use inventories as

a means of increasing shipments of certain coated paper to the U.S. market.

Supply disruptions

*** importer of certain coated paper from Indonesia (***) reported ***. 

Nonsubject Imports

Imports from nonsubject sources of certain coated paper, as a share of the quantity of total U.S.

imports of certain coated paper, decreased from *** percent in 2006 to *** percent in 2008. Imports

from nonsubject sources accounted for *** percent of the quantity of total imports in the first quarter of

2009.7

Demand

The existence of substitutes for certain coated paper discussed below indicates that the demand

for this product is likely to be relatively price elastic. The demand for certain coated paper is largely
 8

 Petitioner’s postconference brief, p. 17.

 9

 U.S. Bureau of Economic Analysis. Gross Domestic Product: Second Quarter 2009 (Third Estimate). 

September 30, 2009.

 10 Included in the narrative responses from importers in this section of the report are *** importers that import

certain coated paper from nonsubject countries and *** firms that purchase certain coated paper from ***. 

 11 Respondents’ postconference brief, pp. 14-15.

II-6

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

2007 2008 2009

Percent change

Real GDP growth

determined by the overall economy and demand for high-end commercially printed advertisements,

reports, and brochures.8

 Real GDP growth at seasonally adjusted annual rates is shown in figure II-1.9

Figure II-1

Certain Coated Paper: Real GDP growth, January 2007-June 2009

Source: Bureau of Economic Analysis.

When asked how the overall demand for certain coated paper has changed since January 2006, all

six responding integrated producers reported that demand has decreased or fluctuated, citing the

recession. Two of four responding converters reported that demand has decreased, citing the recession

and the increase of competing forms of advertisement; one converter reported that demand has fluctuated;

and one reported that demand has increased.

Thirteen of 14 responding importers reported that demand has decreased or fluctuated since 2006,

mostly citing the recession.10 One of the importers reported that demand has decreased every year since

2006 and three of these importers reported that demand increased from 2006 to mid-2008, after which it

decreased. One importer reported that demand has not changed.

Apparent U.S. consumption of certain coated paper sheets and sheeter rolls by quantity decreased

by *** percent from 2006 to 2008 overall, decreasing by *** percent from 2006 to 2007 before further

decreasing by *** percent from 2007 to 2008. Apparent U.S. consumption in the first two quarters of

2009 is *** percent below the first two quarters of 2008.

Respondents stated that most of the decline in demand for certain coated paper in 2008 and 2009

is permanent, due to a structural shift of printed materials to on-line content.11 Three importers and one

converter reported that there has been a shift from certain coated paper to electronic or on-line media.
 12 Respondents’ postconference brief, p. 28.

 13 One integrated producer also reported that demand may increase in March and April for spring fashion

advertisements and another reported that national elections and the Olympics may also affect demand.

 14 Respondents also stated that, due to the lead times from China and Indonesia, imports are typically shipped in

January or February for the spring season. Conference transcript, p. 195 (Hunley).

 15 Included in the importers’ responses in this section of the report are *** firms that purchase imports from other

importers: ***.

II-7

 Respondents also stated that purchasers of certain coated paper built up inventories during 2008

in order to hedge against further price increases and that these purchasers began to draw down inventories

in the second half of 2008, resulting in reduced orders in addition to the recessionary effect on demand.12 

Business Cycles

When asked if the certain coated paper market was subject to business cycles, *** U.S. integrated

producers and one converter reported that demand peaks in the third and fourth quarters leading up to the

holiday season.13 Respondent parties reported that there are seasonal peaks in the spring and in the fall,

but that the typical business cycle has been disrupted in the second half of 2008 and 2009 due to the

recession.14

Substitute Products

One U.S. integrated producer reported that uncoated paper is a substitute for certain coated paper,

but another integrated producer noted that uncoated paper does not print with the same image and color

quality as certain coated paper. Another integrated producer noted that coated paper in web roll form is

generally not a substitute for certain coated paper due to differences in performance and quality.

Two converters reported that uncoated paper is a possible substitute. One converter reported that

consumers of uncoated paper are switching to low-cost grades of coated paper, while the other converter

reported that the prices of certain coated paper and uncoated paper have both decreased since 2006. One

converter reported that there has been an increase in competing forms of advertisement, including

electronic media and on-line content. 

Ten importers reported that uncoated paper is a substitute, five named coated groundwood paper,

and two named coated paper in web roll form. Three importers noted that there is limited substitutability

between these products and certain coated paper because they are of inferior quality. Three importers

reported that electronic media or on-line content can substitute for certain coated paper. Five importers

reported that the prices of substitutes can affect the price of certain coated paper, stating that the prices of

printing papers (excluding newspaper) tend to move together. One of these importers noted that, due to

the recession, consumers of the more costly certain coated paper products are increasingly looking for

cheaper alternatives. Two importers reported that prices of substitutes do not affect the price of certain

coated paper. Three importers reported that there are no substitutes for certain coated paper. 

SUBSTITUTABILITY ISSUES

The degree of substitutability between domestic products and subject and nonsubject imports and

between subject and nonsubject imports is examined in this section. The discussion is based upon the

results of questionnaire responses from producers and importers.15
II-8

Comparisons of Domestic Product and Subject Imports

In order to determine whether U.S.-produced certain coated paper can generally be used in the

same applications as imports from China and Indonesia, producers and importers were asked whether the

products can “always,” “frequently,” “sometimes,” or “never” be used interchangeably. Four of six U.S.

integrated producers reported that they are always interchangeable, as shown in table II-2. A slight

majority of converters reported that they are always or frequently interchangeable. A majority of the

importers that compared certain coated paper from China and Indonesia with those from the United States

reported that they are always or frequently interchangeable, as shown in table II-2. 

Table II-2

Certain coated paper: Perceived degree of interchangeability of product produced in the United

States and in other countries, by country pairs

Country comparison

U.S. integrated

producers

U.S. Converters U.S. importers

AFSNAFSNAFSN

U.S. vs. subject countries:

 U.S. vs. China 4 2 0 0 2 1 1 0 4 4 3 0

 U.S. vs. Indonesia 42002110453 0

U.S. vs. nonsubject countries:

 U.S. vs. Other 4 2 0 0 2 1 1 0 2 4 3 0

Subject country comparisons:

 China vs. Indonesia 420031006320

Subject countries vs. nonsubject countries:

 China vs. Other 4 2 0 0 2 1 1 0 2 4 3 0

 Indonesia vs. Other 42002110332 0

Note.–“A” = Always, “F” = Frequently, “S” = Sometimes, and “N” = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

As indicated in table II-3, half of responding U.S. integrated producers reported that differences

other than price between U.S.-produced certain coated paper and subject imports are frequently or

sometimes a significant factor in their sales, while the other half reported that they are never a significant

factor. Likewise, half of responding converters reported that differences other than price between U.S.-

produced certain coated paper and subject imports are frequently or sometimes a significant factor in their

sales, while the other half reported that they are never a significant factor. Responses from importers

were mixed, with a majority reporting that differences other than price between U.S.-produced 

certain coated paper and imports from China are always a significant factor. Roughly half of responding 

importers reported that differences other than price between U.S.-produced certain coated paper and 
 16 Conference transcript, pp. 112-113 (Nelson, Miller, and Graff).

II-9

Table II-3

Certain coated paper: Differences other than price between products from different sources1

Country comparison

U.S. integrated

producers

U.S. converters U.S. importers

AFSNAFSNAFSN

U.S. vs. subject countries:

 U.S. vs. China 0 1 2 3 1 1 2 0 6 1 3 0

 U.S. vs. Indonesia 012311204141

U.S. vs. nonsubject countries:

 U.S. vs. Other 0 1 2 3 1 0 3 0 3 0 5 0

Subject country comparisons:

 China vs. Indonesia 012220113043

Subject countries vs. nonsubject countries:

 China vs. Other 0 1 2 2 1 0 3 0 4 1 3 0

 Indonesia vs. Other 012210302120

 1

 Producers and importers were asked if differences other than price between certain coated paper produced in

the United States and in other countries are a significant factor in their firms’ sales of certain coated paper.

Note.–“A” = Always, “F” = Frequently, “S” = Sometimes, and “N” = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

imports from Indonesia are always a significant factor and the other half reporting that they are sometimes

significant. Two U.S. integrated producers and one purchaser reported that the quality of certain coated

paper from China and Indonesia has significantly improved and is comparable to that of U.S.-produced

certain coated paper.16

One integrated producer reported that its location is an important factor in its ability to offer

availability, transportation, and technical support to its customers. Another integrated producer reported

that U.S. integrated producers generally have a broader product range than import suppliers and that U.S.

producers offer superior quality, environmentally-friendly features, shorter lead times, local warehousing,

and technical support. One converter noted that some purchasers may choose a certain source for

nationalistic reasons, or due to inventory or credit availability. One converter reported that long lead

times from China and lack of converting capacity in the United States limits the range of custom sizes that

producers in China can offer. Another converter reported that it has experienced severe quality problems

with imports from China and Indonesia including baggy rolls, inconsistent caliper, coating streaks, and

wrinkles. Two importers reported that U.S.-produced certain coated paper generally has a higher fiber

content resulting in higher stiffness values, which allows the paper to run faster in high-speed presses and

allows a lower basis weight paper to be substituted in some applications. These importers also reported

that lead times from China are 12 weeks, whereas U.S. producers can ship within one day and that U.S.

producers have superior technical support and automated customer service on the internet whereas the

producers in China have a manual system. Four other importers also reported that U.S. suppliers have

shorter lead times and a superior supply chain than import suppliers. One importer reported that some
 17 Conference transcript, pp. 56 and 91 (Graff).

 18 Conference transcript, p. 91 (Stewart, Sandstrom).

 19 This converter also reported having quality problems with imports from China and Indonesia.

II-10

purchasers specifically request U.S. brands or certain sizes and weights that subject import suppliers

cannot offer because they lack a U.S. distribution network. 

When asked if there had been any significant changes in product range or marketing of certain

coated paper since 2006, one U.S. integrated producer reported that the availability of environmentallyfriendly features (e.g., recycled fiber content, green power, certifications) has increased and that U.S.

producers have lowered their prices for such features. One top-tier purchaser reported that such

environmental features are very important to his firm and has been unable to verify if import suppliers can

offer these features or not.17 Another purchaser reported that demand for these features has increased. 

One purchaser reported that the vast majority of commercial printers may be interested in environmental

features but do not necessarily have a formal certification process, while another purchaser stated that

price remains a more important factor in a purchasing decision than the desire to have environmentallyfriendly features.18 

One integrated producer reported that there has been a shift from higher grades of certain coated

paper to the economy #3 grade (with brightness levels of 86-89). One purchaser reported that U.S.

integrated producers *** have introduced lower-cost grades in order to compete with imports. Two

converters reported that there has been an increase in product ranges offered, including higher brightness

levels and more weights and sizes. 

Nonsubject Comparisons

In addition to comparisons between the U.S. product and imports from the subject country, U.S.

producer and importer comparisons between the United States and imports from nonsubject countries and

between subject imports and nonsubject imports are also shown in tables II-2 and II-3. One converter that

also imports from nonsubject source reported that lead times from suppliers of imports from Europe are

about 6 to 8 weeks, whereas the lead time on imports from Asia are 12 weeks. Another converter

reported that it has experienced severe quality problems with imports from Korea including baggy rolls,

inconsistent caliper, coating streaks, and wrinkles.19 Two importers reported that European producers

offer certain coated paper with a higher quality printing surface, superior customer service, and shorter

lead times than producers in China.
 1

 The term “integrated” producers is used to distinguish those producers who produce sheeter rolls from U.S.

converters, which process sheeter rolls into sheet, and is not used to indicate the level of vertical integration of those

producers.

 2

 U.S. integrated producers reported 164,601 short tons of U.S. commercial shipment to converters in 2008. U.S.

converters which submitted responses to the Commission’s questionnaire reported production of 24,777 short tons in

2008, or 15.1 percent of total U.S. commercial shipments of sheeter rolls.

 3

 Petitioners have stated that they believe U.S. converters should be considered part of the U.S. industry. 

Petitioners’ postconference brief, “Answers to Staff Questions,” exh. 9, p. 1; Respondents did not take a definitive

position, but indicated that the effects of the inclusion of U.S. converters would be immaterial on the industry data

given their relatively small size in the market. Conference transcript, p. 190 (Porter).

 4

 MeadWestvaco also submitted a U.S. producer’s questionnaire which reported integrated production during the

period of investigation. Although not identified in the petition as a U.S. producer, MeadWestvaco considered a

number of its paperboard products to be within the scope of these investigations.

Two U.S. companies, Verso Paper Corp. (“Verso”) and West Linn Paper Co. (“West Linn”) submitted data

pertaining to their web roll operations. Verso and West Linn produce web rolls, but not certain coated paper. Their

data is included in table C-2. 

 5

 The Commission’s questionnaire mailing list consisted of 235 firms (108 converters and 127 importers). All

these firms received U.S. producer’s and U.S. importer’s questionnaires. Sixty-five firms reported that they did not

produce or convert coated paper. One firm, *** submitted a response with incomplete and unusable data.

III-1

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND

EMPLOYMENT

Information presented in this section of the report is based on (except as noted) the questionnaire

responses of six integrated producers1

 which are believed to account for virtually all U.S. production of

certain coated paper in 2008 and four U.S. converters, which are estimated to account for approximately

15.1 percent2

 of U.S. conversion activities in 2008.3

U.S. PRODUCERS

The Commission sent producers’ questionnaires to five firms identified in the petition as U.S.

producers of certain coated paper. All firms submitted responses.4

 Petitioners contend that U.S. firms

that process sheeter rolls into certain coated paper should be part of the U.S. industry. Respondents do

not object to these firms being included in the U.S. industry. Therefore, the Commission sent producers’

questionnaires to 108 companies believed to be U.S. converters of certain coated paper that were

identified in the petition. Four firms submitted responses containing usable data.5

 The data submitted by

U.S. converters are included in the U.S. employment data as well as in the financial data set forth in Part

VI of this report. The data submitted by U.S. converters are not included in U.S. shipment and U.S.

apparent consumption data as this would result in the double-counting of U.S. shipments, once as U.S.

shipments of sheeter rolls from the U.S. integrated producers to the U.S. converters and then again as U.S.

shipments of sheets from U.S. converters to their customers. Table III-1 presents the list of reporting U.S.

integrated producers and converters with each company’s U.S. production location, share of reported U.S.

integrated or converting production in 2008, and position on the petition.
III-2

Table III-1

Certain coated paper: U.S. coaters and converters, U.S. production locations, shares of U.S.

production in 2008, and positions on the petition

Firm

Production

location

Share of reported

production

(percent)

Position on the petition

China Indonesia

U.S. Integrated Producers

Appleton1 Kimberly, WI *** Petitioner Petitioner

MeadWestvaco Glen Allen, VA *** *** ***

Mohawk Cohoes, NY *** *** ***

NewPage2 Escanaba, MI

Luke, MD

Rumford, ME

Wickliffe, KY

Wisconsin

Rapids, WI

*** Petitioner Petitioner

Sappi3 Cloquet, MN

Muskegon, MI

Skowhegan, ME

Allentown, PA

*** Petitioner Petitioner

Smart4 Hamilton, OH *** *** ***

U.S. Converters

Clampitt Dallas, TX *** *** ***

J&M Cumming Irvington, NJ *** *** ***

Nekoosa Nekoosa, WI *** *** ***

Wausau Mosinee, WI *** *** ***

 1 Appleton is a wholly owned subsidiary of Arjowiggins S.A.S. of Issy-les-Moulineaux, France, a producer of certain coated

paper.

 2 Private equity firm Cerberus Capital Management L.P. of New York, New York owns 76.6 percent of NewPage’s stock, Stora

Enso Oyj of Helsinki, Finland owns 20.1 percent, and the remaining share of 3.3 percent is owned by NewPage’s directors and

officers.

 3 Sappi is a wholly owned subsidiary of Sappi Limited of Braamfontein, South Africa and is affiliated with Sappi Fine Paper

Europe of Brussels, Belgium, a producer of certain coated paper. Sappi Limited also owns a 34 percent stake in Jiangxi

Chenming Paper Co., Ltd., a company it reported does not import into the United States or produce certain coated paper.

 4 Smart Papers (“Smart”) is wholly owned by the private equity firm Plainfield Asset Management LLC of Greenwich, CT.

Source: Compiled from data submitted in response to Commission questionnaires.
 6

 Petitioners maintain that unfairly traded subject imports are the major cause of the reported mill closures,

production slowdowns, and unemployment. Petitioners’ postconference brief, p. 37. Respondents argue that these

events are the result of the continuing efforts of the domestic industry to consolidate and rationalize inefficient

capacity and are presented to shareholders as positive events. Respondents’ postconference brief, pp. 33-35.

In the 2007 Coated Free Sheet Paper investigation, one paper mill was closed and several machines shut

down. The Commission found that “there is little contemporaneous evidence, however, that these events are

attributable to the effects of subject imports.” Coated Free Sheet Paper from China, Indonesia, and Korea, Inv.

Nos. 701-TA-444-446 and 731-TA-1107-1109 (Final), USITC Publication 3965, December 2007, p. 18.

III-3

U.S. CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

U.S. Integrated Producers

Data on U.S. coaters’ capacity, production, and capacity utilization are presented in table III-2. 

Total U.S. capacity increased from 2006 to 2008 by 1.2 percent and remained steady (lower by 0.1

percent) between January-June 2008 and January-June 2009. U.S. capacity volume accounted for 160.6

percent of apparent U.S. consumption of certain coated paper in 2008. Total U.S. production of certain

coated paper decreased by 14.4 percent from 2006 to 2008, and was lower by 9.5 percent from JanuaryJune 2008 to January-June 2009. Annual capacity utilization ranged from 30.6 percent in January-June

2009 to 39.4 percent in 2006. Two of the six U.S. integrated producers, NewPage and Sappi, reported

changes in capacity due to acquisitions and/or mill closures.6

 The tabulation below lists these events that

occurred during the period of investigation.

Firm Date Description of activity

Annual production

change

(short tons)

NewPage November 2006 Shut down paper machine #7 in Luke, MD

Significant downtime paper machine #11 in

Rumford, ME

***

December 2007 Acquired Stora Enso North America Added the Wisconsin

Rapids, WI mill and the

Kimberly, WI mill.

February 2008 Shut down paper machine #11 in Rumford, ME ***

July 2008 Shut down Kimberly, WI coated freesheet

facility

***

November 2008 Shut down Chillicothe sheeting facility

January 2009 Market-related downtime ***

April 2009 Market-related downtime ***

Sappi August 2009 Shut down Muskegon, MI mill ***

2009 Market-related downtime

Source: Compiled from data submitted in response to Commission questionnaires; conference transcript, pp. 26-27 (Nelson)

and pp. 34-34 (Ayer).
III-4

Table III-2

Certain coated paper: U.S. coaters’ capacity, production, and capacity utilization, 2006-08,

January-June 2008, and January-June 2009

Item

Calendar year January-June

2006 2007 2008 2008 2009

Capacity (short tons)

Appleton *** *** *** *** ***

MeadWestvaco *** *** *** *** ***

Mohawk (1) (1) (1) (1) (1)

NewPage *** *** *** *** ***

Sappi *** *** *** *** ***

Smart *** *** *** *** ***

 Total 2,864,425 2,943,777 2,829,110 1,408,370 1,406,963

Production (short tons)

Appleton *** *** *** *** ***

MeadWestvaco *** *** *** *** ***

Mohawk *** *** *** *** ***

NewPage *** *** *** *** ***

Sappi *** *** *** *** ***

Smart *** *** *** *** ***

 Total 1,145,595 1,117,841 980,751 481,873 436,262

Capacity utilization (percent)

Appleton *** *** *** *** ***

MeadWestvaco *** *** *** *** ***

Mohawk (1) (1) (1) (1) (1)

NewPage *** *** *** *** ***

Sappi *** *** *** *** ***

Smart *** *** *** *** ***

 Average 39.4 37.4 34.1 33.6 30.6

 1 Mohawk did not provide capacity data.

Source: Compiled from data submitted in response to Commission questionnaires.
III-5

All the U.S. integrated producers reported producing other products using the same

manufacturing equipment and/or production employees that were used to produce certain coated paper. 

Table III-3 shows overall U.S. capacity for these producers as well as the U.S. production of other

products for which they have allocated capacity.

Table III-3

Certain coated paper and other products: Overall capacity of U.S. coaters, and production by

firms and products, 2008

* * * * * * *

U.S. Converters

Data on U.S. converters’ capacity, production, and capacity utilization are presented in table III4. Total U.S. capacity remained steady throughout the entire period of investigation. Total U.S.

conversion production of certain coated paper increased by *** percent from 2006 to 2008 (with an

increase of *** percent from 2006 to 2007) and was lower by *** percent from January-June 2008 to

January-June 2009. Capacity utilization ranged from *** percent in 2007 to *** percent in January-June

2009.

Table III-4

Certain coated paper: U.S. converters’ capacity, production, and capacity utilization, 2006-08,

January-June 2008, and January-June 2009

* * * * * * *

Three of the four reporting U.S. converters reported producing other products using the same

manufacturing equipment and/or production employees that were used to produce certain coated paper. 

Only *** reported not producing other products. Table III-5 shows overall U.S. capacity for U.S.

converters as well as the U.S. production of other products for which they have allocated capacity.

Table III-5

Certain coated paper and other products: Overall capacity of U.S. converters, and production by

firms and products, 2008

* * * * * * *

U.S. PRODUCERS’ U.S. SHIPMENTS AND EXPORT SHIPMENTS

U.S. Integrated Producers

As detailed in table III-6, the volume of U.S. integrated producers’ U.S. shipments of certain

coated paper decreased by 16.8 percent from 2006 to 2008, and was lower by 16.5 percent from JanuaryJune 2008 to January-June 2009. The value of U.S. shipments also decreased by 13.7 percent from 2006

to 2008, and was lower by 29.3 percent from January-June 2008 to January-June 2009. *** reported ***

internal consumption in 2008 (*** short tons and January-June 2009 (***). *** reported export

shipments to ***. *** reported export shipments to ***. 
III-6

Table III-6

Certain coated paper: U.S. integrated producers’ shipments, by types, 2006-08, January-June

2008, and January-June 2009

Item

Calendar year January-June

2006 2007 2008 2008 2009

Quantity (short tons)

U.S. commercial shipments of– 

 Sheeter rolls 194,312 167,337 164,601 88,377 52,863

 Sheet 793,392 770,093 656,997 316,793 285,291

 Total U.S. commercial shipments 987,704 937,430 821,708 405,170 338,276

Export shipments *** *** *** *** ***

 Total shipments *** *** *** *** ***

Value ($1,000)

U.S. commercial shipments of– 

 Sheeter rolls 150,194 139,139 146,624 76,047 45,572

 Sheet 985,435 928,242 833,677 422,009 306,607

 Total U.S. commercial shipments 1,135,629 1,067,381 980,407 498,056 352,287

Export shipments *** *** *** *** ***

 Total shipments *** *** *** *** ***

Unit value (per short ton)

U.S. commercial shipments of– 

 Sheeter rolls 773 831 891 860 862

 Sheet 1,242 1,205 1,269 1,332 1,075

 Total U.S. commercial shipments 1,150 1,139 1,193 1,229 1,041

Export shipments *** *** *** *** ***

 Average *** *** *** *** ***

Share of quantity (percent)

U.S. commercial shipments of– 

 Sheeter rolls *** *** *** *** ***

 Sheet *** *** *** *** ***

 Total U.S. commercial shipments *** *** *** *** ***

Export shipments *** *** *** *** ***

 Total 100.0 100.0 100.0 100.0 100.0

Note:–***.

Source: Compiled from data submitted in response to Commission questionnaires.
III-7

U.S. Converters

As shown in table III-7, the volume of U.S. converters’ U.S. shipments of certain coated paper

increased irregularly by *** percent from 2006 to 2008, but was lower by *** percent from January-June

2008 to January-June 2009. The value of U.S. shipments also increased irregularly by *** percent from

2006 to 2008, but was lower by *** percent from January-June 2008 to January-June 2009. None of the

U.S. producers reported internal consumption or transfers to related firms of certain coated paper.

Table III-7

Certain coated paper: U.S. converters’ shipments of slitted rolls, by types, 2006-08, January-June

2008, and January-June 2009

* * * * * * *

U.S. PRODUCERS’ IMPORTS AND PURCHASES OF IMPORTS

None of the U.S. integrated producers reported any U.S. imports or purchases of imports from

China or Indonesia. ***, reported that they purchased from U.S. importers the subject product from

China during the period of investigation. Table III-8 presents *** purchases of certain coated paper from

China, its U.S. conversion production, and the ratio of their purchases to their U.S. conversion

production.

Table III-8

Certain coated paper: U.S. converters’ subject imports and purchases of subject imports, 2006-08,

January-June 2008, and January-June 2009

* * * * * * *

U.S. PRODUCERS’ INVENTORIES

Data on end-of-period inventories of certain coated paper for the period of investigation are

presented in table III-9.
 7

 Petitioners argue that the casual link between job losses and unfairly traded subject imports is further confirmed

by the Department of Labor’s issuance during the period of investigation of three Trade Adjustment Assistance

certifications for job losses at NewPage’s Kimberly, WI and Rumford, ME mills and for job losses at Smart’s West

Chicago, IL mill. Two additional certifications are currently pending for job losses at Appleton and for Sappi’s job

losses at its Muskegon, MI mill. Petitioners’ postconference brief, p. 41 and exh. 21.

III-8

Table III-9

Certain coated paper: U.S. coaters’ and converters’ end-of-period inventories, 2006-08, JanuaryJune 2008, and January-June 2009

Item

Calendar year January-June

2006 2007 2008 2008 2009

U.S. integrated producers

Inventories (short tons) 202,439 205,308 275,698 182,102 210,786

Ratio to production (percent) 17.7 18.4 28.1 18.9 24.2

Ratio to U.S. shipments (percent) 20.5 21.9 33.6 22.5 31.2

Ratio to total shipments (percent) 19.4 20.2 30.8 20.4 29.2

U.S. converters

Inventories (short tons) *** *** *** *** ***

Ratio to production (percent) *** *** *** *** ***

Ratio to U.S. shipments (percent) *** *** *** *** ***

Ratio to total shipments (percent) *** *** *** *** ***

Note.--January-June ratios are calculated using annualized production and shipment data.

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

Data provided by U.S. producers on the number of production and related workers (“PRWs”)

engaged in the production of certain coated paper,7

 the total hours worked by such workers, wages paid to

such PRWs, productivity, and unit labor costs during the period of investigation are presented in table III10, by U.S. integrated producers and U.S. converters. 
III-9

Table III-10

Certain coated paper: Average number of production and related workers producing certain coated

paper, hours worked, wages paid to such employees, and hourly wages, productivity, and unit labor

costs, 2006-08, January-June 2008, and January-June 2009

Item

Calendar year January-June

2006 2007 2008 2008 2009

U.S. integrated producers

PRWs (number) *** *** *** *** ***

Hours worked (1,000) *** *** *** *** ***

Wages paid ($1,000) *** *** *** *** ***

Hourly wages *** *** *** *** ***

Productivity (short tons per hour) *** *** *** *** ***

Unit labor costs (per short ton) *** *** *** *** ***

U.S. converters

PRWs (number) *** *** *** *** ***

Hours worked (1,000) *** *** *** *** ***

Wages paid ($1,000) *** *** *** *** ***

Hourly wages *** *** *** *** ***

Productivity (short tons per hour) *** *** *** *** ***

Unit labor costs (per short ton) *** *** *** *** ***

U.S. integrated producers and converters

PRWs (number) 2,301 2,192 1,814 1,950 1,705

Hours worked (1,000) 4,513 4,258 3,664 1,688 1,622

Wages paid ($1,000) 122,582 119,166 107,677 48,429 44,831

Hourly wages $27.16 $27.99 $29.38 $28.69 $27.63

Productivity (short tons per hour) 258.9 269.0 274.1 292.4 275.0

Unit labor costs (per short ton) $104.93 $104.03 $107.20 $98.12 $100.47

Source: Compiled from data submitted in response to Commission questionnaires.

 1

 The Commission’s questionnaire mailing list consisted of 235 firms (108 converters and 127 importers). All

these firms received U.S. producer’s and U.S. importer’s questionnaires. Fifty-nine firms reported that they did not

import certain coated paper into the United States. One firm, *** submitted a response with incomplete and

unusable data.

 2

 In addition to the 13 usable responses (the U.S. importers shown in table IV-1), the Commission received U.S.

importer questionnaire responses from four firms that provided data to the Commission regarding their importation

of web rolls. These firms include: ***. 

The Commission also received U.S. importer’s questionnaire responses from firms that, after further

inquiry, were deemed purchasers rather than U.S. importers of the subject product. These firms include: ***.

 3

 Petitioners’ postconference brief, “Answers to Questions from Staff,” exh. 1 at exh. Q1-1. Respondents claim

that petitioners assumption with regard to U.S. imports from nonsubject countries, specifically EU countries, may be

understated. Petitioners’ assumption is that for a number of HTS statistical reporting numbers (those for coated

groundwood paper), U.S. imports from nonsubject countries are entirely in the form of rolls and not included within

the scope of these investigations. Respondents claim that certain EU export statistics show that a portion of these

imports are in sheet form. See Respondents; postconference brief, exh. 3. Respondents’ submitted EU export

statistics show that the portion claimed to be in sheet form would be equal to 12.4 percent of total U.S. imports from

nonsubject countries.

Respondents also question petitioners’ assumptions with regard to U.S. imports from Indonesia and

maintain that those imports are overstated. Respondents claim that a portion of U.S. imports from Indonesia were

misclassified. (See Negligibility). 

 4

 Respondents argue that the preliminary duties in the 2007 Coated Free Sheet Paper investigation distorted

volumes of U.S. imports from subject countries particularly in the first half of 2008. They maintain that the

preliminary duties ceased in late 2007 and, given the order lead time, U.S. imports in the first half of 2008 “were

simply returning to historical levels,” and are not evidence of a “surge” in U.S. imports from subject countries. 

(continued...)

IV-1

PART IV: U.S. IMPORTS, APPARENT CONSUMPTION, AND

MARKET SHARES

U.S. IMPORTERS

The Commission sent importer questionnaires to 127 firms listed in the petition as likely to be

U.S. importers of certain coated paper, as well as to all U.S. producers.1

 Questionnaire responses

containing usable data were received from 13 firms2

 and accounted the majority of U.S. imports from

China and Indonesia.

Table IV-1 lists all responding U.S. importers of certain coated paper from Indonesia and China,

their U.S. locations, and their quantities of imports, by source, in 2008.

Table IV-1

Certain coated paper: Reported U.S. imports, by importers and by sources of imports, 2008

* * * * * * *

U.S. IMPORTS

Table IV-2 presents data for U.S. imports of certain coated paper from China, Indonesia, and

nonsubject countries. The data below are compiled using adjusted Commerce statistics. The adjustments

are based on those provided by the petitioners.3

 As shown, U.S. imports from China decreased by 2.5

percent from 2006 to 2008 but were higher by 50.2 percent from January-June 2008 to January-June

2009.4

 The volume of U.S. imports from Indonesia increased by 18.4 percent from 2006 to 2008, but
 4

 (...continued)

Respondents’ postconference brief, p. 23.

 5

 Respondents’ postconference brief, pp. 45-46. Respondents claim that Unisource switched suppliers because of

a dispute over payment terms with respondents and that NewPage offered favorable pricing because of the subsidies

it received as part of the Alternative Fuel Tax Credit, the so-called “Black Liquor Subsidies.” Ibid. at exh. 1, pp. 7-

8. Petitioners claim that Unisource switched to NewPage not because of price, but rather because of Unisource’s

concern that respondents wanted to dramatically increase its volume of imports into the United States during a

period of decreasing demand brought about by the recession. Petitioners’ postconference brief, “Answers to Staff

Questions,” exh. 4, p. 2. Petitioners submitted an affidavit from a Unisource vice president which stated that ***. 

Ibid. at exh. Q4-2.

 6

 Petitioners postconference brief, p. 47.

 7

 Conference transcript, p. 183 (Hunley).

IV-2

were lower by 7.5 percent from January-June 2008 to January-June 2009. The volume of U.S. imports

from nonsubject countries decreased by 25.8 percent from 2006 to 2008, and were lower by 39.4 percent

from January-June 2008 and January-June 2009. The largest sources of U.S. imports from nonsubject

countries in 2008 were (in descending order of volume): (1) Canada, (2) Finland, (3) Korea, (4)

Germany, and (5) Japan.

In 2009, *** Unisource shifted from suppliers in subject countries to domestic supply. ***. 

Unisource, another large national paper distributor, stopped receiving shipments from GPS in July 2009,

after it decided earlier in 2009 to obtain its supply needs from NewPage.5

 Subsequent to the loss of the

Unisource account, Asia Pulp & Paper Co., Ltd. began to create an e-commerce, U.S. distribution

network for its products named “Eagle Ridge Paper.” Petitioners claim that this distributor is fully

operational and is currently underselling domestic producers by wide margins.6

 Respondents claim that

the Eagle Ridge distribution network is in its infancy stages of development and that to create a

distribution network of sufficient size to replace the volumes lost from the Unisource account will take

years.7
IV-3

Table IV-2

Certain coated paper: U.S. imports, by sources, 2006-08, January-June 2008, and January-June

2009

Source

Calendar year January-June

2006 2007 2008 2008 2009

Quantity (short tons)

China 282,726 302,858 275,532 109,757 164,829

Indonesia 44,695 52,541 52,938 21,506 19,883

 Subtotal 327,421 355,399 328,470 131,263 184,712

All others 824,533 727,306 611,626 324,258 196,512

 Total 1,151,955 1,082,705 940,096 455,521 381,224

Value ($1,000)

1

China 253,940 279,470 268,349 106,020 142,038

Indonesia 39,475 45,543 48,765 19,121 16,458

 Subtotal 293,416 325,013 317,115 125,141 158,496

All others 809,932 737,251 650,135 337,366 204,901

 Total 1,103,348 1,062,264 967,250 462,506 363,397

Unit value (per short ton)

China $898 $923 $974 $966 $862

Indonesia 883 867 921 889 828

 Subtotal 896 915 965 953 858

All others 982 1,014 1,063 1,040 1,043

 Average 958 981 1,029 1,015 953

Share of quantity (percent)

China 24.5 28.0 29.3 24.1 43.2

Indonesia 3.9 4.9 5.6 4.7 5.2

 Subtotal 28.4 32.8 34.9 28.8 48.5

All others 71.6 67.2 65.1 71.2 51.5

 Total 100.0 100.0 100.0 100.0 100.0

Share of value (percent)

China 23.0 26.3 27.7 22.9 39.1

Indonesia 3.6 4.3 5.0 4.1 4.5

 Subtotal 26.6 30.6 32.8 27.1 43.6

All others 73.4 69.4 67.2 72.9 56.4

 Total 100.0 100.0 100.0 100.0 100.0

 1

 Landed, duty-paid.

Source: Compiled from adjusted Commerce statistics.
 8

 Respondents’ postconference brief, pp. 19-20. HTS subheading 4810.92 is described as: “ Other paper and

paperboard: Multi-ply: In strips or rolls of a width exceeding 15 cm or in rectangular (including square) sheets with

one side exceeding 36 cm and the other side exceeding 15 cm in the unfolded state”

 9

 Petitioners’ postconference brief, pp. 23-29.

 10 Apparent consumption and market share data using data obtained from U.S. importer questionnaire responses

for U.S. imports from Indonesia can be found in appendix C, table C-4.

IV-4

Misclassification Issue Regarding U.S. Imports from Indonesia

Respondents argue that Commerce statistics overstate U.S. imports from Indonesia throughout the

period of investigation because they misclassified shipments of multi-ply paperboard, a product they

deem to be outside the scope of these investigations, under HTS statistical reporting numbers stated in the

scope. They maintain that the proper HTS heading for their product is 4810.92.8

 Petitioners argue that

these products are within the scope of these investigations and are properly classified and included in U.S.

imports from Indonesia.9

 They maintain that the scope does not exclude multi-ply products. Throughout

this report, adjusted Commerce statistics are used to show the quantity and value of U.S. imports from

Indonesia, which would include the alleged misclassified product.10 The tabulation below sets forth the

volume data for allegedly misclassified product. 

Data source 2006 2007 2008 Jan-June

2008

Jan.-June

2009

Quantity (short tons)

Adjusted Commerce data1 44,695 52,541 52,938 21,506 19,883

Exports to the U.S.2 *** *** *** *** ***

Alleged Misclassified product *** *** *** *** ***

 1 Includes the allegedly misclassified product.

 2 Data submitted by Indonesian respondents in their foreign producer questionnaire. Respondents have not included the

volumes of the allegedly misclassified product in its export shipment data. 

Source: Commerce statistics adjusted by methodology outlined in Petitioners’ postconference brief, “Answers to Staff

Questions,” exh. Q1-1; Indonesian respondents’ foreign producer questionnaire response. See Petitioners’ postconference brief,

“Answers to Staff Questions,” exh. Q2-2 and Respondents’ postconference brief, exh. 3.
 11 Petition, p. 16; petitioners’ postconference brief, p. 18. In the 2007 investigation on Coated Free Sheet Paper,

the Commission cumulated U.S. imports from China, Indonesia, and Korea. In that investigation, respondents

presented the argument that there existed geographical separation in the marketplace with U.S. imports supplying the

Western region of the United States and U.S. producers concentrated in the Eastern regions of the United States. 

No party advances that argument in these current investigations. Coated Free Sheet Paper from China, Indonesia,

and Korea, Inv. Nos. 701-TA-444-446 and 731-TA-1107-1109 (Final), USITC Publication 3965, December 2007,

pp. 9-10; See Petitioners’ postconference brief, p. 19 (“Imports of certain coated paper are not concentrated in the

western region of the United States, as is confirmed by official import statistics.”).

 12 See Petitioners’ postconference brief, exhs. 5 and 6.

IV-5

CUMULATION CONSIDERATIONS

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

Commission has generally considered four factors: (1) fungibility, (2) presence of sales or offers to sell

in the same geographical market, (3) common or similar channels of distribution, and (4) simultaneous

presence in the market. Issues concerning fungibility and channels of distribution are addressed in 

Part II of this report. With regard to geographical markets and presence in the market, the petitioners

argue that imported certain coated paper from China and Indonesia competes without regard to

geographical location in the United States and that these imports have been simultaneously present in the

U.S. market during the period of investigation.11 Official Commerce statistics show that U.S. imports

from the China and Indonesia did enter the United States through geographically dispersed U.S. ports of

entry and monthly throughout the entire period of investigation.12 Respondents do not address the issue

of cumulation of subject imports and instead maintain that imports from Indonesia are negligible (see

Negligibility).
 13 19 U.S.C. § 1677(24)(A)(ii).

 14 15 CFR § 2013.1.

 15 Respondent’s postconference brief, p. 11.

 16 Petitioners provide the Commission with four methodologies for the computation of negligibility all of which

show U.S. imports from Indonesia above the 3 and 4 percent thresholds. The methodologies are summarized as

follows: 

(1) Monthly Commerce statistics adjusted per petitioners assumptions (this is Methodology 1 in table IV-3)

(2) Same as methodology 1 but adding coated groundwood sheet exports from Europe identified in EU

export statistics

(3) Monthly U.S. import data is derived from the foreign producer questionnaire response with alleged

misclassified product added back and total imports from all other countries based on adjusted

Commerce statistics

(4) Combination of methodologies (2) and (3) with U.S. imports from Indonesia calculated using (3) and

total U.S. imports using (2) (adding coated groundwood sheet exports from Europe to the total U.S.

imports). Petitioners’ postconference brief, “Answers to Staff Questions,” exh. Q3-1.

Respondents also provide the Commission with three methodologies for the computation of negligibility all

of which show U.S. imports from Indonesia below the 4 percent threshold, but only one methodology shows imports

below the 3 percent threshold. Respondents’ methodologies all compute the numerator in the same manner, namely

using adjusted Commerce statistics while subtracting out the alleged misclassified product. The respondents’ three

methodologies, therefore alter the computation of the denominator. These methodologies are summarized as

follows:

(1) Computes the denominator as total U.S. imports as defined in the petition, which included sheeter rolls

before the scope alteration

(2) Computes the denominator as total U.S. imports as defined in the revised scope (excluding sheeter

rolls), but adding in U.S. imports from nonsubject countries that they deem within the scope. This is

methodology 2 in table IV-3, with the exception that table IV-3 does not make the additions to U.S.

imports from nonsubject countries. 

(3) Computes the denominator as total U.S. imports as defined as all products in the domestic like product

definition for which respondents are advocating, namely all sheets, sheeter rolls, and web rolls. This is

the only methodology presented by respondents that shows U.S. imports from Indonesia below the 3

percent negligibility threshold. Respondents’ postconference brief, exh. 3. 

IV-6

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.13 Section 771(24)(B) of the Act further

provides that in a countervailing duty investigation under section 701, imports of subject merchandise

from developing countries are negligible if such imports account for less than 4 percent of the volume of

all such merchandise imported into the United States in the specified 12-month period. In accordance

with section 771(B) of the Act, the United States Trade Representative has designated Indonesia as a

developing country under the countervailing duty law.14 No party disputes that the share of the total

quantity of U.S. imports from China surpassed the requisite negligibility threshold during the period. 

With regard to U.S. imports from Indonesia, however, Indonesian respondents argue that U.S. imports

from Indonesia during the period of September 2008 to August 2009 were below the negligibility

thresholds of 3 and 4 percent.15 The parties have each advanced several methodologies for the

computation of negligibility.16 

Data compiled by the Commission show U.S. imports from Indonesia during the period

accounted for either 6.8 percent or *** percent of total U.S. imports based on quantity depending on the
 17 Both of the methodologies shown in Table IV-3 use “subject merchandise” data to compute Indonesian and

total U.S. imports meaning that these imports are those as defined by the Commerce’s scope definition of these

investigations (aside from the misclassification issue). Neither of these methodologies expands the definition of

“subject imports” to include sheeter rolls or web rolls.

IV-7

methodology adopted. Table IV-3 below presents monthly U.S. import data from September 2008 to

August 2009 using two methodologies. Methodology 1 is based solely on adjusted monthly Commerce

statistics using petitioners assumptions as to the adjustments. Methodology 2 is based on adjusted

monthly Commerce statistics using petitioners assumptions and then subtracting out monthly volumes

that respondents have deemed misclassified and not within the scope of these investigations.17

Table IV-3

Certain coated paper: Monthly U.S. imports, by sources of imports, September 2008-August 2009

Methodology 1

Monthly Adjusted

Commerce Statistics

Methodology 2 

Monthly Adjusted Commerce Statistics subtracting alleged

Misclassified product

Month/Year Indonesia

Total

imports Indonesia

Alleged

misclassified

product

Total Indonesia

without

misclassified

product

Total

imports

Quantity (short tons); shares (percent)

Sept. 2008 7,297 71,011 7,297 *** *** ***

Oct. 2008 6,596 77,584 6,596 *** *** ***

Nov. 2008 4,499 92,424 4,499 *** *** ***

Dec. 2008 4,882 83,479 4,882 *** *** ***

Jan. 2009 4,680 87,368 4,680 *** *** ***

Feb. 2009 1,574 63,839 1,574 *** *** ***

March 2009 3,629 60,645 3,629 *** *** ***

April 2009 2,334 57,039 2,334 *** *** ***

May 2009 2,891 56,843 2,891 *** *** ***

June 2009 4,774 55,490 4,774 *** *** ***

July 2009 3,753 56,446 3,753 *** *** ***

Aug. 2009 8,754 53,632 8,754 *** *** ***

 Total quantity 55,665 815,800 55,665 *** *** ***

Share of total (percent) 6.8 ***

Source: Adjusted Commerce statistics. Total monthly volumes for allegedly misclassified product are taken from Respondents’

revised attachment B to its questionnaire, October 16, 2009; Respondents’ postconference brief, exh. 3.
IV-8

APPARENT U.S. CONSUMPTION AND MARKET SHARES

Data on apparent U.S. consumption of certain coated paper are presented in table IV-4. From

2006 to 2008, the quantity of apparent U.S. consumption of certain coated paper decreased by 17.7

percent and was lower by 16.4 percent from January-June 2008 to January-June 2009. From 2006 to

2008, the value of apparent U.S. consumption decreased by 13.0 percent and by 25.5 percent between the

interim periods. 

Data on U.S. market shares for certain coated paper are presented in table IV-5. From 2006 to

2008, U.S. producers’ market share based on quantity and value remained steady ranging between 46.2

percent in 2006 and 46.6 in 2008. Between January-June 2008 and January-June 2009, U.S. producers

market share based on volume again remained steady, but lost 2.6 percentage points based on value. U.S.

imports from China gained 2.4 percentage points of U.S. market share during 2006-2008 based on both

quantity and value. Between the interim periods, U.S. imports from China gained 10.2 percentage points

of U.S. market share based on quantity and 8.8 percentage points based on value. U.S. imports from

Indonesia gained 0.9 percentage points of U.S. market share during 2006-2008 based on quantity and 0.7

percentage points based on value. Between the interim periods, U.S. imports from Indonesia gained 0.3

percentage points of U.S. market share based on both quantity and value. U.S. imports from nonsubject

countries lost 3.8 percentage points of U.S. market share during 2006-2008 based on quantity and 2.8

percentage points based on value. Between the interim periods, U.S. imports from nonsubject countries

lost 10.4 percentage points of U.S. market share based on quantity and 6.5 percentage points based on

value. 
IV-9

Table IV-4

Certain coated paper: U.S. shipments of domestic product, U.S. imports by sources, and apparent

U.S. consumption, 2006-08, January-June 2008, and January-June 2009

Item

Calendar year January-June

2006 2007 2008 2008 2009

Quantity (short tons)

U.S. producers’ U.S. shipments 987,704 937,430 821,708 405,170 338,276

U.S. imports from--

 China 282,726 302,858 275,532 109,757 164,829

 Indonesia 44,695 52,541 52,938 21,506 19,883

 Subtotal 327,421 355,399 328,470 131,263 184,712

 All other countries 824,533 727,306 611,626 324,258 196,512

 Total imports 1,151,955 1,082,705 940,096 455,521 381,224

Apparent U.S. consumption 2,139,659 2,020,135 1,761,805 860,691 719,500

Value ($1,000)

U.S. producers’ U.S. shipments 1,135,629 1,067,381 980,407 498,056 352,287

U.S. imports from--

 China 253,940 279,470 268,349 106,020 142,038

 Indonesia 39,475 45,543 48,765 19,121 16,458

 Subtotal 293,416 325,013 317,115 125,141 158,496

 All other countries 809,932 737,251 650,135 337,366 204,901

 Total imports 1,103,348 1,062,264 967,250 462,506 363,397

Apparent U.S. consumption 2,238,977 2,129,646 1,947,657 960,562 715,684

Source: Compiled from data submitted in response to Commission questionnaires and from adjusted Commerce statistics.
IV-10

Table IV-5

Certain coated paper: Apparent U.S. consumption and market shares, 2006-08, January-June 2008,

and January-June 2009

Item

Calendar year January-June

2006 2007 2008 2008 2009

Quantity (short tons)

Apparent U.S. consumption 2,139,659 2,020,135 1,761,805 860,691 719,500

Value ($1,000)

Apparent U.S. consumption 2,238,977 2,129,646 1,947,657 960,562 715,684

Share of quantity (percent)

U.S. producers’ U.S. shipments 46.2 46.4 46.6 47.1 47.0

U.S. imports from--

 China 13.2 15.0 15.6 12.8 22.9

 Indonesia 2.1 2.6 3.0 2.5 2.8

 Subtotal 15.3 17.6 18.6 15.3 25.7

 All other countries 38.5 36.0 34.7 37.7 27.3

 Total imports 53.8 53.6 53.4 52.9 53.0

Share of value (percent)

U.S. producers’ U.S. shipments 50.7 50.1 50.3 51.9 49.2

U.S. imports from--

 China 11.3 13.1 13.8 11.0 19.8

 Indonesia 1.8 2.1 2.5 2.0 2.3

 Subtotal 13.1 15.3 16.3 13.0 22.1

 All other countries 36.2 34.6 33.4 35.1 28.6

 Total imports 49.3 49.9 49.7 48.1 50.8

Note.–Because of rounding, figures may not add to totals shown.

Source: Compiled from data submitted in response to Commission questionnaires and from adjusted Commerce statistics. 
IV-11

RATIO OF IMPORTS TO U.S. PRODUCTION

Data on the ratio of imports to U.S. production of certain coated paper are presented in table IV-6.

Table IV-6

Certain coated paper: U.S. production, U.S. imports, and ratios of imports to production, 2006-08,

January-June 2008, and January-June 2009

Item

Calendar year January-June

2006 2007 2008 2008 2009

Quantity (short tons)

U.S. production 1,145,595 1,117,841 980,751 481,873 436,262

U.S. imports from--

 China 282,726 302,858 275,532 109,757 164,829

 Indonesia 44,695 52,541 52,938 21,506 19,883

 Subtotal 327,421 355,399 328,470 131,263 184,712

 All other countries 824,533 727,306 611,626 324,258 196,512

 Total imports 1,151,955 1,082,705 940,096 455,521 381,224

Ratio of imports to U.S. production (percent)

U.S. imports from--

 China 24.7 27.1 28.1 22.8 37.8

 Indonesia 3.9 4.7 5.4 4.5 4.6

 Subtotal 28.6 31.8 33.5 27.2 42.3

 All other countries 72.0 65.1 62.4 67.3 45.0

 Total imports 100.6 96.9 95.9 94.5 87.4

Source: Compiled from data submitted in response to Commission questionnaires and from adjusted Commerce statistics.

 1

 *** integrated producers, *** reported that pulp accounts for between *** and *** percent and *** reported

that chemicals and dyes account for *** percent of the total cost of production.

 2

 In early 2009, U.S. paper mills began applying for and receiving an alternative fuel tax credit of $0.50 per

gallon of kraft pulp by-product (or “black liquor”) they produce under Section 6426(e) of the Internal Revenue Code

that went into effect in 2007. The tax credit reportedly expires at the end of 2009. Petitioners’ postconference brief,

answers to Staff Questions, exh. 6, p. 2. Such kraft pulp by-product results from the production of certain coated

paper and other papers, including other coated free sheet papers and coated groundwood paper. IRS Notice 2006-92. 

http://www.irs.gov/pub/irs-drop/n-06-92.pdf. Respondents also reported that U.S. paper mills learned in October

2009 that they are eligible for an additional tax credit of $1.01 per gallon of kraft pulp under a provision in the Food,

Conservation and Energy Act. Respondents’ postconference brief, exh. 1, pp. 18-19.

 Respondent parties contend that the alternative fuel tax credit has allowed U.S. integrated producers to lower

prices on its certain coated paper in 2009. Conference transcript, pp. 12-13 (Durling). Petitioners have stated,

however, that they ***. Petitioner’s postconference brief, Answer to Staff Questions, exh. 6, p. 8.

V-1

PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

Raw Material Costs

U.S. integrated producers of certain coated paper reported that pulp, chemicals and dyes, coating

additives, and packaging are the principal raw materials used in producing certain coated paper. *** of

the responding integrated producers reported that pulp accounts for between *** percent and *** percent

of the total cost of production and that chemicals and dyes account for between *** percent and ***

percent.1 Most of the integrated producers reported that the cost of pulp has increased by *** to ***

percent since 2006 and that the costs of chemicals and dyes have increased by *** to *** percent.2

U.S. Inland Transportation Costs

U.S. integrated producers reported that U.S. inland transportation costs of certain coated paper

range from *** to *** percent of the delivered price. Converters reported that U.S. inland transportation

costs range from *** to *** percent of the delivered price. Importers reported that U.S. inland

transportation costs of certain coated paper range from *** to *** percent of the delivered price.

U.S. inland shipping distances for U.S.-produced certain coated paper and certain coated paper

produced in China and Indonesia were requested from both U.S. producers and U.S. importers. For the

U.S. producers, *** percent of their U.S. sales in 2008 occurred within distances of 100 miles from their

facilities, *** percent occurred within distances of 101 to 1,000 miles, and *** percent occurred within

distances over 1,000 miles from their facilities. For converters, *** percent of sales by value in 2008

occurred within 100 miles of their facilities, *** percent of sales occurred within 101 to 1,000 miles, and

*** percent occurred within distances over 1,000 miles. For importers of certain coated paper from

China, *** percent of sales by value in 2008 occurred within 100 miles of their storage facilities, ***

percent of sales occurred within 101 to 1,000 miles, and *** percent occurred within distances over 1,000

miles. For importers of certain coated paper from Indonesia, *** percent of sales by value in 2008

occurred within 100 miles of their storage facilities, *** percent of sales occurred within 101 to 1,000

miles, and *** occurred within distances over 1,000 miles.
 3 Firms were also asked to report pricing data separately for sales to merchants/distributors and sales to end users. 

 The pricing data presented here include both sales to merchants/distributors and sales to end users. While the

reported prices of sales to end users are generally slightly higher than the reported prices of sales to

merchants/distributors, the vast majority of reported sales went to merchants/distributors. Reported sales to end

users accounted for *** percent of sales reported by integrated producers and converters; *** percent of sales of

imports from China; and *** percent of sales of imports from Indonesia.

 Firms were also requested to provide pricing data on sales of imports from nonsubject sources. These prices are

presented in appendix D.

V-2

PRICING PRACTICES

Pricing Methods

When questionnaire respondents were asked how they determined the prices that they charge for

certain coated paper, *** the U.S. integrated producers reported the use of price lists, *** reported ***,

and *** reported also using transaction-by-transaction negotiations. Converters reported the use of ***.

Importers of certain coated paper from China and Indonesia reported that *** for certain coated paper, as

determined by ***, as well as ***.

*** U.S. integrated producers reported that they quote prices of certain coated paper on an f.o.b.

basis and *** quote prices on a delivered basis. Converters typically quote prices on a delivered basis.

*** importers reported that they quote prices of certain coated paper on an f.o.b. basis, *** reported

quoting prices on a delivered basis, and *** reported quoting on either an f.o.b. or delivered basis.

Sales Terms and Discounts

U.S. producers and importers of certain coated paper from China and Indonesia were asked what

share of their sales were on a (1) long-term contract basis (multiple deliveries for more than 12 months),

(2) short-term contract basis (up to and including 12 months), and (3) spot sales basis (for a single

delivery) during 2008. Three U.S. integrated producers reported a mixture of short-term contracts and

spot sales, two integrated producers reported that *** of their sales are on a spot basis, and *** reported a

mixture of long-term and short-term contracts, as well as spot sales. These producers’ short-term

contracts typically last ***. Integrated producers’ long-term contracts last ***. Most converters reported

that they sell exclusively on a spot basis, with *** reporting that most of ***. Converters’ short-term

contracts last ***.

Among the importers that reported sales of imports from China and Indonesia, *** reported that

the vast majority of their sales are on a long-term contract basis with the remainder being sold on a spot

basis, *** reported that *** of its sales are on a short-term contract basis, and *** reported that all of

their sales are on a spot basis. Importers’ long-term contracts typically last more than one year, fix price

with an approximate expected quantity, and do not contain meet-or-release provisions, whereas importers’

short-term contracts fix both price and quantity and do not contain meet-or-release provisions.

*** reported that they offer non-standard discounts based on volume. Two converters reported

that they offer discounts based on volume. *** of five responding importers of certain coated paper from

China and Indonesia reported applying discounts on a transaction-by-transaction basis.

PRICE DATA

The Commission requested U.S. integrated producers, converters, and importers of certain coated

paper from China and Indonesia to provide quarterly data for the total quantity and f.o.b. value of selected

products that were shipped to unrelated customers in the U.S. market.3

 Data were requested for the period

January 2006-June 2009. The products for which pricing data were requested are as follows:
 4

 The U.S. sales prices presented here include sales reported by integrated producers and converters. Sales

reported by converters accounted for *** percent of the sales data presented here and do not change the price trends

or margins of underselling. Among the responding converters, *** and *** reported that they *** use U.S.-sourced

sheeter rolls in their conversion of sheets, while *** reported that it used sheeter rolls from ***.

 5

 Some firms that reported sales of imports from China are actually purchasers and were excluded from the data

presented here. Specifically, *** reported that it purchases its products from importers ***; *** reported that it

purchases its products from importer ***; *** reported that it purchases from ***; and *** reported that it purchases

its products from importers ***. E-mail from ***; *** Importers’ Questionnaire response at II-5a; e-mail from ***;

and e-mail from ***.

 6

 Some firms that reported sales of imports from Indonesia are actually purchasers and were excluded from the

data presented here. Specifically, *** reported that it purchases its products from importers *** and *** reported

that it purchases its product from an importer. E-mail from ***; ***’s Importers’ Questionnaire response at II-5b.

V-3

Product 1.—Coated paper, two-side coated sheets, 70-100 pounds text basis weights, brightness 

levels 86-89.

Product 2.— Coated paper, two-side coated sheets, 70-100 pounds text basis weights, brightness 

levels 90-91.

Product 3.— Coated paper, two-side coated sheets, 70-100 pounds text basis weights, brightness 

levels 92-95.

Product 4.— Coated paper, one-side coated sheets, 70-100 pounds text basis weights, brightness 

levels 83 and above.

Product 5. — Coated paper, two-side coated sheeter rolls, 70-100 pounds text basis 

weights, brightness levels 87 and above.

*** U.S. integrated producers, *** converters,4 *** importers of product imported from 

China (***),5 and *** importers of product imported from Indonesia (***)6 provided pricing data for

sales of the requested products, although not all firms reported pricing data for all products for all

quarters. Pricing data reported by these firms accounted for approximately *** percent of the quantity of

U.S. producers’s U.S. shipments of certain coated paper, *** percent of the quantity of U.S. imports from

China, and *** percent of the quantity of U.S. imports from Indonesia during January 2006-June 2009.
 7

 There were *** quarters of reported sales of product 3 from Indonesia.

V-4

Price Trends

Weighted-average f.o.b. prices reported for U.S. integrated producers, converters, and importers

are presented in tables V-1 through V-5 and in figures V-1 through V-5 on a quarterly basis during

January 2006-June 2009. For sales reported by U.S. integrated producers and converters, product 1

accounted for *** percent of the total quantity reported by U.S. integrated producers and converters for

all pricing products over the entire period, product 2 accounted for *** percent, product 4 accounted for

*** percent, product 3 accounted for *** percent, and product 5 accounted for *** percent. For sales of

products imported from China, product 1 accounted for *** percent of the total quantity reported by

importers for all pricing products from China over the entire period, product 5 accounted for *** percent,

product 3 accounted for *** percent, and product 4 accounted for *** percent. There were *** reported

sales of product 2 imported from China. For sales of products imported from Indonesia, product 1

accounted for *** percent of the total quantity reported by importers for all pricing products from

Indonesia over the entire period and product 3 accounted for *** percent. There were *** reported sales

of products 2, 4, or 5 imported from Indonesia. 

The weighted-average sales prices of U.S.-produced product 1 increased overall by *** percent

from the first quarter of 2006 to the second quarter of 2009, first increasing by *** percent from the first

quarter of 2006 to their highest point in the ***, before decreasing by *** percent to the second quarter of

2009. The weighted-average sales prices of product 1 imported from China decreased overall by ***

percent from the first quarter of 2006 to the second quarter of 2009, first increasing by *** percent from

the first quarter of 2006 to their highest point in the ***, before decreasing by *** percent thereafter. The

weighted-average sales prices of product 1 imported from Indonesia decreased overall by *** percent

from the first quarter of 2006 to the second quarter of 2009, first fluctuating but generally increasing by

*** percent from 2006 to the third quarter of 2008, before decreasing by *** percent thereafter.

The weighted-average sales prices of U.S.-produced product 2 increased overall by 1.4 percent

over the entire period, slightly increasing by 4.3 percent from the first quarter of 2006 to their highest

point in the first quarter of 2009 before slightly decreasing in the second quarter of 2009. 

The weighted-average sales price of U.S.-produced product 3 remained relatively flat for most of

the period before increasing in the first and second quarters of 2009 to a level 15.4 percent higher than the

first quarter of 2006. The weighted-average sales prices of product 3 imported from China increased

overall by *** percent from the *** quarter of 2006 (the first period for which data were reported) to the

second quarter of 2009, generally increasing throughout most of the period before decreasing in the

second quarter of 2009. The weighted-average sales prices of product 3 imported from Indonesia

increased by *** percent from the fourth quarter of 2007 to the second quarter of 2009.7

The weighted-average sales prices of U.S.-produced product 4 increased overall by *** over the

entire period, increasing by *** percent from the first quarter of 2006 to their highest level in *** before

decreasing by *** percent thereafter. The weighted-average sales prices of product 4 imported from

China decreased by *** percent over the entire period, fluctuating but increasing by *** percent from the

first quarter of 2006 to their highest level in the *** before decreasing by *** percent thereafter.

The weighted-average sales prices of U.S.-produced product 5 fluctuated but generally increased

overall by *** percent from the first quarter of 2006 to the second quarter of 2009. The weighted-average

sales prices of product 5 imported from China fluctuated but increased by *** percent overall, first

increasing by *** percent from the first quarter of 2006 to their highest point in the *** before decreasing

*** percent thereafter.
V-5

Table V-1

Certain coated paper: Weighted-average f.o.b. prices and quantities of domestic and imported

product 1 and margins of underselling/(overselling), by quarters, January 2006-June 2009

* * * * * * *

Table V-2

Certain coated paper: Weighted-average f.o.b. prices and quantities of domestic product 21

, by

quarters, January 2006-June 2009

Period

United States

Price

(per short ton)

Quantity

(short tons)

2006:

 Jan.-Mar. $1,286.73 25,174

 Apr.-June 1,273.93 26,524

 July-Sept. 1,300.01 24,612

 Oct.-Dec. 1,301.47 23,124

2007:

 Jan.-Mar. 1,284.95 25,811

 Apr.-June 1,276.88 26,352

 July-Sept. 1,280.64 28,367

 Oct.-Dec. 1,299.34 24,897

2008:

 Jan.-Mar. 1,295.70 26,281

 Apr.-June 1,315.02 27,116

 July-Sept. 1,330.50 25,733

 Oct.-Dec. 1,338.33 21,839

2009:

 Jan.-Mar. 1,342.28 19,625

 Apr.-June 1,304.85 19,002

 1 Coated paper, two-side coated sheets, 70-100 pounds text basis weights, brightness levels 90-91.

Source: Compiled from data submitted in response to Commission questionnaires.
V-6

Table V-3

Certain coated paper: Weighted-average f.o.b. prices and quantities of domestic and imported

product 31 and margins of underselling/(overselling), by quarters, January 2006-June 2009

Period

United States China Indonesia

Price

(per short

ton)

Quantity

(short

tons)

Price

(per short

ton)

Quantity

(short

tons)

Margin

(percent)

Price

(per short

ton)

Quantity

(short

tons)

Margin

(percent)

2006:

 Jan.-Mar. $1,315.51 17,059 (2) (2) (3) (2) (2) (3)

 Apr.-June 1,310.74 14,877 (2) (2) (3) (2) (2) (3)

 July-Sept. 1,314.59 16,457 (2) (2) (3) (2) (2) (3)

 Oct.-Dec. 1,311.50 15,232 $*** *** *** (2) (2) (3)

2007:

 Jan.-Mar. 1,340.81 15,728 *** *** *** (2) (2) (3)

 Apr.-June 1,309.18 16,992 *** *** *** (2) (2) (3)

 July-Sept. 1,331.58 17,617 *** *** *** (2) (2) (3)

 Oct.-Dec. 1,343.04 17,117 *** *** *** $*** *** *** 

2008:

 Jan.-Mar. 1,342.20 16,636 *** *** *** *** *** ***

 Apr.-June 1,338.84 16,578 *** *** *** *** *** *** 

 July-Sept. 1,343.86 15,573 *** *** *** (2) (2) (3)

 Oct.-Dec. 1,350.92 15,666 *** *** *** (2) (2) (3)

2009:

 Jan.-Mar. 1,389.42 11,203 *** *** *** (2) (2) (3)

 Apr.-June 1,516.45 14,210 *** *** *** *** *** *** 

 1 Coated paper, two-side coated sheets, 70-100 pounds text basis weights, brightness levels 92-95.

 2

 No sales reported.

 3

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.
V-7

Price

1,000

1,050

1,100

1,150

1,200

1,250

1,300

1,350

1,400

12341234123412

2006 2007 2008 2009

Dollars per short ton

US

Table V-4

Certain coated paper: Weighted-average f.o.b. prices and quantities of domestic and imported

product 4 and margins of underselling/(overselling), by quarters, January 2006-June 2009

* * * * * * *

Table V-5

Certain coated paper: Weighted-average f.o.b. prices and quantities of domestic and imported

product 5 and margins of underselling/(overselling), by quarters, January 2006-June 2009

* * * * * * *

Figure V-1

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and imported

product 1, by quarters, January 2006-June 2009

* * * * * * *

Figure V-2

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic product 2, by

quarters, January 2006-June 2009

Figure continued on next page.
V-8

Quantity

0

5,000

10,000

15,000

20,000

25,000

30,000

12341234123412

2006 2007 2008 2009

Short tons

US

Figure V-2--continued

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic product 2, by

quarters, January 2006-June 2009

Source: Table V-2.

Figure V-3

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and imported

product 3, by quarters, January 2006-June 2009

* * * * * * *

Figure V-4

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and imported

product 4, by quarters, January 2006-June 2009

* * * * * * *

Figure V-5

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and imported

product 5, by quarters, January 2006-June 2009

* * * * * * *
V-9

Table V-6

Certain coated paper: Summary of weighted-average f.o.b. prices for products 1-5 from the United

States, China, and Indonesia

Item Number of

quarters

Low price 

(per short ton)

High price

(per short ton)

Change in price1

(percent)

Product 1 

United States 14 $*** $*** ***

China 14 *** *** ***

Indonesia 14 *** *** ***

Product 2

United States 14 1,273.93 1,342.28 1.4

China 0 (2) (2) (2)

Indonesia 0 (2) (2) (2)

Product 3

United States 14 1,309.18 1,516.45 15.4

China 11 *** *** ***

Indonesia 4 *** *** ***

Product 4

United States 14 *** *** ***

China 14 *** *** ***

Indonesia 0 (2) (2) (2)

Product 5

United States 14 *** *** ***

China 14 *** *** ***

Indonesia 0 (2) (2) (2)

 1 Percentage change from the first quarter in which price data were available to the last quarter in which price data

were available, based on unrounded data.

 2 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.

Price Comparisons

Margins of underselling and overselling for the period are presented by product category in table 

V-7. The data show that prices of imports from China were lower than the U.S. producers’ prices in 41

out of 53 quarterly comparisons, by margins ranging from 0.9 percent to 29.9 percent. The prices of

imports from China were higher than U.S. producers’ prices in 12 quarterly comparisons, by margins

ranging from 0.5 to 22.7 percent. The data show that prices of imports from Indonesia were lower than

the U.S. producer prices in all 18 quarterly comparisons, by margins ranging from 5.4 percent to 27.4

percent. 
 8 *** allegations provided by converters total $*** or *** percent of the total value of lost sales allegations and

*** allegations provided by converters total $*** or *** percent of the total value of lost revenues allegations. 

 9

 ***. ***’s response to the lost sales allegation, e-mail from ***. Staff estimates that a lost sale of *** short

tons of U.S. product from *** is roughly valued at $***, based on U.S. producers’ weighted-average prices of U.S.-

produced sheet products in *** presented earlier in part V of this report. Likewise, staff estimates that a lost sale of

*** short tons of U.S. product from *** is roughly valued at $***. If the allegation of $*** is considered a

confirmed lost sale, the total confirmed lost sales would total $***.

V-10

Table V-7

Certain coated paper: Instances of underselling/overselling and the range and average of margins

for products 1-5, January 2006-June 2009

Underselling Overselling

Number of

instances

Range

(percent)

Average

margin

(percent)

Number of

instances

Range

(percent)

Average

margin

(percent)

By product:

 Product 1 28 5.4 to 23.3 12.3 0 (1) (1)

 Product 2 0 (1) (1) 0 (1) (1)

 Product 3 15 *** *** 0 (1) (1)

 Product 4 6 1.2 to 17.6 8.7 8 0.5 to 22.7 7.8

 Product 5 10 0.9 to 13.1 5.2 4 1.2 to 8.7 4.5

By country:

 China 41 0.9 to 29.9 12.5 12 0.5 to 22.7 6.7

 Indonesia 18 5.4 to 27.4 14.6 0 (1) (1)

 Total2 59 0.9 to 29.9 13.1 12 0.5 to 22.7 6.7

 1 Not applicable.

 2 Total number of instances for all cited products for both subject countries, range of margins for all cited

products for both subject countries, and average margin for all cited products for both subject countries.

Source: Compiled from data submitted in response to Commission questionnaires.

LOST SALES AND LOST REVENUES

The Commission requested that U.S. integrated producers and converters report any instances of

lost sales or revenues they experienced due to competition from imports of certain coated paper from

China and Indonesia since January 2006.8

 Integrated producers and converters provided *** lost sales

allegations totaling $*** and *** lost revenues allegations totaling $***. Staff contacted the ***

purchasers cited in the allegations; *** responded. *** confirmed lost sales allegations totaling $*** and

*** purchasers confirmed lost revenues allegations totaling $***.9 The results are summarized in tables

V-8 and V-9 and are discussed below.
V-11

Table V-8

Certain coated paper: U.S. integrated producers’ and converters’ lost sales allegations

* * * * * * *

Table V-9

Certain coated paper: U.S. integrated producers’ and converters’ lost revenue allegations

* * * * * * *

*** was named in a lost revenues allegation valued at $*** allegedly occurring in ***. It agreed

with the allegation. 

*** was named in a lost revenues allegation valued at $*** allegedly occurring in ***. It agreed

with the allegation. 

*** was named in a lost sales allegation valued at $*** allegedly occurring in ***. It agreed with

the allegation. It further reported that it has switched from purchasing certain coated paper from U.S.

producers to suppliers of imports from China and Indonesia due to price and that U.S. producers have

reduced their prices in order to compete with subject imports.

*** was named in *** lost sales allegations valued at $*** and *** lost revenues allegations

valued at $*** allegedly occurring in 2009. It agreed with the ***. It further reported that it has

switched from purchasing certain coated paper from U.S. producers to suppliers of imports from China

due to price and that U.S. producers have reduced their prices in order to compete with imports from

China.

*** was named in a lost sales allegation valued at $***. It agreed with the allegation. It further

reported that it has switched from purchasing certain coated paper from U.S. producers to suppliers of

imports from China and Indonesia due to price and that U.S. producers have reduced their prices in order

to compete with subject imports. Specifically, it reported that integrated producers *** reduced their

prices in *** by approximately $*** per short ton.

*** was named in *** lost sales *** valued at $*** and *** lost revenues *** valued at $***. It

reported that there was not enough information provided in the allegations to provide a specific response

to the transactions cited; however, it did report that it *** due to price and that U.S. producers have

reduced their prices in order to compete with subject imports.

*** was named in a lost sales allegation valued at $***. It agreed with the allegation. It further

reported that it has switched from purchasing certain coated paper from U.S. producers to suppliers of

imports from China and Indonesia due to price and that U.S. producers have reduced their prices in order

to compete with subject imports. 

*** was named in a lost sales allegation at $*** and a lost revenues allegation valued at $***

allegedly occurring in ***. It agreed with the allegations. It further reported that it has switched from

purchasing certain coated paper from U.S. producers to suppliers of imports from China and Indonesia

due to price as well as quality. It also reported that U.S. producers have reduced their prices in order to

compete with subject imports, but that prices of imports from Europe, Korea, and Japan have also driven

prices down.

*** was named in a lost sales allegation valued at $***. It did not respond to the specific

transaction cited in the allegation, but did report that it has switched from purchasing certain coated paper

from U.S. producers to suppliers of imports from China due to price and that U.S. producers have reduced

their prices to compete with imports from China.

*** was named in a lost sales allegation valued at $*** allegedly occurring in ***. *** reported

that it did reduce its purchases from U.S. producers by *** short tons from *** and increased its

purchases of imports from China by *** short tons in that period, due to a variety of factors, one of which
 10 ***’s response to the lost sales allegation, e-mail from ***. 

 11 Respondents’ postconference brief, pp. 45-46. 

 12 Respondents’ postconference brief, at exh. 1, pp. 7-8.

 13 Petitioners’ postconference brief, “Answers to Staff Questions,” pp. 2-3.

 14 Petitioners’ postconference brief, “Answers to Staff Questions,” exh. Q4-2.

 15 Respondents’ postconference brief, exh. 19.

V-12

may have been price.10 *** then switched from purchasing subject imports in *** to U.S. integrated

producer *** and ***.11 Respondents claim that ***.12 ***.13 ***.14 

*** was named in *** lost revenues *** allegedly occurring in ***. It disagreed with the

allegations, stating that the prices cited in the allegations ***. *** further reported that it has not

switched from purchasing certain coated paper from U.S. producers to suppliers of imports from China

and/or Indonesia; however, it did report that U.S. producers have reduced their prices in order to compete

with subject imports.

*** was named in *** lost sales ***, *** valued at $*** and another ***. It disagreed with the

allegations, stating that ***. Specifically, it reported that ***. ***. It also reported that ***. ***. ***.15

***. It further reported that it has not switched purchasing certain coated paper from U.S.

producers to suppliers of imports from China and/or Indonesia; however, it did report that U.S. producers

have reduced their prices in order to compete with subject imports. 
 1

 ***. 

 2

 ***. E-mail with attachments from Mohawk to USITC auditor, October 19, 2009. ***. E-mail with

attachments from Nekoosa to USITC auditor, October 21, 2009.

 3

 Staff notes that some double counting of sales volume is inevitable when combining the financial results of

integrated producers and converters. However, the aggregated financial results are still generally meaningful on a

consolidated basis due to the offsetting effect of any double counted volume being reported once as revenue at the

integrated level and again as a component of raw material cost at the converter level. Because total sales volume

reflects some double counting, average sales and cost values on an integrated and converter-basis are more specific

to those operations (see table VI-3) as compared to average values based on the consolidated information (see table

VI-2). 

 4

 While product mix changed somewhat during the period, overall variations in average sales value were

attributed primarily to changes in price. Letter with attachments from Stewart and Stewart and King & Spalding on

behalf of Appleton, NewPage, and Sappi to USITC auditor, October 22, 2009. E-mail with attachment from Wausau

to USITC auditor, October 21, 2009. E-mail with attachment from King & Spalding on behalf of Smart Papers to

USITC auditor, October 23, 2009. 

 5 ***. Response to question III-8, MeadWeasvaco U.S. producer questionnaire response. ***.

VI-1

PART VI: FINANCIAL EXPERIENCE OF THE U.S. PRODUCERS

BACKGROUND

Ten U.S. producers reported their certain coated paper financial results on the basis of generally

accepted accounting principles (“GAAP”) with the majority reporting on a calendar-year basis.1

Revenue represents commercial sales comprised primarily of domestic shipments followed by a small

share of exports.2

The financial results on certain coated paper represent the combined operations of companies

designated as integrated producers (Appleton, MeadWestvaco, Mohawk, NewPage, Sappi, and Smart

Papers) and converters (J&M Cummings, Nekoosa, Resource One, and Wausau). The majority of certain

coated paper financial results information is accounted for by the integrated segment (97.4 percent of total

sales revenue) with the rest accounted for by converters (2.6 percent of total sales revenue). Differences

between the trade section and financial section of this report in terms of total sales/shipment volume and

value generally reflect the elimination of converters in the trade section in order to avoid the double

counting of volume.3

 

OPERATIONS ON CERTAIN COATED PAPER

Income-and-loss data for operations on certain coated paper are presented in table VI-1 and on an

average unit basis in table VI-2. Table VI-3 presents selected company-specific financial information. A

variance analysis of the overall financial results on certain coated paper is presented in table VI-4.4

(Note: Combined financial results on certain coated paper and web rolls are presented in table C-3.)

The pattern of financial results on certain coated paper in large part reflects the operations of

integrated producers NewPage and Sappi which accounted for *** of cumulative certain coated paper

sales value, respectively. As discussed in a previous section of this report, integrated producers in general

vary in terms of the level of vertical integration, as well as the extent and types of other products

produced. Both NewPage and Sappi are integrated back to pulp operations with both companies ***. 

MeadWestvaco, accounting for *** of cumulative sales value, was the ***.5

Converters, while similar inasmuch as their primary input is sheeter rolls, are different in terms of

the extent to which they convert sheeter rolls into sheets on their own behalf for resale or on the basis 
VI-2

Table VI-1

Results of operations on certain coated paper, 2006-08, January-June 2008, and January-June

2009

Item

Calendar year January-June

2006 2007 2008 2008 2009

Quantity (short tons)

Total net sales quantity 1,093,778 1,084,674 953,567 472,160 380,638

Value ($1,000)

Total net sales value 1,223,838 1,197,751 1,099,905 559,200 388,943

Cost of goods sold:

 Raw materials 518,072 504,352 476,115 239,430 177,309

 Direct labor 202,732 161,432 142,897 73,243 67,299

 Other factory costs 345,911 366,013 324,020 156,285 125,916

 Total cost of goods sold 1,066,716 1,031,797 943,032 468,958 370,524

Gross profit 157,122 165,955 156,873 90,243 18,419

Selling expenses 34,721 32,844 31,903 16,811 12,778

General and administrative expenses 53,724 50,714 55,232 29,059 22,861

 Total SG&A expenses 88,445 83,558 87,135 45,870 35,639

Operating income or (loss) 68,677 82,397 69,738 44,373 (17,220)

Interest expense 70,221 61,259 51,268 26,386 24,345

Other expenses 21,819 2,383 5,706 2,624 4,626

Other income items 8,775 2,300 273 1,095 36,211

Net income or (loss) (14,587) 21,054 13,038 16,458 (9,980)

Depreciation/amortization 72,185 60,815 64,232 37,881 34,666

Estimated cash flow 57,598 81,869 77,270 54,339 24,686

Ratio to net sales (percent)

Raw material 42.3 42.1 43.3 42.8 45.6

Direct labor 16.6 13.5 13.0 13.1 17.3

Other factory costs 28.3 30.6 29.5 27.9 32.4

 Cost of goods sold 87.2 86.1 85.7 83.9 95.3

Gross profit 12.8 13.9 14.3 16.1 4.7

SG&A expenses 7.2 7.0 7.9 8.2 9.2

Operating income or (loss) 5.6 6.9 6.3 7.9 (4.4)

Net income or (loss) (1.2) 1.8 1.2 2.9 (2.6)

Number of producers reporting

Operating losses 5 4 3 2 5

Data 10 10 10 10 10

Source: Compiled from data submitted in response to Commission questionnaires.
VI-3

Table VI-2

Results of operations on certain coated paper (per short ton), 2006-08, January-June 2008, and

January-June 2009

Item

Calendar year January-June

2006 2007 2008 2008 2009

Unit value (dollars per short ton)

Total net sales $1,119 $1,104 $1,153 $1,184 $1,022

Cost of goods sold:

 Raw material 474 465 499 507 466

 Direct labor 185 149 150 155 177

 Other factory costs 316 337 340 331 331

 Total cost of goods sold 975 951 989 993 973

Gross profit 144 153 165 191 48

SG&A expenses 81 77 91 97 94

Operating income or (loss) 63 76 73 94 (45)

Source: Compiled from data submitted in response to Commission questionnaires.

Table VI-3

Results of operations on certain coated paper, by firm, 2006-08, January-June 2008, and JanuaryJune 2009

* * * * * * *

of a tolling agreement. The *** average sales value reported by Resource One, which accounts for a ***

share of the total conversion-specific activity shown in table VI-3, primarily reflects the fact that

Resource One is ***.

Revenue

As shown in the revenue section of the variance analysis (see table VI-4), the overall decline in

revenue between 2006 and 2008 was due to lower sales volume partially offset by a modest positive price

variance. Table VI-3 shows that, while company-specific increases were not uniform, most of the

integrated producers reported higher average sales values in 2008 compared to 2007. In contrast and with

the exception of ***, the responding converters reported lower average sales/tolling revenue in 2008. 

While lower sales volume continued to be the principal factor explaining reduced revenue in

interim 2009 compared to interim 2008, a negative price variance also contributed to the decline. With

the exception of ***, all of the U.S. producers reported lower average sales values in interim 2009 
VI-4

Table VI-4

Variance analysis of financial results on certain coated paper operations, 2006-08, January-June

2008, and January-June 2009

Item

Calendar year Jan.-June

2006-08 2006-07 2007-08 2008-09

Value ($1,000)

Total net sales:

 Price variance 32,950 (15,900) 46,928 (61,864)

 Volume variance (156,883) (10,187) (144,775) (108,394)

 Total net sales variance (123,933) (26,087) (97,847) (170,258)

Cost of sales:

 Raw materials:

 Cost variance (24,454) 9,408 (32,725) 15,711

 Volume variance 66,411 4,312 60,962 46,410

 Net raw material variance 41,957 13,720 28,237 62,122

 Direct labor:

 Cost variance 33,847 39,613 (978) (8,253)

 Volume variance 25,988 1,687 19,513 14,197

 Net direct labor variance 59,835 41,301 18,535 5,944

 Other factory costs:

 Cost variance (22,451) (22,981) (2,248) 75

 Volume variance 44,342 2,879 44,241 30,294

 Net other factory cost 21,891 (20,102) 41,993 30,369

 Net cost of sales:

 Cost variance (13,058) 26,040 (35,951) 7,533

 Volume variance 136,742 8,879 124,716 90,901

 Total net cost of sales 123,684 34,919 88,765 98,434

Gross profit variance (250) 8,832 (9,082) (71,823)

SG&A expenses:

 Expense variance (10,027) 4,151 (13,677) 1,339

 Volume variance 11,338 736 10,100 8,891

 Total SG&A variance 1,310 4,887 (3,577) 10,231

Operating income variance 1,061 13,719 (12,659) (61,593)

Summarized as:

 Price variance 32,950 (15,900) 46,928 (61,864)

 Net cost/expense variance (23,086) 30,191 (49,627) 8,872

 Net volume variance (8,804) (572) (9,959) (8,601)

Source: Compiled from data submitted in response to Commission questionnaires.
 6

 ***. Letter with attachments from Stewart and Stewart and King & Spalding on behalf of Appleton, New Page,

and Sappi to USITC auditor, October 22, 2009. 

 7

 ***. E-mail with attachment from King & Spalding on behalf of Smart Papers to USITC auditor, October 23,

2009. 

 8

 E-mail with attachment from King & Spalding on behalf of Smart Papers to USITC auditor, October 23, 2009. 

 9

 Since converters’ primary raw material input is sheeter rolls, conversion costs (direct labor and other factory

costs) relative to total COGS is substantially less than the conversion costs associated with integrated producers who

either produce their own pulp or purchase it. ***. USITC auditor preliminary phase notes. 

 10 (See Chapter I for a description of the production process; e.g., “off-machine” coater, ***, is a non-integrated

(“off-line”) coating machine.) Appleton stated that ***. Letter with attachments from Stewart and Stewart and King

& Spalding on behalf of Appleton, NewPage, and Sappi to USITC auditor, October 22, 2009. 

 According to NewPage, ***. Ibid.

 Sappi stated that ***. Ibid. 

 With respect to producers reporting financial results on both certain coated paper and web rolls, ***. Ibid. ***.

VI-5

compared to interim 2008.6

 As noted previously, changes in average sales value were reportedly related

primarily to lower prices, as opposed to changes in product mix.7

 

Cost of Goods Sold

The primary component of certain coated paper cost of good sold (COGS) is raw material

accounting for 49.1 percent of cumulative COGS. Consistent with the generally capital intensive nature

of the production process, other factory costs accounted for the second largest primary component of

COGS at 34.1 percent of cumulative COGS followed by direct labor at 16.8 percent. 

The overall trend of raw material costs was erratic with a decline in 2007 followed by an increase

in 2008 and then a subsequent decline in interim 2009. As shown in table VI-3 and notwithstanding ***,

average raw material costs varied from company to company with the lowest average raw material costs

generally reported by the most vertically integrated producers: NewPage, Sappi, and MeadWestvaco. As

noted later in this section with respect to the black liquor-related tax credit issue, increased pulp

production to take advantage of the tax credit and lower corresponding pulp prices reportedly impacted

the relative cost advantage of the different types of integrated producers in interim 2009. As shown in

table VI-3, ***.8

 

As a group, and ***, converters reported higher average raw material costs compared to the

integrated producers which is generally consistent with the nature of the primary input that they process.9

Table VI-2 shows that, while average direct labor and other factory costs did change during the

period, overall variations in direct labor and other factory costs were somewhat lower compared to

changes in raw material costs. The overall increase in average direct labor and other factory costs in

interim 2009, which partially offset the decline in average raw material cost noted above, appears to be

generally consistent with lower capacity utilization. When comparing company specific operations at the

end of the period, the decline in ***. 

The extent to which certain coated paper is a primary product line or a secondary product line

varies from producer to producer. As a share of combined certain coated paper sales volume and web roll

sales volume, the certain coated paper sales volume of the two largest producers of certain coated paper,

NewPage and Sappi, represents ***, respectively, on a cumulative basis. Large certain coated paper

producers were asked to provide additional information regarding how they allocated costs between

certain coated paper and other product lines.10
 11 Appleton stated that the company ***. Letter with attachments from Stewart and Stewart and King & Spalding

on behalf of Appleton, NewPage, and Sappi to USITC auditor, October 22, 2009. 

 12 Exhibit 4 of respondent’s post conference brief (response 4). For the second quarter ending June 2009 and also

based on public information, Verso reportedly received a total of $37 million under this program. Ibid. Verso is not

reflected in this section of the report because it only reported operations on web rolls. 

 13 Respondent’s postconference brief, exhibit 7 (2nd quarter 2009 NewPage Corporation Earnings Conference

Call, p. 4).

 14 While the black liquor-related tax credit currently being used is reportedly going to expire in 2009, pulp

producers are also apparently eligible for a $1.01 per gallon tax credit under the Food, Conservation and Energy Act. 

Respondent’s postconference brief, exhibit 4 (response 4). Its status as a nonrefundable income tax credit, however,

presumably makes this tax credit less appealing than the former tax credit which reportedly allowed for direct

payment in the absence of tax liability or when the credit exceeded the liability. Ibid. 

VI-6

Black liquor-related tax credit

Because the direct benefit of the black liquor-related tax credit effectively only accrues to

producers of pulp who generate black liquor as a by product, NewPage, Sappi, and Meadwestvaco are the

only integrated producers who can receive the tax credit. As noted above, the other integrated producers

do not produce pulp, but instead purchase it.11 With respect to their certain coated paper financial results

and payments received/accrued pursuant to the black liquor-related tax credit, NewPage and Sappi

reported allocated amounts of ***. ***. Based on public information, the total amount received by

NewPage during interim 2009 (i.e., unallocated to any specific product line) was $112 million, while

Sappi reportedly accrued a total of $39 million which was received after the end of the interim period.12

Notwithstanding its direct impact in terms of payments to fully-integrated producers, the tax

credit also reportedly had indirect effects. A NewPage company official stated during an earnings

conference call that “{i}t’s important to note on this page that our competitive cost advantage is reduced

due to the impact of substantially lower pulp prices. While the tax credit is currently benefitting all

producers, it’s actually potentially benefitting the non-integrated producer more, due to the flattening of

the cost curve. The highest cost producers are the non-integrated mills and they have been receiving

substantial benefits in their costs due to extra pulp that’s been produced, and sold at lower prices so that

the domestic producers can benefit from the subsidy.”13 14 

Profitability

Notwithstanding lower sales volume as the period progressed, the industry’s financial results

were marginally higher in 2008 compared to 2006 both in terms of absolute operating income and the

ratio of operating income to sales. (Note: Profitability using these measures was highest in 2007.) 

Interim 2009, in contrast, reflects a decline to an overall operating loss with ***. In contrast, the

converters, ***, continued to report operating income, albeit at a lower level compared to interim 2008. 

An important factor explaining the interim 2009 operating losses was a sharp contraction of the

overall gross profit margin which in turn reflects a higher COGS-to-sales ratio as average sales values

declined by a larger percentage compared to the decline in average COGS. While the industry’s total

SG&A expenses were lower on an absolute basis in interim 2009 compared to interim 2008, the reduction

in revenue resulted in higher SG&A expense ratios which, along with the decline in gross profit,

contributed to the interim 2009 operating loss. With regard to the higher SG&A expense ratios reported

for certain coated paper operation compared to web rolls, U.S. producers generally indicated that certain

coated paper is sold to a more diffuse customer base compared to web rolls which requires
 15 ***. Letter with attachments from Stewart and Stewart and King & Spalding on behalf of Appleton, NewPage,

and Sappi to USITC auditor, October 22, 2009. 

 16 Ibid. ***. Petitioners’ postconference brief, exhibit 19. 

 17 Letter with attachments from Stewart and Stewart and King & Spalding on behalf of Appleton, NewPage, and

Sappi to USITC auditor, October 22, 2009.

 18 According to Appleton, ***. Ibid. ***. 

 19 ***. Note to table III-12, NewPage U.S. producer questionnaire response. ***. Letter with attachments from

Stewart and Stewart and King & Spalding on behalf of Appleton, NewPage, and Sappi to USITC auditor, October

22, 2009. 

VI-7

relatively more SG&A resources. Higher service requirements for certain coated paper customers was

also referenced as a factor which would generally impact the level of SG&A expenses.15 

Material non-recurring charges were reported by several companies and in *** case is reflected

directly in the reported financial results. ***.16 ***.17 ***.18 ***.

CAPITAL EXPENDITURES, RESEARCH AND DEVELOPMENT EXPENSES, 

ASSETS, AND RETURN ON INVESTMENT

Data on capital expenditures, research and development (“R&D”) expenses, assets, and return on

investment related to certain coated paper operations are presented in table VI-5.

Table VI-5

Operations on certain coated paper: Capital expenditures, R&D expenses, total assets, and return

on investment, by firms, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Consistent with its larger share of total activity, the integrated producers collectively accounted

for *** percent of the period’s total capital expenditures with ***. Like total sales, however, the majority

of overall capital expenditures are accounted for by NewPage and Sappi (***, respectively). 

R&D expenses, which were highest in 2008 ***, were reported only by the integrated group of

producers with no converters reporting R&D expenses. ***. 

***, all U.S. producers reported total asset information related to their operations on certain

coated paper. As noted at the beginning of this section of the report, ***.19

CAPITAL AND INVESTMENT

The Commission requested U.S. producers to describe any actual or anticipated negative effects

of imports of certain coated paper from China and Indonesia on their firms’ growth, investment, ability to

raise capital, existing development and production efforts (including efforts to develop a derivative or

more advanced version of the product), or the scale of capital investments. 

Actual Negative Effects

Converters

J&M Cummings ***.

Nekoosa ***.
VI-8

Resource One ***.

Wausau ***.

Integrated Producers

Appleton ***.

MeadWestvaco ***.

Mohawk ***.

NewPage ***.

Sappi ***

Smart Papers ***.

Anticipated Negative Effects

Converters

J&M Cummings ***.

Resource One ***.

Nekoosa ***.

Wausau ***.

Integrated Producers

Appleton ***.

MeadWestvaco ***.

Mohawk ***.

NewPage ***.

Sappi ***.

Smart Papers ***.
 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

agricultural product or the processed agricultural product (but not both),
 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

 Responses to the Commission’s Foreign Producer questionnaire.

VII-2

(VIII) the actual and potential negative effects on the existing

development and production efforts of the domestic industry, including

efforts to develop a derivative or more advanced version of the domestic

like product, and

(IX) any other demonstrable adverse trends that indicate the probability

that there is likely to be material injury by reason of imports (or sale for

importation) of the subject merchandise (whether or not it is actually

being imported at the time).2

Information on the nature of the alleged subsidies was presented earlier in this report; information

on the volume and pricing of imports of the subject merchandise is presented in Parts IV and V; and

information on the effects of imports of the subject merchandise on U.S. producers’ existing development

and production efforts is presented in Part VI. Information on inventories of the subject merchandise;

foreign producers’ operations, including the potential for “product-shifting;” any other threat indicators, if

applicable; and any dumping in third-country markets, follows.

THE INDUSTRY IN CHINA

The Commission received responses from three firms accounting for approximately *** percent

of 2008 production of certain coated paper in China and the vast majority of exports to the United States

from China.3

 The three reporting Chinese producers include: (1) Gold East Paper (Jiangsu) Co., Ltd.

(“Gold East”); (2) Gold Huansheng Paper Co., Ltd. (“Gold Huansheng”); and (3) Shandong Chenming

Paper Holdings, Ltd. (“Chenming”). Gold East and Gold Huansheng are related companies and are also

affiliates of the large conglomerate, Asia Pulp & Paper Co., Ltd., headquartered in Singapore. Asia Pulp

& Paper Co., Ltd. is also affiliated with Indonesian respondents. Capacity, production, and export

shipment data regarding the individual firms are presented in table VII-1.

Table VII-1

Certain coated paper: China’s reported production capacity, production, shipments, and

inventories, 2008

* * * * * * *

Chenming reported that *** percent of its total sales in the most recent fiscal year were sales of

certain coated paper. In 2006, *** percent of Chenming’s total shipments of certain coated paper were

exported to the United States, *** percent of its shipments were to its home market, and *** percent of its

shipments were to export markets such as ***. Chenming’s exports to the United States *** throughout

the period of investigation, and by 2008, accounted for only *** percent of its total shipments. In 2008,

*** percent of Chenming’s shipments were going to its home market, *** percent in 2006. 
 4

 ***.

 5

 ***. Petitioners, citing public sources, state that the new mill in China will be complete and begin production in

March 2010. Petitioners’ postconference brief, p. 45.

 6

 ***.

 7

 ***. Petitioners, citing public sources, state that the new mill in China will be complete and begin production in

March 2010. Petitioners’ postconference brief, p. 45.

 8

 ***.

 9

 Petitioners’ postconference brief, p. 44 and exh. 23.

 10 Respondents’ postconference brief, pp. 47-48.

 11 Ibid.

VII-3

Chenming’s reported capacity increased by *** percent from 2006 to 2008, but is projected to

*** in 2009 and 2010.4

 Its production increased by *** percent from 2006 to 2008, and is projected to

*** in 2009 and 2010. Chenming reported that its largest U.S. importer of certain coated paper during the

period of investigation was ***. 

Gold East reported that *** percent of its total sales in the most recent fiscal year were sales of

certain coated paper. In 2006, *** percent of Gold East’s total shipments of certain coated paper were

exported to the United States, *** percent of its shipments were to its home market, and *** percent of its

shipments were to export markets such as ***. Gold East’s exports to the United States *** throughout

the period of investigation, and by 2008, accounted for *** percent of its total shipments. In 2008, ***

percent of Gold East’s shipments were going to its other export markets, *** percent in 2006. 

Gold East’s reported capacity *** from 2006 to 2008, and is projected to *** in 2009 and 2010.5

Its production increased by *** percent from 2006 to 2008, and is projected to *** in 2009 and 2010.6

Gold East reported that its largest U.S. importer of certain coated paper in 2008 was ***. 

Gold Huansheng reported that *** percent of its total sales in the most recent fiscal year were

sales of certain coated paper. In 2006, *** percent of Gold Huansheng’s total shipments of certain coated

paper were exported to the United States, *** percent of its shipments were to its home market, and ***

percent of its shipments were to export markets such as ***. Gold Huansheng’s exports to the United

States *** throughout the period of investigation, and ***, by 2008 accounted for *** percent of its total

shipments. In 2008, *** percent of Gold Huansheng’s shipments were going to its other export markets,

*** percent in 2006. 

Gold Huansheng’s reported capacity *** from 2006 to 2008, and is projected to *** in 2009 and

2010.7

 Its production increased by *** percent from 2006 to 2008, and is projected to *** in 2009 and

2010.8

 Gold Huansheng reported that its largest U.S. importer of certain coated paper in 2008 was ***. 

RISI, an information provider for the global forest products industry, projects an increase of 24.9

percent in Chinese capacity to produce coated woodfree paper products from 2010 to 2011. During the

same 2010 to 2011 time horizon, RISI projects an increase of 8.6 percent in the apparent consumption of

coated woodfree paper in China.9

 Respondents maintain that Chinese producers currently have high

capacity utilization rates and that increases in capacity to produce certain coated paper in China are

necessary to keep up with increased demand in its home market and not intended for export markets.10

Respondents also observe that Chinese producers lost the accounts of *** Unisource. ***. Unisource,

another large national paper distributor, stopped receiving shipments from respondents in July 2009, after

it decided earlier in 2009 to obtain its supply needs from New Page.11

Table VII-2 presents cumulative data for reported capacity, production, and shipments of certain

coated paper for all reporting producers in China. 
 12 ***.

 13 ***.

VII-4

Table VII-2

Certain coated paper: China’s reported production capacity, production, shipments, and

inventories, 2006-08, January-June 2008, January-June 2009, and projections for 2009 and 2010

* * * * * * *

THE INDUSTRY IN INDONESIA

The Commission received responses from three producers of certain coated paper in Indonesia. 

As the firms are all related, they submitted a consolidated response to the Commission’s foreign producer

questionnaire. These firms included: (1) PT. Pindo Deli Pulp and Paper Mills, (2) PT. Pabrik Kertas

Tjiwi Kimia, Tbk., and (3) PT. Indah Kiat Pulp & Paper Tbk. (collectively, “Indonesian respondents”). 

Indonesian respondents are affiliates of the large conglomerate, Asia Pulp & Paper Co., Ltd.,

headquartered in Singapore. The Indonesian respondents claimed to account for approximately ***

percent of production of certain coated paper in Indonesia, and accounted for all the exports to the United

States during the period of investigation. 

Indonesian respondents reported that *** percent of their total sales in the most recent fiscal year

were sales of certain coated paper. In 2006, *** percent of Indonesian respondents’ total shipments of

certain coated paper were exported to the United States, *** percent of their shipments were to their home

market, and *** percent of their shipments were to export markets such as ***. Indonesian respondents’

exports to the United States *** throughout the period of investigation, and by 2008, accounted for ***

percent of their total shipments. In 2008, *** percent of Indonesian respondents’ shipments were going

to their other export markets, *** percent in 2006. 

Indonesian respondents’ reported capacity *** from 2006 to 2008, and is projected to *** in

2009 and 2010.12 Their production increased by *** percent from 2006 to 2008, and is projected to ***

in 2009.13 Table VII-3 presents data for reported capacity, production, and shipments of certain

coated paper for all reporting producers in Indonesia. 

Table VII-3

Certain coated paper: Indonesia’s reported production capacity, production, shipments, and

inventories, 2006-08, January-June 2008, January-June 2009, and projections for 2009 and 2010

* * * * * * *
VII-5

U.S. IMPORTERS’ INVENTORIES

Reported inventories held by U.S. importers of subject merchandise from China and Indonesia

and nonsubject countries are shown in table VII-4.

Table VII-4

Certain coated paper: U.S. importers’ end-of-period inventories of subject and nonsubject

imports, by sources, 2006-2008, January-June 2008, and January-June 2009

* * * * * * *

U.S. IMPORTERS’ CURRENT ORDERS

The Commission requested U.S. importers to indicate whether they imported or arranged for the

importation of certain coated paper after June 30, 2009. *** of the 13 reporting U.S. importers stated that

they had imported or arranged for importation since June 30, 2009. Table VII-5 presents the U.S.

importers which indicated that they had imported or arranged for the importation of the subject product

from China and Indonesia and the quantity of those U.S. imports.

Table VII-5

Certain coated paper: U.S. importers’ orders of subject imports from China and Indonesia

subsequent to June 30, 2009, by firm

* * * * * * *

ANTIDUMPING AND COUNTERVAILING DUTY ORDERS IN THIRD-COUNTRY MARKETS

The tabulation below lists the governments that have placed antidumping, countervailing duty or

safeguard duties on certain coated paper.

 Country imposing

duty

Country against which

duty is imposed

Amount of duty

(percent ad valorem)

Commencement date of

duty

China Japan and Korea 10.4 to 71.0 2003 original AD order

August 2009 duties

continued for 5 years

Taiwan Japan 8.0 to 44.0 2000 original AD order

India Global safeguard 20.0 provisional April 2009

Source: Petitioners’ postconference brief, “Answers to Staff Questions,” exh. 8.
 14 Mittal Steel Point Lisas Ltd. v. United States, Slip Op. 2007-1552 at 17 (Fed. Cir., Sept. 18, 2008), quoting

from Statement of Administrative Action on Uruguay Round Agreements Act, H.R. Rep. 103-316, Vol. I at 851-52;

see also Bratsk Aluminum Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006).

 15 Maine, John. “Green Shoots of Recovery in Printing and Writing Paper Markets?” September 10, 2009

http://www.risiinfo.com (accessed September 11, 2009); Maine, John. “North American Coated Paper Demand and

Capacity Are Closing the Gap, but Europe Will Likely Announce Huge Closures in 2010.” October 22, 2009

http://www.risiinfo.com (accessed October 22, 2009); Stora Enso, “Interim Review January-March 2009" April 23,

2009 http://www.storaenso.com (accessed October 22, 2009); Stora Enso, “Interim Review January-September

2009" October 22, 2009 http://www.storaenso.com (accessed October 22, 2009). 

 16 Two Canadian firms (Domtar Corporation and Thunder Bay Fine Papers) were reported to have produced

coated free sheet paper during the period of investigation. Their production may have included certain coated paper. 

2008 Lockwood-Post Directory of Pulp & Paper Mills Global Edition. Bedford, Massachusetts: RISI, Inc., 2008.

VII-6

INFORMATION ON PRODUCERS IN NONSUBJECT COUNTRIES

In assessing whether the domestic industry is materially injured or threatened with material injury

“by reason of subject imports,” the legislative history states “that the Commission must examine all

relevant evidence, including any known factors, other than the dumped or subsidized imports, that may be

injuring the domestic industry, and that the Commission must examine those other factors (including nonsubject imports) ‘to ensure that it is not attributing injury from other sources to the subject imports.’”14

The worldwide market environment for coated free sheet paper during the period of investigation

has been tumultuous, with demand, production, and shipments declining rapidly, leading to excess

production capacity despite some reductions in capacity. Global demand for coated free sheet paper

decreased as the severe economic downturn caused advertising expenditures to drop sharply, reducing

demand for magazines and catalogues. This cyclical decline in demand was accompanied by a structural

decline in demand for coated free sheet paper, particularly in North America and Europe, as some

advertisers migrated away from the print medium. Global demand for coated free sheet paper declined by

approximately 16 percent, from 30 million tons in 2006 to an estimated 25.2 million tons in 2009, with

most of this decline occurring within the past two years. The drop in demand began in North America

and Europe, but in 2009 spread to Asia and Latin America. As demand fell, producers cut production and

shipments of coated free sheet paper. Despite capacity reductions by some producers, excess capacity for

coated free sheet paper remained, particularly in Europe.15 

The United States imports certain coated paper from a number of nonsubject countries. Canada,

Finland, Germany, and Korea are four important suppliers to the United States. Information on these

countries’ trade in certain coated paper is provided below.

Canada

Table VII-6 presents data on Canadian exports and imports of certain coated paper, and table VII7 shows data for Canadian exports to the United States as a share of total Canadian exports. During

2006-08, Canada had a large trade deficit in certain coated paper. The United States accounted for more

than 80 percent of total Canadian exports of certain coated paper between 2006 and 2008.16
 17 Six Finnish firms (Ahlstrom Kauttua Oy, Jujo Thermal Ltd., M-real Corp., Stora Enso, Tervakoski Oy, and

UPM) were reported to have produced coated free sheet paper during the period of investigation. Some of these

firms likely produced certain coated paper. 2008 Lockwood-Post Directory of Pulp & Paper Mills Global Edition.

Bedford, Massachusetts: RISI, Inc., 2008.

VII-7

Table VII-6

Certain coated paper: Canada’s exports and imports, 2006-08

Destination

Calendar year

2006 2007 2008

Quantity (short tons)

Exports 34,771 5,466 4,651

Imports 237,486 240,442 226,598

Net exports (202,715) (234,977) (221,946)

Note.–Export and import figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Table VII-7

Certain coated paper: Canada’s total exports and exports to the United States, 2006-08

Destination

Calendar year

2006 2007 2008

Quantity (short tons)

United States 34,421 5,266 3,897

World 34,771 5,466 4,651

Share of total (percent)

United States 99.0 96.3 83.8

Note.–Export figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Finland

Table VII-8 presents data on Finland’s exports and imports of certain coated paper, and table VII9 shows data for Finland’s exports to the United States as a share of total Finnish exports. Finland was a

net exporter of certain coated paper during 2006-08, supplying paper to numerous countries, including

Brazil, Denmark, Germany, Mexico, Russia, and Sweden. During the period, exports to the United States

accounted for no more than 8 percent of total Finnish exports of certain coated paper.17 
 18 Approximately 14 German firms were reported to have produced coated free sheet paper during the period of

investigation. Some of these firms likely produced certain coated paper. These firms are: Buttenpapierfabrik

Gmund GmbH & Co. KG, Hahnemuhle FineArt GmbH, Papierfabrik August Koehler AG, Koehler Kehl GmbH, Mreal Corp., Nordland Papier GmbH, Sappi Fine Papers, Papierfabrik Scheufelen GmbH & Co. KG, Stora Enso,

Papierfabrick Zerkall Renker & Sohne GmbH & Co. KG, Steinbeis Temming Papier GmbH & Co., Illig’sche

Papierfabrick, Kanzan Spezialpapiere GmbH, and Felix Schoeller Jr. 2008 Lockwood-Post Directory of Pulp &

Paper Mills Global Edition. Bedford, Massachusetts: RISI, Inc., 2008.

VII-8

Table VII-8

Certain coated paper: Finland’s exports and imports, 2006-08

Destination

Calendar year

2006 2007 2008

Quantity (short tons)

Exports 483,890 464,126 450,116

Imports 32,980 48,366 32,586

Net exports 450,910 415,760 417,530

Note.–Export and import figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Table VII-9

Certain coated paper: Finland’s total exports and exports to the United States, 2006-08

Destination

Calendar year

2006 2007 2008

Quantity (short tons)

United States 37,852 30,419 17,627

World 483,890 464,126 450,116

Share of total (percent)

United States 7.8 6.6 3.9

Note.–Export figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Germany

Table VII-10 presents data on German exports and imports of certain coated paper, and table VII11 shows data for German exports to the United States as a share of total German exports. Germany

exported and imported large volumes of certain coated paper during 2006-08. Other European countries

were the destination for much of Germany’s exports. Germany’s largest export market during the period

was France, but in 2008 France accounted for only 8 percent of total German exports. Exports to the

United States totaled only 6 percent of total German exports of certain coated paper in 2008.18 
 19 Eight Korean firms were reported to have produced coated free sheet paper during the period of investigation. 

Some of these firms likely produced certain coated paper. These firms are: EN Paper Mfg. Co., Ltd., Hankuk Paper

Mfg. Co., Ltd., Hansol Paper Co., Ltd., Moorim Paper Co., Ltd., Namhan Paper Co., Ltd., Samwha Paper Co., Ltd.,

Daehan Paper Co., Ltd., and Hongwon Paper Mfg. Co., Ltd. 2008 Lockwood-Post Directory of Pulp & Paper Mills

Global Edition. Bedford, Massachusetts: RISI, Inc., 2008.

VII-9

Table VII-10

Certain coated paper: Germany’s exports and imports, 2006-08

Destination

Calendar year

2006 2007 2008

Quantity (short tons)

Exports 1,838,351 1,750,966 1,681,671

Imports 888,485 879,601 920,010

Net exports 949,866 871,365 761,661

Note.–Export and import figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Table VII-11

Certain coated paper: Germany’s total exports and exports to the United States, 2006-08

Destination

Calendar year

2006 2007 2008

Quantity (short tons)

United States 161,487 144,557 98,441

World 1,838,351 1,750,966 1,681,671

Share of total (percent)

United States 8.8 8.3 5.9

Note.–Export figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Korea

Table VII-12 presents data on Korean exports and imports of certain coated paper, and table VII13 shows data for Korean exports to the United States as a share of total Korean exports. Korea was a

large net exporter of certain coated paper during 2006-08. The United States was Korea’s largest export

market for certain coated paper but it accounted for no more than 30 percent of Korea’s total exports

during the period. Other large export markets for Korea included Iran, Australia, Japan, and China.19
VII-10

Table VII-12

Certain coated paper: Korea’s exports and imports, 2006-08

Destination

Calendar year

2006 2007 2008

Quantity (short tons)

Exports 1,587,074 1,619,620 1,485,741

Imports 16,797 20,867 22,605

Net exports 1,570,276 1,598,753 1,463,136

Note.–Export and import figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.

Table VII-13

Certain coated paper: Korea’s total exports and exports to the United States, 2006-08

Destination

Calendar year

2006 2007 2008

Quantity (short tons)

United States 478,023 451,159 382,576

World 1,587,074 1,619,620 1,485,741

Share of total (percent)

United States 30.1 27.9 25.7

Note.–Export figures are quantities reported at the 6-digit level for HTS subheadings 4810.14 and 4810.19.

Source: Compiled from Global Trade Atlas database.
A-1

APPENDIX A

FEDERAL REGISTER NOTICES

Federal Register / Vol. 74, No. 188 / Wednesday, September 30, 2009 / Notices 50243 

investigations as parties must file an 

entry of appearance with the Secretary 

to the Commission, as provided in 

section 201.11 of the Commission’s 

rules, no later than 21 days prior to the 

hearing date specified in this notice. A 

party that filed a notice of appearance 

during the preliminary phase of the 

investigations need not file an 

additional notice of appearance during 

this final phase. The Secretary will 

maintain a public service list containing 

the names and addresses of all persons, 

or their representatives, who are parties 

to the investigations. 

Limited disclosure of business 

proprietary information (BPI) under an 

administrative protective order (APO) 

and BPI service list.—Pursuant to 

section 207.7(a) of the Commission’s 

rules, the Secretary will make BPI 

gathered in the final phase of these 

investigations available to authorized 

applicants under the APO issued in the 

investigations, provided that the 

application is made no later than 21 

days prior to the hearing date specified 

in this notice. Authorized applicants 

must represent interested parties, as 

defined by 19 U.S.C. 1677(9), who are 

parties to the investigations. A party 

granted access to BPI in the preliminary 

phase of the investigations need not 

reapply for such access. A separate 

service list will be maintained by the 

Secretary for those parties authorized to 

receive BPI under the APO. 

Staff report.—The prehearing staff 

report in the final phase of these 

investigations will be placed in the 

nonpublic record on November 16, 

2009, and a public version will be 

issued thereafter, pursuant to section 

207.22 of the Commission’s rules. 

Hearing.—The Commission will hold 

a hearing in connection with the final 

phase of these investigations beginning 

at 9:30 a.m. on December 1, 2009, at the 

U.S. International Trade Commission 

Building. Requests to appear at the 

hearing should be filed in writing with 

the Secretary to the Commission on or 

before November 25, 2009. A nonparty 

who has testimony that may aid the 

Commission’s deliberations may request 

permission to present a short statement 

at the hearing. All parties and 

nonparties desiring to appear at the 

hearing and make oral presentations 

should attend a prehearing conference 

to be held at 9:30 a.m. on November 30, 

2009, at the U.S. International Trade 

Commission Building. Oral testimony 

and written materials to be submitted at 

the public hearing are governed by 

sections 201.6(b)(2), 201.13(f), and 

207.24 of the Commission’s rules. 

Parties must submit any request to 

present a portion of their hearing 

testimony in camera no later than 7 

business days prior to the date of the 

hearing. 

Written submissions.—Each party 

who is an interested party shall submit 

a prehearing brief to the Commission. 

Prehearing briefs must conform with the 

provisions of section 207.23 of the 

Commission’s rules; the deadline for 

filing is November 23, 2009. Parties may 

also file written testimony in connection 

with their presentation at the hearing, as 

provided in section 207.24 of the 

Commission’s rules, and posthearing 

briefs, which must conform with the 

provisions of section 207.25 of the 

Commission’s rules. 

The deadline for filing posthearing 

briefs is December 8, 2009; witness 

testimony must be filed no later than 

three days before the hearing. In 

addition, any person who has not 

entered an appearance as a party to the 

investigations may submit a written 

statement of information pertinent to 

the subject of the investigations, 

including statements of support or 

opposition to the petition, on or before 

December 8, 2009. On December 23, 

2009, the Commission will make 

available to parties all information on 

which they have not had an opportunity 

to comment. Parties may submit final 

comments on this information on or 

before December 28, 2009, but such 

final comments must not contain new 

factual information and must otherwise 

comply with section 207.30 of the 

Commission’s rules. All written 

submissions must conform with the 

provisions of section 201.8 of the 

Commission’s rules; any submissions 

that contain BPI must also conform with 

the requirements of sections 201.6, 

207.3, and 207.7 of the Commission’s 

rules. The Commission’s rules do not 

authorize filing of submissions with the 

Secretary by facsimile or electronic 

means, except to the extent permitted by 

section 201.8 of the Commission’s rules, 

as amended, 67 Fed. Reg. 68036 

(November 8, 2002). Even where 

electronic filing of a document is 

permitted, certain documents must also 

be filed in paper form, as specified in II 

(C) of the Commission’s Handbook on 

Electronic Filing Procedures, 67 FR 

68168, 68173 (November 8, 2002). 

Additional written submissions to the 

Commission, including requests 

pursuant to section 201.12 of the 

Commission’s rules, shall not be 

accepted unless good cause is shown for 

accepting such submissions, or unless 

the submission is pursuant to a specific 

request by a Commissioner or 

Commission staff. 

In accordance with sections 201.16(c) 

and 207.3 of the Commission’s rules, 

each document filed by a party to the 

investigations must be served on all 

other parties to the investigations (as 

identified by either the public or BPI 

service list), and a certificate of service 

must be timely filed. The Secretary will 

not accept a document for filing without 

a certificate of service. 

Authority: These investigations are being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.21 of the 

Commission’s rules. 

Issued: September 25, 2009. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E9–23562 Filed 9–29–09; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–470–471 and 

731–TA–1169–1170 (Preliminary)] 

Certain Coated Paper Suitable for 

High-Quality Print Graphics Using 

Sheet-Fed Presses From China and 

Indonesia 

AGENCY: United States International 

Trade Commission. 

ACTION: Institution of antidumping and 

countervailing duty investigations and 

scheduling of preliminary phase 

investigations. 

SUMMARY: The Commission hereby gives 

notice of the institution of investigations 

and commencement of preliminary 

phase antidumping and countervailing 

duty investigations Nos. 701–TA–470– 

471 and 731–TA–1169–1170 

(Preliminary) under sections 703(a) and 

733(a) of the Tariff Act of 1930 (19 

U.S.C. 1671b(a) and 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 China and Indonesia of 

certain coated paper suitable for highquality print graphics using sheet-fed 

presses, provided for in subheadings 

4810.13.11, 4810.13.19, 4810.13.20, 

4810.13.50, 4810.13.60, 4810.13.70, 

4810.14.11, 4810.14.19, 4810.14.20, 

4810.14.50, 4810.14.60, 4810.14.70, 

4810.19.11, 4810.19.19, 4810.19.20, 

4810.22.10, 4810.22.50, 4810.22.60, 

4810.22.70, 4810.29.10, 4810.29.50, 

4810.29.60, and 4810.29.70 of the 

Harmonized Tariff Schedule of the 

United States, that are alleged to be sold 


CPrice-Sewell on DSKGBLS3C1PROD with NOTICES
50244 Federal Register / Vol. 74, No. 188 / Wednesday, September 30, 2009 / Notices 

in the United States at less than fair 

value and alleged to be subsidized by 

the Governments of China and 

Indonesia. Unless the Department of 

Commerce extends the time for 

initiation pursuant to sections 

702(c)(1)(B) or 732(c)(1)(B) of the Act 

(19 U.S.C. 1671a(c)(1)(B) or 

1673a(c)(1)(B)), the Commission must 

reach a preliminary determination in 

antidumping and countervailing duty 

investigations in 45 days, or in this case 

by November 9, 2009. The 

Commission’s views are due at 

Commerce within five business days 

thereafter, or by November 17, 2009. 

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). 

DATES: Effective Date: September 23, 

2009. 

FOR FURTHER INFORMATION CONTACT: 

Christopher J. Cassise (202–708–5408), 

Office of Investigations, U.S. 

International Trade Commission, 500 E 

Street, SW., Washington, DC 20436. 

Hearing-impaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202– 

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

these investigations may be viewed on 

the Commission’s electronic docket 

(EDIS) at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background.—These investigations 

are being instituted in response to a 

petition filed on September 23, 2009, by 

Appleton Coating, LLC, Kimberly, WI; 

NewPage Corp., Mianisburg, OH; Sappi 

Fine Paper North America, Boston, MA; 

and the United Steel, Paper and 

Forestry, Rubber Manufacturing, Energy, 

Allied Industrial and Service Workers 

International Union (‘‘USW’’). 

Participation in the investigations and 

public service list.—Persons (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 

sections 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 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 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 

section 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 Investigations has scheduled 

a conference in connection with these 

investigations for 9:30 a.m. on October 

14, 2009, at the U.S. International Trade 

Commission Building, 500 E Street, 

SW., Washington, DC. Parties wishing to 

participate in the conference should 

contact Chris Cassise (202–708–5408) 

not later than October 9, 2009, 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 

sections 201.8 and 207.15 of the 

Commission’s rules, any person may 

submit to the Commission on or before 

October 19, 2009, 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 sections 201.6, 207.3, 

and 207.7 of the Commission’s rules. 

The Commission’s rules do not 

authorize filing of submissions with the 

Secretary by facsimile or electronic 

means, except to the extent permitted by 

section 201.8 of the Commission’s rules, 

as amended, 67 FR 68036 (November 8, 

2002). Even where electronic filing of a 

document is permitted, certain 

documents must also be filed in paper 

form, as specified in II (C) of the 

Commission’s Handbook on Electronic 

Filing Procedures, 67 FR 68168, 68173 

(November 8, 2002). 

In accordance with sections 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 section 207.12 of the 

Commission’s rules. 

Issued: September 25, 2009. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E9–23563 Filed 9–29–09; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

[OMB Number 1122–NEW] 

Office on Violence Against Women; 

Agency Information Collection 

Activities: Proposed Collection; 

Comments Requested 

ACTION: 30-Day Notice of Information 

Collection Under Expedited, Emergency 

Review: Office on Violence Against 

Women Solicitation Template. 

The Department of Justice, Office on 

Violence Against Women (OVW) will be 

submitting the following information 

collection request to the Office of 

Management and Budget (OMB) for 

expedited, emergency review and 

approval in accordance with the 

Paperwork Reduction Act of 1995 and 

emergency clearance procedures under 

5 CFR 1320.13. The proposed 

information collection is published to 

obtain comments from the public and 

affected agencies. 

The purpose of this notice is to allow 

for 30 days for public comment until 

October 30, 2009. 

Written comments and/or suggestions 

regarding the items contained in this 

notice, especially the estimated public 

burden and associated response time, 

should be directed to The Office of 

Management and Budget, Office of 


CPrice-Sewell on DSKGBLS3C1PROD with NOTICES
Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 53703 

1See Petition for the Imposition of Antidumping 

and Countervailing Duties Pursuant to Sections 701 

and 731 of the Tariff Act of 1930, as Amended: 

Certain Coated Paper Suitable for High-Quality 

Print Graphics Using Sheet-Fred Presses from the 

People’s Republic of China, dated September 23, 

2009 (‘‘Petition’’). 

exporters of subject merchandise which 

have not received their own rate, the 

cash deposit rate will be the rate 

applicable to the Vietnamese exporters 

that supplied that non–Vietnamese 

exporter. These deposit requirements, 

when imposed, shall remain in effect 

until further notice. 

Notification to Importers 

This notice also serves as a final 

reminder to importers of their 

responsibility under 19 CFR 

351.402(f)(2) to file a certificate 

regarding the reimbursement of 

antidumping duties prior to liquidation 

of the relevant entries during this 

review period. Failure to comply with 

this requirement could result in the 

Secretary’s presumption that 

reimbursement of antidumping duties 

occurred, and in the subsequent 

assessment of double antidumping 

duties. 

Notification of Interested Parties 

This notice serves as a final reminder 

to importers of their responsibility 

under 19 CFR 351.402(f)(2) to file a 

certificate regarding the reimbursement 

of antidumping duties prior to 

liquidation of the relevant entries 

during the review period. Pursuant to 19 

CFR 351.402(f)(3), failure to comply 

with this requirement could result in 

the Department’s presumption that 

reimbursement of antidumping duties 

occurred and the subsequent assessment 

of doubled antidumping duties. 

This notice also serves as a reminder 

to parties subject to administrative 

protective order (‘‘APO’’) of their 

responsibility concerning the 

disposition of proprietary information 

disclosed under APO as explained in 

the administrative protective order 

itself. Timely written notification of the 

return/destruction of APO materials or 

conversion to judicial protective order is 

hereby requested. Failure to comply 

with the regulations and the terms of an 

APO is a sanctionable violation. 

We are issuing and publishing these 

results and notice in accordance with 

sections 751(a)(1) and 777(i)(1) of the 

Act. 

Dated: October 13, 2009. 

Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration. 

[FR Doc. E9–25209 Filed 10–19–09; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

(C–570–959) 

Certain Coated Paper Suitable for 

High–Quality Print Graphics Using 

Sheet–Fed Presses from the People’s 

Republic of China: Initiation of 

Countervailing Duty Investigation 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: October 20, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Yasmin Nair and Joseph Shuler, AD/ 

CVD Operations, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230; 

telephone: (202) 482–3813 and (202) 

482–1293, respectively. 

SUPPLEMENTARY INFORMATION: 

The Petition 

On September 23, 2009, the 

Department of Commerce 

(‘‘Department’’) received a petition filed 

in proper form by Appleton Coated LLC, 

NewPage Corporation, S.D. Warren 

Company d/b/a Sappi Fine Paper North 

America, and the United Steel, Paper 

and Forestry, Rubber, Manufacturing, 

Energy, Allied Industrial and Service 

Workers International Union 

(collectively, ‘‘Petitioners’’), domestic 

producers of certain coated paper 

suitable for high–quality print graphics 

using sheet–fed presses (‘‘coated 

paper’’).1 In response to the 

Department’s requests, Petitioners 

provided timely information 

supplementing the Petition on October 

2, 2009, and October 6, 2009. 

In accordance with section 702(b)(1) 

of the Tariff Act of 1930, as amended 

(‘‘the Act’’), Petitioners allege that 

manufacturers, producers, or exporters 

of coated paper in the People’s Republic 

of China (‘‘PRC’’) receive 

countervailable subsidies within the 

meaning of section 701 of the Act, and 

that such imports are materially 

injuring, or threatening material injury 

to, an industry in the United States. 

The Department finds that Petitioners 

filed the Petition on behalf of the 

domestic industry because they are 

interested parties as defined in section 

771(9)(C) and (D) of the Act, and 

Petitioners have demonstrated sufficient 

industry support with respect to the 

countervailing duty (‘‘CVD’’) 

investigation (see ‘‘Determination of 

Industry Support for the Petition’’ 

section below). 

Period of Investigation 

The period of investigation is January 

1, 2008, through December 31, 2008. 

Scope of Investigation 

The products covered by the 

investigation are coated paper products 

from the PRC. For a full description of 

the scope of the investigation, please see 

‘‘Scope of Investigation,’’ in Appendix I 

of this notice. 

Comments on Scope of Investigation 

During our review of the Petition, we 

discussed the scope with Petitioners 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 

Department’s 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 by 

November 2, 2009, twenty calendar days 

from the signature date of this notice. 

Comments should be addressed to 

Import Administration’s APO/Dockets 

Unit, Room 1870, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230. 

The period of the 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 

determination. 

Consultations 

Pursuant to section 702(b)(4)(A)(ii) of 

the Act, on September 23, 2009, the 

Department invited representatives of 

the Government of the PRC (‘‘GOC’’) for 

consultations with respect to the CVD 

petition. The GOC did not request such 

consultations, however, on October 13, 

2009, the GOC’s Ministry of Commerce 

submitted to the United States Embassy 

in Beijing, China comments pertaining 

to the Petition. 

Determination of Industry Support for 

the Petition 

Section 702(b)(1) of the Act requires 

that a petition be filed on behalf of the 

domestic industry. Section 702(c)(4)(A) 

of the Act provides that a petition meets 

this requirement if the domestic 

producers or workers who support the 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
53704 Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 

petition account for: (i) at least 25 

percent of the total production of the 

domestic like product; and (ii) 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. Moreover, section 702(c)(4)(D) 

of the Act provides that, if the petition 

does not establish support of domestic 

producers or workers accounting for 

more than 50 percent of the total 

production of the domestic like product, 

the Department shall: (i) poll the 

industry or rely on other information in 

order to determine if there is support for 

the petition, as required by 

subparagraph (A); or (ii) determine 

industry support using a statistically 

valid sampling method. 

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 a 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’’), which is 

responsible for determining whether 

‘‘the domestic industry’’ has been 

injured, must also determine what 

constitutes a domestic like product in 

order to define the industry. While both 

the Department and the ITC must apply 

the same statutory definition regarding 

the domestic like product (see section 

771(10) of the Act), they do so for 

different purposes and pursuant to a 

separate and distinct authority. In 

addition, the Department’s 

determination is subject to limitations of 

time and information. Although this 

may result in different definitions of the 

like product, such differences do not 

render the decision of either agency 

contrary to law. See USEC, Inc. v. 

United States, 132 F. Supp. 2d 1, 8 (Ct. 

Int’l Trade 2001), citing Algoma Steel 

Corp., Ltd. v. United States, 688 F. 

Supp. 639, 644 (Ct. Int’l Trade 1988), 

aff’d 865 F.2d 240 (Fed. Cir. 1989), cert. 

denied 492 U.S. 919 (1989). 

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 the domestic like 

product, Petitioners offer a definition of 

domestic like product that includes 

sheeter rolls (rolls of certain coated 

paper intended to be slit and used in 

sheet–fed presses) and, therefore, is 

broader than the scope of the 

investigation, which does not include 

sheeter rolls. Based on our analysis of 

the information submitted on the 

record, we have determined that coated 

paper described in the scope of the 

investigation and sheeter rolls constitute 

a single domestic like product and we 

have analyzed industry support in terms 

of that domestic like product. For a 

discussion of the domestic like product 

analysis in this case, see Countervailing 

Duty Investigation Initiation Checklist: 

Certain Coated Paper from the PRC 

(‘‘PRC Initiation Checklist’’) at 

Attachment II, Analysis of Industry 

Support for the Petitions Covering 

Certain Coated Paper from the People’s 

Republic of China and Indonesia, dated 

concurrently with this notice and on file 

in the Central Records Unit, Room 1117 

of the main Department of Commerce 

building. 

In determining whether Petitioners 

have standing under section 

702(c)(4)(A) of the Act, we considered 

the industry support data contained in 

the Petition with reference to the 

domestic like product as defined in the 

Petition. To establish industry support, 

Petitioners provided their own 2008 

shipments of the domestic like product, 

as well as one supporting company’s 

(SMART Papers) 2008 shipments, and 

compared the total to the 2008 

shipments of the entire domestic 

industry. See Volume I of the Petition, 

at 2–3, Exhibits I–3, I–4, and I–19, and 

Supplement to the AD/CVD Petitions, 

dated October 2, 2009, at 19–22 and 

Exhibit 4. Petitioners estimated total 

2008 shipments of the domestic like 

product based on the American Forest & 

Paper Association annual Coated 

Printing Papers Survey. See Volume I of 

the Petition, at 3 and Exhibits I–3 and 

I–4, and Supplement to the AD/CVD 

Petitions, dated October 2, 2009, at 22 

and Exhibit 4; see also PRC Initiation 

Checklist at Attachment II. 

Our review of the data provided in the 

Petition, supplemental submissions, and 

other information readily available to 

the Department indicates that 

Petitioners have established industry 

support. First, the Petition established 

support from domestic producers (or 

workers) accounting for more than 50 

percent of the total production of the 

domestic like product and, as such, the 

Department is not required to take 

further action in order to evaluate 

industry support (e.g., polling). See 

section 702(c)(4)(D) of the Act; see also 

PRC Initiation Checklist at Attachment 

II. Second, the domestic producers (or 

workers) have met the statutory criteria 

for industry support under section 

702(c)(4)(A)(i) of the Act because the 

domestic producers (or workers) who 

support the Petition account for at least 

25 percent of the total production of the 

domestic like product. See PRC 

Initiation Checklist at Attachment II. 

Finally, the domestic producers (or 

workers) have met the statutory criteria 

for industry support under section 

702(c)(4)(A)(ii) of the Act because 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. Accordingly, the Department 

determines that the Petition was filed on 

behalf of the domestic industry within 

the meaning of section 702(b)(1) of the 

Act. See id. 

The Department finds that Petitioners 

filed the Petition on behalf of the 

domestic industry because they are 

interested parties as defined in sections 

771(9)(C) and 771(9)(D) of the Act and 

they have demonstrated sufficient 

industry support with respect to the 

CVD investigation that they are 

requesting the Department initiate. See 

id. 

Injury Test 

Because the PRC is a ‘‘Subsidies 

Agreement Country’’ within the 

meaning of section 701(b) of the Act, 

section 701(a)(2) of the Act applies to 

this investigation. Accordingly, the ITC 

must determine whether imports of the 

subject merchandise from the PRC 

materially injure, or threaten material 

injury to, a U.S. industry. 

Allegations and Evidence of Material 

Injury and Causation 

Petitioners allege that imports of 

coated paper from the PRC are 

benefitting from countervailable 

subsidies and that such imports are 

causing, or threaten to cause, material 

injury to the domestic industry 

producing certain coated paper. In 

addition, Petitioners allege that 

subsidized imports exceed the 

negligibility threshold provided for 

under section 771(24)(A) of the Act. 

Petitioners contend that the industry’s 

injured condition is illustrated by 

reduced market share, underselling and 

price depressing and suppressing 

effects, increased import penetration, 

lost sales and revenue, reduced 

production, capacity, and capacity 

utilization, reduced shipments and 

inventories, reduced employment, and 

reduced financial performance. We have 

assessed the allegations and supporting 

evidence regarding material injury, 


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threat of 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 

PRC Initiation Checklist at Attachment 

III, Analysis of Allegations and 

Evidence of Material Injury and 

Causation for the Petitions Covering 

Certain Coated Paper from the People’s 

Republic of China and Indonesia. 

Initiation of Countervailing Duty 

Investigation 

Section 702(b) of the Act requires the 

Department to initiate a CVD proceeding 

whenever an interested party files a 

petition on behalf of an industry that: 

(1) alleges the elements necessary for an 

imposition of a duty under section 

701(a) of the Act; and (2) is 

accompanied by information reasonably 

available to Petitioner(s) supporting the 

allegations. 

The Department has examined the 

CVD petition on coated paper from the 

PRC and finds that it complies with the 

requirements of section 702(b) of the 

Act. Therefore, in accordance with 

section 702(b) of the Act, we are 

initiating a CVD investigation to 

determine whether manufacturers, 

producers, or exporters of coated paper 

in the PRC receive countervailable 

subsidies. For a discussion of evidence 

supporting our initiation determination, 

see Initiation Checklist. 

We are including in our investigation 

the following programs alleged in the 

Petition to have provided 

countervailable subsidies to producers 

and exporters of the subject 

merchandise in the PRC: 

A. Preferential Lending to the Coated 

Paper Industry 

1. Policy Loans from State–Owned 

Commercial Banks and Government 

Policy Banks 

2. Fast–Growth High–Yield Forestry 

Program Loans 

B. Income Tax Programs 

1. Income Tax Exemption/Reduction 

under ‘‘Two–Free/Three Half’’ 

Program 

2. Local Income Tax Exemption and 

Reductions for ‘‘Productive’’ 

Foreign–Invested Enterprises 

(‘‘FIEs’’) 

3. Income Tax Reduction for FIEs 

Purchasing Domestically–Produced 

Equipment 

4. Tax Subsidies to FIEs Based on 

Geographic Location 

5. Preferential Tax Policies for 

Technology or Knowledge– 

Intensive FIEs 

6. Tax Programs for FIEs that are High 

or New Technology Enterprises 

7. Income Tax Reductions for High– 

Technology Industries in 

Guangdong Province 

8. Preferential Tax Policies for 

Research and Development at FIEs 

9. Income Tax Credits for 

Domestically–Owned Companies 

Purchasing Domestically–Produced 

Equipment 

10. Income Tax Exemption Program 

for Export–Oriented FIEs 

11. Corporate Income Tax Refund 

Program for Reinvestment of FIE 

profits in Export–Oriented 

Enterprises 

12. Exemption from City Maintenance 

and Construction Taxes and 

Education Surcharges for FIEs 

C. Indirect Tax and Import Tariff 

Programs 

1. Value Added Tax (‘‘VAT’’) and 

Tariff Exemptions on Imported 

Equipment 

2. VAT Rebates on Domestically 

Produced Equipment 

3. Domestic VAT Refunds for 

Companies Located in the Hainan 

Economic Development Zone 

D. Grant Programs 

1. Funds for Forestry Plantation 

Construction and Management 

2. The State Key Technologies 

Renovation Project Fund 

3. Loan Interest Subsidies for Major 

Industrial Technology Reform 

Projects in Wuhan 

4. Funds for Water Treatment 

Improvement Projects in the 

Songhuajiang Basin 

5. Special Fund for Energy Saving 

Technology Reform in Wuhan and 

Shouguang Municipality 

6. Clean Production Technology Fund 

7. Famous Brands Awards 

E. Provision of Goods or Services for 

Less Than Adequate Remuneration 

(‘‘LTAR’’) 

1. Papermaking Chemicals 

2. Electricity 

3. Land–Use Rights to State Owned 

Enterprises 

F. Economic Development Zone 

Programs 

1. Subsidies in the Nanchang EDZ 

2. Subsidies in the Wuhan EDZ 

3. Subsidies in the Yangpu EDZ 

4. Subsidies in the Zhenjiang EDZ 

For further information explaining why 

the Department is investigating these 

programs, see Initiation Checklist. 

We are not including in our 

investigation the following programs 

alleged to benefit producers and 

exporters of the subject merchandise in 

the PRC: 

1. State Science and Technology 

Support Scheme 

Petitioners allege that the GOC 

provides grants to support research and 

development under the National Mid– 

term and Long–term Science and 

Technology Plan (2006 – 2020). While 

the Department has relied on policy 

directives such as the 2007 Paper Plan 

and Decision No. 40 to support 

specificity findings with respect to 

policy lending, Petitioners have not 

pointed to any language in these policy 

directives regarding grants to promote 

research and development. Instead, the 

grants are given pursuant to the Science 

and Technology Plan and Petitioners’ 

specificity allegations in this respect are 

based on Section 771(5A)(D)(ii) and 

(D)(iii)(I) of the Act. Regarding the 

former, Petitioners appear to argue that 

because eligibility is not automatic 

((D)(ii)(I)) and/or because the eligibility 

criteria are not clearly set out 

((D)(ii)(III)), the program is specific as a 

matter of law. However, Petitioners have 

misconstrued the structure of (D)(ii) and 

a finding of de jure specificity set forth 

under section 771(5A)(D)(i) of the Act. 

Section 771(5A)(D)(ii) does not mean 

that if one or more of the criterion listed 

under this section of the Act is not meet 

then the program is specific as a matter 

of law. To be specific as a matter of law 

the program must meet the standard set 

forth under section 771(5A)(D)(i) of the 

Act: the legislation under which the 

program operates expressly limits access 

to the subsidy to an enterprise or 

industry. Petitioners have failed to 

sufficiently allege or support a claim 

that this program is de jure specific 

under Section 771(5A)(D)(i) of the Act. 

Finally, Petitioners have provided no 

support for their claim that the number 

of recipients is limited. Consequently, 

we do not plan on investigating this 

program. 

2. Special Funds for Environmental 

Protection 

Petitioners allege that central, 

provincial, and local government funds, 

in the form of grants or loan interest 

subsidies, are available to support 

certain qualified environmental 

protection projects. Although 

Petitioners point to specific language in 

the Papermaking Plan regarding policy 

support, that Plan was in place from 

2001 – 2005, while the measures 

authorizing these grants were put in 

place after that timeframe. Further, 

Petitioners have not provided evidence 

showing that grants provided pursuant 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
53706 Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 

2 ‘‘ ‘Paperboard’ refers to Certain Coated Paper 

that is heavier, thicker and more rigid than coated 

paper which otherwise meets the product 

description. In the context of Certain Coated Paper, 

paperboard typically is referred to as ‘cover,’ to 

distinguish it from ‘text.’’’ 

3One of the key measurements of any grade of 

paper is brightness. Generally speaking, the brighter 

the paper the better the contrast between the paper 

and the ink. Brightness is measured using a GE 

Reflectance Scale, which measures the reflection of 

light off of a grade of paper. One is the lowest 

reflection, or what would be given to a totally black 

grade, and 100 is the brightest measured grade. 

to these authorizations are specific in 

law under Section 771(5A)(D)(i) or in 

fact under Section 771(5A)(D)(iii). We 

do not agree with Petitioners’ claim of 

specificity under Section 771(5A)(D)(ii) 

for the reasons explained above under, 

‘‘State Science and Technology Support 

Scheme.’’ Consequently, we do not plan 

on investigating this program. 

3. Provision of Coal for LTAR 

Petitioners allege that the GOC 

provides coal to Chinese producers of 

coated paper for LTAR. Petitioners have 

not supported their allegation that this 

program is specific to paper producers. 

The program as it relates to electricity 

generation targets the electricity 

industry, not the papermaking industry. 

Further, Petitioners have not supported 

their claim that the paper industry is an 

‘‘export industry.’’ Consequently, we do 

not plan on investigating this program. 

4. Provision of Water for LTAR 

Petitioners allege that the GOC 

provides favored sectors with 

differential water rates and unlimited 

water use. Petitioners have not provided 

sufficient support of a national policy to 

provide water for LTAR to coated paper 

producers. Consequently, we do not 

plan on investigating this program. 

5. Currency Undervaluation 

Petitioners allege that the GOC– 

maintained exchange rate effectively 

prevents the appreciation of the Chinese 

currency (RMB) against the U.S. dollar. 

Therefore, when producers/exporters in 

the PRC sell their dollars at official 

foreign exchange banks, as required by 

law, the producers receive more RMB 

than they otherwise would if the value 

of the RMB were set by market 

mechanisms. In the alternative, 

Petitioners allege that GOC foreign 

exchange market interventions 

constitute a price support (of the U.S. 

dollar vis a vis the RMB), within the 

meaning of section 771(5)(B)(ii). In both 

cases, Petitioners describe the benefit 

conferred as the excess of RMB 

received, over what would have been 

received at a market rate (‘‘excess 

RMB’’) and alleges specificity within the 

meaning of Section 771(5A)(B) of the 

Act by virtue of the fact that ‘‘ there is 

a direct and positive correlation 

between the export activity/export 

earnings and the amount of subsidy 

received.’’ Section 771(5A)(B) of the Act 

describes an export subsidy as ‘‘ a 

subsidy that is, in law or fact, 

contingent upon export performance, 

alone or as 1 of 2 or more conditions.’’ 

Petitioners have failed to sufficiently 

allege that the receipt of the excess RMB 

is contingent on export or export 

performance because receipt of the 

excess RMB is independent of the type 

of transaction or commercial activity for 

which the dollars are converted or of the 

particular company or individuals 

converting the dollars. Consequently, 

we do not plan on investigating this 

program because Petitioners have failed 

to properly allege the specificity 

element. 

Respondent Selection 

For this investigation, the Department 

expects to select respondents based on 

U.S. Customs and Border Protection 

(‘‘CBP’’) data for U.S. imports during the 

period of investigation. We intend to 

release the CBP data under 

Administrative Protective Order 

(‘‘APO’’) to all parties with access to 

information protected by APO within 

five days of the announcement of the 

initiation of this investigation. 

Interested parties may submit comments 

regarding the CBP data and respondent 

selection within seven calendar days of 

publication of this notice. We intend to 

make our decision regarding respondent 

selection within 20 days of publication 

of this Federal Register notice. 

Interested parties must submit 

applications for disclosure under APO 

in accordance with 19 CFR 351.305(b). 

Instructions for filing such applications 

may be found on the Department’s 

website at http://ia.ita.doc.gov/apo. 

Distribution of Copies of the Petition 

In accordance with section 

702(b)(4)(A)(i) of the Act, a copy of the 

public version of the Petition has been 

provided to the Government of the PRC. 

As soon as and to the extent practicable, 

we will attempt to provide a copy of the 

public version of the Petition to each 

exporter named in the Petition, 

consistent with section 351.203(c)(2) of 

the Department’s regulations 

ITC Notification 

We have notified the ITC of our 

initiation, as required by section 702(d) 

of the Act. 

Preliminary Determination by the ITC 

The ITC will preliminarily determine, 

within 25 days after the date on which 

it receives notice of the initiation, 

whether there is a reasonable indication 

that imports of subsidized coated paper 

from the PRC are causing material 

injury, or threatening to cause material 

injury, to a U.S. industry. See section 

703(a)(2) of the Act. A negative ITC 

determination will result in the 

investigation being terminated; 

otherwise, the investigation will 

proceed according to statutory and 

regulatory time limits. 

This notice is issued and published 

pursuant to section 777(i) of the Act. 

Dated: October 13, 2009. 

Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration. 

Appendix I 

Scope of the Investigation 

The merchandise covered by this 

investigation includes certain coated 

paper and paperboard2 in sheets 

suitable for high quality print graphics 

using sheet–fed presses; coated on one 

or both sides with kaolin (China or other 

clay), calcium carbonate, titanium 

dioxide, and/or other inorganic 

substances; with or without a binder; 

having a GE brightness level of 80 or 

higher3; weighing not more than 340 

grams per square meter; whether gloss 

grade, satin grade, matte grade, dull 

grade, or any other grade of finish; 

whether or not surface–colored, 

surface–decorated, printed (except as 

described below), embossed, or 

perforated; and irrespective of 

dimensions (‘‘Certain Coated Paper’’). 

Certain Coated Paper includes (a) coated 

free sheet paper and paperboard that 

meets this scope definition; (b) coated 

groundwood paper and paperboard 

produced from bleached chemi–thermomechanical pulp (‘‘BCTMP’’) that meets 

this scope definition; and (c) any other 

coated paper that meets this scope 

definition. 

Certain Coated Paper is typically (but 

not exclusively) used for printing multi– 

colored graphics for catalogues, books, 

magazines, envelopes, labels and wraps, 

greeting cards, and other commercial 

printing applications requiring high 

quality print graphics. Specifically 

excluded from the scope are imports of 

paper and paperboard printed with final 

content printed text or graphics. 

As of 2009, imports of the subject 

merchandise are provided for under the 

following categories of the Harmonized 

Tariff Schedule of the United States 

(‘‘HTSUS’’): 4810.14.11, 4810.14.1900, 

4810.14.2010, 4810.14.2090, 

4810.14.5000, 4810.14.6000, 4810.14.70, 

4810.19.1100, 4810.19.1900, 

4810.19.2010, 4810.19.2090, 

4810.22.1000, 4810.22.50, 4810.22.6000, 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 53707 

4810.22.70, 4810.29.1000, 4810.29.5000, 

4810.29.6000, 4810.29.70. While 

HTSUS subheadings are provided for 

convenience and customs purposes, the 

written description of the scope of the 

investigation is dispositive. 

[FR Doc. E9–25210 Filed 10–19–09; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

(C–423–809) 

Stainless Steel Plate in Coils from 

Belgium: Rescission of Countervailing 

Duty Administrative Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: October 20, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Alexander Montoro or Mary Kolberg, at 

(202) 482–0238 or (202) 482–1785, 

respectively; AD/CVD Operations, 

Office 1, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW, 

Washington, DC 20230. 

SUPPLEMENTARY INFORMATION: 

Background 

On May 1, 2009, the Department of 

Commerce (‘‘the Department’’) 

published a notice announcing the 

opportunity to request an administrative 

review of the countervailing duty order 

on stainless steel plate in coils from 

Belgium. See Antidumping or 

Countervailing Duty Order, Finding, or 

Suspended Investigation; Opportunity 

To Request Administrative Review, 74 

FR 20278 (May 1, 2009). On June 1, 

2009, ArcelorMittal Stainless Belgium 

N.V. (‘‘AMS Belgium’’) timely requested 

an administrative review covering the 

period January 1, 2008, through 

December 31, 2008. In accordance with 

19 CFR 351.221(c)(1)(i), the Department 

published a notice initiating an 

administrative review of the 

countervailing duty order on stainless 

steel plate in coils from Belgium. See 

Initiation of Antidumping and 

Countervailing Duty Administrative 

Reviews and Requests for Revocation in 

Part, 74 FR 30052 (June 24, 2009). 

Rescission of Review 

Pursuant to 19 CFR 351.213(d)(l), the 

Secretary will rescind an administrative 

review, in whole or in part, if the party 

that requested a review withdraws the 

request within 90 days of the date of 

publication of the notice of initiation of 

the requested review. On September 22, 

2009, AMS Belgium withdrew its 

request for review within the 90-day 

period. Therefore, in response to AMS 

Belgium’s withdrawal of its request for 

an administrative review, and as no 

other party requested a review, the 

Department is rescinding this 

administrative review of the 

countervailing duty order on stainless 

steel plate in coils from Belgium for the 

period January 1, 2008, through 

December 31, 2008. 

Assessment 

The Department will instruct U.S. 

Customs and Border Protection (‘‘CBP’’) 

to assess countervailing duties at the 

cash deposit rate in effect on the date of 

entry, for entries during the period 

January 1, 2008, through December 31, 

2008. The Department intends to issue 

appropriate assessment instructions to 

CBP 15 days after the date of 

publication of this notice of rescission 

of administrative review. In addition, 

pursuant to an injunction issued in 

ArcelorMittal Stainless Belgium N.V. v. 

United States, CIT No. 08–00434, on 

January 16, 2009, the Department must 

continue to suspend liquidation of 

entries made by AMS Belgium pending 

a conclusive court decision in that 

action. 

Notification Regarding Administrative 

Protective Order 

This notice serves as a final reminder 

to parties subject to administrative 

protection orders (‘‘APO’’) of their 

responsibility concerning the 

disposition of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305(a)(3). Timely 

written notification of the return/ 

destruction of APO materials or 

conversion to judicial protective order is 

hereby requested. Failure to comply 

with the regulations and terms of an 

APO is a sanctionable violation. 

This determination is issued and 

published in accordance with sections 

751(a)(l) and 777(i)(l) of the Tariff Act 

of 1930, as amended, and 19 CFR 

351.213(d)(4). 

Dated: October 13, 2009. 

John M. Andersen, 

Acting Deputy Assistant Secretary for 

Antidumping and Countervailing Duty 

Operations. 

[FR Doc. E9–25200 Filed 10–19–09; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–560–824] 

Certain Coated Paper From Indonesia: 

Initiation of Countervailing Duty 

Investigation 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: October 20, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Gene Calvert or Dana Mermelstein, 

AD/CVD Operations, Office 6, Import 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone: (202) 482–3586 or (202) 482– 

1391, respectively. 

SUPPLEMENTARY INFORMATION: 

The Petition 

On September 23, 2009, the 

Department of Commerce (‘‘the 

Department’’) received a countervailing 

duty (‘‘CVD’’) petition concerning 

imports of certain coated paper suitable 

for high-quality print graphics using 

sheet-fed presses (‘‘certain coated 

paper’’) from Indonesia filed in proper 

form by Appleton Coated LLC, NewPage 

Corporation, Sappi Fine Paper North 

America, and the United Steel, Paper 

and Forestry, Rubber, Manufacturing, 

Energy, Allied Industrial and Service 

Workers International Union 

(collectively, ‘‘Petitioners’’). See 

‘‘Petition for the Imposition of 

Countervailing Duties: Certain Coated 

Paper Suitable for High-Quality Print 

Graphics Using Sheet-Fed Presses from 

Indonesia,’’ dated September 23, 2009 

(Indonesia CVD Petition). On September 

29, October 5, and October 7, 2009, the 

Department issued additional requests 

for information and clarification of 

certain areas of the Indonesia CVD 

Petition. Based on the Department’s 

requests, Petitioners timely filed 

additional information pertaining to the 

Indonesia CVD Petition on October 2, 

October 6, and October 9, 2009 

(hereinafter, ‘‘Supplement to the 

Indonesia CVD Petition,’’ dated October 

2, 2009, ‘‘Second Supplement to the 

Indonesia CVD Petition,’’ dated October 

6, 2009, and ‘‘Third Supplement to the 

Indonesia CVD Petition,’’ dated October 

9, 2009). 

In accordance with section 702(b)(1) 

of the Tariff Act of 1930, as amended, 

(‘‘the Act’’), Petitioners allege that 

producers/exporters of certain coated 

paper in Indonesia received 

countervailable subsidies within the 

meaning of sections 701 and 771(5) of 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 53707 

4810.22.70, 4810.29.1000, 4810.29.5000, 

4810.29.6000, 4810.29.70. While 

HTSUS subheadings are provided for 

convenience and customs purposes, the 

written description of the scope of the 

investigation is dispositive. 

[FR Doc. E9–25210 Filed 10–19–09; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

(C–423–809) 

Stainless Steel Plate in Coils from 

Belgium: Rescission of Countervailing 

Duty Administrative Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: October 20, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Alexander Montoro or Mary Kolberg, at 

(202) 482–0238 or (202) 482–1785, 

respectively; AD/CVD Operations, 

Office 1, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW, 

Washington, DC 20230. 

SUPPLEMENTARY INFORMATION: 

Background 

On May 1, 2009, the Department of 

Commerce (‘‘the Department’’) 

published a notice announcing the 

opportunity to request an administrative 

review of the countervailing duty order 

on stainless steel plate in coils from 

Belgium. See Antidumping or 

Countervailing Duty Order, Finding, or 

Suspended Investigation; Opportunity 

To Request Administrative Review, 74 

FR 20278 (May 1, 2009). On June 1, 

2009, ArcelorMittal Stainless Belgium 

N.V. (‘‘AMS Belgium’’) timely requested 

an administrative review covering the 

period January 1, 2008, through 

December 31, 2008. In accordance with 

19 CFR 351.221(c)(1)(i), the Department 

published a notice initiating an 

administrative review of the 

countervailing duty order on stainless 

steel plate in coils from Belgium. See 

Initiation of Antidumping and 

Countervailing Duty Administrative 

Reviews and Requests for Revocation in 

Part, 74 FR 30052 (June 24, 2009). 

Rescission of Review 

Pursuant to 19 CFR 351.213(d)(l), the 

Secretary will rescind an administrative 

review, in whole or in part, if the party 

that requested a review withdraws the 

request within 90 days of the date of 

publication of the notice of initiation of 

the requested review. On September 22, 

2009, AMS Belgium withdrew its 

request for review within the 90-day 

period. Therefore, in response to AMS 

Belgium’s withdrawal of its request for 

an administrative review, and as no 

other party requested a review, the 

Department is rescinding this 

administrative review of the 

countervailing duty order on stainless 

steel plate in coils from Belgium for the 

period January 1, 2008, through 

December 31, 2008. 

Assessment 

The Department will instruct U.S. 

Customs and Border Protection (‘‘CBP’’) 

to assess countervailing duties at the 

cash deposit rate in effect on the date of 

entry, for entries during the period 

January 1, 2008, through December 31, 

2008. The Department intends to issue 

appropriate assessment instructions to 

CBP 15 days after the date of 

publication of this notice of rescission 

of administrative review. In addition, 

pursuant to an injunction issued in 

ArcelorMittal Stainless Belgium N.V. v. 

United States, CIT No. 08–00434, on 

January 16, 2009, the Department must 

continue to suspend liquidation of 

entries made by AMS Belgium pending 

a conclusive court decision in that 

action. 

Notification Regarding Administrative

Protective Order 

This notice serves as a final reminder 

to parties subject to administrative 

protection orders (‘‘APO’’) of their 

responsibility concerning the 

disposition of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305(a)(3). Timely 

written notification of the return/ 

destruction of APO materials or 

conversion to judicial protective order is 

hereby requested. Failure to comply 

with the regulations and terms of an 

APO is a sanctionable violation. 

This determination is issued and 

published in accordance with sections 

751(a)(l) and 777(i)(l) of the Tariff Act 

of 1930, as amended, and 19 CFR 

351.213(d)(4). 

Dated: October 13, 2009. 

John M. Andersen, 

Acting Deputy Assistant Secretary for 

Antidumping and Countervailing Duty 

Operations. 

[FR Doc. E9–25200 Filed 10–19–09; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–560–824] 

Certain Coated Paper From Indonesia: 

Initiation of Countervailing Duty 

Investigation 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: October 20, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Gene Calvert or Dana Mermelstein, 

AD/CVD Operations, Office 6, Import 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone: (202) 482–3586 or (202) 482– 

1391, respectively. 

SUPPLEMENTARY INFORMATION: 

The Petition 

On September 23, 2009, the 

Department of Commerce (‘‘the 

Department’’) received a countervailing 

duty (‘‘CVD’’) petition concerning 

imports of certain coated paper suitable 

for high-quality print graphics using 

sheet-fed presses (‘‘certain coated 

paper’’) from Indonesia filed in proper 

form by Appleton Coated LLC, NewPage 

Corporation, Sappi Fine Paper North 

America, and the United Steel, Paper 

and Forestry, Rubber, Manufacturing, 

Energy, Allied Industrial and Service 

Workers International Union 

(collectively, ‘‘Petitioners’’). See 

‘‘Petition for the Imposition of 

Countervailing Duties: Certain Coated 

Paper Suitable for High-Quality Print 

Graphics Using Sheet-Fed Presses from 

Indonesia,’’ dated September 23, 2009 

(Indonesia CVD Petition). On September 

29, October 5, and October 7, 2009, the 

Department issued additional requests 

for information and clarification of 

certain areas of the Indonesia CVD 

Petition. Based on the Department’s 

requests, Petitioners timely filed 

additional information pertaining to the 

Indonesia CVD Petition on October 2, 

October 6, and October 9, 2009 

(hereinafter, ‘‘Supplement to the 

Indonesia CVD Petition,’’ dated October 

2, 2009, ‘‘Second Supplement to the 

Indonesia CVD Petition,’’ dated October 

6, 2009, and ‘‘Third Supplement to the 

Indonesia CVD Petition,’’ dated October 

9, 2009). 

In accordance with section 702(b)(1) 

of the Tariff Act of 1930, as amended, 

(‘‘the Act’’), Petitioners allege that 

producers/exporters of certain coated 

paper in Indonesia received 

countervailable subsidies within the 

meaning of sections 701 and 771(5) of 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
53708 Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 

the Act, and that imports from these 

producers/exporters materially injure, 

or threaten material injury to, an 

industry in the United States. 

The Department finds that Petitioners 

have filed this CVD petition on behalf 

of the domestic industry because they 

are interested parties as defined in 

sections 771(9)(C) and 771(9)(D) of the 

Act, and Petitioners have demonstrated 

sufficient industry support with respect 

to the CVD investigation that they are 

requesting the Department to initiate 

(see ‘‘Determination of Industry Support 

for the CVD Petition,’’ below). 

Period of Investigation 

The anticipated period of 

investigation (‘‘POI’’) is calendar year 

2008. See 19 CFR 351.204(b)(2). 

Scope of Investigation 

The products covered by this 

investigation are certain coated paper 

from Indonesia. For a full description of 

the scope of this investigation, please 

see the ‘‘Scope of Investigation’’ in the 

Appendix to this notice. 

Comments on Scope of Investigation 

During our review of the Indonesia 

CVD Petition, we discussed the scope 

with Petitioners 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 (See 

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 by 

November 2, 2009. Comments should be 

addressed to Import Administration’s 

APO/Dockets Unit, 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. 

Consultations 

Pursuant to section 702(b)(4)(A)(ii) of 

the Act, the Department held 

consultations with the Government of 

Indonesia (‘‘GOI’’) with respect to the 

Indonesia CVD Petition on October 7, 

2009. See Memorandum to The File, 

‘‘Consultations with the Government of 

Indonesia Regarding the Countervailing 

Duty Petition on Certain Coated Paper 

from Indonesia,’’ dated October 9, 2009, 

a public document on file in the Central 

Records Unit (‘‘CRU’’), Room 1117 of 

the main Department of Commerce 

building. 

Determination of Industry Support for 

the Petition 

Section 702(b)(1) of the Act requires 

that a petition be filed on behalf of the 

domestic industry. Section 702(c)(4)(A) 

of the Act provides that a petition meets 

this requirement if the domestic 

producers or workers who support the 

petition account for: (i) At least 25 

percent of the total production of the 

domestic like product; and (ii) 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. Moreover, section 702(c)(4)(D) 

of the Act provides that, if the petition 

does not establish support of domestic 

producers or workers accounting for 

more than 50 percent of the total 

production of the domestic like product, 

the Department shall: (i) poll the 

industry or rely on other information in 

order to determine if there is support for 

the petition, as required by 

subparagraph (A); or (ii) determine 

industry support using a statistically 

valid sampling method. 

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 a petition has the 

requisite industry support, the statute 

directs the Department to look to 

producers and workers who produce the 

domestic like product. The United 

States International Trade Commission 

(‘‘ITC’’), which is responsible for 

determining whether ‘‘the domestic 

industry’’ has been injured, must also 

determine what constitutes a domestic 

like product in order to define the 

industry. While both the Department 

and the ITC must apply the same 

statutory definition regarding the 

domestic like product (see section 

771(10) of the Act), they do so for 

different purposes and pursuant to a 

separate and distinct authority. In 

addition, the Department’s 

determination is subject to limitations of 

time and information. Although this 

may result in different definitions of the 

like product, such differences do not 

render the decision of either agency 

contrary to law. See USEC, Inc. v. 

United States, 132 F. Supp. 2d 1, 8 (Ct. 

Int’l Trade 2001), citing Algoma Steel 

Corp., Ltd. v. United States, 688 F. 

Supp. 639, 644 (Ct. Int’l Trade 1988), 

aff’d 865 F.2d 240 (Fed. Cir. 1989), cert. 

denied 492 U.S. 919 (1989). 

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 the domestic like 

product, Petitioners offer a definition of 

domestic like product that includes 

sheeter rolls (rolls of certain coated 

paper intended to be slit and used in 

sheet-fed presses) and, therefore, is 

broader than the scope of the 

investigation, which does not include 

sheeter rolls. Based on our analysis of 

the information submitted on the 

record, we have determined that certain 

coated paper described in the scope of 

the investigations and sheeter rolls 

constitute a single domestic like product 

and we have analyzed industry support 

in terms of that domestic like product. 

For a discussion of the domestic like 

product analysis in this case, see 

Countervailing Duty Investigation 

Initiation Checklist: Certain Coated 

Paper from Indonesia (‘‘Indonesia CVD 

Initiation Checklist’’) at Attachment II, 

Analysis of Industry Support for the 

Petitions Covering Certain Coated Paper 

from the People’s Republic of China and 

Indonesia, dated concurrently with this 

notice and on file in the CRU, Room 

1117 of the main Department of 

Commerce building. 

In determining whether Petitioners 

have standing under section 

702(c)(4)(A) of the Act, we considered 

the industry support data contained in 

the Indonesia CVD Petition with 

reference to the domestic like product as 

defined in the Indonesia CVD Petition. 

To establish industry support, 

Petitioners provided their own 2008 

shipments of the domestic like product, 

as well as one supporting company’s 

(SMART Papers) 2008 shipments, and 

compared the total to the 2008 

shipments of the entire domestic 

industry. See Volume I of the Indonesia 

CVD Petition, at 2–3, Exhibits I–3, I–4, 

and I–19, and Supplement to the 

Indonesia CVD Petition, dated October 

2, 2009, at 19–22 and Exhibit 4. 

Petitioners estimated total 2008 

shipments of the domestic like product 

based on the American Forest & Paper 

Association annual Coated Printing 

Papers Survey. See Volume I of the 

Indonesia CVD Petition, at 3 and 

Exhibits I–3 and I–4, and Supplement to 

the Indonesia CVD Petition, dated 

October 2, 2009, at 22 and Exhibit 4; see 

also Indonesia CVD Initiation Checklist 

at Attachment II. 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 53709 

Our review of the data provided in the 

Indonesia CVD Petition, supplemental 

submissions, and other information 

readily available to the Department 

indicates that Petitioners have 

established industry support. First, the 

Indonesia CVD Petition established 

support from domestic producers (or 

workers) accounting for more than 50 

percent of the total production of the 

domestic like product and, as such, the 

Department is not required to take 

further action in order to evaluate 

industry support (e.g., polling). See 

section 702(c)(4)(D) of the Act; see also 

Indonesia CVD Initiation Checklist at 

Attachment II. Second, the domestic 

producers (or workers) have met the 

statutory criteria for industry support 

under section 702(c)(4)(A)(i) of the Act 

because the domestic producers (or 

workers) who support the Indonesia 

CVD Petition account for at least 25 

percent of the total production of the 

domestic like product. See Indonesia 

CVD Initiation Checklist at Attachment 

II. Finally, the domestic producers (or 

workers) have met the statutory criteria 

for industry support under section 

702(c)(4)(A)(ii) of the Act because the 

domestic producers (or workers) who 

support the Indonesia CVD 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 Indonesia CVD Petition. 

Accordingly, the Department 

determines that the Indonesia CVD 

Petition was filed on behalf of the 

domestic industry within the meaning 

of section 702(b)(1) of the Act. See id. 

The Department finds that Petitioners 

filed the Indonesia CVD Petition on 

behalf of the domestic industry because 

they are interested parties as defined in 

sections 771(9)(C) and 771(9)(D) of the 

Act and they have demonstrated 

sufficient industry support with respect 

to the countervailing duty investigation 

that they are requesting the Department 

initiate. See id. 

Injury Test 

Because Indonesia is a ‘‘Subsidies 

Agreement Country’’ within the 

meaning of section 701(b) of the Act, 

section 701(a)(2) of the Act applies to 

this investigation. Accordingly, the ITC 

must determine whether imports of the 

subject merchandise from Indonesia 

materially injure, or threaten material 

injury to, a U.S. industry. 

Allegations and Evidence of Material 

Injury and Causation 

Petitioners allege that imports of 

certain coated paper from Indonesia are 

benefitting from countervailable 

subsidies and that such imports are 

causing, or threaten to cause, material 

injury to the domestic industry 

producing certain coated paper. In 

addition, Petitioners allege that 

subsidized imports exceed the 

negligibility threshold provided for 

under section 771(24)(A) of the Act. 

Petitioners contend that the industry’s 

injured condition is illustrated by 

reduced market share, underselling and 

price depressing and suppressing 

effects, increased import penetration, 

lost sales and revenue, reduced 

production, capacity, and capacity 

utilization, reduced shipments and 

inventories, reduced employment, and 

reduced financial performance. We have 

assessed the allegations and supporting 

evidence regarding material injury, 

threat of 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 

Indonesia CVD Initiation Checklist at 

Attachment III, ‘‘Analysis of Allegations 

and Evidence of Material Injury and 

Causation’’ for the Petitions Covering 

Certain Coated Paper from the People’s 

Republic of China and Indonesia. 

Initiation of Countervailing Duty 

Investigation 

Section 702(b)(1) of the Act requires 

the Department to initiate a CVD 

investigation whenever an interested 

party files a CVD petition on behalf of 

an industry that: (1) alleges the elements 

necessary for an imposition of a duty 

under section 701(a) of the Act; and (2) 

is accompanied by information 

reasonably available to the petitioners 

supporting the allegations. 

The Department has examined the 

countervailing duty petition on certain 

coated paper from Indonesia and finds 

that it complies with the requirements 

of section 702(b)(1) of the Act. 

Therefore, in accordance with section 

702(b)(1) of the Act, we are initiating a 

CVD investigation to determine whether 

producers/exporters of certain coated 

paper from Indonesia receive 

countervailable subsidies. For a 

discussion of evidence supporting our 

initiation determination, see Indonesia 

CVD Initiation Checklist. 

We are including in our investigation 

the following programs alleged in the 

Indonesia CVD Petition to provide 

countervailable subsidies to producers/ 

exporters of the subject merchandise: 

1. Provision of Standing Timber for 

Less Than Adequate Remuneration. 

2. Government Prohibition of Log 

Exports. 

3. Government Provision of InterestFree Reforestation Loans. 

4. Debt Forgiveness through the 

Indonesian Government’s Acceptance of 

Financial Instruments with No Market 

Value. 

5. Debt Forgiveness through APP/ 

SMG’s Buyback of its Own Debt from 

the Indonesian Government. 

6. Government Forgiveness of 

Stumpage Obligations. 

7. Tax Incentives for Investment in 

Priority Business Lines and Designated 

Regions: 

a. Corporate Income Tax Deduction; 

b. Accelerated Depreciation and 

Amortization; 

c. Extension of Loss Carryforward; 

d. Reduced Withholding Tax on 

Dividends. 

Respondent Selection 

The petition identifies the Asia Pulp 

& Paper/Sinar Mas Group (APP/SMG), 

through the two Indonesian coated 

paper mills it operates, PT. Pabrik 

Kertas Tjiwi Kimia Tbk. (‘‘Tjiwi Kimia’’) 

and PT Pindo Deli Pulp and Paper 

(‘‘Pindo Deli’’), as the one major 

producer of coated paper in Indonesia. 

We have placed on the record import 

data from U.S. Customs and Border 

Protection (‘‘CBP’’) which supports 

Petitioners’ contention. We note that in 

a recent countervailing duty 

investigation covering coated free sheet 

paper from Indonesia, the Department 

found that the APP/Sinar Mas Group 

produced almost all exports of coated 

paper from Indonesia and that Tjiwi 

Kimia and Pindo Deli are cross-owned 

companies within the APP/SMG family 

of companies, which operates together 

as a vertically integrated paper 

production company. See Coated Free 

Sheet Paper from Indonesia: Final 

Affirmative Countervailing Duty 

Determination, 72 FR 60642 (October 

25, 2007), and accompanying Issues and 

Decision Memorandum. 

Because record information indicates 

that APP/SMG is the producer of nearly 

all of the coated paper produced in 

Indonesia, we are selecting APP/SMG as 

a mandatory respondent in this 

investigation, pursuant to section 

777A(c)(2)(B) of the Act. We will release 

the CBP data under APO to the parties 

covered by APO on the day this 

initiation is announced. We will 

consider comments from interested 

parties on respondent selection. Parties 

wishing to comment must do so within 

five days of the publication of this 

notice in the Federal Register. 

Distribution of Copies of the CVD 

Petition 

In accordance with section 

702(b)(4)(A)(i) of the Act, copies of the 

public versions of the Indonesia CVD 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
53710 Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 

1 ‘‘ ‘Paperboard’ refers to Certain Coated Paper 

that is heavier, thicker and more rigid than coated 

paper which otherwise meets the product 

description. In the context of Certain Coated Paper, 

paperboard typically is referred to as ‘cover,’ to 

distinguish it from ‘text.’ ’’ 

2One of the key measurements of any grade of 

paper is brightness. Generally speaking, the brighter 

the paper the better the contrast between the paper 

and the ink. Brightness is measured using a GE 

Reflectance Scale, which measures the reflection of 

light off of a grade of paper. One is the lowest 

reflection, or what would be given to a totally black 

grade, and 100 is the brightest measured grade. 

Petition and amendments thereto have 

been provided to the GOI. To the extent 

practicable, we will attempt to provide 

a copy of the public version of the 

Indonesia CVD Petition to each exporter 

named in the petition, as provided 

under 19 CFR 351.203(c)(2). 

ITC Notification 

We have notified the ITC of our 

initiation, as required by section 702(d) 

of the Act. 

Preliminary Determination by the ITC 

The ITC will preliminarily determine, 

within 45 days after the date on which 

the petition was filed, whether there is 

a reasonable indication that imports of 

subsidized certain coated paper from 

Indonesia materially injure, or threaten 

material injury to, a U.S. industry. See 

section 703(a)(2) of the Act. A negative 

ITC determination will result in the 

investigation being terminated; see 

section 703(a)(1) of the Act. Otherwise, 

the investigation will proceed according 

to statutory and regulatory time limits. 

This notice is issued and published 

pursuant to section 777(i) of the Act. 

Dated: October 13, 2009. 

Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration. 

Appendix I—Scope of the Investigation 

The merchandise covered by this 

investigation includes certain coated 

paper and paperboard 1 in sheets 

suitable for high quality print graphics 

using sheet-fed presses; coated on one 

or both sides with kaolin (China or other 

clay), calcium carbonate, titanium 

dioxide, and/or other inorganic 

substances; with or without a binder; 

having a GE brightness level of 80 or 

higher 2; weighing not more than 340 

grams per square meter; whether gloss 

grade, satin grade, matte grade, dull 

grade, or any other grade of finish; 

whether or not surface-colored, surfacedecorated, printed (except as described 

below), embossed, or perforated; and 

irrespective of dimensions (‘‘Certain 

Coated Paper’’). 

Certain Coated Paper includes (a) 

coated free sheet paper and paperboard 

that meets this scope definition; (b) 

coated groundwood paper and 

paperboard produced from bleached 

chemi-thermo-mechanical pulp 

(‘‘BCTMP’’) that meets this scope 

definition; and (c) any other coated 

paper that meets this scope definition. 

Certain Coated Paper is typically (but 

not exclusively) used for printing multicolored graphics for catalogues, books, 

magazines, envelopes, labels and wraps, 

greeting cards, and other commercial 

printing applications requiring high 

quality print graphics. 

Specifically excluded from the scope 

are imports of paper and paperboard 

printed with final content printed text 

or graphics. 

As of 2009, imports of the subject 

merchandise are provided for under the 

following categories of the Harmonized 

Tariff Schedule of the United States 

(‘‘HTSUS’’): 4810.14.11, 4810.14.1900, 

4810.14.2010, 4810.14.2090, 

4810.14.5000, 4810.14.6000, 4810.14.70, 

4810.19.1100, 4810.19.1900, 

4810.19.2010, 4810.19.2090, 

4810.22.1000, 4810.22.50, 4810.22.6000, 

4810.22.70, 4810.29.1000, 4810.29.5000, 

4810.29.6000, 4810.29.70. While 

HTSUS subheadings are provided for 

convenience and customs purposes, the 

written description of the scope of the 

investigation is dispositive. 

[FR Doc. E9–25187 Filed 10–19–09; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–560–823, A–570–958] 

Certain Coated Paper Suitable for 

High-Quality Print Graphics Using 

Sheet-Fed Presses From Indonesia 

and the People’s Republic of China: 

Initiation of Antidumping Duty 

Investigations 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: October 20, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Gemal Brangman (Indonesia) or Frances 

Veith (People’s Republic of China), AD/ 

CVD Operations, Office 2 and Office 8, 

respectively, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230; telephone: (202) 

482–3773 or (202) 482–4295, 

respectively. 

SUPPLEMENTARY INFORMATION: 

The Petitions 

On September 23, 2009, the 

Department of Commerce (‘‘the 

Department’’) received Petitions 

concerning imports of certain coated 

paper, suitable for high-quality print 

graphics using sheet fed presses 

(‘‘certain coated paper’’) from Indonesia 

and the People’s Republic of China 

(‘‘PRC’’) filed in proper form by 

Appleton Coated LLC, NewPage 

Corporation, S.D. Warren Company d/b/ 

a Sappi Fine Paper North America, and 

the United Steel, Paper and Forestry, 

Rubber, Manufacturing, Energy, Allied 

Industrial and Service Workers 

International Union (collectively, 

‘‘Petitioners’’). See Petition for the 

Imposition of Antidumping Duties on 

Certain Coated Paper from Indonesia 

(‘‘Indonesia petition’’) dated September 

23, 2009; and Petition for the Imposition 

of Antidumping Duties on Certain 

Coated Paper from the People’s 

Republic of China dated September 23, 

2009 (‘‘PRC petition’’) (collectively, ‘‘the 

Petitions’’). On September 29, and 

October 7, 2009, the Department issued 

requests for additional information and 

clarification of certain areas of the 

Petitions. Based on the Department’s 

request, Petitioners filed supplements to 

the Petitions for both countries on 

October 2, 8, and 9, 2009. 

In accordance with section 732(b) of 

the Tariff Act of 1930, as amended (‘‘the 

Act’’), Petitioners allege that imports of 

certain coated paper from Indonesia and 

the PRC 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 

materially injure, or threaten material 

injury to, an industry in the United 

States. 

The Department finds that Petitioners 

filed these Petitions on behalf of the 

domestic industry because Petitioners 

are interested parties as defined in 

sections 771(9)(C) and 771(9)(D) of the 

Act, and they have demonstrated 

sufficient industry support with respect 

to the investigations that they are 

requesting the Department to initiate 

(see ‘‘Determination of Industry Support 

for the Petitions’’ below). 

Scope of Investigations 

The products covered by these 

investigations are certain coated paper 

from Indonesia and the PRC. For a full 

description of the scope of the 

investigations, please see the ‘‘Scope of 

Investigations,’’ in Appendix I of this 

notice. 

Comments on Scope of Investigations 

During our review of the Petitions, we 

discussed the scope with Petitioners to 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
53710 Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 

1 ‘‘ ‘Paperboard’ refers to Certain Coated Paper 

that is heavier, thicker and more rigid than coated 

paper which otherwise meets the product 

description. In the context of Certain Coated Paper, 

paperboard typically is referred to as ‘cover,’ to 

distinguish it from ‘text.’ ’’ 

2One of the key measurements of any grade of 

paper is brightness. Generally speaking, the brighter 

the paper the better the contrast between the paper 

and the ink. Brightness is measured using a GE 

Reflectance Scale, which measures the reflection of 

light off of a grade of paper. One is the lowest 

reflection, or what would be given to a totally black 

grade, and 100 is the brightest measured grade. 

Petition and amendments thereto have 

been provided to the GOI. To the extent 

practicable, we will attempt to provide 

a copy of the public version of the 

Indonesia CVD Petition to each exporter 

named in the petition, as provided 

under 19 CFR 351.203(c)(2). 

ITC Notification 

We have notified the ITC of our 

initiation, as required by section 702(d) 

of the Act. 

Preliminary Determination by the ITC 

The ITC will preliminarily determine, 

within 45 days after the date on which 

the petition was filed, whether there is 

a reasonable indication that imports of 

subsidized certain coated paper from 

Indonesia materially injure, or threaten 

material injury to, a U.S. industry. See 

section 703(a)(2) of the Act. A negative 

ITC determination will result in the 

investigation being terminated; see 

section 703(a)(1) of the Act. Otherwise, 

the investigation will proceed according 

to statutory and regulatory time limits. 

This notice is issued and published 

pursuant to section 777(i) of the Act. 

Dated: October 13, 2009. 

Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration. 

Appendix I—Scope of the Investigation 

The merchandise covered by this 

investigation includes certain coated 

paper and paperboard 1 in sheets 

suitable for high quality print graphics 

using sheet-fed presses; coated on one 

or both sides with kaolin (China or other 

clay), calcium carbonate, titanium 

dioxide, and/or other inorganic 

substances; with or without a binder; 

having a GE brightness level of 80 or 

higher 2; weighing not more than 340 

grams per square meter; whether gloss 

grade, satin grade, matte grade, dull 

grade, or any other grade of finish; 

whether or not surface-colored, surfacedecorated, printed (except as described 

below), embossed, or perforated; and 

irrespective of dimensions (‘‘Certain 

Coated Paper’’). 

Certain Coated Paper includes (a) 

coated free sheet paper and paperboard 

that meets this scope definition; (b) 

coated groundwood paper and 

paperboard produced from bleached 

chemi-thermo-mechanical pulp 

(‘‘BCTMP’’) that meets this scope 

definition; and (c) any other coated 

paper that meets this scope definition. 

Certain Coated Paper is typically (but 

not exclusively) used for printing multicolored graphics for catalogues, books, 

magazines, envelopes, labels and wraps, 

greeting cards, and other commercial 

printing applications requiring high 

quality print graphics. 

Specifically excluded from the scope 

are imports of paper and paperboard 

printed with final content printed text 

or graphics. 

As of 2009, imports of the subject 

merchandise are provided for under the 

following categories of the Harmonized 

Tariff Schedule of the United States 

(‘‘HTSUS’’): 4810.14.11, 4810.14.1900, 

4810.14.2010, 4810.14.2090, 

4810.14.5000, 4810.14.6000, 4810.14.70, 

4810.19.1100, 4810.19.1900, 

4810.19.2010, 4810.19.2090, 

4810.22.1000, 4810.22.50, 4810.22.6000, 

4810.22.70, 4810.29.1000, 4810.29.5000, 

4810.29.6000, 4810.29.70. While 

HTSUS subheadings are provided for 

convenience and customs purposes, the 

written description of the scope of the 

investigation is dispositive. 

[FR Doc. E9–25187 Filed 10–19–09; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–560–823, A–570–958] 

Certain Coated Paper Suitable for 

High-Quality Print Graphics Using 

Sheet-Fed Presses From Indonesia 

and the People’s Republic of China: 

Initiation of Antidumping Duty 

Investigations 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: October 20, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Gemal Brangman (Indonesia) or Frances 

Veith (People’s Republic of China), AD/ 

CVD Operations, Office 2 and Office 8, 

respectively, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230; telephone: (202) 

482–3773 or (202) 482–4295, 

respectively. 

SUPPLEMENTARY INFORMATION: 

The Petitions 

On September 23, 2009, the 

Department of Commerce (‘‘the 

Department’’) received Petitions 

concerning imports of certain coated 

paper, suitable for high-quality print 

graphics using sheet fed presses 

(‘‘certain coated paper’’) from Indonesia 

and the People’s Republic of China 

(‘‘PRC’’) filed in proper form by 

Appleton Coated LLC, NewPage 

Corporation, S.D. Warren Company d/b/ 

a Sappi Fine Paper North America, and 

the United Steel, Paper and Forestry, 

Rubber, Manufacturing, Energy, Allied 

Industrial and Service Workers 

International Union (collectively, 

‘‘Petitioners’’). See Petition for the 

Imposition of Antidumping Duties on 

Certain Coated Paper from Indonesia 

(‘‘Indonesia petition’’) dated September 

23, 2009; and Petition for the Imposition 

of Antidumping Duties on Certain 

Coated Paper from the People’s 

Republic of China dated September 23, 

2009 (‘‘PRC petition’’) (collectively, ‘‘the 

Petitions’’). On September 29, and 

October 7, 2009, the Department issued 

requests for additional information and 

clarification of certain areas of the 

Petitions. Based on the Department’s 

request, Petitioners filed supplements to 

the Petitions for both countries on 

October 2, 8, and 9, 2009. 

In accordance with section 732(b) of 

the Tariff Act of 1930, as amended (‘‘the 

Act’’), Petitioners allege that imports of 

certain coated paper from Indonesia and 

the PRC 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 

materially injure, or threaten material 

injury to, an industry in the United 

States. 

The Department finds that Petitioners 

filed these Petitions on behalf of the 

domestic industry because Petitioners 

are interested parties as defined in 

sections 771(9)(C) and 771(9)(D) of the 

Act, and they have demonstrated 

sufficient industry support with respect 

to the investigations that they are 

requesting the Department to initiate 

(see ‘‘Determination of Industry Support 

for the Petitions’’ below). 

Scope of Investigations 

The products covered by these 

investigations are certain coated paper 

from Indonesia and the PRC. For a full 

description of the scope of the 

investigations, please see the ‘‘Scope of 

Investigations,’’ in Appendix I of this 

notice. 

Comments on Scope of Investigations 

During our review of the Petitions, we 

discussed the scope with Petitioners to 


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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 by November 2, 2009, the 

next business day after 20 calendar days 

from the date of signature of this notice. 

Comments should be addressed to 

Import Administration’s APO/Dockets 

Unit, 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. 

Comments on Product Characteristics 

for Antidumping Duty Questionnaires 

We are requesting comments from 

interested parties regarding the 

appropriate physical characteristics of 

certain coated paper to be reported in 

response to the Department’s 

antidumping questionnaires. This 

information will be used to identify the 

key physical characteristics of the 

subject merchandise in order to more 

accurately report the relevant factors 

and costs of production, as well as to 

develop appropriate product 

comparison criteria. 

Interested parties may provide any 

information or comments that they feel 

are relevant to the development of an 

accurate listing of physical 

characteristics. Specifically, they may 

provide comments as to which 

characteristics are appropriate to use as 

(1) general product characteristics and 

(2) the product comparison criteria. We 

note that it is not always appropriate to 

use all product characteristics as 

product comparison criteria. We base 

product comparison criteria on 

meaningful commercial differences 

among products. In other words, while 

there may be some physical product 

characteristics utilized by 

manufacturers to describe certain coated 

paper, it may be that only a select few 

product characteristics take into account 

commercially meaningful physical 

characteristics. In addition, interested 

parties may comment on the order in 

which the physical characteristics 

should be used in product matching. 

Generally, the Department attempts to 

list the most important physical 

characteristics first and the least 

important characteristics last. 

In order to consider the suggestions of 

interested parties in developing and 

issuing the antidumping duty 

questionnaires, we must receive 

comments at the above-referenced 

address by November 2, 2009. 

Additionally, rebuttal comments must 

be received by November 9, 2009. 

Determination of Industry Support for 

the Petitions 

Section 732(b)(1) of the Act requires 

that a petition be filed on behalf of the 

domestic industry. Section 732(c)(4)(A) 

of the Act provides that a petition meets 

this requirement if the domestic 

producers or workers who support the 

petition account for: (i) At least 25 

percent of the total production of the 

domestic like product; and (ii) 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. Moreover, section 732(c)(4)(D) 

of the Act provides that, if the petition 

does not establish support of domestic 

producers or workers accounting for 

more than 50 percent of the total 

production of the domestic like product, 

the Department shall: (i) Poll the 

industry or rely on other information in 

order to determine if there is support for 

the petition, as required by 

subparagraph (A); or (ii) determine 

industry support using a statistically 

valid sampling method. 

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 a 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’’), which is 

responsible for determining whether 

‘‘the domestic industry’’ has been 

injured, must also determine what 

constitutes a domestic like product in 

order to define the industry. While both 

the Department and the ITC must apply 

the same statutory definition regarding 

the domestic like product (see section 

771(10) of the Act), they do so for 

different purposes and pursuant to a 

separate and distinct authority. In 

addition, the Department’s 

determination is subject to limitations of 

time and information. Although this 

may result in different definitions of the 

like product, such differences do not 

render the decision of either agency 

contrary to law. See USEC, Inc. v. 

United States, 132 F. Supp. 2d 1, 8 (Ct. 

Int’l Trade 2001), citing Algoma Steel 

Corp., Ltd. v. United States, 688 F. 

Supp. 639, 644 (Ct. Int’l Trade 1988), 

aff’d 865 F.2d 240 (Fed. Cir. 1989), cert. 

denied 492 U.S. 919 (1989). 

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 the domestic like 

product, Petitioners offer a definition of 

domestic like product that includes 

sheeter rolls (rolls of certain coated 

paper intended to be slit and used in 

sheet-fed presses) and, therefore, is 

broader than the scope of the 

investigations, which does not include 

sheeter rolls. Based on our analysis of 

the information submitted on the 

record, we have determined that certain 

coated paper described in the scope of 

the investigations and sheeter rolls 

constitute a single domestic like product 

and we have analyzed industry support 

in terms of that domestic like product. 

For a discussion of the domestic like 

product analysis in this case, see 

Antidumping Duty Investigation 

Initiation Checklist: PRC Initiation 

Checklist at Attachment II, Analysis of 

Industry Support for the Petitions 

Covering Certain Coated Paper Suitable 

for High-Quality Print Graphics Using 

Sheet-Fed Presses from the People’s 

Republic of China and Indonesia, and 

Antidumping Duty Investigation 

Initiation Checklist: Indonesia Initiation 

Checklist at Attachment II, Analysis of 

Industry Support for the Petitions 

Covering Certain Coated Paper Suitable 

for High-Quality Print Graphics Using 

Sheet-Fed Presses from the People’s 

Republic of China and Indonesia, dated 

concurrently with this notice and on file 

in the Central Records Unit (‘‘CRU’’), 

Room 1117 of the main Department of 

Commerce building. 

In determining whether Petitioners 

have standing under section 

732(c)(4)(A) of the Act, we considered 

the industry support data contained in 

the Petitions with reference to the 

domestic like product as defined in the 

Petitions. To establish industry support, 

Petitioners provided their own 2008 

shipments of the domestic like product, 

as well as the 2008 shipments of one 

supporting company (SMART Papers), 

and compared the total to the 2008 

shipments of the entire domestic 

industry. See Volume I of the Petitions, 

at 2–3, Exhibits I–3, I–4, and I–19, and 

Supplement to the AD/CVD Petitions, 


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dated October 2, 2009, at 19–22 and 

Exhibit 4. Petitioners estimated total 

2008 shipments of the domestic like 

product based on the American Forest & 

Paper Association Annual Coated 

Printing Papers Survey. See Volume I of 

the Petitions, at 3 and Exhibits I–3 and 

I–4, and Supplement to the AD/CVD 

Petitions, dated October 2, 2009, at 22 

and Exhibit 4; see also PRC Initiation 

Checklist at Attachment II, and 

Indonesia Initiation Checklist at 

Attachment II. 

Our review of the data provided in the 

Petitions, supplemental submissions, 

and other information readily available 

to the Department indicates that 

Petitioners have established industry 

support. First, the Petitions established 

support from domestic producers (or 

workers) accounting for more than 50 

percent of the total production of the 

domestic like product and, as such, the 

Department is not required to take 

further action in order to evaluate 

industry support (e.g., polling). See 

section 732(c)(4)(D) of the Act; see also 

PRC Initiation Checklist at Attachment 

II, and Indonesia Initiation Checklist at 

Attachment II. Second, the domestic 

producers (or workers) have met the 

statutory criteria for industry support 

under section 732(c)(4)(A)(i) of the Act 

because the domestic producers (or 

workers) who support the Petitions 

account for at least 25 percent of the 

total production of the domestic like 

product. See PRC Initiation Checklist at 

Attachment II, and Indonesia Initiation 

Checklist at Attachment II. Finally, the 

domestic producers (or workers) have 

met the statutory criteria for industry 

support under section 732(c)(4)(A)(ii) of 

the Act because the domestic producers 

(or workers) who support the Petitions 

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 Petitions. 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 id. 

The Department finds that Petitioners 

filed the Petitions on behalf of the 

domestic industry because they are 

interested parties as defined in sections 

771(9)(C) and 771(9)(D) of the Act and 

they have demonstrated sufficient 

industry support with respect to the 

antidumping duty investigations that 

they are requesting the Department 

initiate. See id. 

Allegations and Evidence of Material 

Injury and Causation 

Petitioners allege that the U.S. 

industry producing the domestic like 

product is being materially injured, or is 

threatened with material injury, by 

reason of the imports of the subject 

merchandise sold at less than normal 

value (‘‘NV’’). In addition, Petitioners 

allege that subject imports exceed the 

negligibility threshold provided for 

under section 771(24)(A) of the Act. 

Petitioners contend that the industry’s 

injured condition is illustrated by 

reduced market share, underselling and 

price depressing and suppressing 

effects, increased import penetration, 

lost sales and revenue, reduced 

production, capacity, and capacity 

utilization, reduced shipments and 

inventories, reduced employment, and 

reduced financial performance. We have 

assessed the allegations and supporting 

evidence regarding material injury, 

threat of 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 

PRC Initiation Checklist at Attachment 

III, Analysis of Allegations and 

Evidence of Material Injury and 

Causation for the Petitions Covering 

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

Presses from the People’s Republic of 

China and Indonesia, and Indonesia 

Initiation Checklist at Attachment III, 

Analysis of Allegations and Evidence of 

Material Injury and Causation for the 

Petitions Covering Certain Coated Paper 

Suitable for High-Quality Print Graphics 

Using Sheet-Fed Presses from the 

People’s Republic of China and 

Indonesia. 

Period of Investigations 

In accordance with 19 CFR 

351.204(b), because these Petitions were 

filed on September 23, 2009, the 

anticipated period of investigation 

(‘‘POI’’) is July 1, 2008, through June 30, 

2009, for Indonesia, and January 1, 

2009, through June 30, 2009, for the 

PRC. 

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 has based 

its decision to initiate investigations 

with respect to Indonesia and the PRC. 

The sources of, and adjustments to, the 

data relating to export price (‘‘EP’’) and 

NV are discussed in greater detail in the 

Indonesia Initiation Checklist and the 

PRC Initiation Checklist. 

Indonesia 

Export Price 

Petitioners calculated EPs using two 

sources: (1) The average unit customs 

values (‘‘AUVs’’) derived from import 

data collected by the U.S. Census 

Bureau; and (2) a price quote from 

Indonesian producers for the sale of 

subject merchandise to U.S. customers. 

They adjusted the price quote for 

international freight and insurance 

(‘‘CIF’’) charges, U.S. inland freight 

charges, and brokerage and handling 

expenses. Petitioners used import data 

for the POI to calculate an average CIF 

cost, and relied upon a price quote 

obtained from a freight company to 

calculate U.S. freight charges. 

Petitioners based U.S. brokerage and 

handling charges on data contained in 

the public questionnaire response of the 

Indonesian respondents in the 2005– 

2006 Investigation of Coated Free Sheet 

Paper from Indonesia. See Indonesia 

Initiation Checklist. 

Normal Value 

Petitioners claimed that Indonesia has 

a viable market for certain coated paper, 

based on information from the website 

of the parent company of two 

Indonesian producers/exporters of the 

subject merchandise. Petitioners 

obtained, through a market researcher, 

delivered price quotes for certain coated 

paper products to Indonesian 

customers, and adjusted these prices for 

VAT tax, distributor’s markup, and 

freight costs. Petitioners obtained 

information on Indonesian VAT taxes 

and the distributor’s markup from the 

market research report. They based 

estimated freight costs on data 

contained in the public questionnaire 

response of the Indonesian respondents 

in the 2005–2006 Investigation of 

Coated Free Sheet Paper from Indonesia. 

See Indonesia Initiation Checklist. 

Sales-Below-Cost Allegation 

Petitioners provided information 

demonstrating reasonable grounds to 

believe or suspect that sales of certain 

coated paper products in the Indonesian 

market were made at prices below the 

fully-absorbed cost of production 

(‘‘COP’’), within the meaning of section 

773(b) of the Act, and requested that the 

Department conduct a country-wide 

sales-below-cost investigation. The 

Statement of Administrative Action 

(‘‘SAA’’), submitted to the Congress in 

connection with the interpretation and 

application of the Uruguay Round 

Agreements Act, states that an allegation 

of sales below COP need not be specific 

to individual exporters or producers. 

See SAA, H.R. Doc. No. 103–316 at 833 


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1See Memorandum from the Office of Policy to 

David M. Spooner, Assistant Secretary for Import 

Administration, regarding The People’s Republic of 

China Status as a Non-Market Economy, dated May 

15, 2006. This document is available online at 

http://ia.ita.doc.gov/download/prc-nme-status/prcnme-status-memo.pdf. 

2See Certain Circular Welded Carbon Quality 

Steel Line Pipe from the People’s Republic of China: 

Final Determination of Sales at Less Than Fair 

Value, 74 FR 14514 (March 31, 2009); Frontseating 

Service Valves from the People’s Republic of China: 

Final Determination of Sales at Less Than Fair 

Value and Final Negative Determination of Critical 

Circumstances, 74 FR 10886 (March 13, 2009); 1- 

Hydroxyethylidene-1, 1-Diphosphonic Acid From 

the People’s Republic of China: Final Determination 

of Sales at Less Than Fair Value, 74 FR 10545 

(March 11, 2009). 

(1994). The SAA, at 833, states that 

‘‘Commerce will consider allegations of 

below-cost sales in the aggregate for a 

foreign country, just as Commerce 

currently considers allegations of sales 

at less than fair value on a country-wide 

basis for purposes of initiating an 

antidumping investigation.’’ 

Further, the SAA provides that 

section 773(b)(2)(A) of the Act retains 

the requirement 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. 

Cost of Production 

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. Petitioners calculated the 

quantity of each of the inputs into COM 

(except factory overhead) and packing 

based on the production experience of 

a U.S. coated paper producer during the 

POI, multiplied by the value of inputs 

used to manufacture coated paper in 

Indonesia using publicly available data. 

Petitioners stated that to the best of their 

knowledge that the coated paper 

manufacturing processes in Indonesia 

are very similar to their own 

manufacturing processes, and therefore 

it is reasonable to estimate the 

Indonesian producers’ usage rates based 

on the usage rates experienced by a U.S. 

coated paper producer. To value all raw 

materials, packing materials, and certain 

energy inputs (coal and woodwaste), 

Petitioners used Indonesian import 

statistics for the most recent twelvemonth period available. To value labor, 

Petitioners relied on a monthly wage 

rate for the Indonesian paper industry as 

reported by the International Labor 

Organization. To value electricity, fuel 

oil, and natural gas, Petitioners used 

prices published by the International 

Energy Agency and the U.S. Embassy in 

Jakarta, Indonesia. To calculate the 

average factory overhead (exclusive of 

labor and energy), SG&A, and financial 

expense rates, Petitioners relied on the 

fiscal year 2008 financial statements of 

an Indonesian producer of packaging 

paper, products in the same general 

category of merchandise as certain 

coated paper. See Indonesia Initiation 

Checklist for further discussion. 

Based upon a comparison of the 

prices of the foreign like product in the 

home market to the calculated COP of 

the product, we find reasonable grounds 

to believe or suspect that sales of the 

foreign like product were made below 

the COP, within the meaning of section 

773(b)(2)(A)(i) of the Act. Accordingly, 

the Department is initiating a countrywide cost investigation. 

Normal Value Based on Constructed 

Value 

Because it alleged sales below cost, 

pursuant to sections 773(a)(4), 773(b) 

and 773(e) of the Act, Petitioners 

calculated NV based on constructed 

value (‘‘CV’’). Petitioners calculated CV 

using the same average COM, SG&A, 

financial and packing figures used to 

compute the COP. See Indonesian 

Initiation Checklist. 

PRC 

Export Price 

Petitioners calculated EPs for certain 

coated paper based on actual sales and 

sales confirmations in 2009. Petitioners 

made adjustments to EPs for certain 

movement expenses. See PRC Initiation 

Checklist. 

Normal Value 

Petitioners state that in every previous 

administrative review and less-than-fair 

value investigation involving 

merchandise from the PRC, the 

Department has concluded that the PRC 

is a non-market economy country 

(‘‘NME’’) and, as the Department has not 

revoked this determination, its NME 

status remains in effect today. See Id. 

The Department has previously 

examined the PRC’s market status and 

determined that NME status should 

continue for the PRC.1 In addition, in 

recent investigations, the Department 

has continued to determine that the PRC 

is an NME country.2

In accordance with section 

771(18)(C)(i) of the Act, the 

presumption of NME status remains in 

effect until revoked by the Department. 

The presumption of NME status for the 

PRC has not been revoked by the 

Department and, therefore, remains in 

effect for purposes of the initiation of 

this investigation. Accordingly, the NV 

of the product is appropriately based on 

factors of production valued in a 

surrogate market economy country, in 

accordance with section 773(c) of the 

Act. In the course of this investigation, 

all parties will have the opportunity to 

provide relevant information related to 

the issues of the PRC’s NME status and 

the granting of separate rates to 

individual exporters. 

Petitioners argue that India is the 

appropriate surrogate country for the 

PRC because it is at a comparable level 

of economic development and it is a 

significant producer of comparable 

merchandise. Petitioners state that the 

Department has determined in previous 

investigations and administrative 

reviews that India is at a level of 

development comparable to the PRC. 

Petitioners identified three producers of 

comparable merchandise in India, 

Seshasayee Paper and Boards, Ltd. 

(‘‘Seshasayee’’), JK Paper, Ltd. (‘‘JK 

Paper’’), and Rama Newsprint and 

Papers Ltd., (‘‘Rama Paper’’), and assert 

that the Department has used 

Seshasayee and JK Paper as surrogate 

producers in the investigation of coated 

free sheet from the PRC. See id. and see 

Final Determination of Sales at Less 

Than Fair Value: Coated Free Sheet 

Paper from the People’s Republic of 

China, 72 FR 60632 (October 25, 2007) 

(‘‘CFS from the PRC’’). 

Based on the information provided by 

Petitioners, the Department believes that 

the use of India as a surrogate country 

is appropriate for purposes of initiation. 

See PRC Initiation Checklist. However, 

after initiation of the investigation, 

interested parties will have the 

opportunity to submit comments 

regarding surrogate country selection 

and, pursuant to 19 CFR 

351.301(c)(3)(i), will be provided an 

opportunity to submit publicly available 

information to value factors of 

production up to 40 days after the date 

of publication of the preliminary 

determination. 

Petitioners provided dumping margin 

calculations using the Department’s 

NME methodology as required by 19 

CFR 351.202(b)(7)(i)(C) and 19 CFR 

351.408. Petitioners calculated NVs for 

several certain coated paper products 

based on both integrated production 

operations and non-integrated 

production operations. See id. 

Petitioners valued the factors of 

production using reasonably available, 

public surrogate country data, including 

India import data from the Monthly 

Statistics of the Foreign Trade of India 


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3See Circular Welded Austenitic Stainless 

Pressure Pipe from the People’s Republic of China: 

Initiation of Antidumping Duty Investigation, 73 FR 

10221, 10225 (February 26, 2008); and Initiation of 

Antidumping Duty Investigation: Certain Artist 

Canvas From the People’s Republic of China, 70 FR 

21996, 21999 (April 28, 2005). 

for the period September 2008 through 

February 2009. See PRC Initiation 

Checklist. 

Petitioners stated that they valued 

certain chemicals using the general 

paper finishing agent classification 

because these chemicals could not be 

identified at a more specific level. See 

id. Further, Petitioners valued calcium 

carbonate using the HTS classification 

for marble based on the Department’s 

similar determination in CFS from the 

PRC. See PRC Initiation Checklist. 

Petitioners valued electricity based on 

the surrogate value used in Tapered 

Roller Bearings and Parts Thereof, 

Finished or Unfinished, from the 

People’s Republic of China: Preliminary 

Results of the 2007–2008 Administrative 

Review of the Antidumping Duty Order, 

74 FR 32539 (July 8, 2009). See PRC 

Initiation Checklist. For natural gas, 

Petitioners used Indian import statistics 

for liquefied natural gas and converted 

the value from rupees per kilogram to 

rupees per million British thermal units 

(‘‘MMBTU’’). See id. For fuel oil, 

Petitioners used Indian import statistics 

and converted the value from rupees per 

ton to rupees per MMBTU. See id. For 

coal, Petitioners used Indian import 

data under the HTS number for steam 

coal. See id. 

Petitioners valued labor using the 

wage rate data published on the 

Department’s Web site, at http:// 

ia.ita.doc.gov/wages/05wages/05wages051608.html. See id. 

Where Petitioners were unable to find 

input prices contemporaneous with the 

POI, they adjusted for inflation using 

the wholesale price index for India, as 

published in International Financial 

Statistics by the International Monetary 

Fund. Further, Petitioners used 

exchange rates, as provided on the 

Department’s Web site, to convert 

Indian rupees to U.S. dollars. See id. 

To calculate factory overhead, selling, 

general and administrative expenses, 

and profit for integrated producers, 

Petitioners relied on the financial 

statements of Seshasayee and JK Paper, 

Indian producers of comparable 

merchandise. For non-integrated 

producer financial ratios, Petitioners 

used the financial statements of Rama 

Paper, a producer of comparable 

merchandise. See id. 

Fair-Value Comparisons 

Based on the data provided by 

Petitioners, there is reason to believe 

that imports of certain coated paper 

from Indonesia and the PRC are being, 

or are likely to be, sold in the United 

States at less than fair value. Based on 

the comparisons of EP to CV, as 

discussed above, the estimated dumping 

margins for Indonesia range from 33 

percent to 41 percent. Based on the 

comparisons of EP to NV, as discussed 

above, the estimated dumping margins 

for the PRC range from 25.7 percent to 

135.8 percent. See id. 

Initiation of Antidumping Investigations 

Based upon the examination of the 

Petitions on certain coated paper from 

Indonesia and the PRC and other 

information reasonably available to the 

Department, the Department finds that 

these Petitions meet the requirements of 

section 732 of the Act. Therefore, we are 

initiating antidumping duty 

investigations to determine whether 

imports of certain coated paper from 

Indonesia and the PRC 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. 

Targeted-Dumping Allegations 

On December 10, 2008, the 

Department issued an interim final rule 

for the purpose of withdrawing 19 CFR 

351.414(f) and (g), the regulatory 

provisions governing the targeteddumping analysis in antidumping duty 

investigations, and the corresponding 

regulation governing the deadline for 

targeted-dumping allegations, 19 CFR 

351.301(d)(5). See Withdrawal of the 

Regulatory Provisions Governing 

Targeted Dumping in Antidumping 

Duty Investigations, 73 FR 74930 

(December 10, 2008). The Department 

stated that ‘‘{w}ithdrawal will allow the 

Department to exercise the discretion 

intended by the statute and, thereby, 

develop a practice that will allow 

interested parties to pursue all statutory 

avenues of relief in this area.’’ See id. at 

74931. 

In order to accomplish this objective, 

if any interested party wishes to make 

a targeted-dumping allegation in any of 

these investigations pursuant to section 

777A(d)(1)(B) of the Act, such 

allegations are due no later than 45 days 

before the scheduled date of the 

country-specific preliminary 

determination. 

Respondent Selection 

Indonesia 

The petition identifies two 

subsidiaries of the Asia Pulp & Paper/ 

Sinar Mas Group, PT. Pabrik Kertas 

Tjiwi Kimia Tbk. (‘‘Tjiwi Kimia’’) and 

PT Pindo Deli Pulp and Paper (‘‘Pindo 

Deli’’), as significant producers/ 

exporters of certain coated paper in 

Indonesia. We have placed on the 

record import data from U.S. Customs 

and Border Protection (‘‘CBP’’), which 

supports Petitioners’ contention. 

Therefore, we are selecting Tjiwi Kimia 

and Pindo Deli as mandatory 

respondents in this investigation, 

pursuant to section 777A(c)(2)(B) of the 

Act. 

We will release the CBP data under 

APO to the parties covered by APO on 

the day this initiation is announced. We 

will consider comments from interested 

parties on respondent selection. Parties 

wishing to comment must do so within 

five days of the publication of this 

notice in the Federal Register. 

Interested parties must submit 

applications for disclosure under APO 

in accordance with 19 CFR 351.305. 

Instructions for filing such applications 

may be found on the Department’s Web 

site at http://ia.ita.doc.gov/apo. 

PRC 

For the PRC, the Department will 

request quantity and value information 

from all known exporters and producers 

identified, with complete contact 

information, in the Petition. The 

quantity and value data received from 

NME exporters/producers will be used 

as the basis to select the mandatory 

respondents. 

The Department requires that the 

respondents submit a response to both 

the quantity and value questionnaire 

and the separate-rate application by the 

respective deadlines in order to receive 

consideration for separate-rate status.3

Appendix II of this notice contains the 

quantity and value questionnaire that 

must be submitted by all NME 

exporters/producers no later than 

November 3, 2009. In addition, the 

Department will post the quantity and 

value questionnaire along with the filing 

instructions on the Import 

Administration Web site, at http:// 

ia.ita.doc.gov/ia-highlights-andnews.html. The Department will send 

the quantity and value questionnaire to 

those PRC companies identified in the 

General Issues and Injury Supplement 

to the Petitions, dated October 2, 2009, 

at Exhibit 8. 

Separate Rates 

In order to obtain separate-rate status 

in NME investigations, exporters and 

producers must submit a separate-rate 

status application. See Certain Circular 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 53715 

4 ‘‘ ‘Paperboard’ refers to Certain Coated Paper 

that is heavier, thicker and more rigid than coated 

paper which otherwise meets the product 

description. In the context of Certain Coated Paper, 

paperboard typically is referred to as ‘cover,’ to 

distinguish it from ‘text.’ ’’ 

5One of the key measurements of any grade of 

paper is brightness. Generally speaking, the brighter 

the paper the better the contrast between the paper 

and the ink. Brightness is measured using a GE 

Reflectance Scale, which measures the reflection of 

light off of a grade of paper. One is the lowest 

reflection, or what would be given to a totally black 

grade, and 100 is the brightest measured grade. 

Welded Carbon Quality Steel Line Pipe 

from the Republic of Korea and the 

People’s Republic of China: Initiation of 

Antidumping Duty Investigations, 73 FR 

23188, 23193 (April 29, 2008) (Certain 

Circular Welded Carbon Quality Steel 

Line Pipe from the PRC). The specific 

requirements for submitting the 

separate-rate application in this 

investigation are outlined in detail in 

the application itself, available on the 

Department’s Web site at http:// 

ia.ita.doc.gov/ia-highlights-andnews.html on the date of publication of 

this initiation notice in the Federal 

Register. The separate-rate application 

will be due sixty (60) days from the date 

of publication of this initiation notice in 

the Federal Register. For exporters and 

producers who submit a separate-rate 

status application and subsequently are 

selected as mandatory respondents, 

these exporters and producers will no 

longer be eligible for consideration for 

separate rate status unless they respond 

to all parts of the questionnaire as 

mandatory respondents. 

Use of Combination Rates in an NME 

Investigation 

The Department will calculate 

combination rates for certain 

respondents that are eligible for a 

separate rate in this investigation. The 

Separate Rates and Combination Rates 

Bulletin states: 

{w}hile continuing the practice of assigning 

separate rates only to exporters, all separate 

rates that the Department will now assign in 

its NME investigations will be specific to 

those producers that supplied the exporter 

during the period of investigation. Note, 

however, that one rate is calculated for the 

exporter and all of the producers which 

supplied subject merchandise to it during the 

period of investigation. This practice applies 

both to mandatory respondents receiving an 

individually calculated separate rate as well 

as the pool of non-investigated firms 

receiving the weighted-average of the 

individually calculated rates. This practice is 

referred to as the application of combination 

rates because such rates apply to specific 

combinations of exporters and one or more 

producers. The cash-deposit rate assigned to 

an exporter will apply only to merchandise 

both exported by the firm in question and 

produced by a firm that supplied the exporter 

during the period of investigation. 

See Separate Rates and Combination 

Rates Bulletin at 6 (emphasis added). 

Distribution of Copies of the Petitions 

In accordance with section 

732(b)(3)(A) of the Act and 19 CFR 

351.202(f), copies of the public version 

of the Petitions and amendments 

thereto, have been provided to the 

representatives of the Governments of 

Indonesia and the PRC. To the extent 

practicable, we will attempt to provide 

a copy of the public version of the of the 

Petitions to each exporter named in the 

petition, as provided under 19 CFR 

351.203(c)(2). 

International Trade Commission (ITC) 

Notification 

We have notified the ITC of our 

initiation, as required by section 732(d) 

of the Act. 

Preliminary Determination by the ITC 

The ITC will preliminarily determine, 

no later than November 9, 2009, 

whether there is a reasonable indication 

that imports of certain coated paper 

from Indonesia and the PRC materially 

injure, or threaten material injury to, a 

U.S. industry. A negative ITC 

determination with respect to any 

country would result in the termination 

of the investigation with respect to that 

country. 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: October 13, 2009. 

Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration. 

Appendix I—Scope of the 

Investigations 

The merchandise covered by each of these 

investigations includes certain coated paper 

and paperboard 4 in sheets suitable for high 

quality print graphics using sheet-fed 

presses; coated on one or both sides with 

kaolin (China or other clay), calcium 

carbonate, titanium dioxide, and/or other 

inorganic substances; with or without a 

binder; having a GE brightness level of 80 or 

higher 5; weighing not more than 340 grams 

per square meter; whether gloss grade, satin 

grade, matte grade, dull grade, or any other 

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

described below), embossed, or perforated; 

and irrespective of dimensions (‘‘Certain 

Coated Paper’’). 

Certain Coated Paper includes (a) coated 

free sheet paper and paperboard that meets 

this scope definition; (b) coated groundwood 

paper and paperboard produced from 

bleached chemi-thermo-mechanical pulp 

(‘‘BCTMP’’) that meets this scope definition; 

and (c) any other coated paper that meets this 

scope definition. 

Certain Coated Paper is typically (but not 

exclusively) used for printing multi-colored 

graphics for catalogues, books, magazines, 

envelopes, labels and wraps, greeting cards, 

and other commercial printing applications 

requiring high quality print graphics. 

Specifically excluded from the scope are 

imports of paper and paperboard printed 

with final content printed text or graphics. 

As of 2009, imports of the subject 

merchandise are provided for under the 

following categories of the Harmonized Tariff 

Schedule of the United States (‘‘HTSUS’’): 

4810.14.11, 4810.14.1900, 4810.14.2010, 

4810.14.2090, 4810.14.5000, 4810.14.6000, 

4810.14.70, 4810.19.1100, 4810.19.1900, 

4810.19.2010, 4810.19.2090, 4810.22.1000, 

4810.22.50, 4810.22.6000, 4810.22.70, 

4810.29.1000, 4810.29.5000, 4810.29.6000, 

4810.29.70. While HTSUS subheadings are 

provided for convenience and customs 

purposes, the written description of the 

scope of the investigations is dispositive. 

Appendix II 

Where it is not practicable to examine all 

known exporters/producers of subject 

merchandise, section 777A(c)(2) of the Tariff 

Act of 1930, as amended, permits us to 

investigate (1) a sample of exporters, 

producers, or types of products that is 

statistically valid based on the information 

available at the time of selection, or (2) 

exporters and producers accounting for the 

largest volume and value of the subject 

merchandise that can reasonably be 

examined. 

In the chart below, please provide the total 

quantity and total value of all your sales of 

merchandise covered by the scope of this 

investigation (see ‘‘Scope of Investigation’’ 

section of this notice), produced in the PRC, 

and exported/shipped to the United States 

during the period January 1, 2009, through 

June 30, 2009. 

Market Total quantity 

in metric tons Terms of sale Total value 

United States 

1. Export Price Sales ................................................................................................................... ........................ ........................ ........................

2. a. Exporter Name .................................................................................................................... ........................ ........................ ........................


cprice-sewell on DSKGBLS3C1PROD with NOTICES
53716 Federal Register / Vol. 74, No. 201 / Tuesday, October 20, 2009 / Notices 

Market Total quantity 

in metric tons Terms of sale Total value 

b. Address .................................................................................................................................... ........................ ........................ ........................

c. Contact ..................................................................................................................................... ........................ ........................ ........................

d. Phone No. ................................................................................................................................ ........................ ........................ ........................

e. Fax No. .................................................................................................................................... ........................ ........................ ........................

3. Constructed Export Price Sales .............................................................................................. ........................ ........................ ........................

4. Further Manufactured .............................................................................................................. ........................ ........................ ........................

Total Sales ............................................................................................................................ ........................ ........................ ........................

Total Quantity: 

• Please report quantity on a metric ton 

basis. If any conversions were used, please 

provide the conversion formula and source. 

Terms of Sales: 

• Please report all sales on the same terms 

(e.g., free on board at port of export). 

Total Value: 

• All sales values should be reported in 

U.S. dollars. Please indicate any exchange 

rates used and their respective dates and 

sources. 

Export Price Sales: 

• Generally, a U.S. sale is classified as an 

export price sale when the first sale to an 

unaffiliated customer occurs before 

importation into the United States. 

• Please include any sales exported by 

your company directly to the United States. 

• Please include any sales exported by 

your company to a third-country market 

economy reseller where you had knowledge 

that the merchandise was destined to be 

resold to the United States. 

• If you are a producer of subject 

merchandise, please include any sales 

manufactured by your company that were 

subsequently exported by an affiliated 

exporter to the United States. 

• Please do not include any sales of subject 

merchandise manufactured in Hong Kong in 

your figures. 

Constructed Export Price Sales: 

• Generally, a U.S. sale is classified as a 

constructed export price sale when the first 

sale to an unaffiliated customer occurs after 

importation. However, if the first sale to the 

unaffiliated customer is made by a person in 

the United States affiliated with the foreign 

exporter, constructed export price applies 

even if the sale occurs prior to importation. 

• Please include any sales exported by 

your company directly to the United States; 

• Please include any sales exported by 

your company to a third-country market 

economy reseller where you had knowledge 

that the merchandise was destined to be 

resold to the United States. 

• If you are a producer of subject 

merchandise, please include any sales 

manufactured by your company that were 

subsequently exported by an affiliated 

exporter to the United States. 

• Please do not include any sales of subject 

merchandise manufactured in Hong Kong in 

your figures. 

Further Manufactured: 

• Sales of further manufactured or 

assembled (including re-packaged) 

merchandise is merchandise that undergoes 

further manufacture or assembly in the 

United States before being sold to the first 

unaffiliated customer. 

• Further manufacture or assembly costs 

include amounts incurred for direct 

materials, labor and overhead, plus amounts 

for general and administrative expense, 

interest expense, and additional packing 

expense incurred in the country of further 

manufacture, as well as all costs involved in 

moving the product from the U.S. port of 

entry to the further manufacturer. 

[FR Doc. E9–25213 Filed 10–19–09; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

Transportation and Related 

Equipment; Technical Advisory 

Committee; Notice of Open Meeting 

The Transportation and Related 

Equipment Technical Advisory 

Committee (TRANSTAC) will meet on 

November 5, 2009, 9:30 a.m., in the 

Herbert C. Hoover Building, Room 

6087B, 14th Street between 

Pennsylvania & Constitution Avenues, 

NW., Washington, DC. The Committee 

advises the Office of the Assistant 

Secretary for Export Administration 

with respect to technical questions that 

affect the level of export controls 

applicable to transportation and related 

equipment or technology. 

Agenda: 

1. Welcome and Introductions. 

2. Review Status of Working Groups. 

3. Proposals from the Public. 

4. Closing Comments. 

The open session will be accessible 

via teleconference to 20 participants on 

a first come, first serve basis. To join the 

conference, submit inquiries to Ms. 

Yvette Springer at 

Yspringer@bis.doc.gov no later than 

October 29, 2009. 

The meeting will be open to the 

public and a limited number of seats 

will be available. Reservations are not 

accepted. To the extent time permits, 

members of the public may present oral 

statements to the Committee. Written 

statements may be submitted at any 

time before or after the meeting. 

However, to facilitate distribution of 

public presentation materials to 

Committee members, the Committee 

suggests that presenters forward the 

public presentation materials to Yvette 

Springer. 

For more information contact Ms. 

Springer on (202) 482–2813. 

Dated: October 15, 2009. 

Yvette Springer, 

Committee Liaison Officer. 

[FR Doc. E9–25191 Filed 10–19–09; 8:45 am] 

BILLING CODE 3510–JT–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

RIN: 0648–XS47 

Pacific Fishery Management Council; 

Public Meeting 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Notice of a public meeting. 

SUMMARY: The Pacific Fishery 

Management Council’s (Council) Ad 

Hoc Salmon Amendment Committee 

(SAC) will hold a meeting to develop 

draft alternatives and plan analyses for 

an amendment to the Pacific Coast 

Salmon Fishery Management Plan 

(FMP) to address the Magnuson-Stevens 

Act (MSA) requirements for annual 

catch limits (ACL) and accountability 

measures (AM). This meeting of the 

SAC is open to the public. 

DATES: The meeting will be held 

Thursday, November 5, 2009, from 8:30 

a.m. to 4:30 p.m. 

ADDRESSES: The meeting will be held at 

the Pacific Council Office, Large 

Conference Room, 7700 NE., 

Ambassador Place, Suite 101, Portland, 

OR 97220–1384; telephone: (503) 820– 

2280. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Chuck Tracy, Salmon Management Staff 

Officer, Pacific Council; telephone: 

(503) 820–2280. 

SUPPLEMENTARY INFORMATION: The 

reauthorized MSA established new 

requirements to end and prevent 


cprice-sewell on DSKGBLS3C1PROD with NOTICES
B-1

APPENDIX B

LIST OF CONFERENCE WITNESSES

B-3

CALENDAR OF PUBLIC CONFERENCE

Those listed below appeared as witnesses at the United States International Trade

Commission’s conference:

Subject: Certain Coated Paper Suited for High-Quality Print

Graphics Using Sheet-Fed Presses from China and

Indonesia

Inv. Nos.: 701-TA-470-471 and 731-TA-1169-1170 (Preliminary)

Date and Time: October 14, 2009 - 9:30 a.m.

The conference was held in connection with these investigations in the Main Hearing

Room, U.S. International Trade Commission, 500 E Street, S.W., Washington, DC. 

OPENING STATEMENTS

Petitioner: Terence P. Stewart, Stewart & Stewart

Respondents: James Durling, Winston & Strawn LLP

IN SUPPORT OF THE IMPOSITION OF ANTIDUMPING AND COUNTERVAILING

DUTIES:

Stewart & Stewart

Washington, DC

and

King & Spalding LLP

Washington, DC

 on behalf of

Appleton Coated, LLC

New Page Corp.

Sappi Fine Paper North America

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

Workers International Union (“USW”)

Barry R. Nelson, Senior Vice President, Sales, NewPage Corp.

Steve DeVoe, General Manager, Sheets & Caliper, NewPage Corp.

Jennifer Miller, Executive Vice President, Strategic Marketing and Communications,

Sappi Fine Paper North America
B-4

IN SUPPORT OF THE IMPOSITION OF ANTIDUMPING AND COUNTERVAILING

DUTIES:–Continued

Anne Ayer, Vice President, Corporate Development, and Chief Information Officer, 

Sappi Fine Paper North America

Greg Savage, Vice President, Commercial Sales, Appleton Coated LLC

Jon Geenen, International Vice President, USW

Jeff Hederick, Vice President, Strategic Development and Sourcing, Unisource

Worldwide, Inc.

Don Crew, President, Clampitt Paper

Mike Graff, President, Sandy Alexander

Irena Pianka, Purchasing Manager, Sandy Alexander

Jim Sandstrom, President, HM Graphics

Carl P. Moyer, Senior Trade Consultant, Stewart and Stewart

Seth T. Kaplan, The Brattle Group

Bonnie B. Byers, Consultant, King & Spalding, LLP

Terence P. Stewart )

Eric P. Salonen )

Elizabeth J. Drake )–OF COUNSEL

Gilbert B. Kaplan )

Joseph W. Dorn )
B-5

IN OPPOSITION TO THE IMPOSITION OF ANTIDUMPING AND

COUNTERVAILING DUTIES:

Winston & Strawn LLP

Washington, DC

 on behalf of

Gold East Paper (Jiangsu) Co., Ltd.

Gold Huasheng Paper Co., Ltd.

PT Pindo Deli Pulp and Paper Mills

PT Pabrik Kertas Tjimi Kimia Tbk

Terry Hunley, Global Paper Solutions 

Daniel Klett, Capital Trade 

Daniel Porter )–OF COUNSEL

James Durling )

CLOSING STATEMENTS

Petitioner: Joseph W. Dorn, King & Spalding, LLC

Respondents: Daniel Porter, Winston & Strawn LLP

C-1

APPENDIX C

SUMMARY DATA

Table C-1

Certain coated paper: Summary data concerning the U.S. market, 2006-08, January-June 2008, and January-June 2009

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2006 2007 2008 2008 2009 2006-08 2006-07 2007-08 2008-09

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . . . 2,139,659 2,020,135 1,761,805 860,691 719,500 -17.7 -5.6 -12.8 -16.4

 Producers' share (1) . . . . . . . . . 46.2 46.4 46.6 47.1 47.0 0.5 0.2 0.2 -0.1

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . 13.2 15.0 15.6 12.8 22.9 2.4 1.8 0.6 10.2

 Indonesia . . . . . . . . . . . . . . . . . 2.1 2.6 3.0 2.5 2.8 0.9 0.5 0.4 0.3

 Subtotal . . . . . . . . . . . . . . . . . 15.3 17.6 18.6 15.3 25.7 3.3 2.3 1.1 10.4

 All other sources . . . . . . . . . . . 38.5 36.0 34.7 37.7 27.3 -3.8 -2.5 -1.3 -10.4

 Total imports . . . . . . . . . . . . . 53.8 53.6 53.4 52.9 53.0 -0.5 -0.2 -0.2 0.1

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . . 2,238,977 2,129,646 1,947,657 960,562 715,684 -13.0 -4.9 -8.5 -25.5

 Producers' share (1) . . . . . . . . . 50.7 50.1 50.3 51.9 49.2 -0.4 -0.6 0.2 -2.6

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . 11.3 13.1 13.8 11.0 19.8 2.4 1.8 0.7 8.8

 Indonesia . . . . . . . . . . . . . . . . . 1.8 2.1 2.5 2.0 2.3 0.7 0.4 0.4 0.3

 Subtotal . . . . . . . . . . . . . . . . . 13.1 15.3 16.3 13.0 22.1 3.2 2.2 1.0 9.1

 All other sources . . . . . . . . . . . 36.2 34.6 33.4 35.1 28.6 -2.8 -1.6 -1.2 -6.5

 Total imports . . . . . . . . . . . . . 49.3 49.9 49.7 48.1 50.8 0.4 0.6 -0.2 2.6

U.S. imports from:

 China:

 Quantity . . . . . . . . . . . . . . . . . . 282,726 302,858 275,532 109,757 164,829 -2.5 7.1 -9.0 50.2

 Value . . . . . . . . . . . . . . . . . . . . 253,940 279,470 268,349 106,020 142,038 5.7 10.1 -4.0 34.0

 Unit value . . . . . . . . . . . . . . . . . $898 $923 $974 $966 $862 8.4 2.7 5.5 -10.8

 Ending inventory quantity . . . . . 20,765 18,390 27,679 0 27,099 33.3 -11.4 50.5 (2)

 Indonesia:

 Quantity . . . . . . . . . . . . . . . . . . 44,695 52,541 52,938 21,506 19,883 18.4 17.6 0.8 -7.5

 Value . . . . . . . . . . . . . . . . . . . . 39,475 45,543 48,765 19,121 16,458 23.5 15.4 7.1 -13.9

 Unit value . . . . . . . . . . . . . . . . . $883 $867 $921 $889 $828 4.3 -1.9 6.3 -6.9

 Ending inventory quantity . . . . . 00000 (2) (2) (2) (2)

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . . . 327,421 355,399 328,470 131,263 184,712 0.3 8.5 -7.6 40.7

 Value . . . . . . . . . . . . . . . . . . . . 293,416 325,013 317,115 125,141 158,496 8.1 10.8 -2.4 26.7

 Unit value . . . . . . . . . . . . . . . . . $896 $915 $965 $953 $858 7.7 2.0 5.6 -10.0

 Ending inventory quantity . . . . . 20,765 18,390 27,679 0 27,099 33.3 -11.4 50.5 (2)

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . 824,533 727,306 611,626 324,258 196,512 -25.8 -11.8 -15.9 -39.4

 Value . . . . . . . . . . . . . . . . . . . . 809,932 737,251 650,135 337,366 204,901 -19.7 -9.0 -11.8 -39.3

 Unit value . . . . . . . . . . . . . . . . . $982 $1,014 $1,063 $1,040 $1,043 8.2 3.2 4.9 0.2

 Ending inventory quantity . . . . . 52,831 60,264 43,529 58,333 35,173 -17.6 14.1 -27.8 -39.7

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . 1,151,955 1,082,705 940,096 455,521 381,224 -18.4 -6.0 -13.2 -16.3

 Value . . . . . . . . . . . . . . . . . . . . 1,103,348 1,062,264 967,250 462,506 363,397 -12.3 -3.7 -8.9 -21.4

 Unit value . . . . . . . . . . . . . . . . . $958 $981 $1,029 $1,015 $953 7.4 2.4 4.9 -6.1

 Ending inventory quantity . . . . . 73,596 78,654 71,208 58,333 62,272 -3.2 6.9 -9.5 6.8

Table continued on next page.

C-3
Table C-1--Continued

Certain coated paper: Summary data concerning the U.S. market, 2006-08, January-June 2008, and January-June 2009

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2006 2007 2008 2008 2009 2006-08 2006-07 2007-08 2008-09

U.S. producers':

 Average capacity quantity . . . . . 2,864,425 2,943,777 2,829,110 1,408,370 1,406,963 -1.2 2.8 -3.9 -0.1

 Production quantity . . . . . . . . . . 1,145,595 1,117,841 980,751 481,873 436,262 -14.4 -2.4 -12.3 -9.5

 Capacity utilization (1) . . . . . . . . 39.4 37.4 34.1 33.6 30.6 -5.3 -2.0 -3.3 -3.0

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . 987,704 937,430 821,708 405,170 338,276 -16.8 -5.1 -12.3 -16.5

 Value . . . . . . . . . . . . . . . . . . . . 1,135,629 1,067,381 980,407 498,056 352,287 -13.7 -6.0 -8.1 -29.3

 Unit value . . . . . . . . . . . . . . . . . $1,150 $1,139 $1,193 $1,229 $1,041 3.8 -1.0 4.8 -15.3

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . . 202,439 205,308 275,698 182,102 210,786 36.2 1.4 34.3 15.8

 Inventories/total shipments (1) . . 19.4 20.2 30.8 20.4 29.2 11.4 0.9 10.5 8.8

 Production workers . . . . . . . . . . 2,301 2,192 1,814 1,950 1,705 -21.2 -4.8 -17.2 -12.6

 Hours worked (1,000s) . . . . . . . . 4,513 4,258 3,664 1,688 1,622 -18.8 -5.7 -13.9 -3.9

 Wages paid ($1,000s) . . . . . . . . 122,582 119,166 107,677 48,429 44,831 -12.2 -2.8 -9.6 -7.4

 Hourly wages . . . . . . . . . . . . . . . $27.16 $27.99 $29.38 $28.69 $27.63 8.2 3.0 5.0 -3.7

 Productivity (tons/1,000 hours) . 258.9 269.0 274.1 292.4 275.0 5.9 3.9 1.9 -5.9

 Unit labor costs . . . . . . . . . . . . . $104.93 $104.03 $107.20 $98.12 $100.47 2.2 -0.9 3.1 2.4

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . 1,093,778 1,084,674 953,567 472,160 380,638 -12.8 -0.8 -12.1 -19.4

 Value . . . . . . . . . . . . . . . . . . . . 1,223,838 1,197,751 1,099,905 559,200 388,943 -10.1 -2.1 -8.2 -30.4

 Unit value . . . . . . . . . . . . . . . . . $1,119 $1,104 $1,153 $1,184 $1,022 3.1 -1.3 4.5 -13.7

 Cost of goods sold (COGS) . . . . 1,066,716 1,031,797 943,032 468,958 370,524 -11.6 -3.3 -8.6 -21.0

 Gross profit or (loss) . . . . . . . . . 157,122 165,955 156,873 90,243 18,419 -0.2 5.6 -5.5 -79.6

 SG&A expenses . . . . . . . . . . . . . 88,445 83,558 87,135 45,870 35,639 -1.5 -5.5 4.3 -22.3

 Operating income or (loss) . . . . . 68,677 82,397 69,738 44,373 (17,220) 1.5 20.0 -15.4 (3)

 Capital expenditures . . . . . . . . . 41,429 34,714 42,773 11,291 13,985 3.2 -16.2 23.2 23.9

 Unit COGS . . . . . . . . . . . . . . . . . $975 $951 $989 $993 $973 1.4 -2.5 4.0 -2.0

 Unit SG&A expenses . . . . . . . . . $81 $77 $91 $97 $94 13.0 -4.7 18.6 -3.6

 Unit operating income or (loss) . $63 $76 $73 $94 ($45) 16.5 21.0 -3.7 (3)

 COGS/sales (1) . . . . . . . . . . . . . 87.2 86.1 85.7 83.9 95.3 -1.4 -1.0 -0.4 11.4

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . 5.6 6.9 6.3 7.9 (4.4) 0.7 1.3 -0.5 -12.4

 (1) "Reported data" are in percent and "period changes" are in percentage points.

 (2) Not applicable.

 (3) Undefined.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis. Because of rounding,

figures may not add to the totals shown. Unit values and shares are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics.

C-4
Table C-2

Web rolls: Summary data concerning the U.S. market, 2006-08, January-June 2008, and January-June 2009

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2006 2007 2008 2008 2009 2006-08 2006-07 2007-08 2008-09

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Indonesia . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Indonesia . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

U.S. imports from:

 China:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 Indonesia:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

Table continued on next page.

C-5
Table C-2--Continued

Web rolls: Summary data concerning the U.S. market, 2006-08, January-June 2008, and January-June 2009

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2006 2007 2008 2008 2009 2006-08 2006-07 2007-08 2008-09

U.S. producers':

 Average capacity quantity . . . . . 5,356,438 5,768,945 5,721,210 2,850,270 2,799,701 6.8 7.7 -0.8 -1.8

 Production quantity . . . . . . . . . . 3,640,628 3,736,723 3,624,826 1,680,815 1,037,828 -0.4 2.6 -3.0 -38.3

 Capacity utilization (1) . . . . . . . . 68.0 64.7 63.3 58.9 37.1 -4.6 -3.2 -1.4 -21.9

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . 3,484,725 3,609,916 3,419,861 1,541,052 872,838 -1.9 3.6 -5.3 -43.4

 Value . . . . . . . . . . . . . . . . . . . . 2,947,692 3,091,639 3,066,003 1,379,521 783,042 4.0 4.9 -0.8 -43.2

 Unit value . . . . . . . . . . . . . . . . . $846 $856 $897 $895 $897 6.0 1.2 4.7 0.2

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . . 299,827 255,820 287,646 298,925 376,153 -4.1 -14.7 12.4 25.8

 Inventories/total shipments (1) . . 8.3 6.8 8.0 9.1 19.8 -0.3 -1.5 1.2 10.7

 Production workers . . . . . . . . . . 4,514 4,216 4,023 4,060 2,165 -10.9 -6.6 -4.6 -46.7

 Hours worked (1,000s) . . . . . . . . 7,875 7,447 7,198 5,513 2,621 -8.6 -5.4 -3.3 -52.5

 Wages paid ($1,000s) . . . . . . . . 356,973 291,874 285,298 120,788 70,315 -20.1 -18.2 -2.3 -41.8

 Hourly wages . . . . . . . . . . . . . . . $45.33 $39.19 $39.63 $21.91 $26.83 -12.6 -13.5 1.1 22.5

 Productivity (tons/1,000 hours) . 462.3 501.8 503.6 304.9 396.0 8.9 8.5 0.4 29.9

 Unit labor costs . . . . . . . . . . . . . $98.05 $78.11 $78.71 $71.86 $67.75 -19.7 -20.3 0.8 -5.7

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . 3,379,572 3,505,304 3,353,220 1,514,160 833,321 -0.8 3.7 -4.3 -45.0

 Value . . . . . . . . . . . . . . . . . . . . 2,851,861 2,998,980 2,990,852 1,351,177 742,166 4.9 5.2 -0.3 -45.1

 Unit value . . . . . . . . . . . . . . . . . $844 $856 $892 $892 $891 5.7 1.4 4.3 -0.2

 Cost of goods sold (COGS) . . . . 2,577,280 2,696,013 2,725,398 1,201,281 665,025 5.7 4.6 1.1 -44.6

 Gross profit or (loss) . . . . . . . . . . 274,581 302,967 265,454 149,896 77,141 -3.3 10.3 -12.4 -48.5

 SG&A expenses . . . . . . . . . . . . . 165,491 157,318 161,457 75,403 44,472 -2.4 -4.9 2.6 -41.0

 Operating income or (loss) . . . . . 109,090 145,649 103,997 74,493 32,669 -4.7 33.5 -28.6 -56.1

 Capital expenditures . . . . . . . . . 82,310 98,042 93,407 43,264 22,268 13.5 19.1 -4.7 -48.5

 Unit COGS . . . . . . . . . . . . . . . . . $763 $769 $813 $793 $798 6.6 0.9 5.7 0.6

 Unit SG&A expenses . . . . . . . . . $49 $45 $48 $50 $53 -1.7 -8.3 7.3 7.2

 Unit operating income or (loss) . $32 $42 $31 $49 $39 -3.9 28.7 -25.4 -20.3

 COGS/sales (1) . . . . . . . . . . . . . 90.4 89.9 91.1 88.9 89.6 0.8 -0.5 1.2 0.7

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . 3.8 4.9 3.5 5.5 4.4 -0.3 1.0 -1.4 -1.1

 (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.

C-6
Table C-3

Certain coated paper + web rolls: Summary data concerning the U.S. market, 2006-08, January-June 2008, and January-June 2009

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2006 2007 2008 2008 2009 2006-08 2006-07 2007-08 2008-09

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . *** *** *** *** *** *** *** *** ***

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Indonesia . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . *** *** *** *** *** *** *** *** ***

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Indonesia . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

U.S. imports from:

 China:

 Quantity . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . *** *** *** *** *** *** *** *** ***

 Indonesia:

 Quantity . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . *** *** *** *** *** *** *** *** ***

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . *** *** *** *** *** *** *** *** ***

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . *** *** *** *** *** *** *** *** ***

 All sources:

 Quantity . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . *** *** *** *** *** *** *** *** ***

Table continued on next page.

C-7
Table C-3--Continued

Certain coated paper + web rolls: Summary data concerning the U.S. market, 2006-08, January-June 2008, and January-June 2009

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2006 2007 2008 2008 2009 2006-08 2006-07 2007-08 2008-09

U.S. producers':

 Average capacity quantity . . . . 8,220,863 8,712,722 8,550,320 4,258,640 4,206,664 4.0 6.0 -1.9 -1.2

 Production quantity . . . . . . . . . 4,786,223 4,854,564 4,605,577 2,162,688 1,474,090 -3.8 1.4 -5.1 -31.8

 Capacity utilization (1) . . . . . . . 58.0 55.5 53.6 50.6 34.9 -4.4 -2.5 -1.8 -15.7

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . 4,472,429 4,547,346 4,241,569 1,946,223 1,211,114 -5.2 1.7 -6.7 -37.8

 Value . . . . . . . . . . . . . . . . . . . 4,083,322 4,159,021 4,046,410 1,877,577 1,135,329 -0.9 1.9 -2.7 -39.5

 Unit value . . . . . . . . . . . . . . . . $913 $915 $954 $965 $937 4.5 0.2 4.3 -2.8

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . 502,266 461,128 563,344 481,027 586,939 12.2 -8.2 22.2 22.0

 Inventories/total shipments (1) 10.7 9.6 12.5 11.5 22.4 1.8 -1.1 2.9 10.9

 Production workers . . . . . . . . . 6,815 6,407 5,837 6,010 3,870 -14.4 -6.0 -8.9 -35.6

 Hours worked (1,000s) . . . . . . 12,388 11,705 10,863 7,201 4,243 -12.3 -5.5 -7.2 -41.1

 Wages paid ($1,000s) . . . . . . . 479,555 411,041 392,975 169,217 115,146 -18.1 -14.3 -4.4 -32.0

 Hourly wages . . . . . . . . . . . . . . $38.71 $35.12 $36.18 $23.50 $27.14 -6.6 -9.3 3.0 15.5

 Productivity (tons/1,000 hours) 388.2 417.1 426.2 302.0 349.7 9.8 7.5 2.2 15.8

 Unit labor costs . . . . . . . . . . . . $99.72 $84.19 $84.89 $77.82 $77.59 -14.9 -15.6 0.8 -0.3

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . 4,473,350 4,589,978 4,306,787 1,986,320 1,213,959 -3.7 2.6 -6.2 -38.9

 Value . . . . . . . . . . . . . . . . . . . 4,075,699 4,196,731 4,090,756 1,910,377 1,131,109 0.4 3.0 -2.5 -40.8

 Unit value . . . . . . . . . . . . . . . . $911 $914 $950 $962 $932 4.3 0.4 3.9 -3.1

 Cost of goods sold (COGS) . . . 3,643,996 3,727,809 3,668,430 1,670,239 1,035,549 0.7 2.3 -1.6 -38.0

 Gross profit or (loss) . . . . . . . . 431,703 468,922 422,327 240,139 95,561 -2.2 8.6 -9.9 -60.2

 SG&A expenses . . . . . . . . . . . 253,936 240,876 248,591 121,273 80,111 -2.1 -5.1 3.2 -33.9

 Operating income or (loss) . . . 177,767 228,046 173,735 118,866 15,449 -2.3 28.3 -23.8 -87.0

 Capital expenditures . . . . . . . . 123,740 132,756 136,180 54,555 36,253 10.1 7.3 2.6 -33.5

 Unit COGS . . . . . . . . . . . . . . . . $815 $812 $852 $841 $853 4.6 -0.3 4.9 1.4

 Unit SG&A expenses . . . . . . . . $57 $52 $58 $61 $66 1.7 -7.6 10.0 8.1

 Unit operating income or (loss) $40 $50 $40 $60 $13 1.5 25.0 -18.8 -78.7

 COGS/sales (1) . . . . . . . . . . . . 89.4 88.8 89.7 87.4 91.6 0.3 -0.6 0.8 4.1

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . 4.4 5.4 4.2 6.2 1.4 -0.1 1.1 -1.2 -4.9

 (1) "Reported data" are in percent and "period changes" are in percentage points.

 (2) Undefined.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis. Because of rounding,

figures may not add to the totals shown. Unit values and shares are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics.

C-8
Table C-4

Certain coated paper (consumption and market shares based on U.S. importer questionnaire data for Indonesia): Summary data concerning the U.S. market, 2006-08,

January-June 2008, and January-June 2009

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2006 2007 2008 2008 2009 2006-08 2006-07 2007-08 2008-09

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . *** *** *** *** *** *** *** *** ***

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Indonesia . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . *** *** *** *** *** *** *** *** ***

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Indonesia . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

U.S. imports from:

 China:

 Quantity . . . . . . . . . . . . . . . . 282,726 302,858 275,532 109,757 164,829 -2.5 7.1 -9.0 50.2

 Value . . . . . . . . . . . . . . . . . . 253,940 279,470 268,349 106,020 142,038 5.7 10.1 -4.0 34.0

 Unit value . . . . . . . . . . . . . . . $898 $923 $974 $966 $862 8.4 2.7 5.5 -10.8

 Ending inventory quantity . . . 20,765 18,390 27,679 0 27,099 33.3 -11.4 50.5 (2)

 Indonesia:

 Quantity . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . *** *** *** *** *** *** *** *** ***

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . *** *** *** *** *** *** *** *** ***

 All other sources:

 Quantity . . . . . . . . . . . . . . . . 824,533 727,306 611,626 324,258 196,512 -25.8 -11.8 -15.9 -39.4

 Value . . . . . . . . . . . . . . . . . . 809,932 737,251 650,135 337,366 204,901 -19.7 -9.0 -11.8 -39.3

 Unit value . . . . . . . . . . . . . . . $982 $1,014 $1,063 $1,040 $1,043 8.2 3.2 4.9 0.2

 Ending inventory quantity . . . 52,831 60,264 43,529 58,333 35,173 -17.6 14.1 -27.8 -39.7

 All sources:

 Quantity . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . *** *** *** *** *** *** *** *** ***

Table continued on next page.

C-9
Table C-4--Continued

Certain coated paper (consumption and market shares based on U.S. importer questionnaire data for Indonesia): Summary data concerning the U.S. market, 2006-08,

January-June 2008, and January-June 2009

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2006 2007 2008 2008 2009 2006-08 2006-07 2007-08 2008-09

U.S. producers':

 Average capacity quantity . . . . 2,864,425 2,943,777 2,829,110 1,408,370 1,406,963 -1.2 2.8 -3.9 -0.1

 Production quantity . . . . . . . . . 1,145,595 1,117,841 980,751 481,873 436,262 -14.4 -2.4 -12.3 -9.5

 Capacity utilization (1) . . . . . . 39.4 37.4 34.1 33.6 30.6 -5.3 -2.0 -3.3 -3.0

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . 987,704 937,430 821,708 405,170 338,276 -16.8 -5.1 -12.3 -16.5

 Value . . . . . . . . . . . . . . . . . . 1,135,629 1,067,381 980,407 498,056 352,287 -13.7 -6.0 -8.1 -29.3

 Unit value . . . . . . . . . . . . . . . $1,150 $1,139 $1,193 $1,229 $1,041 3.8 -1.0 4.8 -15.3

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . 202,439 205,308 275,698 182,102 210,786 36.2 1.4 34.3 15.8

 Inventories/total shipments (1) 19.4 20.2 30.8 20.4 29.2 11.4 0.9 10.5 8.8

 Production workers . . . . . . . . . 2,301 2,192 1,814 1,950 1,705 -21.2 -4.8 -17.2 -12.6

 Hours worked (1,000s) . . . . . . 4,513 4,258 3,664 1,688 1,622 -18.8 -5.7 -13.9 -3.9

 Wages paid ($1,000s) . . . . . . 122,582 119,166 107,677 48,429 44,831 -12.2 -2.8 -9.6 -7.4

 Hourly wages . . . . . . . . . . . . . $27.16 $27.99 $29.38 $28.69 $27.63 8.2 3.0 5.0 -3.7

 Productivity (tons/1,000 hours) 258.9 269.0 274.1 292.4 275.0 5.9 3.9 1.9 -5.9

 Unit labor costs . . . . . . . . . . . . $104.93 $104.03 $107.20 $98.12 $100.47 2.2 -0.9 3.1 2.4

 Net sales:

 Quantity . . . . . . . . . . . . . . . . 1,093,778 1,084,674 953,567 472,160 380,638 -12.8 -0.8 -12.1 -19.4

 Value . . . . . . . . . . . . . . . . . . 1,223,838 1,197,751 1,099,905 559,200 388,943 -10.1 -2.1 -8.2 -30.4

 Unit value . . . . . . . . . . . . . . . $1,119 $1,104 $1,153 $1,184 $1,022 3.1 -1.3 4.5 -13.7

 Cost of goods sold (COGS) . . 1,066,716 1,031,797 943,032 468,958 370,524 -11.6 -3.3 -8.6 -21.0

 Gross profit or (loss) . . . . . . . . 157,122 165,955 156,873 90,243 18,419 -0.2 5.6 -5.5 -79.6

 SG&A expenses . . . . . . . . . . . 88,445 83,558 87,135 45,870 35,639 -1.5 -5.5 4.3 -22.3

 Operating income or (loss) . . . 68,677 82,397 69,738 44,373 (17,220) 1.5 20.0 -15.4 (3)

 Capital expenditures . . . . . . . . 41,429 34,714 42,773 11,291 13,985 3.2 -16.2 23.2 23.9

 Unit COGS . . . . . . . . . . . . . . . $975 $951 $989 $993 $973 1.4 -2.5 4.0 -2.0

 Unit SG&A expenses . . . . . . . $81 $77 $91 $97 $94 13.0 -4.7 18.6 -3.6

 Unit operating income or (loss) $63 $76 $73 $94 ($45) 16.5 21.0 -3.7 (3)

 COGS/sales (1) . . . . . . . . . . . 87.2 86.1 85.7 83.9 95.3 -1.4 -1.0 -0.4 11.4

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . 5.6 6.9 6.3 7.9 (4.4) 0.7 1.3 -0.5 -12.4

 (1) "Reported data" are in percent and "period changes" are in percentage points.

 (2) Not applicable.

 (3) Undefined.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis. Because of rounding,

figures may not add to the totals shown. Unit values and shares are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics.

C-10
D-1

APPENDIX D

PRICES OF NONSUBJECT IMPORTS

D-3

Weighted-average prices of products imported from Korea undersold the U.S. products in 48 out

of 62 quarterly comparisons and oversold the U.S. products in 14 instances. Prices of imports from Korea

oversold products imported from China in 31 out of 45 quarterly comparisons and undersold the imports

from China in the remaining 14 instances. Prices of imports from Korea oversold products imported from

Indonesia in 14 out of 15 quarterly comparisons.

Weighted-average prices of products imported from Austria undersold the U.S. products in all 29 

quarterly comparisons. Prices of imports from Austria undersold the products imported from China in all

12 quarterly comparisons. Prices of imports from Austria undersold the products imported from

Indonesia in all 4 quarterly comparisons. 

Weighted-average prices of products imported from Finland oversold the U.S. products in all 14 

quarterly comparisons. Prices of imports from Finland oversold the products imported from China in all 

14 quarterly comparisons. Prices of imports from Finland oversold the products imported from Indonesia

in all 14 quarterly comparisons. 

Weighted-average prices of products imported from Germany undersold the U.S. products in all 

14 quarterly comparisons. Prices of imports from Germany undersold the products imported from China

in all 11 quarterly comparisons. Prices of imports from Germany undersold the products imported from

Indonesia in all 4 quarterly comparisons. 

Weighted-average prices of products imported from Thailand undersold the U.S. products in all

11 quarterly comparisons. Prices of imports from Thailand oversold the products imported from China in

9 out of 11 quarterly comparisons. Prices of imports from Thailand oversold the products imported from

Indonesia in 9 out of 11 quarterly comparisons. 

Weighted-average prices of products imported from Taiwan undersold the U.S. products in all 13

quarterly comparisons. Prices of imports from Taiwan undersold the products imported from China in 7

out of 12 quarterly comparisons. Prices of imports from Taiwan undersold the products imported from

Indonesia in 2 out of 4 quarterly comparisons. 

Figure D-1

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and imported

product 1, by quarters, January 2006-June 2009

* * * * * * *

Figure D-2

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and imported

product 2, by quarters, January 2006-June 2009

* * * * * * *

Figure D-3

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and imported

product 3, by quarters, January 2006-June 2009

* * * * * * *

Figure D-4

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and imported

product 4, by quarters, January 2006-June 2009

* * * * * * *
D-4

Figure D-5

Certain coated paper: Weighted-average f.o.b prices and quantities of domestic and imported

product 5, by quarters, January 2006-June 2009

* * * * * * *