Commission Regulation (EC) No 18/98 of 7 January 1998 imposing a provisional anti-dumping duty on imports of synthetic fibre ropes originating in India
Date: 1998-01-07
Institutions: European Commission
Subjects: India, anti-dumping duty, anti-dumping legislation, import, man-made fibre, manufactured goods

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Official Journal of the European Communities

8. 1. 98

COMMISSION REGULATION (EC) No 18/98

of 7 January 1998

imposing a provisional anti-dumping duty on imports of synthetic fibre ropes
originating in India

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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
the European Com-
from countries not members of
munity (1),
(EC)
by
No 2331/96 (2), and in particular Article 7 thereof,

Regulation

amended

as

After consulting the Advisory Committee,

Whereas:

A. PROCEDURE

(1)

to

available

injurious

impact of

In June 1997, an anti-dumping proceeding con-
cerning imports of synthetic fibre ropes originating
in India was terminated without
imposition of
measures on the grounds
that although some
factors appeared to indicate the existence of injury,
the overall degree of
the
dumped imports was not sufficiently established to
justify the imposition of measures in the light of
in relation to the
the
information available
information made
investigation period. However,
subsequently
the Commission
contained sufficient prima facie evidence that the
the Community industry may have
situation of
continued
further deteriorated as
dumped imports
In these special
from India.
circumstances, and given that the new information
could not be taken into consideration within the
context of
the
Commission decided to initiate
a new anti-
dumping proceeding on the basis of Article 5 (6) of
Regulation (EC) No 384/96 (hereinafter referred to
as the ‘Basic Regulation’). The initiation of this
proceeding was announced by a notice published
in the Official Journal of the European Communi-
ties(3) in July 1997.

the abovementioned proceeding,

result of

a

(2)

The Commission officially advised the producers
exporters and importers known to be concerned
and the representatives of the exporting country,
about the initiation of the proceeding. Interested

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 317, 6. 12. 1996, p. 1.
(3) OJ C 201, 1. 7. 1997, p. 8.

(3)

(4)

(5)

(6)

(7)

parties were given the opportunity to make their
views known in writing and to request a hearing.

The Commission sent questionnaires to all ex-
porters and importers known to be concerned and
Indian exporting
from one
received
producer. None of the importers replied to the
Commission’s questionnaire.

replies

the

Given the large number of Community producers
the Commission
proceeding,
supporting
decided to investigate injury on the basis of a selec-
tion of Community producers in accordance with
Article 17 of the Basic Regulation. Detailed ques-
tionnaires were sent
to this selection of Com-
munity producers and information was received
from them.

The Commission sought and verified all informa-
tion it deemed necessary for the assessment of
preliminary determination of dumping and injury
and carried out investigations at the premises of the
following companies:

Community producers

— Randers (Denmark),
— Oliveira SA (Portugal),
— Verto Portugal (Portugal),
— Bihr Frères (France),
— Quintas & Quintas (Portugal),
— Cotesi (Portugal),
— Sicor (Portugal),
— Geo Gleistein & Sohn (Germany);

Producer/exporter

— Garware-Wall Ropes Limited, Pune, India.

The investigation of dumping covered the period
from 1 July 1996 to 31 May 1997 (hereinafter
referred to as ‘the investigation period’). The exam-
ination of injury covered the period from 1993 up
to the end of the investigation period.

B. PRODUCT

CONCERNED
PRODUCT

AND

LIKE

1. Product concerned

The product under consideration is twine, cordage,
ropes and cables, whether or not plaited or braided
and whether or not impregnated, coated, covered or
sheathed with rubber or plastics of polyethylene or
polypropylene, other than binder and baler twine,

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measuring more than 50 000 decitex (5 g/m),
plaited and other, as well as other synthetic fibres
of nylon or other polyamides or of polyesters
measuring more than 50 000 decitex (5 g/m),
plaited and other. The product as described above
falls within CN codes 5607 49 11, 5607 49 19,
5607 50 11 and 5607 50 19.

The product in question is used for a wide variety
of naval and industrial applications, in particular
for shipping (especially for mooring purposes), and
the fishing industry.

It is produced in many different types depending
on the raw material composition and on the
number of strands making up the ropes.

2. Like product

The investigation showed that the different types of
synthetic fibre ropes sold in India are alike in their
physical characteristics, application and use to
those exported to the Community industry. Sim-
ilarly, the ropes manufactured in the Community
and those exported from India to the Community
have the same characteristics and compete with
each other. It is therefore concluded that they must
be considered like products within the meaning of
Article 1 (4) of the Basic Regulation.

C. DUMPING

1. Normal value

trade, by looking at the proportion of profitable
sales of the type in question.

In cases where, per product type, the volume of
sales above unit cost represented less than 80 %
but more than 10 % of the total sales volume, the
normal value for this type was established on the
basis of the weighted average price of profitable
domestic
transactions only. Where, per
product type, the volume of domestic sales above
unit cost represented less than 10 % of the total
sales volume, domestic sales were considered insuf-
ficient in the sense of Article 2 (4) of the Basic
Regulation and were therefore disregarded.

sales

Where, for the corresponding product type, there
were no or insufficient similar domestic sales in the
ordinary course of trade and given that there was
no other cooperating producer in India, normal
value was constructed in accordance with Article 2
(3) and Article 2 (6) (b) of the Basic Regulation, i.e.
on the basis of all costs of manufacturing and
SG&A expenses incurred by the exporting producer
when producing the product type concerned for
sales on the domestic market, plus a profit margin
based on the profitable sales of the like product
made by this producer on the domestic market.

2. Export price

(13) As the cooperating producer made its export sales
to the Community directly to independent
im-
porters, export price was, in accordance with Article
2 (8) of the Basic Regulation, established on the
basis of the prices actually paid or payable by these
independent customers.

In order to establish normal value, the Commission
first analysed whether the total domestic sales of
the cooperating exporting producer was represent-
ative in accordance with Article 2 (2) of the Basic
Regulation i.e. whether the total volume of such
sales constituted 5 % or more of the total volume
of export sales to the Community. This assessment
revealed that the cooperating exporting producer’s
domestic sales of synthetic fibre ropes were rep-
resentative.

3. Comparison

(14)

For the purpose of ensuring a fair comparison
between the normal value and the export price, due
allowance in the form of adjustments was made for
differences which were claimed and demonstrated
to affect price comparability in accordance with
Article 2 (10) of the Basic Regulation.

The Commission then examined whether
total
domestic sales of each product type exported to the
i.e. whether the
Community were representative,
volume of such sales constituted 5 % or more of
the
corresponding type
the
exported to the Community.

volume of

sales

types meeting this test,

For those product
the
Commission subsequently examined whether the
domestic sales of each product type could be con-
sidered as being made in the ordinary course of

Adjustments for transport, insurance, clearing and
handling charges,
import charges,
credit costs and discounts were granted.

indirect

taxes,

(15)

The cooperating exporting producer claimed that
an allowance should be granted for the imported
charges borne by the raw material imported. This
adjustment was granted where the duties shown to
be paid on raw materials imported and physically
incorporated in the product sold domestically were
shown to be refunded when exporting the products.

(8)

(9)

(10)

(11)

(12)

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The company also claimed an adjustment
for
physical characteristics on the grounds that some
ropes exported to the Community contained a
small proportion of waste. This claim was rejected,
in accordance with Article 2 (10) of the Basic Regu-
lation, as the company was not in a position to
demonstrate that
this physical difference had
affected sales prices.

An adjustment for differences in other factors was
also claimed on the grounds that
the domestic
market infrastructure requires the maintenance of a
network of depots throughout the country which
affects price comparability. However, the company
was neither able to quantify the expenses incurred
by this infrastructure nor to demonstrate how these
expenses affected prices. In view of the above, this
claim was rejected.

4. Dumping margin

(16)

In accordance with Article 2 (11) of
the Basic
Regulation, the dumping margin was established
on the basis of a comparison between the weighted
average normal value by type and the weighted
average export price of the corresponding type at
an ex-factory level.

The comparison of
the normal value with the
export price showed the existence of dumping, the
dumping margin being equal to the amount by
which the normal value exceeds the price for
export to the Community.

a

as

percentage

Expressed
Community
weighted average dumping margin amounts
96,4 %.

frontier price, duty unpaid,

free-at-
the
to

the

of

(17)

For exporting producers which neither replied to
the Commission’s questionnaire nor otherwise
made themselves known, the dumping margin was
determined on the basis of the facts available in
accordance with the provisions of Article 18 (1) of
the Basic Regulation.

Eurostat, possibly because of the delay in reporting
by national customs authorities.

in order

to avoid rewarding any
Nevertheless,
possible non-cooperation, the product type which
appeared most dumped was selected, provided that
it did not result in a dumping margin lower than
that established. The residual dumping margin was
the dumping
then determined on the basis of
margin of the product type selected for the co-
operating company. Expressed as a percentage of
the free-at-Community frontier price, duty unpaid,
the margin is 251 %.

D. COMMUNITY INDUSTRY

(18)

The Community producers supporting the pro-
ceeding represented approximately 96 % of
the
Community production of the product concerned
and therefore constituted the Community industry
in accordance with Articles 4 (1) and 5 (4) of the
Basic Regulation.

E. INJURY

1. Preliminary remarks

(19) As indicated in recital 6, for the purposes of estab-
lishing injury in the present proceeding the
Commission has analysed data relating to the
period 1993 to May 1997. However, as regards the
the
development of
period considered,
for the
purpose of a year-to-year comparison, used the
figures relating to the 11 months of the investiga-
tion period (six months of 1996 and five months of
1997) as a basis for extrapolating the figures for a
12-month period.

the injury indicators over
the Commission has,

(20)

The geographical scope of the investigation was the
Community as composed at the time of the initi-
ation of the proceeding, i.e. the Community of 15
Member States.

2. Collection of injury data

A comparison of Eurostat data with the volume of
exports to the Community reported by the co-
operating exporting producer was made in order to
establish the level of cooperation. This comparison
showed that
the level of cooperation was high.
However, during the investigation, the Commission
has established that the volume of exports declared
by the
the product
concerned from India to the Community was
higher than the volume of imports quantified by

cooperating producer of

(21)

The Commission requested and obtained informa-
tion from all producers supporting the proceeding
relating to production,
sales and employment
(‘global information’). In view of the large number
of producers
the
Commission based the remaining injury indicators
on information from a selection of Community
producers, i.e. capacity, capacity utilization, prices,
profitability, cost of production, stocks and invest-
ments (‘sampled information’).

in the Community industry,

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Pursuant to Article 17 of the Basic Regulation, the
selection was made according to geographical loca-
tion and the size of the companies in terms of
production and sales and it includes large as well as
small companies. Furthermore, it should be noted
that more than half of the Community production
is located in one Member State. Notwithstanding
this,
the Commission included producers from
other Member States in its selection.

The selected companies accounted for 47 % of
production and 44 % of
the product
concerned of the Community industry during the
investigation period.

sales of

3. Community consumption

(22) Community consumption was based on global
information on volume of sales of the Community
industry and Eurostat information on volume of
imports. As regards imports originating in India,
the data obtained from Eurostat were adjusted to
take account of information supplied by the Indian
cooperating exporting producer and verified by the
Commission. The volume of sales of the Com-
munity producers not cooperating in the pro-
ceeding was estimated, on the basis of the available
information, at 4 % of the total sales of the whole
Community producers.

On the above basis, Community consumption
increased from 21 820 tonnes in 1993 to 26 405
tonnes
in 1995 and remained relatively stable
thereafter, reaching 27 049 tonnes in the investiga-
tion period, which represents an overall increase of
24 % over the period considered.

Community producers during the investigation
period, the Commission compared the prices of the
selected Community producers with comparable
prices of the cooperating exporter concerned in the
Community. Due to the large number of different
types of synthetic fibre ropes, the price comparison
was made on the basis of a selection of transactions
representing approximately 70 % of the volume of
sales of all types of synthetic fibre ropes made by
the Community producers.

to take

The sales prices of the Community industry con-
sidered were those to independent customers,
adjusted where necessary to ex-works level. Adjust-
ments were made to the exporters’ selling prices
(cif Community frontier)
account of
customs duty paid and an allowance in respect of
the
importation costs. The transactions of
post
product types selected represented a large propor-
tion of the total volume of imports from India into
the Community during the investigation period.
All prices were compared after excluding all
discounts and rebates and at a comparable level of
trade.

The results of the comparison (conducted on an
average-to-average basis) showed that during the
investigation period price undercutting margins for
the imports originating in India, expressed as a
percentage of the Community industry’s average
selling prices ranged from 0 % to 38 % with an
overall weighted average of 16 %. The differences
in these margins reflect the large variety of ropes
falling within the definition of
the product
concerned.

6. Situation of the Community industry

4. Volume and market share of the dumped

imports

(a) Production (global information)

(23)

The total volume of all dumped imports of
synthetic fibre ropes originating in India increased
significantly over the period considered, rising from
440 tonnes in 1993 to 1 342 tonnes in 1996, then
slightly decreasing to 1 239 tonnes in the investiga-
tion period. Overall,
the volume of dumped
imports increased by 182 % between 1993 and the
investigation period.

The market share of synthetic fibre ropes imported
from India rose significantly between 1993 and the
investigation period, increasing from 2 % in 1993
to 5,1 % in 1996 then slightly decreasing to 4,6 %
in the investigation period.

(25)

(26)

5. Prices of the dumped imports

(24)

In order
to determine whether
producer was undercutting the prices of

the exporting
the

of

the product

Production levels
concerned
produced by the Community industry increased
during the period considered, going from 19 465
tonnes in 1993 to 22 373 tonnes in the investiga-
tion period, which represents an overall increase of
15 %. Production levels
should be viewed in
conjunction with Community consumption which
increased by 24 % during the period considered.

(b) Sales

volume
(global information)

of

the Community

industry

The volume of sales of the Community industry on
the Community market
increased during the
period considered, with the sales levels at 19 179
tonnes in 1993 and 20 784 tonnes in the investiga-
tion period, which represents an overall increase of
8 %. This trend shows that the sales of Community
producers were not able to follow the trend in
consumption which increased by 24 % during the
period considered.

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(c) Market share (global information)

(27)

The development of sales volume compared to that
of apparent Community consumption, shows that
the market share held by the Community produ-
cers decreased during the period considered. The
market share of the Community producers went
from 88 % in 1993 to 77,5 % in 1995, 78,6 % in
1996 and 76,8 % in the investigation period. The
overall
loss of market share was 11 percentage
points between 1993 and the investigation period.
Moreover, it should be noted that the Community
industry lost 10 percentage points in market share
between 1993 and 1995 which is the period during
which the increase in imports from India became
particularly relevant. In 1996, the market share of
the Community industry slightly improved but was
again on the decline in the investigation period.

(d) Employment (global information)

(28)

Employment levels in the Community industry for
the product concerned declined during the period
considered. Employment fell from 1 247 in 1993 to
1 129 in the investigation period, a decrease of
9 %. Despite a slight improvement between 1995
and 1996, employment declined again in the inves-
tigation period.

(e) Capacity, capacity utilization (sampled infor-

mation)

(29) As regards capacity, it should be noted that the
production facilities for synthetic fibre ropes are
also used in the production of other products not
concerned by the present proceedings, products
fluctuations of
which are subject
demand in the market, e.g. agricultural twines. As a
consequence, an estimate of the capacity normally
attributed to the production of
the product
concerned by the Community industry had to be
made.

to seasonal

On this basis, capacity slightly increased,
from
16 164 tonnes in 1993 to 17 008 tonnes during the
investigation period which represents an increase of
5 %. This increase was in line with expectations of
market growth (increase in consumption of 24 %
over the period concerned). However, the rate of
stable
capacity utilization remained relatively
during the period considered going from 61 % in
1993 to 62 % in the investigation period.

(f) Stocks (sampled information)

(30)

The investigation has
the product
concerned is usually produced to order within the

shown that

Community. Generally,
therefore, no significant
levels of stocks were maintained by the Com-
munity producers, although stocks of product
ordered and not yet sold exist occasionally.

(g) Investments (sampled information)

(31)

(32)

Yearly investments made by the sampled com-
panies increased overall, going from ECU 549 996
in 1993 to ECU 1 033 882 in the investigation
period. This represents an overall increase of 88 %.
It should be noted that this significant increase is
due for the most part to investments in replace-
ment machinery over the period considered as part
of an overall restructuring programme.

(h) Productivity (sampled information)

Productivity of the Community industry increased
overall from 12,45 tonnes per person employed in
1993 to 15,2 tonnes per person employed in the
investigation period, in spite of a slight decrease in
the investigation period compared to 1996. This
increase in productivity must be seen in the
context of the significant technological improve-
ments in the rope-making machines before and
during the period considered which enabled the
introduction of leaner and more integrated produc-
tion processes.

(i) Price evolution (sampled information)

(33)

The weighted average prices of
the product
concerned sold by the sampled companies on the
Communmity market fluctuated over the period
considered, overall however, they increased by 1 %.

Furthermore, while the prices of the imports from
India increased by 6 % over the period considered,
it should be noted that,
in the vast majority of
cases, these prices were found to be significantly
lower that than the Community producers’ prices
for the whole period considered.

(j) Profitability (sampled information)

(34)

The profitability of
the Community industry,
expressed as a percentage of net sales, went from a
weighted average loss of – 1,7 % in 1993 to a
weighted average loss of – 7,1 % in the investiga-
tion period. It should be noted however, that the
financial situation deteriotated particularly from
1995 onwards, going from a loss of – 1,2 % to a
loss of – 7,1 % in the investigation period.

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7. Conclusion on injury

(35)

The investigation has shown that the Community
industry has suffered significant price pressure from
the imports originating in India over the whole
period considered, with undercutting up to 38 %.
In addition, the Community industry suffered a
significant
loss of market share (11 percentage
points) at a time when Community consumption
increased by 24 %. Employment levels appeared to
be on the decline in spite of restructuring efforts
made by the Community industry.

Furthermore, the Community industry showed a
significant deterioration of
results
from 1995 onwards and a weighted average loss of
– 7,1 % of net sales in the investigation period.

the financial

In the light of the foregoing analysis, the Commis-
sion has provisionally concluded that the Com-
munity industry has suffered material injury within
the meaning of Article 3 (1) of the Basic Regula-
tion.

F. CAUSATION OF INJURY

(36)

1. Effects of the dumped imports

In its examination of whether the material injury
suffered by the Community industry had been
caused by the effect of the dumped imports, the
Commission found that
the volume of dumped
imports increased substantially between 1993 and
the investigation period (+182 %). It should be
noted that, between 1993 and 1996, the volume of
imports originating in India into the Community
more than doubled and their cumulated market
share increased by 3 percentage points, whilst
during the same period the Community industry
lost 10 percentage points. Between 1996 and the
investigation period, the volume of imports from
India slightly declined. However, despite this slight
the volume of dumped imports from
decrease,
in the investigation
India remained significant
period.

it

is noted than the market

Furthermore,
for
synthetic fibre ropes is price-sensitive and trans-
parent. The Commission found that the product
under
to be considered as a
commodity and that any downward pressure on
prices tended to have an immediate impact on the
market.

investigation is

In this context, the Commission found that the
the
imports from India undercut

the prices of

Community industry by an average of 16 % and up
to 38 % during the investigation period. In addi-
tion, over the whole period considered, the prices
of imports from India were consistently and signi-
ficantly lower
the Community
industry. It should be noted that this undercutting
continued during the investigation period, despite
the relative decline in volume of the imports ori-
ginating in India in this later period. Furthermore,
the Indian prices were found to be the lowest on
the market in this period.

than those of

(37) As concerns the Community industry’s financial
situation, it was not favourable at the beginning of
the period considered, however, it had significantly
deteriorated by the end of the period.

Two distinct phases can be observed. Between 1993
and 1995 the Community industry’s financial situ-
ation remained relatively stable, albeit loss-making.
This shows that the Community industry, under
pressure from the dumped imports, attempted to
maintain the level of profitability at the expense of
market share. From 1995 onwards, however, in the
light of
the
dumped imports, the Community industry had to
modify its pricing strategy in order not to lose
the market and to maintain
further
production
consequently
reduced and profitability significantly deteriorated.

the continuous price pressure of

Prides were

shares of

levels.

Under the circumstances, it is concluded that the
dumped imports of synthetic fibre ropes origin-
ating in India have caused material injury to the
Community industry.

2. Effects of other factors

(38)

The Commission examined whether
the injury
suffered by the Community industry could have
been caused by factors other than the dumped
imports. In particular, the Commission looked at
the trend in consumption in the Community
market, the viability of the Community industry,
the evolution and impact of imports from third
countries not included in the present proceeding
and the impact of any increases in the cost of raw
materials.

(a) Community consumption

(39) Community consumption of synthetic fibre ropes
increased in total by 24 % between 1993 and the
investigation period, with a tendency to stabilize
after 1995. The injury suffered by the Community
industry cannot,
therefore, be attributed to the
trend in demand.

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(b) Competitiveness of the Community industry

into the Community, which was
relative individual share of imports.

the highest

(40) Despite losses in the beginning of the period, it is
recalled that over
the period considered the
Community industry made significant investments
in replacement machinery in order to tie-up with
developments in technology. These new machines
enabled a leaner and more integrated production
process, which in turn resulted in a notable
increase in productivity of 22 % between 1993 and
the investigation period. Moreover, the Community
industry continued its efforts in research and deve-
lopment and in quality control
the
period considered. The Community industry there-
fore improved its performance both in cost and in
quality terms over the period considered.

throughout

(c) Imports from other third countries

(41)

of

the overall market
The Commission found that
share
from third countries not
imports
concerned by these proceedings increased by 8,5 %
during the period considered. The Commission
examined in particular imports from the Republic
of Korea, Norway, Poland, Russia and the Czech
Republic.

As regards the imports from the Republic of Korea,
an anti-dumping proceeding was initiated on 31
July 1997, following a complaint by Eurocord on
the Community industry (1). Since the
behalf of
market share of
the imports originating in the
Republic of Korea significantly progressed during
the period considered from 0,4 % to 4 %, it cannot
be excluded that Korean imports contributed to the
injury sustained by the Community industry.
However, the results of the investigation are still
pending.

The market share held by imports from Norway,
Russia and the Czech Republic increased over the
period considered, but their prices were found to be
higher than Indian prices. The prices of imports
originating in Poland were found to be lower than
Indian prices only in 1994,
their
market
the period
considered.

share remained stable over

furthermore,

It should be further noterd that, except for 1994,
the Indian import prices were found to be the
lowest on the market
in the period considered.
Moreover, between 1995 and the investigation
period, the volume of the Indian imports alone
represented 20 % of the total volume of imports

(1) OJ C 232, 31. 7. 1997, p. 6.

(d) Changes in the prices of raw materials

(42)

The Commission also considered whether
the
injury suffered by the Community industry could
have been caused by the fluctuations in the cost of
the raw materials during the period considered.

The Commission found significant fluctuations in
the cost of
the period
the raw materials over
concerned. Overall, the prices of polyethylene and
polypropylene granulates, the main raw materials
used in the production of the product concerned,
increased respectively by 41 % and 52 % between
1993 and the investigation period. Considering that
the raw materials account for approximately 50 %
of the total costs of production, the average sales
price charged by the Community industry should
have increased by 23 % over the period considered
to cover the overall increase in raw material costs.
This should be compared to an overall increase in
the sales prices of the Community industry of 1 %.

3. Conclusion on causation

(43) Although it cannot be excluded that the variation
in the cost of raw materials may have had a certain
adverse effect on the situation of the Community
industry, and that some of the imports from other
third countries may have contributed to the loss in
market share and the negative situation of
the
Community industry, this does not detract from
the fact that the imports of synthetic fibre ropes
originating in India,
taken in isolation, caused
material injury to the Community industry.

This conclusion is drawn in particular given the
loss of market share of the Community industry
combined with a deterioration of profitability,
which coincided with an increase in the volume
and market share of Indian imports at prices that
constantly undercut
the Community
industry, at levels found to be the lowest on the
market in the investigation period.

those of

G. COMMUNITY INTEREST

1. Preliminary remarks

(44)

The Commission provisionally examined, on the
basis of the information submitted, whether despite
the dumping and injury findings, compelling
reasons exist which would lead to the conclusion
that it is not in the Community interest to impose
measures in the present case.

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For this purpose, the Commission has considered
the impact of possible measures for all parties
involved in the proceedings and also the con-
taking
sequences for those same parties, of not
provisional measures.

2. Collection of information

(45)

In order to assess the likely impact of measures, the
in-
Commission requested information from all
in-
terested parties known to the Commission,
cluding parties in the upstream industries,
the
Community industry, and user industries. It is to be
noted that the Commission received only limited
and generic replies.

The parties examined in the context of the present
Community interest analysis fall into the following
main categories:
raw material producers
upstream, the Community industry, the importers/
distributors and users downstream.

the

It should be noted that synthetic fibre ropes are
sold in the Community in their finished state,
therefore no downstream processing industry as
such is concerned by these proceedings.

(48)

3. Interests of the raw material producers

(46)

The raw materials used in the production of the
product are polymers such as, inter alia, poly-
propylene, polyethylene, polyamide and polyester.
These polymers can be in the form of granulates,
which need to be extruded, or yarns. They are
generally produced in the Community by the main
petrochemical industrial groups.

Although a number of
raw material producers
wrote to the Commission in support of the present
proceedings, there appears to be no evidence that
these producers would be significantly affected by
the imposition or the non-imposition of measures,
given that their sales to rope producers would be
marginal to their overall businesses.

4. Interests of the Community industry

(49)

(a) Nature and structure

of

the Community

industry

(47)

The Community industry is made up of some 30
companies that produce the product concerned.
The Community industry is
spread over most
Member States, however a large concentration of
companies is to be found in Portugal. The Portu-
guese producers accounted for approximately 60 %

of the production of the Community industry in
the investigation period.

The Community producers are, for the largest part,
family-owned small- to medium-sized companies.

The Community industry essentially transforms the
raw materials into synthetic fibre rope through the
following main production phases: an extrusion
phase (the melting of the raw materials into useable
yarn), a stranding phase (creating strands from the
yarns) and a twisting or braiding phase (twisting or
braiding the strands to make up the rope). The
product concerned is a finished product that does
not generally undergo any further significant trans-
formation.

(b) Viability of the Community industry

invested significantly

The financial situation of the Community industry
was not favourable already at the beginning of the
period considered, leading to restructuring during
this period. The investigation has shown that as a
result of the dumped imports the financial situ-
ation of
the Community industry has worsened
significantly and that the Community industry has
lost significant market share over the period con-
sidered. However, it is recalled that the Community
industry
the
period considered in new machinery, which
enabled the introduction of more efficient produc-
tion processes. The Community industry also
invested into quality assurance and control and has
undergone important
research and development
efforts to introduce the production of new types of
special ropes providing a higher added value and
involving more advanced technologies. Finally, at
the end of the investigation period the Community
industry still held a significant market share, which
demonstrates that Community producers are reli-
able suppliers.

throughout

(c) Likely effects of the imposition or non-imposi-

tion of measures

If the pressure exerted by the dumped imports is
allowed to continue further, financial losses would
continue to occur. The Community industry would
then not be able to finance its efforts in developing
products and over a longer term company closures
could follow. In this respect it is noted that the
Commission were informed that, as a consequence
of the price pressure existing on the Community
market during the period considered, a number of
Community producers have had to limit
their
production range and a number of others have
stopped producing altogether.

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It is very likely that without measures to correct the
effects of dumped imports, this negative trend will
continue.

On the other hand, if measures were imposed, the
Community industry should be able to increase
prices and improve profitability.

5. Interests of the importers/distributors

(50)

The distribution chain of the product concerned is
characterized by an important number of
im-
porters-distributors who, unlike the Community
industry, hold significant levels of stocks of the
product concerned. It is important to note that the
distributors have an important power in setting the
price level
for the product concerned often re-
sulting from their unique position in the distribu-
tion chain.

The importers/distributors generally act as
the
intermediaries between both the Community
industry and the exporters, and the users. A typical
example of the role of the importers/distributors is
the activity of a ship’s chandler in a major port; the
ship’s chandler will often determine the source of
his supply (Community or imported) on the basis
of the price charged for the product concerned on
the day.

Since the importers and distributors have the power
to set the prices on the market and since they are
generally free to determine the source of
their
supply (Community or imported), the Commission
do not see that they would be significantly affected
by the imposition or non-imposition of measures.
submitted to the
Moreover, no evidence was
Commission that this would not be the case.

6. Interests of the users

(51)

The users of the product concerned mainly consist
of the fishing and shipping industries.

Given the extreme price sensitivity of the market,
the Commission believes that, the impact of the
imposition of measures would in all likelihood take
the form of a price increase.

Ropes are generally used for mooring purposes,
general on-board purposes or for ancillary purposes
to the use of fishing nets. The costs relating to the
to the main costs
ropes is therefore peripheral
incurred
concerned, when
industry
compared to other costs such as the depreciation of

the

by

the vessels, fuel, insurance, labour or maintenance.
This conclusion is reinforced given that synthetic
fibre ropes can be used for a long time, without
specific maintenance. According to the information
available, the Commission believe, therefore, that
the product concerned only represents a negligible
part of
the user industries,
which also explains the lack of cooperation from
the users in this present proceeding. Any expected
price increase would therefore be marginal for the
users.

the overall costs of

7. Conclusion on Community interest

(52) Given the rate of increases of imports from India
over the period considered and the exporter’s be-
haviour on the Community market to constantly
and significantly undercut
the
Community industry, there is a likelihood that, in
the absence of measures, this trend will continue
and further aggravate the injury caused to the
Community producers.

the prices of

The effects of the imposition of measures can be
expected to assist
the Community industry to
improve profitability, with consequent beneficial
effects on the competitive conditions on the
Community market and the reduction of the threat
of further closures and reductions in employment.
The beneficial effects are also expected to assist the
Community producers to take full advantage of the
investments made in recent years,
to continue
developing new products of higher technology for
new and specialized applications.

As regard the user industries, any expected price
increase would only have a marginal impact.

The Commission has concluded that,
in the
circumstances there are no compelling reasons not
to impose measures.

H. PROVISIONAL DUTY

1. Injury elimination level

(53) Having established that the dumped imports under
consideration have caused material
injury to the
Community industry and that there are no compel-
ling reasons not to take action, provisional anti-
dumping measures
adopted. The
measures envisaged should be sufficient to elim-
inate the injury caused by these imports without
exceeding the dumping margins found.

should be

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such injury requires

The removal of
the
industry should be put in a position where prices
reach a level which would prevail in the absence of
dumped imports. It was concluded that at such a
level Community producers could cover their costs
of prodution plus a reasonable amount for profit.

that

Therefore, the weighted average export prices for
those product types used in the determination of
price undercutting were compared, for the period
of investigation, on a cif Community frontier level,
adjusted to take account of customs duty paid and
an allowance in respect of post importation costs,
with the actual weighted average selling prices
charged by the selected Community producers
concerned, increased, where appropriate, to cover
production cost plus a profit margin of 5 %.

This profit margin was considered, for the purpose
of a preliminary determination, to be the minimum
profit level necessary to make this sector viable. It
the product
takes
concerned is considered by the interested parties as
being a commodity.

account of

that

fact

the

This comparison showed an injury margin of
53,0 % of
free-at-
Community frontier price, before duty.

the weighted average net,

2. Provisional anti-dumping duty

(54) According to Article 7 (2) of the Basic Regulation,
the level of the provisional anti-dumping duties
should be equal either to the margin of dumping
or
injury,
whichever is the lower.

amount necessary

to remove

the

Since the injury margin provisionally found for the
than the respective
Indian exporter
lower
dumping margin,
the rate of provisional anti-
dumping duty for this exporter should be based on
the injury elimination level found.

is

(55)

For companies which did not cooperate in the
investigation, the provisional duty is based on the
injury margin, i.e. 82,0 %, found for the product
type selected for the establishment of dumping
margin in respect of these companies, since the
dumping margin exceeded the injury margin.

may make their views known in writing and
request a hearing. Furthermore,
should be
emphasised that all findings made for the purpose
of this Regulation are provisional and may have to
be reconsidered for the purpose of any definitive
duty which the Commission may propose,

it

HAS ADOPTED THIS REGULATION:

Article 1

1.
A provisional anti-dumping duty is hereby imposed
on imports of synthetic fibre ropes falling within CN
codes 5607 49 11, 5607 49 19, 5607 50 11 and 5607 50 19
originating in India.

2.
For the purposes of this Regulation, the rate of the
provisional anti-dumping duty applicable to the net free-
at-Community frontier price before duty shall be as
follows:

— Garware Wall
Ropes Ltd

— Other manu-
facturers

53,4 % (additional Taric code 8755),

82,0 % (additional Taric code 8900).

The provisions in force concerning duties and other

3.
customs practices shall apply.

4.
The release for free circulation in the Community of
the products referred to in paragraph 1 shall be subject to
the provision of a security, equivalent to the amount of
the provisional duty.

Article 2

Pursuant to Articles 20 and 21 of Regulation (EC) No
384/96 of 22 December 1995, the parties concerned may
make their views known in writing and apply to be heard
orally by the Commission within one month of the entry
into force of this Regulation.

Article 3

Subject to Articles 7, 9, 10 and 14 of Regulation (EC) No
384/96 of 22 December 1995, Article 1 of this Regulation
shall apply for a period of
the
Commission extends its validity or the Council adopts
definitive measures before the expiry of that period.

six months unless

I. FINAL PROVISION

Article 4

(56)

In the interests of sound administration, a period
should be fixed in which the parties concerned

This Regulation shall enter into force on the day fol-
lowing its publication in the Official Journal of the
European Communities.

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This Regulation shall be binding in its entirety and directly applicable in all Member
States.

Done at Brussels, 7 January 1998.

For the Commission

Leon BRITTAN

Vice-President