98/90/EC: Commission Decision of 21 January 1998 terminating the anti-dumping proceeding concerning imports of dihydrostreptomycin originating in the People's Republic of China
Date: 1998-01-21
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, chemical product, import

L 17/42

EN

Official Journal of the European Communities

22. 1. 98

COMMISSION DECISION

of 21 January 1998

terminating the anti-dumping proceeding concerning imports of dihydrostrep-
tomycin originating in the People’s Republic of China

(98/90/EC)

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 from countries not members of the European
Community (1), as amended by Council Regulation (EC)
No 2331/96 (2), and in particular Article 9(2) thereof,

(3)

After consulting the Advisory Committee,

Whereas:

A. PREVIOUS PROCEDURE

(4)

(1)

Following a complaint lodged by the European
Council of Chemical Manufacturers Federations
(CEFIC) acting on behalf of
the sole known
producer of dihydrostreptomycin in the European
Community, the Council, by Regulation (EEC) No
3836/91 (3),
imposed a definitive anti-dumping
duty on imports of dihydrostreptomycin (herein-
after referred to as DHS) falling within CN code
2941 20 10, originating in the People’s Republic of
China.

The rate of duty imposed was ECU 20,16 per kilo-
gram of base DHS or the difference between the
cif price and ECU 58,4 per kilogram of base DHS,
whichever is the higher.

evidence of changed circumstances contained in
the application was considered sufficient to justify
the opening of a review investigation pursuant to
Article 11(3) of Regulation (EC) No 384/96 (the
‘Basic Regulation').

By a notice published in the Official Journal of
the Commission
the European Communities,
accordingly announced the review of Regulation
(EEC) No 3836/91 pursuant to Article 11(3) of the
Basic Regulation. Given that no change of circum-
stances regarding dumping had been claimed in
initiated on 4 January
the request,
1996 (4), was initially limited to aspects of injury.

the review,

it emerged that

A preliminary examination of the situation showed
that there was one producer of DHS remaining in
the Community. However,
the
circumstances of the case had changed sufficiently
to warrant a full review of both dumping and
injury. The changed circumstances included an
the domestic
alteration in the composition of
industry (the original sole complainant producer,
Rhône-Poulenc, had ceased production but there
was one other producer in the Community) and
information that Japan, the analogue country used
in the original investigation, no longer produced
DHS. Furthermore, Chinese export prices appeared
to have considerably increased. The implications of
these developments were thought
to justify the
extension of the scope of the reveiw to cover a full
examination of both dumping and injury.

two

Chinese

companies,

For
specifically
mentioned in the operative part of the Regulation,
the duty amounted to ECU 14,9 per kilogram of
base
difference
between the CIF price and ECU 53,16 per kilo-
gram of base DHS, whichever is the higher.

dihydrostreptomycin

the

or

B. REVIEW INVESTIGATION

(2)

The Commission subsequently received a request
in the Community, acting on
by an importer
behalf of a Chinese exporter, to repeal the meas-
ures in force. The applicant alleged that there was
no longer a Community DHS industry which
could be injured by the imports concerned. The

(5)

(6)

Having consulted the Advisory Committee on the
matter, the Commission decided, on its own initia-
tive, to extend the initial scope of the review to
cover both dumping and injury. An investigation
was initiated by a notice published in the Official
Communities (5),
Journal
pursuant to Article 11(3) of the Basic Regulation.
The Commission officially advised the producer,
exporters and importers known to be concerned as
well as users of the product.

the European

of

The investigation initially covered the year 1995
and, following the extension of the scope of the
review, the investigation period for dumping was 1
January to 30 November 1996.

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 317, 6. 12. 1996, p. 1.
(3) OJ L 362, 31. 12. 1991, p. 1.

(4) OJ C 1, 4. 1. 1996, p. 4.
(5) OJ C 386, 20. 12. 1996, p. 9.

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Official Journal of the European Communities

L 17/43

(7)

(8)

(9)

Since the review was in progress at the end of the
period of application of
it also
covered the circumstances mentioned in Article
11(2) and (7) of the Basic Regulation.

the measures,

to all

The Commission sought and verified all the infor-
mation it deemed necessary to its determination.
Questionnaires were sent
the companies
known to be concerned and replies were received
from the companies listed below. Verification visits
were carried out at the premises of the Community
producer, the cooperating unrelated importers and
two user companies including one related to the
Community producer.

All parties which so requested were granted a
hearing.

(a) Community producer

Norbrook Manufacturing
Ireland);

Ltd

(NML,

(b) Producers/Exporters in the People’s Republic of

China

 Long March Pharmaceutical Plant,
 Shanghai No 4 Pharmaceutical Plant;

(c) Importers in the Community

 Helm AG (Germany),
 Tocelo Chemicals BV (Netherlands);

(d) Community users

 Intervet International

(Akzo-Nobel group,

Netherlands),

 Sanofi-SNA (France),
 Laboratoires Virbac (France),
 Laboratorios Syva (Spain),
 Norbrook

Laboratories

Ltd

(11)

(Northern

Ireland, related to NML).

C. PRODUCT UNDER CONSIDERATION AND

LIKE PRODUCT

1. Product under consideration

The product concerned by this investigation is the
invest-
same as the one covered by the initial
igation, i.e. DHS, an anti-infective agent obtained
from the hydrogenation of
streptomycin and
generally combined with other antibiotics such as
penicillin-procaïn for
the production of basic
veterinary medicines (injectable pen-strep doses).
These end-products have become commodities and
are widely used as preventive medicine in cattle,
pig
applications
include a number of other veterinary products such
as ointments and oily suspensions.

and sheep breeding. Minor

fermentation
mycin, which is obtained by a
process and mostly produced in the People’s
Republic of China. Both forms are intended for
the same applications, mainly pen-strep formula-
tions used in veterinary medicine.

they

A number of users claimed that the liquid formu-
lation produced and sold by the Community
industry could not be compared with the DHS
powder produced and exported by the People’s
Republic of China because
cannot be
processed in the same way. However, the Commis-
sion has found that, although traded in liquid
form,
the DHS produced and sold by the
Community industry and the one imported in dry
form from the People’s Republic of China have the
same chemical formula and properties and have
exactly the same uses (basically the production of
and are generally inter-
pen-strep medicines)
changeable.

Therefore these products are considered as like
products,
in accordance with Article 1(4) of the
Basic Regulation, for the purpose of this invest-
igation.

D. DEVELOPMENT OF THE COMMUNITY

MARKET

1. Community industry

The investigation showed that Rhône-Poulenc, the
sole complainant Community producer
in the
original 1990 investigation, had ceased production
of DHS in May 1994. At present, Norbrook Manu-
facturing Ltd, in Ireland, is the sole producer of
DHS in the Community. Nearly all the output of
Norbrook Manufacturing Ltd is
transferred in-
ternally to its related company, Norbrook Labor-
atories Ltd (NLL), for the manufacture of pen-strep
medicines. The global Community market share of
Norbrook Manufacturing Ltd, (i.e. comprising both
sales to the open market as well as transfers of
products used captively within the Norbrook
group) was 24 % in 1995 and during the invest-
igation period. As far as Norbrook’s open market
share is concerned, less than 1 % of the respective
sales were made to independent customers, mainly
in Spain, thus representing a negligible part of the
Community open market.

2. Consumption

2. Like product

(12)

(10) DHS is mainly exported as powdered sulphate by
Chinese exporters/producers but is also produced
in a liquid form in the Community. Both forms
are derived from one single raw material, strepto-

Community

In the investigation period, the estimated apparent
of DHS
global
amounted to 234 tonnes. On an indexed basis,
consumption fell from 100 in 1993 to 87 in the
investigation period.

consumption

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3. Imports

its cost of manufacture plus a reasonable margin
for SG&A and profit.

(13)

(14)

It should be noted that
in addition to Rhône-
Poulenc, in the Community, Meiji in Japan ceased
production of DHS in 1993. The Chinese produ-
cers seem to be enjoying a worldwide dominance
of the DHS market now that the major chemical
groups have stopped producing DHS sulphate.
China is the main supplier of the Community’s
market
the
direct
Community and 75 % of the total Community
consumption in the investigation period) and virtu-
ally the only supplier on the Community’s open
following the
market. It should be noted that,
imposition of the anti-dumping duty on CN code
29 41 20 10 in 1991, Chinese imports of DHS have
largely been made under other codes not subject to
the duty, thus evading the anti-dumping measures.

(98 % of

imports

into

The Chinese exports to the Community amounted
to 176 tonnes, of a value of ECU 7,9 million (1) in
the investigation period. Chinese average prices
showed an increase of 25 % in 1994 and 5 % in
1995. They increased by another 7 % in the
investigation period. Other
(Romania,
Switzerland) are presently negligible.

imports

E. DUMPING

1. Analogue country

Since the People’s Republic of China is considered
a non-market economy country, the Commission
undertook to find a market economy third country
in which DHS was produced in sufficient quant-
ities during the investigation period in order to
establish a normal value for the Chinese exports.
the product concerned in Brazil,
Producers of
India, Romania and the United States of America
were considered, but none was willing or able to
co-operate in the Commission investigation. In the
absence of any available third country, there was
no other option than to use the Community as the
analogue market
the
normal value, in accordance with Article 2(7) of the
Basic Regulation.

the establishment of

for

However, since its sales of the like product or of
the same general category of products were not
made in sufficient quantities, and in the absence of
any other
the
Commission services examined whether or not the
amounts for SG&A costs and for profit could be
determined on the same basis as in the original
investigation.

reliable source of

information,

In the original investigation, Japan served as an
analogue country and the SG&A costs were deter-
mined by reference to those incurred by the sole
cooperating Japanese producer. As far as the profit
margin is concerned, a rate of 5 % was applied in
the original investigation, the product in question
being a raw material used in a mature generic
pharmaceutical product in the agricultural sector.
Since there were no indications that this method
was no longer appropriate, it was decided to deter-
mine SG&A costs and profit accordingly.

3. Export price

(16)

two Chinese producers/exporters which
The
replied to the questionnaire represented nearly all
Chinese exports of the product concerned to the
Community. As the cooperating Chinese exporters
made export sales to the Community directly to
independent importers, export prices were estab-
lished on the basis of the prices actually paid or
payable by independent importers, in accordance
with Article 2(8) of
the Basic Regulation, as
provided by the cooperating exporters.

4. Comparison

(17)

For the purpose of a fair comparison, the export
price was adjusted to fob Chinese harbour level
and normal value was similarly adjusted to fob
national border level.

The comparison between the export price and the
normal value on a weighted average to weighted
average basis showed a dumping margin of 1,5 %,
i.e. de minimis.

2. Normal value

F. RECURRENCE OF DUMPING

(15)

Since the sole Community producer did not sell
the product concerned in sufficient quantities to
independent customers on the Community market,
normal value had to be constructed on the basis of

(1) Estimated on the basis of Eurostat, CN codes 2941 20 10 and

2941 20 20.

(18)

In examining whether dumping is likely to recur,
it should be noted that Chinese unit prices of DHS
have been increasing since 1993, with an overall
increase of 40 % up to and including the invest-
igation period. During this period the volume of
imports also grew to the extent that it now repre-
sents 98 % of
into the
Community.

the direct

imports

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These developments are mainly due to China now
being virtually the only source of supply on the
Community open market. These circumstances
reflect the fact that competition on the market for
DHS is now limited. There are no indications that
this
led the
Commission to deem the recurrence of dumping
of Chinese imports unlikely. No arguments to the
contrary have been presented.

situation will change, which has

H. CONCLUSION

(20) Given the above findings, it was concluded that the
proceeding concerning imports of DHS originating
in the People’s Republic of China should be term-
inated and that the anti-dumping duty in force
should be allowed to lapse.

DECIDES:

G. INJURY AND COMMUNITY INTEREST

Sole Article

(19)

aspects

In view of the conclusions concerning dumping, it
was not considered necessary to develop injury and
arising from the
Community interest
investigation since this would not alter the conclu-
reached. The Community producer was
sions
informed of
and
the Commission’s
contested the figures used for the evolution of
Chinese prices, which the Commission had estab-
lished on the basis of Eurostat. However, no other
substantiated information was
submitted which
would alter the Commission’s conclusions in this
respect.

findings

The anti-dumping proceeding concerning imports of
dihydrostreptomycin falling within CN codes 2941 20 10
and 2941 20 20 and originating in the People’s Republic
of China is hereby terminated.

Done at Brussels, 21 January 1998.

For the Commission

Leon BRITTAN

Vice-President