1999R0603 — EN — 18.08.2001 — 002.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCIL REGULATION (EC)No 603/1999
of 15 March 1999
imposing a definitive anti-dumping duty on imports of polypropylene binder or baler twine
originating in Poland, the Czech Republic and Hungary, and collecting definitively the provisional
duty imposed
(OJ L 75, 20.3.1999, p. 1)
Amended by:
Official Journal
No page date
►M1Council Regulation (EC) No 968/2000 of 8 May 2000 L 112 1 11.5.2000
►M2Council Regulation (EC) No 1657/2001 of 10 August 2001 L 221 1 17.8.2001
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COUNCIL REGULATION (EC)No 603/1999
of 15 March 1999
imposing a definitive anti-dumping duty on imports of polypropy-
lene binder or baler twine originating in Poland, the Czech Republicand Hungary, and collecting definitively the provisional duty
imposed
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) No 384/96 of 22 December
1995 on protection against dumped imports from countries not membersof the European Community(
1), and in particular Article 9(4) thereof,
Having regard to the proposal submitted by the Commission after
consulting the Advisory Committee,
Whereas:
A.PROVISIONAL MEASURES
(1)By Commission Regulation (EC) No 2107/98(2) (hereinafter
referred to as ‘the provisional duty Regulation’) provisional duties
were imposed on imports of polypropylene binder or baler twine
originating in Poland, the Czech Republic, Hungary and SaudiArabia. All cooperating Hungarian exporting producers and onecooperating Czech exporting producer offered price undertakings,which were accepted by the provisional duty Regulation and byCommission Regulation (EC) No 2649/98.
B.SUBSEQUENT PROCEDURE
(2)Following the imposition of the provisional measures, certain
exporting producers and importers of the product concernedsubmitted comments in writing. Those parties who so requested
were granted an opportunity to be heard.
(3)Since the publication of the provisional duty Regulation, the
Commission continued to seek and verify all information deemed
necessary for its definitive findings and carried out investigations
of the following companies:
(a)Complainant Community producers
— Pippo Tuote Oy, Outokumpu, Finland,
— Irish Ropes, Kildare, Ireland;
(b)Exporting producer
WKI Isoliertechnik Spolska z.o.o., Weltyn, Poland.
(4)Parties were informed of the essential facts and considerations on
the basis of which it was intended to recommend the impositionof definitive anti-dumping duties and the definitive collection of
amounts secured by way of provisional duty. They were also
granted a period within which to make representations subsequentto this disclosure.
(5)The oral and written comments submitted by the interested partieswere considered and, where deemed appropriate, taken intoaccount in the definitive findings.1999R0603 — EN — 18.08.2001 — 002.001 — 2
(1) OJ L 56, 6. 3. 1996, p. 1. Regulation as last amended by Regulation (EC) No
905/98 (OJ L 128, 30. 4. 1998, p 18).
(2) JO L 267, 2. 10. 1998, p. 7. Regulation as amended by Commission
Regulation (CE) No 2649/98 (JO L 335, 10. 12. 1998, p. 41).
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C.PRODUCT CONCERNED AND LIKE PRODUCT
(6)In the absence of any new information, the provisional findings,
as set out in recitals 6 to 8 of the provisional duty Regulation, areconfirmed.
D.DUMPING
1.Poland
(a)Cooperation
(7)As described in recital 9 of the provisional duty Regulation, two
companies' replies to the questionnaire had been consideredinadequate for the purposes of the investigation, as theinformation provided did not permit an accurate determinationeither of normal values or of export prices. Subsequent to theadoption of provisional measures, these two companies requested
to be allowed to rectify the deficiencies contained in their
previous submissions, and to be granted the opportunity of a lateverification.
(8)One of the two companies claimed that it was a small company,with only limited export activity during the investigation periodand limited resources for dealing with the requirements of theinvestigation. This request for a late verification could not,however, be accepted since, as had already been made clear wheninforming the company of its insufficient cooperation, it would
mean discriminating against other companies which had made the
effort to cooperate properly. Moreover, the company had beenduly informed of the consequences of its non-cooperation and hadpreviously been granted more than one opportunity to rectify thedeficiencies contained in its reply to the questionnaire.
(9)The other company justified its request on the grounds that it hadwrongly considered itself to be operating on a different level to allthe other Polish firms concerned by the investigation, because itprimarily produced baler twine under an outward processing
regime, whereby raw materials acquired in the Community
market were processed into finished products in Poland, beforebeing returned to the Community for sale. This particularsituation had caused the company to believe — erroneously —that it would not be affected by the anti-dumping investigation as
such and consequently it had originally not submitted a complete
reply to the questionnaire. The Commission considered that,because of the special situation of the company compared to theother Polish producers, the fact of allowing it to submit additionalinformation would not constitute discrimination against othercooperating companies. The company was therefore given a
further opportunity to submit the necessary information, which
was duly verified. The results of the verification are set out inrecitals 13 and 15 hereto.
(10)A third company, which came forward only after the provisionalduty Regulation had been published, asked to be allowed tocooperate in the proceeding. This request was rejected as thedeadline for a reply to the questionnaire had long since expired.
(b)Normal value
(11)Two companies questioned the profit margin which had been used
by the Commission in constructing normal values and proposedthat a lower rate of profit be used. One company claimed that theprofit margin used in constructing the normal value did not reflectthe fact that profit margins in the baler twine business are rather
low and tend to be strongly influenced by seasonal and climatic
fluctuations. The alternative margin suggested by this companywas that achieved from all company operations, includingproducts different from those under investigation. The othercompany claimed that, because of its position as a relatively newproducer of baler twine, it actually had no means of influencing1999R0603 — EN — 18.08.2001 — 002.001 — 3
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the existing level of selling prices in the market, and thus of
obtaining the higher margin relied upon by the Commission.
The Commission considers that the profit margin used in
constructing the normal value was correctly determined inaccordance with Article 2(6) of the Basic Regulation, i.e. theweighted average profit realised on domesticsales by the solecooperating Polish exporting producer which had sufficient
quantities of domesticsales of the like produc t in the ordinary
course of trade. These claims could not, therefore, be accepted.
(12)In the course of reviewing the calculations, it was decided that anadjustment for technical characteristics made when constructingthe normal value for three Polish exporting producers was notrequired (see recital 8 below).
(13)As far as the company WKI Isoliertechnik Spolska z.o.o.(hereinafter ‘WKI’) is concerned, its sales of baler twine on thePolish domesticmarket were, overall, made in representative
quantities, i.e. they constituted 5 % or more of the quantity
exported to the Community. However, the individual types ofbaler twine sold for export to the Community did not correspondto those sold on the domesticmarket. Normal value was thereforeconstructed, in accordance with Article 2(3) of the Basic
Regulation. As for all other cooperating Polish producers,
constructed normal value was calculated on the basis of thecost of production in Poland (including selling, general andadministrative (SG&A) expenses) plus a reasonable amount ofprofit. The company's own SG&A expenses were used. The rateof profit was calculated, in accordance with Article 2(6)(a) of the
BasicRegulation, using the ac tual rate of profit established for the
sole cooperating producer located in Poland which had sufficientquantities of domesticsales of the like produc t in the ordinarycourse of trade.
(c)Export price, comparison and dumping margin
(14)Following the disclosure of the Commission's definitive findings,
one company pointed out a clerical error in the calculation of its
dumping margin. The calculation has been rechecked and the
error rectified. No other comments were received in this respectfrom the Polish exporting producers. After revision of thecalculations, the dumping margins are as follows:
—BZLP Bezalin: 17,2 %
—CZWC Chemitex: 20,3 %
—PAT Defalin SA: 16,3 %
—Industrial Chemistry Research Institute: 28,4 %
—Terplast sp z.o.o.: 23,0 %.
(15)In the case of WKI, all sales of the product concerned on theCommunity market were made to related customers in theCommunity. Export prices were therefore constructed in accor-dance with Article 2(9) of the Basic Regulation, on the basis ofthe price at which the imported products were first resold to an
independent buyer within the Community. For this company, the
weighted average normal value per type of the product concernedwas compared with the weighted average export price, inaccordance with Article 2(11) of the Basic Regulation. Theweighted average dumping margin determined, expressed as apercentage of the cif import price at the Community frontier duty
unpaid, is as follows:
—WKI Isoliertechnik Spolska z.o.o., Weltyn: 46 %.
(16)In view of the fact that the import volume represented by
cooperating Polish exporting producers, after the inclusion ofWKI, has increased from less than 70 % to more than 90 %, the1999R0603 — EN — 18.08.2001 — 002.001 — 4
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residual dumping margin for Poland has been revised. The revised
residual dumping margin, now set at the level of the highestdumping margin found for a cooperating company located in
Poland, and expressed as a percentage of the cif import price at
the Community border, duty unpaid, is 46 %.
2.Czech Republic
(a)Normal value
(17)One of the two Czech exporting producers claimed that normal
value had been constructed for several types of baler twine, forwhich there had been sales on the domestic market. According to
the company, normal value for these types should therefore have
been based on the corresponding domestic sales prices. However,this request could not be accepted since the products sold on thedomesticmarket largely did not c orrespond to those sold on theexport market and, in the very small number of cases where they
allegedly did, such sales were not in the ordinary course of trade.
(18)The same company questioned a small adjustment for technical
characteristics made by the Commission in the provisional dutyRegulation when constructing the normal value. After carefulconsideration of the arguments presented, it was concluded thatthe adjustment could not in the final analysis be justified, and the
calculations were corrected accordingly.
(19)Finally, the same company also claimed that the rate of profit
used by the Commission in constructing the normal value was toohigh and did not correspond to the actual profitability of the balertwine business, which was in reality lower. In this connection it
should be pointed out that the profit margin was calculated in
accordance with Article 2(6) of the Basic Regulation on the basisof the profits obtained on domesticsales of the like produc t by theproducer concerned. The claim was therefore rejected, and theprovisional findings are confirmed in this respect.
(b)Export price
(20)No comments were received in this respect.
(c)Comparison
(21)Both Czech companies asked for a level of trade adjustment,
arguing that while domesticsales were to end-users, export saleswere to dealers. However, no reliable evidence was produced insupport of this assertion. Indeed, in the case of one company itwas established that export sales as well as domesticsales had
been made to end-users; in the case of the other company, a
significant proportion of domestic sales were found to have beenmade to dealers and the company failed to demonstrate that therewere consistent and distinct differences in functions and prices ofthe seller for different levels of trade in that market. Conse-
quently, these claims could not be accepted.
(22)One company claimed that export transactions had been
compared with domestic transactions of a substantially lowervolume, for which a higher selling price would therefore benormal. However, the domesticsales were found to be suffic ientlyrepresentative and in the ordinary course of trade and they
therefore allowed a fair comparison, which has been made in
accordance with Article 2(10) of the Basic Regulation. In anyevent, the simple fact that the quantity sold on average pertransaction on the domestic market was smaller than the averagequantity sold per transaction on the export market is not
considered sufficient for an adjustment to normal value.
(d)Dumping margin
(23)After revision of the calculations, the dumping margins are as
follows:1999R0603 — EN — 18.08.2001 — 002.001 — 5
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—Lanex a.s.: 24,8 %
—Juta a.s.: 21,8 %
The residual dumping margin is set at 24,8 %.
3.Hungary
(a)Normal value
(24)One company objected to the method used by the Commission in
determining the constructed normal value. It claimed that the
SG&A expenses relating to the company's wholly ownedsubsidiary should not have been included in the constructednormal value due to the fact that the subsidiary was concernedwith a different selling activity. However, the verificationestablished that the vast majority of sales of baler twine on the
domesticmarket had been made via this subsidiary. As the
SG&A expenses had evidently been incurred in the sale of balertwine on the domesticmarket, they should c onsequently havebeen accounted for in the cost calculation of the subsidiary. Theseexpenses have therefore to be taken into account in establishingthe SG&A expenses of the parent company. Therefore, the
provisional findings in this respect are confirmed.
(25)Another company claimed that the cost of production it had
submitted for one specific type of baler twine for one month was
higher than in other months and should therefore be disregarded.
The company, however failed to provide any satisfactoryexplanation as to why this anomaly had occurred and the claimwas therefore rejected.
(b)Export price, comparison and dumping margin
(26)No comments were received with regard to the determination of
export price, the comparison and the dumping margin as set out inthe provisional duty Regulation. The provisional findings on thedumping margins are therefore confirmed at the following rates:
—Elso Magyar Kenderfono Rt: 33,3 %
—Partium '70 Rt: 12,1 %
—Tiszai Vegyi Kombinat Rt: 26,4 %
The residual dumping margin remains at 33,3 %.
4.Saudi Arabia
(27)In view of the findings on the injury threshold (see recital 71
hereto) no definitive determination of dumping has been made in
respect of the sole cooperating exporting producer.
E.COMMUNITY INDUSTRY
(28)In the absence of any new information, the provisional findings as
stated in recital 35 of the provisional duty Regulation, are hereby
confirmed.
F.INJURY
1.General
(29)In view of the findings on the injury threshold (see recital 71
hereto) the Saudi Arabian imports have been excluded from theinjury analysis.1999R0603 — EN — 18.08.2001 — 002.001 — 6
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2.Community consumption
(30)In determining total apparent consumption on the Community
market, the total sales of the Community industry plus the sales
by the remaining non-cooperating Community producers on the
Community market, were added to the imports into the samemarket.
The volume of imports was, for the purposes of the definitive
findings, determined on the basis of adjusted Eurostat figures asstated in recital 36 of the provisional duty Regulation. TheCommission continued to investigate after the imposition of theprovisional duty and obtained and verified new data. This resulted
in a change in the apparent consumption for the period considered
(i.e. the period between 1994 and the investigation period) due toadjusted import figures concerning mainly Poland. On this basis,Community consumption increased from 40 231 tonnes in 1994 to51 788 tonnes in 1996 and remained relatively stable thereafter,reaching 51 288 tonnes in the investigation period, which
represents an overall increase of 27 % over the period considered.
3.Allegation of anti-competitive behaviour
(31)In their comments following the disclosure, the Polish exporting
producers continued to argue that the calculation of price-
undercutting margins as well as the findings on other injury
factors, causation and Community interest were vitiated onaccount of two investigations, allegedly initiated by theCommission against anti-competitive practices by the Communityproducers of polypropylene granulates and the Communityproducers of baler twine.
(32)The Polish exporting producers were unable to substantiate theirallegation that a concerted practice existed for the raw materialand for baler twine. Although investigation into olefins andpolyolefins, such as polypropylene, was started in 1995 (Case NoIV/E-2/35.765) the findings were negative and the case was
closed. As for baler twine, the Commission established that no
official complaint had been lodged and that none was pending.
(33)Some interested parties argued that discussions had taken placebetween the Community producers and the Polish exportingproducers which is, per se, anti-competitive behaviour. It should,
however, be noted that those consultations were held in the
framework of the textile agreement as provided for by that
agreement.
(34)In the light of the above it was concluded that the above-mentioned allegations were groundless.
4.Volume and market share of the dumped imports
(a)Cumulation
(35)Since for the remaining three countries, i.e. the Czech Republic,
Hungary and Poland, no new information was received, theconclusions reached in recital 37 of the provisional duty
Regulation are confirmed.
(b)Volume, value and market share of imports from the
exporting countries concerned
(36)The volume of imports from the three remaining countries
concerned increased from 5 264 tonnes in 1994 to 14 147 tonnes
during the investigation period, representing an increase of 169 %.
(37)In terms of market share based on total Community consumption,the market penetration of the dumped imports from the threecountries concerned rose from 13 % in 1994 to 27,6 % during theinvestigation period in volume terms — an increase of 111 %.1999R0603 — EN — 18.08.2001 — 002.001 — 7
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(c)Prices of the dumped imports
(38)The results of the comparison showed that price-undercutting
margins (calculated on a weighted-average to weighted-averagebasis), expressed as a percentage of the Community industry'saverage selling prices, ranged as follows: for Poland from 4,7 to
16,3 % with an overall weighted average of 11,9 %; for the Czech
Republicfrom 16,1 % to 19,2 % with an overall weighted averageof 16,1 % and for Hungary from 16,9 % to 21,4 % with an overallweighted average of 18,2 %.
(39)A Hungarian exporting producer claimed that the Commission inits calculation of undercutting should take into consideration theprice at which this company purchased polypropylene granulatesin Hungary. This argument has to be rejected as in a price-undercutting analysis actual import prices to the Community from
the countries concerned are compared with actual prices of the
Community industry.
5.Situation of the Community industry
(40)As mentioned in recital 3 hereto, following the publication of the
provisional duty Regulation the Commission continued to seek
and verify all information deemed necessary for their definitivefindings and carried out investigations at the premises ofCommunity producers of the product concerned. This led to thefindings on injury indicators for the Community industry, which
varied insignificantly from those, stated in the provisional duty
Regulation. For the sake of completeness the injury indicators areset out below.
(a)Production, capacity and capacity utilisation
(41)Production of the Community industry increased during the
period considered, rising from 28 877 tonnes in 1994 to 33 557tonnes in the investigation period. This represents an overallincrease of 16 %. Production increased at a lower rate thanCommunity consumption, which increased by 27 % during theperiod considered.
(42)On the basis of the methodology described in recital 43 of theprovisional duty Regulation, capacity increased from 42 232tonnes in 1994 to 46 484 tonnes during the investigation period,
which represents an increase of 10 %. This increase was in line
with expectations of market growth. The rate of capacityutilisation increased slightly during the period considered, risingfrom 68,4 % in 1994 to 72,2 % in the investigation period.
(b)Sales volume
(43)The volume of sales of the Community industry on the
Community market increased during the period considered,from 24 840 tonnes in 1994 to 26 796 tonnes in the investigationperiod. This represents an overall increase of 8 %.
(c)Market share
(44)The Community industry's market share decreased from 61,7 % in
1994 to 58,3 % in 1995, 57,7 % in 1996 and 52,2 % during theinvestigation period. The overall loss of market share was 9,5
percentage points between 1994 and the investigation period.
(d)Stocks
(45)Stocks significantly increased between 1994 and the investigation
period by 42 %.
(e)Average sales price and price evolution
(46)The weighted average prices of the product concerned sold by the
Community industry on the Community market fluctuated overthe period considered, increasing by 11 % overall.1999R0603 — EN — 18.08.2001 — 002.001 — 8
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(f)Profitability
(47)The profitability of the Community industry, expressed as a
percentage of net sales, decreased from a weighted average profitof 3,5 % in 1994 to 1,3 % in the investigation period. It should benoted, however, that the financial situation deteriorated particu-
larly from 1995 onwards, falling from a profit of 13,4 % to a
profit of 1,3 % in the investigation period.
(g)Investment
(48)Yearly investments made by the Community industry increased
overall, rising from ECU 1,17 million in 1994 to ECU 1,29million in the investigation period, with a peak in 1996 of ECU3,26 million. This represents an overall increase of 11 % over the
period considered.
(h)Employment
(49)Employment rose from 590 in 1994 to 722 in 1995. Since 1995
employment in the Community industry decreased to 669, i.e. by7,3 %.
(i)Comments on injury
(50)Interested parties argued that the situation of the Community
industry can be considered as stable or good. The decline inmarket share and profitability observed during the periodconsidered could not be an indicator of injury because it was
compensated for by an improvement in other injury indicators.
In this respect, it should be recalled that, in accordance with
Article 3(5) of the Basic Regulation, no single injury factor cannecessarily give decisive guidance as to the situation of theCommunity industry. In the present case, it is accepted that the
following of the injury indicators as Community production,
capacity utilisation, sales, sales price, investment, employmentwere not in a negative trend during the period under investigation.
It should be noted that the above situation has to be seen in the
light of a long expansion of Community consumption. Indeed,
during the period under investigation production increased at alower rate than Community consumption. Moreover, in spite ofthe increase in productivity over the same period, the Communityindustry suffered a significant loss in market share at a time whenCommunity consumption had increased by 27 %. Furthermore,
the Community industry showed a significant deterioration in its
financial results from 1995 onwards, profits falling from 13,4 %to 1,3 % of net sales in the investigation period, and sufferedsignificant price pressure from the dumped imports throughoutthe period considered, with price undercutting of up to 21,4 %
during the investigation period.
(51)The exporting producers argued that employment increasedduring the period under investigation. However, it should also
be noted that after an increase in 1996, employment levels wereagain on the decline in the investigation period. As regardsinvestment, it should be noted that one Community producersuffered from a factory fire and had to replace its productionmachinery in 1996. This is one of the reasons for the increased
investment noted during the period under investigation.
6.Conclusion on injury
(52)In the absence of any other arguments concerning the situation of
the Community industry and in the light of the above, theconclusion that the Community industry has suffered materialinjury within the meaning of Article 3(1) of the Basic Regulation,as stated in recitals 36 to 51 of the provisional duty Regulation, ishereby confirmed.1999R0603 — EN — 18.08.2001 — 002.001 — 9
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G.CAUSATION OF INJURY
1.Effects of the dumped imports
(53)In view of conclusions on cumulation as set out in recital 35
hereto, the findings on the volume and market share of the
dumped imports from the countries concerned were changed
accordingly. It was found that the volume of dumped importsfrom Poland, the Czech Republic and Hungary increasedsubstantially between 1994 and the investigation period (169 %).It should be noted that, between 1994 and 1995, the volume of thedumped imports into the Community increased by 62 % and a
further significant increase occurred between 1996 and the
investigation period. This had the effect that the cumulated totalmarket share of imports from the three exporting countriesconcerned increased from 13,1 % in 1994 to 27,6 % in theinvestigation period, i.e. by 14,5 percentage points. In contrast,
the Community industry's market share decreased by 9,5
percentage points between 1994 and the investigation period.Moreover, it should be noted that the Community industry lost 5,4percentage points in market share between 1996 and 1997 alone,which is the period during which the increase in imports from theexporting countries concerned became particularly relevant.
(54)Moreover, it was found that the prices of the dumped importsundercut the Community industry's prices significantlythroughout the whole period considered, including the periodfrom 1995 onwards, thus exerting downward pressure on the sales
prices of the Community industry.
The decline in profitability experienced by the Community
industry between 1995 and the investigation period was therefore
clearly linked to the depressed sales prices over that period, whichin turn occurred at a time of significant price undercutting by thedumped imports.
(55)One exporting producer claimed that its volume of exports to the
Community had been so small in comparison with Community
consumption of the product concerned during the investigationperiod that it could hardly have caused any injury to theCommunity industry. This argument has to be dismissed becausethe export volume of an individual company is not relevant in
determining the extent of the injury caused to the Community
industry, injury being assessed for countries as a whole, and not inrelation to single companies.
2.Effects of other factors
(a)General
(56)The cooperating exporting producers argued that any material
injury suffered by the Community industry could not beattributable to imports originating in the three countriesconcerned.
They argued that the Community industry's profitability between
1995 and the investigation period had fallen due to the inflatedprices of raw material paid by the Community industry.
Furthermore, they claimed that any decline in profitability in
this period was also due to increased overheads, in particulardepreciation charges and interest expenses, as a result of thesubstantial investment made by the Community industry.
The Commission, in recital 58 of the provisional duty Regulation,
has already addressed the argument concerning the price of rawmaterial, establishing that the Community industry could not raise
its prices sufficiently due to the significant price undercutting
found for imports from the exporting countries concerned.
(57)Furthermore, as regards the impact of the investments made bythe Community industry on profitability, it was found that thesehad a marginal impact on the Community industry's costs of1999R0603 — EN — 18.08.2001 — 002.001 — 10
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production during the period considered, mainly because any
costs related to these new investments were compensated for bygains in productivity and by an overall reduction in other general
and administrative expenses.
(b)Other imports
(58)No new comments were received relating to the effect of imports
from other countries. Therefore, the findings and conclusions onthe effect of imports from countries other than Poland, the Czech
Republicand Hungary on the injurious situation of the
Community industry, as stated in recital 54 of the provisionalduty Regulation, are hereby confirmed.
(c)Europe Agreements
(59)The Hungarian exporting producers argued that in its preliminary
findings the Commission had not distinguished between the
growth of imports caused by dumping and the growth of importsforeseeable due to the implementation of the Europe Agreementresulting in improved access to the Community market.
The Europe Agreement, although clearly aimed at establishing
preferential trade relationships with Hungary, by phasing out theduty on imports of baler twine from 9 % to 0 %, does not preventthe Community from taking action if unfair trade practices havebeen established. Furthermore, the levels of undercutting and
dumping found for the three countries concerned by this
investigation cannot be explained by the reduction of the dutypreviously in force. In these circumstances the phasing out of theduty is not considered sufficient to break the causal link betweenthe dumped imports and the material injury suffered by theCommunity industry.
This argument has therefore to be rejected.
(d)Effects of the dismantling of the MFA
(60)The Polish exporting producers argued that in its preliminary
findings the Commission did not take into consideration the fact
that the dismantling of the MFA would result in loss of marketshare and account, to a certain extent, for the price suppressionexperienced by the Community industry.
It should be noted that during the investigated period imports
from Poland were under a quota system in accordance with thetextile agreement between the Community and Poland. Therelevant quotas for 1995, 1996 and 1997 were 5 281, 5 545 and5 823 tonnes respectively. Polish exporting producers did not
fully use the quota allocated to them in 1995 and 1996. Only
during the investigation period did the exporting producers fromPoland fully use their quota. The increasing trend of the importsoriginating in Poland coincided with the presence of dumping.
In this respect it was concluded that the increase in exports to the
Community as such did not cause injury to the Communityindustry, but the fact that those exports were made, as establishedin the investigation, at dumped injurious prices. Furthermore, thedismantling of the quota system, provided for by the MFA,
happened in 1998 which is after the period under investigation.
Thus, the dismantling of the MFA in this case appears to be
irrelevant.
(e)Effects of bad weather conditions
(61)Some exporting producers argued that the injury suffered by the
Community industry was not due to the dumped imports from thecountries concerned, but to the increased costs resulting fromallegedly reduced consumption, due to the adverse weatherconditions.1999R0603 — EN — 18.08.2001 — 002.001 — 11
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It was found that consumption in the Community market
increased during the period under investigation, when dumpedimports from the countries concerned increased by 169 % despite
the weather conditions. It is clear that the Community industry
mainly lost market share due to the increased presence of dumpedimports, rather than the adverse weather conditions.
(f)Overcapacity of the Community industry
(62)Some interested parties argued that the injury suffered by the
Community industry was not due to the dumped imports, but toovercapacity.
It was established during the investigation that Community
production was not sufficient to supply the Community baler
twine market. Thus, the argument concerning the allegedovercapacity has to be rejected.
(g)Structural changes in the baler twine market
(63)Furthermore, the same interested parties argued that the
Community industry failed to recognise the gradual markettrends from fine baler twine to nets and from medium to heavybaler twine. Moreover, they argued that the shift from mediumbaler twine to heavy baler twine had had a direct impact on the
total tonnage sold, as less heavy baler twine than medium baler
twine is needed to produce the same weight of bales.
It is indeed true that during the period under investigation these
shifts occurred in the Community baler twine market. Never-theless, it was found that the Community industry, especially with
the investment on replacing old machinery, kept up with these
changes by increasing its presence in the heavy baler twinemarket. Moreover, it should be noted that consumption increasedduring the investigated period, thus the argument concerning theimpact on the tonnage from the shift from medium baler twine toheavy baler twine has to be rejected.
3.Conclusion on causation
(64)In the light of the above, although it cannot be excluded that some
other factors may have had a negative impact on the situation of
the Community industry, this impact was not such as to break the
causal link between the injury suffered by the Communityindustry and the dumped imports originating in the countriesconcerned. Therefore and in the absence of any new information,the conclusion that the combined effect of the imports of baler
twine originating in Poland, the Czech Republic and Hungary,
taken in isolation, have caused material injury to the Communityindustry is confirmed.
This conclusion is drawn in particular given the loss in market
share of the Community industry, combined with a deteriorationin profitability, which coincided with an increase in the volume
and market share of the dumped imports, at prices which
constantly undercut those of the Community industry.
H.COMMUNITY INTEREST
(65)It was claimed that the conclusion on the Community interest in
the provisional duty Regulation was not supported by factualevidence. In particular, it was argued that the Commission had nottaken into consideration the impact of anti-dumping measures onthe importers, in order to support its conclusions concerning the
Community interest.
It should be noted that the Commission contacted all known
importers. Only limited and general replies were received.Moreover, no additional substantiated comments were submittedfrom the abovementioned parties after the adoption of provisionalmeasures.1999R0603 — EN — 18.08.2001 — 002.001 — 12
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(66)In the absence of a reaction from users, it has been assumed that
the impact of any expected price increase would be limited,
taking into account the level of the duty proposed. It is alsothought that the imposition of measures will lead to areinstatement of effective competition that will enable theCommunity industry to regain the lost market share and improveits profitability.
(67)It was therefore concluded that the findings set out in recitals 66to 67 of the provisional duty Regulation could be confirmed.
I.DEFINITIVE MEASURES
1.Definitive measures
(a)Injury elimination level
(68)A Hungarian exporting producer argued that its export prices had
to be adjusted for the purposes of the injury elimination levelassessment, to take account of the difference in raw materialprices between the Hungarian and the Community industry.
However, as stated in recital 70 of the provisional duty
Regulation, the injury elimination level was determined on the
basis of the costs of production of the Community industry plus a
reasonable amount of profit. Any considerations of differences incosts of production between the Hungarian and the Communityindustry are therefore irrelevant in this respect.
(69)For the purpose of establishing the level of the measures
definitively to be imposed, it was considered that the prices of
the dumped imports should be increased to a non-injurious level.The necessary price increase or injury margin was determined onthe basis of a comparison of the weighted-average export pricesfor those types of baler twine used in the determination of priceundercutting at a cif Community frontier level, with the actual
weighted-average cost of production of the Community industry
plus a profit margin of 5 %. This profit margin was considered tobe the profitability likely to be achieved in the absence ofinjurious dumping and takes account of the fact that the productconcerned is considered by the interested parties as a commodity.
(70)An injury margin was established for each of the cooperatingexporting producers concerned and expressed as a percentage ofthe cif value of their exports to the Community.
(71)Following the disclosure of the provisional findings, commentswere submitted with regard to the method used in the
determination of the injury margin for the Saudi Arabian
exporting producer.
It was argued that the Commission should include in its
calculations one specific type of baler twine, which representedthe majority of Saudi Arabian sales to the UK market. TheCommission considered this argument and found that theinclusion of these sales by the Saudi Arabian exporting producerto the UK market would make the calculations more representa-
tive. The Commission revised its calculations accordingly, using
the same methodology as explained in recital 70 of theprovisional duty Regulation.
On the basis of this methodology the revised injury margin for the
sole Saudi exporting producer (Synthec) was found to be at a ‘ de
minimus ’ level and for two Polish exporting producers PAT
Defalin s.a. and Terplast sp z.o.o. 27 % and 6,1 % accordingly.The injury elimination level for WKI Isoliertechnik Spolska
z.o.o., Weltyn is 15,7 %. The injury margins concerning the other
exporting producers remain unchanged.
(72)In view of the findings set out above, it is proposed that definitiveanti-dumping duties be imposed on imports of binder or balertwine originating in the Czech Republic, Hungary, and Poland. As1999R0603 — EN — 18.08.2001 — 002.001 — 13
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to imports from Saudi Arabia, it is proposed, in application by
analogy of Article 9(3) of the Basic Regulation, to terminate theproceeding without measures.
(73)In accordance with Article 9(4) of the Basic Regulation, for all
exporting producers the proposed duty is based on the lower of
the injury or the dumping margin. The same applies for theresidual duties. It should be noted that for the definitive findingsPolish cooperating producers now account for more than 90 % oftotal Polish exports. Therefore, a residual duty was calculated
using the highest duty found for an individual cooperating
exporting producer located in Poland.
(b)Form and level of the definitive measures
(74)Based on the above conclusions on dumping, injury, causation
and Community interest, it was considered what the form andlevel of anti-dumping measures should be to remove the trade-distorting effects of injurious dumping and to restore effective
competitive conditions on the Community market.
(75)Definitive measures should take the form of ad-valorem duties,
the rates of which have been fixed individually for cooperatingcompanies. However, for those companies which have offeredprice undertakings, this form of measure is acceptable. Theseundertakings reflect the definitive findings of the investigation
with respect to the minimum prices provided therein and have
been accepted by Commission Decision 1999/215/EC(
1).
(c)Undertakings
(76)It will be recalled from recital 72 et seq. of the provisional duty
Regulation that undertakings had been offered by the cooperatingexporting producers in Hungary, and accepted by the Commis-sion.
(77)After the adoption of the provisional anti-dumping measures, one
cooperating Czech exporting producer (Juta a.s.) offered a price
undertaking to the Commission, in accordance with Article 8(1)of the BasicRegulation. The Commission c onsidered that theundertaking offered by the exporting producer concerned wasacceptable, and, after consulting the Advisory Committee, an
amendment to the provisional duty Regulation was accordingly
made by Commission Regulation (EC) No 2649/98(
2). Following
the Commission's disclosure of its definitive findings, the othercooperating Czech company and a Polish company also offeredundertakings which were judged acceptable. The Commission'sacceptance of the undertakings is now consolidated in Decision
1999/215/EC.
2.Collection of the provisional duties
(78)Five other Polish producers also offered an undertaking which, in
contrast to those accepted from other producers in the presentproceedings, would have given the companies concerned a freechoice in deciding whether to export under the undertaking or not.
The Commission rejected these offers on the grounds that the
companies would have had the option of exporting higher-pricedproducts under the undertaking, while lower-priced products borethe duty. It should be noted that the minimum price which has tobe respected for each product group on a quarterly weightedaverage basis is intended to ensure that all sales are made at a
non-injurious price. Allowing some sales to be made outside the
undertaking would have prevented this aim from being achieved.
(79)In the light of the seriousness of the injury suffered by theCommunity industry, it is considered necessary that the amounts1999R0603 — EN — 18.08.2001 — 002.001 — 14
(1) See page 34 of this Official Journal.
(2) OJ L 335, 10. 12. 1998, p. 41.
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securd by way of the provisional anti-dumping duties imposed by
Regulation (EC) No 2107/98 should be definitively collected atthe rate of the definitive duties imposed.
J.TERMINATION OF THE PROCEEDING IN RESPECT OF
SAUDI ARABIA
(80)In view of the conclusions of the definitive investigation, the
proceeding concerning imports originating in Saudi Arabia isterminated by Commission Decision 1999/215/EC without theimposition of measures. The amounts secured by way of aprovisional anti-dumping duty should therefore be released.
HAS ADOPTED THIS REGULATION:
Article 1
1. As definitive anti-dumping duty is hereby imposed on imports of
polypropylene binder or baler twine, currently classifiable within CNcode ex 5607 41 00 (TARIC code 5607 41 00*10), originating inPoland, the Czech Republic and Hungary.
2. The rate of the definitive anti-dumping duty applicable to the net
free-at-Community frontier prices before duty of the products manu-factured by the companies listed below shall be as follows:
Country CompanyRate of
duty
(%)TARIC
additional
code
Poland BZLP Bezalin 19,4 8450
PAT Defalin s.a. 16,3 8569
Industrial Chemistry Research
Institute12,8 8578
Terplast sp z.o.o. 6,1 8579
WKI Isoliertechnik Spolka
z.o.o.15,7 A091
All other companies 20,3 8900
Czech Republic All companies 24,8 8900Hungary All companies 32,9 8900
3. Unless otherwise specified, the provisions in force concerning
customs duties and other customs practices shall apply
Article 2
1. Notwithstanding Article 1, the definitive duty shall not apply to
imports of polypropylene binder or baler twine produced and directlyexported and invoiced to an importing company in the Community by
the companies listed in paragraph 2, which have offered price
undertakings accepted by the Commission.
2. Imports made within the context of the undertakings offered and
accepted shall be declared under the following TARIC additional codes:
Country CompanyTARIC
additional
code
Czech Republic Juta a.s. 8596
Lanex a.s. 85801999R0603 — EN — 18.08.2001 — 002.001 — 15
▼M2
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▼M1
▼M1
Country CompanyTARIC
additional
code
Hungary Partium '70 Rt 8581
Tiszai Vegyi Kombinat Rt 8582
Elso Magyar Kenderfono Rt 8583
Article 3
1. The amounts provisionally secured by Regulation (EC) No 2107/
98 with respect to imports originating in the countries mentioned inArticle 1 shall be collected at the duty rate definitively imposed.
2. The amounts provisionally secured by Regulation (EC) No 2107/
98 with respect to imports originating in Saudi Arabia shall be released.
3. Article 2(2) of Regulation (EC) No 2107/98 shall be repealed.
Article 4
This Regulation shall enter into force on the day following its
publication in the Official Journal of the European Communities .
This Regulation shall be binding in its entirety and directly applicable in
all Member States.1999R0603 — EN — 18.08.2001 — 002.001 — 16
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