Commission Regulation (EC) No 178/98 of 23 January 1998 imposing a provisional anti-dumping duty on imports of potassium permanganate originating in India and the Ukraine
Date: 1998-01-23
Institutions: European Commission
Subjects: India, Ukraine, anti-dumping duty, chemical salt, import, originating product

24. 1. 98

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Official Journal of the European Communities

L 19/23

COMMISSION REGULATION (EC) No 178/98

of 23 January 1998

imposing a provisional anti-dumping duty on imports of potassium perman-
ganate originating in India and the Ukraine

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

there were particular reasons why they should be
heard were granted a hearing.

Having regard to the Treaty establishing the European
Community,

(5)

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 Regulation (EC) No 2331/
96 (2), and in particular Article 7 thereof,

After consulting the Advisory Committee,

Whereas:

(1)

(2)

(3)

(4)

A. PROCEDURE

In April 1997, the Commission announced by a
notice published in the Official Journal of the
European Communities (3) the initiation of an anti-
dumping proceeding with regard to imports into
of potassium permanganate
the Community
and
and the Ukraine
originating
commenced an investigation.

in India

The proceeding was initiated as a result of a
complaint lodged in March 1997 by the European
Chemical Industry Council (CEFIC), on behalf of
Community producers
total
Community production of potassium permangante.
The complaint contained evidence of dumping of
the said product and of material injury resulting
therefrom, which was considered sufficient
to
justify the initiation of a proceeding.

representing

the

the representatives of

The Commission officially advised the producers,
exporting producers and importers known to be
concerned,
the exporting
countries and the complainant, of the initiation of
the proceeding. The parties directly concerned
were given the opportunity to make their views
known in writing and to request a hearing within
the time limit set in the notice of initiation.

as well

A number of exporting producers in the countries
as Community producers,
concerned,
Community users and importers made their views
known in writing. All parties who so requested
within the above time limit and indicated that

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 317, 6. 12. 1996, p. 1.
(3) OJ C 130, 26. 4. 1997, p. 4.

The Commission sent questionnaires to all parties
known to be concerned and received replies from
the complaining Community producers, from one
from one company in the
company in India,
Ukraine and from one company in the USA (ori-
ginally envisaged as a possible analogue country for
the Ukraine). The Commission also received
replies
the
Community, one of which was considered mean-
ingful and complete.

from unrelated

importers

in

(6)

The Commission sought and verified all the infor-
mation it deemed necessary for the purpose of a
preliminary determination of dumping, injury and
Community interest, and carried out verifications
at the premises of the following companies:

(a) Community producers

(cid:190) Chemie GmbH Bitterfeld-Wolfen, Bitter-

feld, Germany,

(cid:190) Industrial Qu(cid:146)mica del Nal(cid:155)n, Oviedo,

Spain;

(b) Producers/exporters in the exporting countries

India

(cid:190) Universal Chemicals and Industries Pvt.

Ltd, Mumbai;

(c) Producer located in the USA, originally envis-

aged as analogue country

(cid:190) Carus Chemical Company, Peru, Illinois.

(7)

The investigation of dumping covered the period 1
April 1996 to 31 March 1997 (hereinafter referred
to as ‘the investigation period'). The examination of
injury and Community interest covered the period
1 January 1992 up to the end of the investigation
period (hereinafter referred to as ‘the period exam-
ined').

B. PRODUCT UNDER CONSIDERATION AND

LIKE PRODUCT

1. Product under consideration

(8)

The product under consideration is potassium
permanganate which has the chemical
formula
KMnO4. It falls within CN code 2841 61 00.

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Potassium permanganate is a compound of man-
ganese, potassium and oxygen whose manufacture
requires two basic raw materials: caustic potash
(KOH) and manganese dioxide or pyrolusite ore
(MnO2). The product
is manufactured in three
grades: technical (97 to 98 % purity of KMnO4, in
the form of crystalline powder),
free flowing
(containing an anti-caking agent) and pharmaceut-
ical (minimum 99 % purity of KMnO4 in the form
of crystals). The different grades will hereinafter be
referred to as ‘product types'.

All grades are obtained from the same production
process and show the same basic chemical proper-
ties. It was therefore concluded that all grades
the
should be considered as one product
purposes of the investigation.

for

Potassium permanganate is mainly used for potable
water treatment, waste water treatment, chemical
and pharmaceutical manufacture, aqua culture,
metal refining, metal surface cleaning, disinfectant
in agriculture and veterinary practices, gas purifica-
tion, process gas deodorisation, bleaching and
special treatments in textile industry, radioactive
decontamination,
and
submarine air purification.

cleaning

turbine

gas

2. Like product

(9)

The Commission found that potassium perman-
ganate produced and sold on the domestic market
in India and that exported to the Community from
the countries concerned as well as that produced
and sold by the Community industry in the
Community market had effectively identical phys-
ical characteristics and uses and were thus like
products within the meaning of Article 1(4) of
Regulation (EC) No 384/96 (hereinafter referred to
as the ‘Basic Regulation').

C. DUMPING

1. Normal value

(a) India

(10)

In order to establish normal value, the Commis-
sion first analysed whether domestic sales were
representative in accordance with Article 2(2) of
the Basic Regulation. In this respect, for the only
cooperating producer, it was established that the
the product concerned
total domestic sales of
represented more than 5 % of the sales volume
destined for the Community.

(11)

It was then examined whether total domestic sales
of each product type constituted 5 % or more of
the sales volume of
type
exported to the Community.

the same product

As it was found that sales of both product types
were representative, the Commission then assessed
whether sufficient sales had been made in the
ordinary course of
trade in accordance with
the Basic Regulation. For one
Article 2(4) of
type, where the volume of sales below
product
production cost was
sales,
less
normal value was established on the basis of the
weighted average prices
all
domestic sales. For the other product type, where
the volume of transactions made at a loss was equal
to or higher than 20 %, but not higher than 90 %
of sales, normal value was established on the basis
of the weighted average prices actually paid for the
remaining profitable domestic sales.

actually paid for

than 20 % of

(b) Ukraine

1. A n a l o g u e c o u n t r y

(12)

Since the Ukraine is considered to be a non-
market economy country, an analogue market
economy country had to be selected for the estab-
lishment of normal value in accordance with
Article 2(7) of the Basic Regulation. It was speci-
fied in the notice of initiation that India or the
USA were
that purpose. No
comments were received within the time limit
specified in the notice of
initiation from any
authority in the Ukraine or any interested party.

considered for

However, during the investigation, it appeared that
the level of cooperation by the United States
producer was not sufficient to enable the Commis-
sion to verify properly the level of prices paid on
the United States market and the costs of produc-
tion. Consequently,
the Commission examined
whether India could constitute a more appropriate
choice. From the investigation it appeared that
India is more similar to the Ukraine in terms of its
production process and production volume. There-
fore, the Commission finally considered that, in
accordance with Article 2(7) of the Basic Regula-
tion,
reasonable choice of analogue
country in this case was India.

the most

2. N o r m a l v a l u e

(13)

For the reasons indicated above, normal value was
established on the basis of the domestic prices of
the Indian producer.

The investigation showed that the domestic sales
in India represented more than 5 % of the total
Ukrainian export sales to the Community, both on
an overall basis and with regard to the only
product type exported from the Ukraine to the
Community.

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(14)

In accordance with Article 2(4) of the Basic Regu-
lation the Commission then assessed for
the
product type in question whether sufficient sales
had been made in the ordinary course of trade. As
it was found that the volume of transactions made
at a loss was equal to or higher than 20 %, but not
higher than 90 % of sales, normal value was estab-
lished on the basis of the weighted average prices
actually paid for the remaining profitable domestic
sales.

2. Export price

(a) India

(15) As the exporting producer made export sales to the
Community directly to independent importers, in
accordance with Article 2(8) of the Basic Regula-
tion, export prices were established on the basis of
the prices actually paid or payable by these inde-
pendent customers.

(b) Ukraine

(16)

The investigation showed that the exports of the
cooperating company in the Ukraine were made
directly to an independent
in the
Community. The export prices were therefore
based on the prices actually paid or payable for the
product sold to the Community in accordance with
Article 2(8) of the Basic Regulation.

importer

(17) As the comparison of the data concerning exports
to the Community provided by the cooperating
Ukrainian exporter and Eurostat statistics indicated
that this company’s exports represented almost all
those reported by Eurostat, they were considered
the
representative of all Ukrainian exports of
product concerned to the Community.

(20)

(21)

(22)

3. Comparison

(23)

(18)

For the purpose of a fair comparison, due allow-
ance 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, these adjust-
ments were made, in respect of packing, transport,
insurance, handling and ancillary costs,
indirect
taxes and import charges, credit costs and commis-
sions.

(19) As the product concerned is sold in both drums
and bags on the Indian domestic market whilst all
export sales are in drums, it was decided to adjust
normal value with a view to deducting all cost of

packing so that normal value can be based on all
domestic sales of the product concerned.

The exporting Indian producer claimed an allow-
ance for domestic transport costs which included
transport costs incurred by the company in moving
the product from one of the plants to a depot. This
claim could not be granted due to the fact that, in
accordance with Article 2(10)(e) of the Basic Regu-
lation, an adjustment shall only be made for costs
incurred for conveying the product concerned
from the premises of
the exporter to an inde-
pendent buyer. In this case the plant and the depot
can be considered to be part of the same economic
and legal entity and the depot as an extended
factory gate.

The exporting Indian producer also claimed an
allowance for
sales on the
the credit cost of
the actual
domestic market and requested that
payment date be used. This claim was rejected on
the grounds
in accordance with Article
2(10)(g) of the Basic Regulation, an adjustment can
only be given for the number of days agreed at the
time of the sale, as only the expense corresponding
to that number of days can be considered to have
influenced the exporter’s decision.

that,

The Indian company also claimed an adjustment
for differences in levels of trade on the grounds
that it sold different quantities to different types of
customers. However, they were unable to demon-
strate consistent and distinct differences in func-
tions and prices for the allegedly different levels of
trade in the Indian domestic market. In view of the
above, no adjustment was granted for differences in
level of trade.

The exporting producer in the Ukraine claimed
adjustments for credit costs and for the level of
trade which are both linked to the specific arrange-
ment between this company and its sole importer
in the Community. The positive adjustment sought
for credit costs could not be granted due to the fact
that there was no evidence of an influence on the
prices charged.

this

that

The adjustment for level of trade was claimed on
the grounds
the
purchase of raw materials and prepays deliveries.
This could not be accepted since the export price
was at an identical level of trade to the normal
value used for the comparison.

importer

finances

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4. Dumping margin

1. G e n e r a l m e t h o d

(24)

Pursuant to Article 2(11) of the Basic Regulation,
the dumping margins were established on the basis
of a comparison between the weighted average
normal value and the weighted average export
prices at ex-factory level and at the same level of
trade.

2. D u m p i n g m a r g i n

(a) India

(25)

The dumping margin expressed as a percentage of
the cif price at Community frontier level was as
follows:

(cid:190) Universal Chemicals and Industries Pvt. Ltd,

Mumbai 6,8 %.

As this company is deemed to represent 100 % of
Indian production of the product concerned, the
residual dumping margin provisionally established
is also 6,8 %.

that

the fact

the Community
In this context,
industry is still in the process of recovering from
the effects of past dumping was a factor, amongst
those due to be evaluated in accordance with the
provision of Article 3(5) of the Basic Regulation,
a particular bearing on the
found to have
Community industry’s
state during the period
examined.

2. Collection of injury data

(29)

The Commission requested and obtained from the
two complaining companies information which
allowed it to establish various injury indicators. It
should, however, be noted that one of
the
Community producers is the sole remaining opera-
tion of the former Bitterfeld Kombinat and is still
in the process of being privatised. Therefore, in
view of the particular situation of that Community
producer, it was considered appropriate not to take
into consideration all information which might be
affected by the said situation, namely that relating
to its cost of production and profitability.

(b) Ukraine

(26)

For
the
the Ukrainian exporting producer,
weighted average normal value fob India national
frontier was compared with its own weighted
average export price fob Ukraine national frontier
at the same level of trade.

(30)

The provisionally established dumping margin is
40,4 %, expressed as a percentage of the cif price
at Community frontier level.

3. Total consumption on the Community

market

calculating

In
consumption of potassium permanganate,
Commission added:

apparent

Community
the

total

(cid:190) the total sales volume in the Community of the
the product

two Community producers of
concerned, and

(cid:190) the total imports into the Community of the
third countries,

product concerned from all
including India and the Ukraine.

D. COMMUNITY INDUSTRY

(27)

of

The two Community producers which cooperated
with the investigation account for the total produc-
tion
the
potassium permanganate
Community. Since neither of them has imported
the product concerned from India or the Ukraine,
or is related to any producers in the countries
concerned,
the
therefore
Community industry in accordance with Article
4(1) of the Basic Regulation.

constitute

they

in

E. INJURY

1. Preliminary remark

(28)

Following an expiry review, a definitive anti-
dumping duty on imports of potassium perman-
ganate originating in the People’s Republic of
China was imposed by Council Regulation (EC)
No 2819/94 (1).

(1) OJ L 298, 19. 11. 1994, p. 32.

(31) With a view to establishing, for the whole period
examined (1992 to March 1997), consistent figures
covering the enlarged Community of 15, the total
imports were based on relevant Eurostat statistics,
as declared under CN code 2841 61 00, combined
with national statistics of Austria, Finland and
Sweden for the period before their accession to the
Community.

On this basis, the apparent Community consump-
tion of potassium permanganate increased from
3 087 tonnes in 1992 to 3 147 tonnes in the invest-
igation period, i.e. a moderate increase of 2 %.

4. Cumulative assessment of the effects of the

dumped imports

(32)

the Commission examined whether

In accordance with Article 3(4) of the Basic Regu-
lation,
the
cumulation of the imports from the two countries
concerned in the present anti-dumping proceeding
was warranted.

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In this respect it has to be noted that:

5. Cumulated volume and market share of

the dumped imports

(cid:190) the total volume of dumped imports for the
product concerned originating in India rose
from 278 tonnes in 1992 to 400 tonnes in the
investigation period, equivalent to an increase
in market share from 9 to 12,7 % for the same
period,

(cid:190) the total volume of dumped imports for the
product concerned originating in the Ukraine
increased from 0 tonnes in 1992 to 176 tonnes
in the investigation period, corresponding to a
market share of 5,6 % in the investigation
period.

The individual volume of imports from India and
the Ukraine and their market share of 12,7 and
5,6 % respectively were therefore not negligible
during the
investigation period. Furthermore,
dumping margins, which were not de minimis,
were established for both countries.

(33) As far as the conditions of competition between
the imports from both countries are concerned,
certain parties have claimed that, due to differences
in these conditions and in particular in the levels
of price undercutting, the impact of the Indian and
Ukrainian imports should not be assessed cumu-
latively.

The investigation however showed that there were
no significant differences in quality between the
Indian and Ukrainian products and they were sold
to the same customers through similar sales chan-
nels. Furthermore, the price behaviour of exporters
in both countries, as reflected in the levels of price
undercutting, was comparable in view of the signi-
ficant undercutting margins. It was accordingly
considered that the conditions of competition on
the Community market
potassium
permangate imported from India and the Ukraine
respectively as well as between the potassium
permanganate imported from both countries and
that produced in the Community were similar.

between

(34) On this basis, the Commission concluded that the
requirements laid down in Article 3(4) of the Basic
Regulation were met and that the effect of the
dumped imports from both countries should be
assessed cumulatively for the purpose of the injury
analysis.

(35)

The total volume of imports from India and the
Ukraine taken together rose from 278 tonnes in
1992 to 576 tonnes in the investigation period, an
increase of 107 %, resulting in a twofold increase
in the combined market share from 9 to 18,3 %
between 1992 and the investigation period.

6. Prices of the dumped imports and under-

cutting

the

(36) Aggregate data from Eurostat and the National
Statistical Offices of Austria, Finland and Sweden
showed that
import price of potassium
permanganate originating in India and the Ukraine
fell by 12 % between 1992 and 1995 and then
increased by 9 % between 1995 and the invest-
igation period, resulting in an overall decrease of
3 % for the whole period examined.

(37)

the investigation period,

For
the Commission
compared the prices of the Community producers
with the prices of the Indian and Ukrainian ex-
porters at the same level of trade. The latter were
the
based on sales
customs duty paid, as well as expenses incurred for
loading and warehousing.

figures, adjusted to reflect

The prices of
the Community producers were
adjusted to an ex-factory level by deducting trans-
port and insurance costs and set at levels of trade
considered to be comparable to those of the Indian
and Ukrainian imports, by deducting credit costs.

(38)

The results of the comparison, when expressed as a
percentage of the Community producers’ selling
prices during the investigation period,
showed
significant undercutting margins of 26 % for the
Ukraine and 8,4 % for India on average.

7. Situation of the Community industry

(a) Production

(39)

The production of the product concerned fluctu-
ated during the period examined. These fluctu-
ations, which resulted from a series of exceptional
events, caused distortions which had an effect on
the trends over the period examined:

(cid:190) the production of one of the producers, which
is producing potassium permanganate amongst
other products, was nil in 1992 and lasted for
only three months in 1993 due to the pressure
exerted by dumped Chinese imports. The
company nevertheless continued to sell from
stock during these two years,

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24. 1. 98

(cid:190) following a drought suffered by the southern
part of Spain,
there was an unusually high
consumption of potassium permanganate on
the Spanish market in 1995.

(40) Overall, the production of the product concerned
by the Community industry increased from 1 688
tonnes in 1992 to 3 141 tonnes in the investigation
period, an increase of 86 %. Half of this increase
was attributable to sales to export markets outside
the Community with quantities varying from 161
tonnes exported in 1992 to 837 tonnes in the
investigation period, i.e. 27 % of the total quantity
sold during that period.

(b) Capacity utilisation rate

(41) Due to the irregular production mentioned above,
which resulted in the starting point to be very low,
the capacity utilisation rate between 1992 and the
investigation period increased from 22,5 to 41,9 %.

(42)

(43)

(c) Sales volume

The volume of sales by the Community industry
on the Community market increased during the
period examined from 1 812 tonnes in 1992 to
2 301 tonnes in the investigation period, repre-
senting an increase of 26 %.

(d) Market share

the volume of sales in the
The comparison of
Community with
apparent Community
the
consumption showed that the market share held
by the Community industry increased from 58,7 %
in 1992 to 71,3 % in 1995, then decreased to 67 %
in 1996 and increased again to 73 % in the invest-
igation period.

(e) Price depression

(44)

It should be noted that, except in Spain, where
price lists were in use, potassium permanganate
sales are carried out on a spot basis and therefore
prices to distributors vary throughout
the year
according to market conditions.

(45)

(46)

(47)

(f) Profitability

The overall profitability of the product concerned
was irregular on the Community market. Despite
its successful efforts to reduce manufacturing costs,
the Community producer whose data have been
used to assess profitability, recorded losses from
1992 to the investigation period.

The trend showed an improvement from 1992 to
1995 with losses varying from index – 100 in
1992 to index – 6 in 1995. This was the result of
a 16 % reduction in manufacturing costs linked
with better capacity utilisation. The situation in
1995 was, as noted above, the result of exceptional
climatic circumstances which led to a significant
increase of the quantity sold. However, in 1996
and during the investigation period, the situation
again deteriorated, with indexed losses (1992 =
– 100) amounting to – 53 and – 75 respectively.

(g) Employment

in

the Community

Employment
industry
decreased by 8 % from 1992 to the investigation
period in terms of hours effectively worked. It
should be underlined that more than 80 % of the
personnel employed was composed of production
employees who,
in the case of the Community
producer, also worked on the production of other
products during the periods of
low activity for
potassium permanganate. It is therefore probable
that without
this fexibility the situation in the
Community would have resulted in more re-
areas where both
dundancies
Germany and Spain register high unemployment
rates.

in geographical

(h) Investment

(48) When expressed as a percentage of total turnover,
increased from 4,3 % in 1992 to

investments
5,7 % in the investigation period.

8. Conclusion on injury

In this context, the average selling price of the
Community industry fell by 10 % from 1992 to
the investigation period. It must be stressed that
this decrease was already effective in 1994, when
the People’s
measures were
imposed against
Republic of China. However,
the Community
producers were never able to regain previous price
levels after the imposition of anti-dumping duties
on Chinese imports.

(49)

The Community industry has been facing the
the
effects of dumping since the beginning of
period examined, firstly due to the imports from
the People’s Republic of China, later by imports
from India and the Ukraine. Under these circum-
stances, the pressure exerted on the prices of the
Community industry, which decreased by 10 %
from 1992 to the investigation period, led to the
persistence of a weak financial situation.

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The price depression prevented recovery from the
effects of past dumping and the financial situation,
although slightly improved, continued to be nega-
tive.

(50)

In the light of the foregoing analysis, it is the view
of the Commission that, overall, positive evidence
showed that the Community industry has suffered
injury which can be considered as material within
the meaning of Article 3(1) of the Basic Regula-
tion.

imported product and the Community produced
one.

(56)

Price difference is the major factor determining
sales. In the course of
the investigation it was
established that the minimum import volume per
transaction is around 15 tonnes. As a consequence,
even a one-off sale undercutting the Community
producers’ prices can already represent a 0,5 %
gain in overall market share. Such a transaction
can therefore have a perceptible and immediate
impact on the situation of the Community market.

F. CAUSATION

(57)

(51)

The Commission examined whether the injury
suffered by the Community industry had been
caused by the dumped Indian and Ukrainian
imports and whether other factors had caused, or
contributed to, that injury.

1. Effect of the dumped imports

(58)

(52)

(53)

fully from the effects of

In examining the effect of the dumped imports, it
was found that the Community industry could not
the measures
benefit
imposed against the People’s Republic of China,
since the re-establishment of fair trading condi-
tions with that country was immediately under-
mined by an increase in low priced, dumped
imports from India and the Ukraine.

It was established that over the period examined,
i.e.
the
from 1992 to the investigation period,
decrease of 291 tonnes in the imports originating
in the People’s Republic of China had been totally
offset by the 298 tonnes increase in the dumped
imports from India and the Ukraine.

(54) With regard to prices, the Commission established
that the imports subject to this proceeding were in
the same price range as imports from the People’s
Republic of China, before the reduction of the
import volumes originating in that country which
took place in 1995. Moreover, these import prices
from the countries concerned did not
improve
It could therefore be
significantly afterwards.
confirmed
countries
concerned by the proceeding, due to their price
level, had a clear undermining effect on the
recovery of the Community industry.

from the

imports

that

(59)

(60)

the

impossibility

also established that

in years when
It was
consumption was not affected by any exceptional
circumstances,
the
Community industry to improve its profitability
coincided with the volume and growth of
the
imports from India and the Ukraine at dumped
prices. In a price-sensitive market, this low-price
policy had the effect of depressing the prices of the
Community industry.

for

It was indeed found that, as a result of systematic
price undercutting by the Indian and Ukrainian
imports, the Community industry had to adjust its
prices downward to the market situation. This
defensive behaviour on the part of the Community
industry is explained by the fact that the industry
strongly needs continuous production cycles and
needed to recover from low production years. It
could not risk seeing its costs per unit increase as a
result of lost sales volumes.

The recovery of the Community industry from the
impact of dumped Chinese imports was
thus
heavily hampered by the combination of the high-
volume and dumped prices of Ukrainian and
Indian imports concerned.

the
The Commission therefore concluded that
dumped imports from the countries concerned had
a considerable negative impact on the situation of
the Community industry during the period under
consideration, on the one hand by impeding its
recovery from past dumping practices by the
Peoples’ Republic of China, and, on the other
hand, by influencing the situation negatively,
notably in terms of profitability.

2. Effect of other factors

(55)

The potassium permanganate produced in the
Community and the potassium permanganate
imported from India and the Ukraine are in direct
competition with each other, essentially on the
basis of price. This price-based competition is
explained by the fact that potassium permanganate
is a bulk product, with moreover no significant
differences of quality or applications between the

(61)

It was examined whether factors other than the
low-priced imports from India and the Ukraine,
might have led or contributed to the weak situa-
tion of the Community industry and in particular
whether imports from countries other than the two
subject to this proceeding might have influenced
this situation.

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24. 1. 98

(a) Imports from other third countries

linked to it are more price-rewarding than the
ageing and disappearing industrial applications.

(62)

(63)

Imports from countries not concerned by this
proceeding decreased from 997 tonnes in 1992 to
270 tonnes in the investigation period, a 73 %
decrease. Amongst these third countries the United
States of Americaa was the major supplier to the
Community market during
investigation
period. The total Community market share held by
imports from third countries other than India and
the Ukraine during the investigation period only
amounted to 8,6 %. As regards prices, the average
price of
these imports, as given by Eurostat,
increased from 1992 to the investigation period to
reach ECU 1705/tonne, a figure 35 % above the
prices of
Indian and Ukrainian imports at a
comparable cif level.

the

is

therefore considered that,

It
although the
Chinese imports had had an impact on the
imports from
Community industry until 1994,
sources other than the countries subject
to the
current proceeding could not be considered to
have
the
Community industry.

caused the precarious

situation of

(b) Development

of

consumption

on

the

Community market

(64)

It has been argued that the injury suffered by the
Community industry was due to the contraction of
demand on the Community market.

(65)

a

consequence,

It should however be recalled that the decrease in
the industrial uses of potassium permanganate has
been balanced in recent years by the increase in
bio-technology uses and above all water treatment
apparent
applications.
As
consumption has been rather
stable on the
Community market since it only slightly increased
by +2 % from 1992 to the investigation period.
Although this
evolution in the pattern of
consumption implies a move to more numerous
and smaller customers which can only be reached
through a further development of the distribution
networks, it cannot be considered detrimental to
the Community industry and does not explain the
surge of the imports concerned which face the
same change in the pattern of users. Indeed, water
treatment applications are likely to develop in
parallel with increased public awareness of envir-
onmental issues. The technology and added value

(66)

These effects, expected in the longer term, could
already be felt in 1995 when, because of excep-
tional climatic circumstances, consumption on the
Community market
suddenly increased to the
benefit of all producers. However, when these
the Community
ceased,
exceptional
industry was again confronted with low-priced
imports from the countries concerned in a market
where consumption had returned to past levels.
The Community industry incurred significant
losses again, as a result from this price pressure.

effects

(67)

It is therefore considered that the variation in the
apparent Community consumption, though notice-
able, could not be considered a material cause of
the injury suffered by the Community industry.

(68)

(69)

(c) Competitiveness of

the Community industry

It has been argued by certain parties that the costs
of
the Community industry were too high to
compete on the world market as a consequence of
its structures and of the (cid:190) allegedly outdated (cid:190)
production processes it uses.

It cannot be denied that one Community producer
the product concerned is going through a
of
restructuring phase due to the fact
that until
recently it was subject to a State-planned economic
system. It should nevertheless be recalled that the
costs and profitability of the Community industry
were assessed exclusively in the light of the verified
data relating to the other Community producer.

(70) As far as this second company is concerned, it was
established that it could prove, with the significant
increase in its export sales at profitable prices, that
it was able to compete on the world market,
mainly that of
the United States of America.
Indeed, this Community producer increased the
volume of its export sales from 21 tonnes in 1992
to 572 tonnes in the investigation period and was
able to achieve in this latter period, on export
markets, prices
than on the
10 % higher
Community market. The increased sales, and
therefore production, allowed the unit costs to
decrease, in addition to the measures improving
the general efficiency which proved to have been
successful.

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Official Journal of the European Communities

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(71) Moreover, although the production processes are
difficult to compare per se, it could be established
that no particular inefficiency was to be found in
terms of cost per tonne for the product concerned
produced in the Community.

(76)

established, and will not be in a position to regain
profitability.

the privatization process of

In particular, the absence of measures would ser-
the
iously impair
Community producer situated in one of the new
German L(cid:132)nder. The restructuring this company
underwent and is still undergoing since the change
in the economic system would prove to have been
in vain at the exact time when it is in a position to
benefit from its efforts and have access to private
investors.

(77) As far as the Spanish producer is concerned, its
ongoing efforts to reduce costs show that it is not
ready to abandon the production of potassium
permanganate, and therefore needs the detrimental
the dumped imports to be corrected.
effects of
Nevertheless, it should be stressed that the indus-
trial group which until now has backed the
production of the product concerned despite its
critical situation, might decide to cease this activity
in the absence of any reasonable hope of price
increases in the Community.

(78)

the existence of

It can therefore be concluded that, in the absence
the Community
of measures,
industry, situated in two regions of the Community
already seriously affected by industrial
restruc-
turing, would ultimately be at risk. This situation
would not be the result of normal conditions of
competition.

3. Interest of traders

smaller quantities

(79) Companies trading in the product concerned in
the Community appear to be mainly distributors of
a wide range of chemical products. The biggest
traders buy the product concerned indiscriminately
from Community producers or producers in third
countries, wherever the price is the lowest. The
significant quantities purchased are resold in
numerous
to
transactions of
parties trading smaller volumes of
the product
concerned. These parties in turn usually repeat the
their own level. The
same distribution steps at
bigger
traders expressed their opposition to a
possible imposition of anti-dumping measures
which would allegedly lead them to stop their
purchases of potassium permanganate from the
countries concerned. The second type of traders in
the Community, i.e. those which trade the product
concerned in smaller quantities, advocated a diver-
sity of supply on the Community market in order
to maintain a secure level of supply and a fair
competing producers. These
choice
traders were in favour of the imposition of meas-
ures.

amongst

(72)

(73)

(74)

(d) Conclusion on causation

It is considered that the dumped imports from
India and the Ukraine, when taken in isolation,
have caused material
injury to the Community
industry. This conclusion is based on the various
elements set out above, especially the quantities
and prices of
the imports concerned, which
resulted in strong downward price pressure on the
Community market for the product concerned and
in particular on the prices and profitability of the
Community industry.

G. COMMUNITY INTEREST

1. Preliminary remark

injurious dumping,

The Commission provisionally examined, on the
basis of all evidence submitted, whether, despite
the presence of
there were
compelling reasons leading to the conclusion that
it would not be in the Community interest
to
impose measures in this particular case. For this
purpose, and pursuant to Article 21(1) of the Basic
Regulation, the Commission considered the impact
of possible measures for all parties involved in the
proceeding, and also the consequences of not
taking measures. In order to provide information
for this assessment, the Commission sent question-
naires to producers, importers and known users of
the product concerned, with a view to evaluating
their economic interests.

2. Interest of the Community industry

The potassium permanganate industry in the world
has reached maturity in terms of technology and
production process,
implying that the consump-
tion per tonne produced of, for example, raw ma-
terials and energy, does not vary significantly
amongst producers operating under normal market
conditions. In this context, the good export perfor-
mances of
the Community industry should be
recalled, as they are a clear indicator of its ability to
compete under
fair conditions on the world
market.

(75)

It is considered that without measures to correct
the effects of the dumped imports the Community
industry will continue to face the undercutting

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Official Journal of the European Communities

24. 1. 98

(80)

(81)

It view of the fact, however, that the measures
proposed are in no way prohibitive, imports could
continue to take place after their imposition. More-
over, most traders who have acted as importers
during the investigation period also purchase
Community-produced potassium permanganate.
Their main function consists of distributing the
products, whatever their origin be. Therefore,
it
cannot be expected that this level of economic
activity will be reduced, in particular in the light of
the stable consumption of the product concerned
during the period examined.

companies in its distribution chain than by the
ex-factory price.

(85) On that basis, and in view of the level of the duties
to be imposed, it is considered that the impact of
any possible measures on users of potassium
permanganate would be negligible.

5. Conclusion on the Community interest

(86)

Finally, as far as the sole importer of the Ukrainian
product is concerned, it should be noted, that, after
numerous invitations to cooperate, it provided the
Commission with incorrect or misleading informa-
tion on its resale margin and profit rate. Its real
profit rate can be assumed to be substantial on the
basis of the evidence available, and it is therefore
considered that possible measures against
the
Urkaine would in no way put the existence of this
company at risk.

In examining the various interests involved and all
the above aspects, the Commission provisionally
considers that there are no compelling reasons not
to take action against the imports in question by
competitive
restoring
and
fair
injury to the Community
preventing further
industry. Leaving the Community industry without
adequate protection would add to its difficulties at
a time when it is beginning to feel the effects of a
progressive recovery from past dumping.

situation

a

4. Interest of users of the product concerned

of

(82) Although questionnaires were sent to a number of
the
in
potassium permanganate
users
Community,
likely to be
including those most
affected by possible measures, none of them coop-
erated fully by replying to the questionnaire in a
meaningful way.

(83)

This can be explained by the fact that the impor-
tant industrial uses of potassium permanganate are
gradually being abandoned. One of the few compa-
nies using potassium permanganate in an intensive
way for the production of other chemical products
in the Community decided to switch its produc-
tion process to another technology using other raw
materials. The low level of representations received
and cooperation obtained from users of potassium
permanganate is also linked with the low cost
impact of potassium permanganate in the end-
product, at least on the basis of the evidence avail-
able. Indeed, it could be established that potassium
permanganate is almost only used in extremely low
quantities when compared with other inputs. In
water treatment for example, the cost linked with
the purchase of potassium permanganate is insig-
nificant given the minute quantities used in this
application.

(84)

Finally, the price of potassium permanganate at
the level of the end-user is in any case determined
more by the costs and profits of the numerous

H. PROPOSED MEASURES

(87)

For the purpose of establishing the level of the
provisional duty, account was taken of the level of
dumping found and the amount of duty necessary
to eliminate the injury suffered by the Community
industry.

(88)

(89)

1. Injury elimination level

Since the injury was mainly in the form of finan-
cial losses, it was considered that the removal of
such injury would be achieved through the estab-
lishment of a non-injurious price level, i.e. a price
level which would prevail
in the absence of
imports from the two countries made at dumped
prices. In the circumstances of this case, it can be
assumed that such non-injurious price levels would
allow the Community industry to cover its costs
and achieve a reasonable profit.

In this respect, the Commission established that a
price level considered adequate to remove the
injury should be based on the weighted average
cost of production of the Community producer for
which this data had been established during the
investigation,
together with a profit of 7 % on
turnover. This profit rate was considered to be an
the capital
appropriate minimum in view of
invested and, more particularly, of
the rate of
return which the Community industry could
reasonably expect
injurious
dumping.

in the absence of

(90)

(91)

(92)

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Official Journal of the European Communities

L 19/33

This injury elimination level was then compared
with the weighted average cif
import prices
reported by the exporters concerned, at the same
level of
trade. The latter were based on sales
figures, adjusted to reflect the customs duty paid as
well as the expenses incurred for loading and ware-
housing. The non-injurious price level was adjusted
to an ex-factory level by deducting transport and
insurance costs and set at levels of trade considered
to be comparable with those of the Indian and
Ukrainian imports, by deducting credit costs.

HAS ADOPTED THIS REGULATION:

Article 1

1. A provisional anti-dumping duty is hereby imposed
on imports of potassium permanganate falling within CN
code 2841 61 00 originating in India and the Ukraine.

2. Form and level of the provisional measures

Since for each country concerned the injury elim-
ination margin thus established is higher than the
dumping margin, the rate of the provisional anti-
dumping duty should be based on the respective
dumping margins.

Since the cooperating exporting producer in India
represented the totality of exports of the product
concerned to the Community, and in order to
avoid possible circumvention of the measures, the
residual duty rate was set at the same level as the
individual company rate.

that

(93) As regards the form of the measures, particular
consideration was given to the fact that the injury
established consisted mainly of a depression of the
Community producers prices,
together with the
negative impact of these low prices on their profit-
ability. The Commission therefore provisionally
considers
the appropriate way to remedy
injury is the imposition of a variable duty based
on a minimum price. This minimum price,
corresponding to the dumping margins added
to the export prices at cif level, should be ECU
1 475/tonne for India and ECU 1 567/tonne for
the Ukraine. The difference in the minimum
prices can be explained by the fact that different
product types were exported by the exporters from
the countries concerned.

I. RIGHTS OF INTERESTED PARTIES

(94)

be

In the interest of sound administration, a period
should
fixed within which the parties
concerned may make their views known in writing
and request a hearing. Furthermore, it should be
stated that the findings made for the purposes of
this Regulation are provisional and may have to be
reconsidered for the purposes of any definitive
duty which the Commission may propose,

2.
For the product concerned referred to in paragraph
1 originating in India, the amount of anti-dumping duty
shall be the difference between the minimum import
price of ECU 1 475 per tonne and the cif Community
frontier price in all cases where the cif Community fron-
tier price per tonne is less than the minimum import
price. No duty shall be
cif
Community frontier price per tonne is equal to or higher
than the minimum import price.

collected where

the

For the product concerned referred to in paragraph
3.
1 originating in the Ukraine,
the amount of anti-
dumping duty shall be the difference between the
minimum import price of ECU 1 567 per tonne and the
cif Community frontier price in all cases where the cif
Community frontier price per tonne is less than the
minimum import price. No duty shall be collected where
the cif Community frontier price per tonne is equal to or
higher than the minimum import price.

4. Unless otherwise specified, the provisions in force
concerning customs duty shall apply.

5.
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

Without prejudice to Article 20 of Regulation (EC) No
384/96, the parties concerned may make known their
views in writing and apply to be heard orally by the
Commission within one month of the date of entry into
force of this Regulation.

Pursuant to Article 21(4) of Regulation (EC) No 384/96,
the parties concerned may comment on the application
of this Regulation within one month of the date of the
date of its entry into force.

Article 3

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

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24. 1. 98

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

Done at Brussels, 23 January 1998.

For the Commission

Leon BRITTAN

Vice-President