Commission Regulation (EC) No 2107/98 of 1 October 1998 imposing provisional anti-dumping duties on imports of polypropylene binder or baler twine originating in Poland, the Czech Republic, Hungary and Saudi Arabia and accepting undertakings offered by certain exporters in connection with those imports
Date: 1998-10-01
Institutions: European Commission
Subjects: EU control, anti-dumping duty, dumping, import, manufactured goods, third country

2. 10. 98

EN

Official Journal of the European Communities

L 267/7

COMMISSION REGULATION (EC) No 2107/98

of 1 October 1998

imposing provisional anti-dumping duties on imports of polypropylene binder
or baler twine originating in Poland, the Czech Republic, Hungary and Saudi
Arabia and accepting undertakings offered by certain exporters in connection
with those imports

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
the European
Community (1), as last amended by Regulation (EC) No
905/98 (2), and in particular Articles 7 and 8 thereof,

not members

of

After consulting the Advisory Committee,

Whereas:

(1)

A. PROCEDURE

On 3 January 1998, the Commission announced,
by a notice published in the Official Journal of
the European Communities (3), the initiation of an
anti-dumping proceeding concerning imports of
polypropylene binder or baler twine originating in
Poland. On 28 February 1998 (4), the Commission
similarly announced the initiation of an anti-
the
dumping proceeding concerning imports of
same product originating in the Czech Republic,
Hungary and Saudi Arabia.

The proceeding with respect to imports of poly-
propylene binder or baler twine originating in
Poland was initiated subsequent to the lodging of a
complaint by the Liaison Committee of European
Union Twine, Cordage and Netting Industries
(Eurocord) in November 1997.

The proceeding with respect
the
same product originating in the Czech Republic,
Hungary and Saudi Arabia was initiated following a
second complaint lodged by Eurocord in January
1998.

to imports of

complaints were
producers

lodged on behalf
representing

of
The
Community
a major
proportion of the Community production of poly-
propylene binder or baler twine. The complaints
contained evidence of dumping of the said product,
and of material injury resulting therefrom, which

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 128, 30. 4. 1998, p. 18.
(3) OJ C 1, 3. 1. 1998, p. 10.
(4) OJ C 65, 28. 2. 1998, p. 8.

was considered sufficient to justify the opening of
the proceedings.

It was subsequently considered appropriate,
both dumping and injury analysis purposes,
combine the two investigations (see recital 5).

for
to

The Commission officially advised the exporting
producers and importers/distributors known to it,
the representatives of the exporting countries and
the complainant Community producers of
the
initiation of
the proceedings. Interested parties
were given the opportunity to make their views
known in writing and to request a hearing. All
parties who so requested were granted a hearing.

in Poland,

The Commission sent questionnaires to all parties
known to be concerned and received information
from 10 complainant Community producers, seven
exporting producers
two exporting
producers in the Czech Republic, three exporting
producers in Hungary and one exporting producer
in Saudi Arabia. The Commission also received
meaningful and complete replies from one unre-
lated importer in the Community and one unre-
lated importer located in Switzerland.

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

(a) Complainant Community producers

(2)

(3)

(4)

Austria:

(cid:190) Teufelberger, Linz, Austria;

Belgium:

(cid:190) Ostend Stores, Oostende, Belgium;

Portugal:

(cid:190) Cordex, Esmoriz, Portugal,

(cid:190) Cotesi, Carvalhos, Portugal,

(cid:190) Exporplas, Cortegaca, Portugal,

(cid:190) Sicor, Cortegaca, Portugal.

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Official Journal of the European Communities

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(b) lmporters/distributors

(cid:190) W. B. V. Oelde, Oelde, Germany,
(cid:190) Fybron, Luzern, Switzerland.

(c) Exporting producers

Poland:

(cid:190) BZLP Bezalin, Bielsko-Biala,
(cid:190) CZWC Chemitex, Sochaczew,
(cid:190) Industrial Chemistry Research Institute,

(8)

Warsaw,

(cid:190) PAT Defalin sa, Swiebodzice,
(cid:190) Terplast sp. zo.o, Sieradz;

Czech Republic:

(cid:190) Lanex a.s., Bolatice,
(cid:190) Juta a.s., Dvur Kralove nad Labem;

Hungary:

(cid:190) Elso Magyar Kenderfono Rt, Szeged,
(cid:190) Partium ’70 Rt, Berettyoujfalu,
(cid:190) Tiszai Vegyi Kombinat Rt, Tiszaujvaros;

Saudi Arabia:

(cid:190) Saudi Yarn and Knitting Technology
Factory (Synthec), a division of NAFA
Enterprises Ltd, Riyadh.

(9)

(5) With regard to both proceedings, the investigation
of dumping covered the period 1 January to 31
December 1997 (hereinafter referred to as ‘the
investigation period') and the examination of injury
covered the period from January 1994 to the end of
the investigation period.

B. PRODUCT UNDER CONSIDERATION AND

LIKE PRODUCT

1. The product concerned

(6)

The product concerned is polypropylene binder or
baler twine (hereinafter referred to as ‘twines').
These twines are used in the agricultural sector,
notably for binding bundles to be picked up by
automatic balers or similar machines.

The product is manufactured in different thick-
nesses (runnages) and with different specifications
in respect of,
for example, knot and tensile
strength, number of twists/turns per metre, colour,
ultra-violet stabilisation and fibrillation. The invest-
shown that, notwithstanding the
igation has
different
the
product concerned, all twines constitute a single
product for the purposes of the investigation. The
product concerned is currently classifiable within
CN code ex 5607 41 00.

thicknesses and specifications of

2. Like product

(7)

by

Polypropylene binder or baler twines produced and
sold
on the
Community market were found to be alike to the
imports from the exporting countries concerned in

the Community

industry

(10)

their basic physical and technical characteristics
and in their uses. The same is true with regard to
the product manufactured and sold on the
domestic market of
countries
the
concerned. All these products are, therefore, like
products, as defined by Article 1(4) of Regulation
(EC) No 384/96 (hereinafter referred to as ‘the
Basic Regulation').

exporting

One Hungarian exporter claimed that the products
it sold to the Community market should not be
likened to the products of
the Community
industry, as their end-use was different. However,
since no evidence was provided to back up this
the Commission sees no reason why
assertion,
these Hungarian products should be excluded from
the scope of this proceeding.

C. DUMPING

1. Poland

(a) Cooperation

Cooperating exporting producers accounted for a
relatively low proportion of total imports origin-
ating in Poland. Seven exporting producers located
in Poland initially replied to the questionnaire. Of
these seven replies, however, two were considered
to be wholly inadequate for the purposes of the
investigation, as the information provided did not
permit an accurate determination either of normal
values or of export prices. These companies were
duly informed and were then given the opportunity
to rectify the deficiencies in their responses, which
they failed to do. The two companies concerned
were therefore informed that they would be consid-
ered as non-cooperating, in accordance with Article
18 of the Basic Regulation.

(b) Normal value

the

To neutralise the effects of inflation on the calcula-
tions, normal value was established for periods of
time as close as possible to the relevant export
dates where
information was
appropriate
provided by the exporting producers concerned. In
all cases, the most detailed information was used.
four companies, normal values were
Thus,
calculated on a monthly basis
and for one
company, on an annual basis. This approach also
takes into account
the
intensive and that
product concerned is capital
average stocking periods are short.

the production of

that

for

(11) On this basis,

it was first determined whether
domestic prices could be used in the determination
of normal value, i.e. whether domestic sales of the
product concerned had been made in sufficient
quantities to independent customers in the or-
dinary course of trade.

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Official Journal of the European Communities

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(12)

i.e.

for

concerned

For all five cooperating companies, sales of twines
made on the domestic market were, overall, made
in representative quantities,
they constituted
5 % or more of
the quantity exported to the
Community. However, the individual types of the
product
the
sold
Community largely did not correspond to those
sold on the domestic market. On a per-type basis,
indeed, it was found that, for all companies, the
types concerned sold
quantity of
domestically was less than 5 % of the quantity of
the comparable types
to the
Community. In all cases, therefore, normal value
was constructed, in accordance with Article 2(3) of
the Basic Regulation.

sold for export

the product

export

to

Constructed normal values were calculated on the
basis of the cost of production in Poland (including
selling, general and administrative (SGA) expenses)
plus a reasonable amount for profit. In all cases,
each company’s own SGA expenses were used. The
rate of profit was calculated, in accordance with
the Basic Regulation, using the
Article 2(6) of
the sole
actual
cooperating producer located in Poland which had
sufficient quantities of domestic sales of the like
product in the ordinary course of trade.

rate of profit established for

(c) Export price

tive cif import prices at the Community border
duty unpaid, are set out below:

(cid:190) BZLP Bezalin:

(cid:190) CZWC Chemitex:

(cid:190) PAT Defalin sa:

(cid:190) Industrial Chemistry Research

Institute:

(cid:190) Terplast sp zo.o:

20,1 %

22,7 %

16,3 %

28,4 %

27,9 %.

(16)

For those exporting producers located in Poland,
which failed to cooperate with the investigation,
dumping was determined on the basis of the facts
available in accordance with Article 18(1) of the
Basic Regulation. This was done in order not to
reward non-cooperation and in order
to avoid
circumvention.

imports

Since there was a relatively high proportion of
total
from Poland accounted for by
non-cooperators, a residual dumping margin was
calculated, based on the highest dumping margin
found for a representative type exported by a coop-
erating exporting producer in Poland.

The residual dumping margin determined for
Poland, expressed as a percentage of the cif import
price at the Community border duty unpaid,
is
40,9 %.

(13) All

sales of

the product

concerned on the
Community market were made to independent
customers in the Community. Export prices were
therefore established on the basis of prices actually
paid or payable for the product when sold for
export
in accordance with
to the Community,
Article 2(8) of the Basic Regulation.

(17)

(18)

(d) Comparison

(14)

In order to ensure a fair comparison between the
normal value and the export price at the same level
of trade, due allowance in the form of adjustments
was made for differences in factors affecting prices
and price comparability in accordance with Article
2(10) of the Basic Regulation. Adjustments were
made for differences in discounts and rebates,
transport, insurance, handling, loading and ancil-
lary costs, packing costs, credit and commissions.

(e) Dumping margin

(15) Weighted average normal value per type of the
product
compared with the
weighted average export price on an ex-works basis
and at the same level of trade, in accordance with
Article 2(11) of the Basic Regulation.

concerned was

The weighted average dumping margins provision-
ally determined for the five cooperating exporting
producers, expressed as a percentage of the respec-

2. Czech Republic

(a) Normal value

It was first determined whether domestic prices
could be used in the determination of normal
value, i.e. whether domestic sales of the product
concerned had been made in sufficient quantities
to independent customers in the ordinary course of
trade.

of

exported to

the quantity

For one of the two Czech exporting producers,
sales of twines made on the domestic market were,
overall, made in representative quantities, i.e. 5 %
or more
the
Community. However, as for Poland, the individual
types of the product concerned sold for export to
the Community by this exporting producer largely
did not correspond to those sold on the domestic
market. On a per-type basis, indeed, it was found
that the quantity of the product types concerned
sold domestically was less than 5 % of the quantity
of the comparable types sold for export to the
Community.

Since the domestic prices of
the other Czech
exporting producer could not be used, as provided
for by Article 2(1) of the Basic Regulation (the
product
two
cooperating exporting producers were different),

types manufactured

the

by

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2. 10. 98

normal value was constructed in accordance with
Article 2(3) of the Basic Regulation.

Constructed normal value was calculated for this
exporting producer on the basis of the verified cost
of production (including the company’s own SGA
expenses) plus a reasonable amount for profit. The
rate of profit was calculated, in accordance with
Article 2(6) of the Basic Regulation, using the profit
established for domestic sales of the like product
made in the ordinary course of
trade by the
producer concerned.

the

For
producer
second Czech exporting
concerned, it was found that sales of twines on the
domestic market during the investigation period
were, overall and on a per-type basis, made in
representative quantities and in the ordinary course
of trade.

Normal value for this company was therefore estab-
lished on the basis of the comparable prices paid or
payable
the product
concerned by independent customers in the or-
dinary course of trade, in accordance with Article
2(1) of the Basic Regulation.

for domestic

sales

of

The weighted average dumping margins provision-
ally determined for the two cooperating exporting
producers, expressed as a percentage of the respec-
tive cif import prices at the Community border
duty unpaid, are set out below:

(cid:190) Lanex a.s.:

(cid:190) Juta a.s.:

24,8 %

24,9 %.

(22)

The proportion of total imports from the Czech
Republic accounted for by cooperating producers
was high. A residual duty was therefore calculated,
on the basis of the facts available in accordance
with Article 18(1) of the Basic Regulation, using the
highest dumping margin found for an individual
cooperating
located in the Czech
Republic.

company

The residual dumping margin determined for the
Czech Republic, expressed as a percentage of the
cif import price at the Community border duty
unpaid, is 24,9 %.

3. Hungary

(b) Export price

(a) Normal value

(19) All

sales of

the product

concerned on the
Community market were made to independent
customers in the Community. Export prices were
therefore established on the basis of prices actually
paid or payable for the product when sold for
in accordance with
to the Community,
export
Article 2(8) of the Basic Regulation.

(23) As for Poland (see recital 10), normal values were
established for periods of time as close as possible
to the relevant export dates, where the appropriate
information was provided by the exporting produ-
cers concerned. For one company, normal values
were thus calculated on a monthly basis and for
two companies, on an annual basis.

(24)

(25)

(c) Comparison

(20)

In order to ensure a fair comparison between the
normal value and the export price at the same level
of trade, due allowance in the form of adjustments
was made for differences in factors affecting prices
and price comparability in accordance with Article
2(10) of the Basic Regulation. Adjustments were
made for differences in discounts and rebates,
transport, insurance, handling, loading and ancil-
lary costs.

(d) Dumping margin

(21) Weighted average normal value per type of the
compared with the
product
weighted average export price on an ex-works basis
and at the same level of trade, in accordance with
Article 2(11) of the Basic Regulation.

concerned was

It was first examined whether domestic prices
could be used in the determination of normal
value, i.e. whether domestic sales of the product
concerned had been made in sufficient quantities
to independent customers in the ordinary course of
trade. Where this was not the case, normal value
was constructed, in accordance with Article 2(3) of
the Basic Regulation. The use of the prices of other
exporting producers, as provided for by Article 2(1)
of the Basic Regulation, was not considered appro-
priate as domestic sales of the product concerned
were made in representative quantities in the or-
dinary course of trade by one company for very few
product types only.

three cooperating Hungarian exporting
For all
producers, overall sales of twines on the domestic
market exceeded the threshold of 5 % of export
sales. As for Poland and the Czech Republic,
however,
the product
concerned sold to the Community largely did not
correspond to those sold on the domestic market.
At
the
following was ascertained:

individual product

the individual

the level of

types of

types

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For one company, on a per-type basis, although
domestic sales of a number of types exceeded the
threshold of 5 % of export sales, none were made
in the ordinary course of trade. Normal value was
types exported in
therefore constructed for all
accordance with Article 2(3) of the Basic Regula-
tion.

For the second company, on a per-type basis, the
threshold of 5 % was exceeded for one type only.
Fewer than 10 % of sales of this one type were,
however, profitable. It was therefore determined
that the product that had been exported to the
Community had not been sold on the domestic
market during the investigation period in sufficient
quantities in the ordinary course of trade. Normal
value was therefore constructed in accordance with
Article 2(3) of the Basic Regulation.

(27)

(28)

some of

For the remaining company, on a per-type basis, a
types were sold in repres-
number of product
these types,
entative quantities. For
however, fewer than 10 % of sales were profitable,
i.e. they were not sold in the ordinary course of
trade. For all product types which were either not
sold in representative quantities or not in the or-
value was
dinary
constructed. The remaining product types that had
been exported to the Community had been sold on
the domestic market in the ordinary course of trade
in sufficient quantities and normal value was estab-
lished on the basis of domestic selling prices of
these types.

trade, normal

course

of

For all
three cooperating exporting producers,
constructed normal value was calculated, where
appropriate, on the basis of the verified cost of
production in Hungary (including SGA expenses)
plus a reasonable amount for profit. In all cases,
each company’s own SGA expenses were used. The
rate of profit was calculated, in accordance with
Article 2(6) of
the Basic Regulation, using the
actual rate established for the sole cooperating
Hungarian producer for which sufficient domestic
sales of the like product were made in the ordinary
course of trade.

(b) Export price

(26) All

sales of

the product

concerned on the
Community market were made to independent
customers in the Community. Export prices were
established on the basis of prices actually paid or
payable for the product when sold for export to the
Community, in accordance with Article 2(8) of the
Basic Regulation.

(c) Comparison

In order to ensure a fair comparison between the
normal value and the export price at the same level
of trade, due allowance in the form of adjustments
was made for differences in factors affecting prices
and price comparability in accordance with Article
2(10) of the Basic Regulation. In particular, adjust-
ments were made to export prices and normal
values for differences in discounts and rebates,
transport, insurance, handling, loading and ancil-
lary costs, credit and commissions, and for differ-
ences in level of trade, where warranted.

(d) Dumping margin

the same level of

For two companies, weighted average normal value
per type of the product concerned was compared
with the weighted average export price on an ex-
works basis and at
in
accordance with Article 2(11) of the Basic Regula-
tion. For the third company, weighted average
normal values were compared to individual export
prices, as a pattern of export prices which differed
significantly among purchasers was apparent and as
the weighted average would not reflect the full
degree of dumping being practised.

trade,

The weighted average dumping margins provision-
ally determined for the three cooperating exporting
producers, expressed as a percentage of the respec-
tive cif import prices at the Community border
duty unpaid, are set out below:

(cid:190) Elso Magyar Kenderfono Rt:

(cid:190) Partium ’70 Rt:

(cid:190) Tiszai Vegyi Kombinat Rt:

33,3 %

12,1 %

26,4 %.

(29)

total

The proportion of
imports from Hungary
accounted for by cooperating producers was high.
A residual duty was therefore calculated, on the
basis of
the facts available in accordance with
Article 18(1) of the Basic Regulation, using the
highest dumping margin found for an individual
cooperating company located in Hungary.

The residual dumping margin determined for
Hungary, expressed as a percentage of
the cif
import price at
the Community border duty
unpaid, is 33,3 %.

4. Saudi Arabia

(a) Normal value

(30)

For the sole cooperating exporting producer, it was
twines on the
established that overall sales of
domestic market exceeded the threshold of 5 % of
export sales and were therefore made in repres-
also
entative quantities. This

threshold was

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Official Journal of the European Communities

2. 10. 98

exceeded on an individual product type basis. It
was further established that all domestic sales were
made in the ordinary course of trade, pursuant to
Article 2(4) of the Basic Regulation.

Normal value was therefore based for the Saudi
Arabian exporting producer, as set out in Article
2(1) of the Basic Regulation, on the basis of the
prices paid or payable for all domestic sales of the
product concerned to independent customers in
the Saudi Arabian market during the investigation
period.

(35)

(b) Export price

(31) All

sales of

the product

concerned on the
Community market were made to independent
customers in the Community. Export prices were
therefore established on the basis of prices actually
paid or payable for the product when sold for
export
in accordance with
to the Community,
Article 2(8) of the Basic Regulation.

(c) Comparison

(32)

In order to ensure a fair comparison between the
normal value and the export price at the same level
of trade, due allowance in the form of adjustments
was made for differences in factors affecting prices
and price comparability in accordance with Article
2(10) of the Basic Regulation. Adjustments were
made
insurance,
handling, loading and ancillary costs, commissions
and after-sales costs.

for differences

in transport,

(d) Dumping Margin

(33) Weighted average normal value per type of the
compared with the
product
weighted average export price on an ex-works basis
and at the same level of trade, in accordance with
Article 2(11) of the Basic Regulation.

concerned was

The weighted average dumping margin provision-
ally determined for the sole cooperating producer
in Saudi Arabia, expressed as a percentage of the
respective cif
the Community
border duty unpaid, is set out below:

import prices at

(cid:190) Saudi Yarn and Knitting Technology Factory
(Synthec), a division of NAFA Enterprises Ltd:
36,8 %.

(34)

Since the cooperating producer accounted for
almost all imports from Saudi Arabia, a residual
duty was calculated, on the basis of the facts avail-
able in accordance with Article 18(1) of the Basic
Regulation, using the dumping margin found for
this producer.

The residual dumping margin determined for Saudi
Arabia, expressed as a percentage of the cif import

price at the Community border duty unpaid,
36,8 %.

is

D. DEFINITION

THE
OF
INDUSTRY

COMMUNITY

by

however,

subsequently

the share of
held

Ten complainant Community producers initially
these 10
replied to the questionnaire. Two of
companies,
not
did
cooperate with the investigation. The investigation
the total Community
showed that
production
eight
Community producers during the investigation
period amounted to more than 70 % of
total
Community production. Therefore, the cooperating
Community producers constitute the Community
industry within the meaning of Article 4(1) of the
the cooperating
Basic Regulation. Hereinafter,
Community producers are referred to as
the
‘Community industry'.

remaining

the

E. INJURY

1. Consumption in the Community

(36) Community

of

by

the

volume

industry

and by

consumption was based on the
the
sales made
combined
Community
remaining
non-cooperating Community producers as well as
on import volumes. As regards the latter, the data
obtained from Eurostat were adjusted to take
account of information supplied by the cooperating
exporting producers and verified by the Commis-
sion. The volume of sales of
the Community
producers not cooperating in the proceeding was
estimated, on the basis of the information available,
at around 30 % of the total sales of all Community
producers.

On the above basis, Community consumption
increased slightly, from 40 230 tonnes in 1994 to
44 363 tonnes in 1995. In 1996 apparent consump-
tion increased substantially to 52 798 tonnes,
reaching 52 526
decreasing slightly thereafter,
tonnes in the investigation period. This represents
an overall
increase of 31 % during the period
considered.

2. Imports of

from the exporting
countries concerned into the Community

twines

(a) Cumulation

(37)

The dumping margins established are not de
minimis, and market
the countries
concerned were not negligible. Imports from the
countries all showed an upward trend. Moreover, it
was found that the prices of these imports were all
in the same range.

shares of

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It should also be recalled that twines imported
from the exporting countries concerned are entirely
interchangeable among themselves and with twines
produced and sold by the Community industry and
are sold through the same sales channels in a
market which is
therefore
transparent.
concluded, in accordance with Article 3(4) of the
Basic Regulation, that a cumulative assessment of
the effects of the imports is appropriate in light of
competition between the
the
imported products and between the imported prod-
ucts and the like Community product.

conditions

It was

of

types of

sales of all

the total volume of

Following this methodology, the price comparison
was made on the basis of a sales volume rep-
resenting approximately 70 % of the total volume
of
twines made by the
Community industry. The transactions of the types
of twines selected also represented a large propor-
tion of
imports from the
exporting countries concerned. The sales prices of
the Community industry considered were those to
independent customers, adjusted where necessary
to an ex-works level, i.e. excluding transport costs.
Adjustments were made to the exporting producers’
selling prices (cif Community frontier)
to take
account of customs duty paid. All prices were
compared after excluding discounts and rebates.

(b) Volume, value and market share of imports

from the exporting countries concerned

The volume of imports from the four countries
concerned increased from 5 263 tonnes in 1994 to
16 441 tonnes during the investigation period,
representing an increase of more than 200 %.

of market

In terms
share based on total
Community consumption, the market penetration
of the dumped imports from the four countries
concerned rose from 13 % in 1994 to 31 % during
the investigation period in volume terms (cid:190) an
increase of 138 %.

expressed as
industry’s

the comparison (which with the
The results of
exception of
one Hungarian producer was
conducted on a weighted-average to weighted-
showed that price undercutting
average basis)
a percentage
margins,
the
of
Community
selling prices,
average
ranged as follows: for Poland from 5,7 to 17,4 %
with an overall weighted average of 14,6 %, for the
Czech Republic from 16,1 to 19,2 % with an
overall weighted average of 16,1 % and for
Hungary from 17,8 % to 21,4 % with an overall
weighted average of 18,2 %. Price undercutting for
Saudi Arabia was 3,8 %.

(c) Prices of imports from the exporting countries

concerned

3. Situation of the Community industry

the Czech
the imports from Poland,
Prices of
Republic and Saudi Arabia increased from 1994 to
the end of the investigation period. It should be
noted that,
these
prices were found to be significantly lower than
those of the Community industry over the whole
period considered. As concerns Hungary, prices
decreased slightly during the same period.

in the vast majority of cases,

(d) Price undercutting

of

imports

from the

exporting countries concerned

the determination of price undercutting
For
regarding the exporting countries concerned, the
Commission analysed data referring to the invest-
igation period. Price undercutting was established
on the basis of a comparison of the export price
with prices charged by the Community industry at
the same level of
traders/distributors,
which purchase directly from the exporting prod-
ucers and the Community industry, and for directly
the four
comparable types of
Member States with the most important markets,
i.e. Germany, France,
and the United
Kingdom.

twines and for

trade,

Italy

i.e.

(a) Production, capacity and capacity utilisation

(42)

Production of the Community industry increased
during the period considered, rising from 25 767
tonnes in 1994 to 30 133 tonnes in the invest-
igation period. This represents an overall increase
of 17 %. Production increased at a lower rate than
Community consumption, which increased by
31 % during the period considered.

(43) As regards capacity, it should be noted that the
production facilities for twines are also used in the
production of other products not concerned by the
present proceedings, e.g. ropes. As a consequence,
the capacity
an estimate based on turnover, of
normally attributed to the production of
the
product concerned by the Community industry
had to be made. On this basis, capacity increased
from 38 732 tonnes in 1994 to 42 984 tonnes
during the investigation period, which represents
an increase of 11 %. This increase was in line with
expectations of market growth. The rate of capacity
utilisation increased slightly during the period
considered, rising from 66,5 % in 1994 to 70 % in
the investigation period.

(38)

(39)

(40)

(41)

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Official Journal of the European Communities

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(44)

(45)

(b) Sales volume 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 21 953
tonnes in 1994 and 24 166 tonnes in the invest-
igation period. This represents an overall increase
of 10 %. This trend shows that the sales of the
Community industry did not follow the trend in
consumption, which increased by 31 % during the
period considered.

(c) Market share

The development of sales volume compared to that
of Community consumption shows that the market
share held by the Community industry decreased
during the period considered. The market share of
the Community industry decreased from 54,6 % in
1994 to 50,4 % in 1995, 49,2 % in 1996 and 46 %
during the investigation period. The overall loss of
market share was 8 percentage points between
1994 and the investigation period.

(d) Stocks

(46)

Stocks significantly increased between 1994 and
the investigation period by 44,4 %.

Community industry decreased to 639,
7,2 %.

i.e. by

4. Conclusion on injury

(51)

The investigation has shown that the Community
industry was subject to substantial price undercut-
ting from the dumped imports, which significantly
increased in terms of volume and market share. In
addition, the Community industry suffered a signi-
ficant loss of market share (8 percentage points) at a
time when Community consumption increased by
31 %.

Furthermore, the Community industry showed a
significant deterioration of its financial results, in
particular from 1995 onwards. In the light of the
foregoing analysis, the Commission has provision-
ally concluded that the Community industry has
suffered material
injury within the meaning of
Article 3(1) of the Basic Regulation.

F. CAUSATION

1. Effect of the dumped imports

(47)

(48)

(49)

(e) Average sales price and price evolution

(52)

The weighted average prices of
the product
concerned sold by the Community industry on the
Community market
the period
considered, overall increasing by 10 %.

fluctuated over

(f) Profitability

The profitability of
the Community industry,
expressed as a percentage of net sales, decreased
from a weighted average profit of 3,9 % in 1994 to
1,9 % in the investigation period, i.e. a decrease of
50 %. It should be noted, however, that the finan-
cial situation deteriorated particularly from 1995
onwards, falling from a profit of 13,5 % to a profit
of 1,9 % in the investigation period.

(g) Investment

Yearly investments made by the Community
industry increased overall, going from ECU 1,07
million in 1994 to ECU 1,22 million in the invest-
igation period, with a peak in 1996 of ECU 3,27
represents
million. Although this
an overall
increase of 14 % over
the period considered,
investments have significantly decreased between
1996 and the investigation period.

(h) Employment

(50)

Employment levels in the Community industry for
the product concerned increased during the period
considered. Employment rose from 557 in 1994 to
in the
689 in 1995. Since 1995 employment

the

In its examination of whether the material injury
suffered by the Community industry had been
caused by the dumped imports, the Commission
volume of dumped imports
found that
increased substantially between 1994 and the
investigation period (210 %). It should be noted
that, between 1994 and 1995, the volume of the
into the Community almost
dumped imports
doubled and a further significant increase occurred
between 1996 and the investigation period. This
had the effect
the cumulated total market
share of
imports from the exporting countries
concerned increased from 13,1 % in 1994 to 31 %
in the investigation period, i.e. by 17,9 percentage
points.
the Community industry’s
market share decreased by 8,6 percentage points
between 1994 and the investigation period. More-
the Community
over,
industry lost 3,2 % in market share between 1996
and 1997 alone, which is the period during which
the increase in imports from the exporting coun-
tries concerned became particularly relevant.

it should be noted that

In contrast,

that

It is, furthermore, noted that the market for twine
is price-sensitive and transparent. The Commission
found that the product under investigation is to be
considered as a commodity and that any downward
pressure on prices tended to have an immediate
impact on the market,
the
exporting producers and the Community industry
sell
their products to the same clients. In this
context, the Commission found that the imports
from the exporting countries concerned undercut
the prices of the Community industry by between
3,8 and 21,4 % during the investigation period.

in particular

as

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L 267/15

In addition, over the whole period considered the
prices of imports from the countries under invest-
igation were consistently and significantly lower
than those of the Community industry. As a result
of this, the Community industry had to adjust its
prices to the market situation in order to avoid
losing market share. Furthermore, the prices from
the dumped imports were found to be the lowest in
the market during the investigation period.

(53)

The situation of the Community industry was at its
worst, with reference in particular to profitability
and market share, during the investigation period,
when the volume of imports from the exporting
countries concerned into the Community was most
significant.

Under the circumstances, it is concluded that the
twines from the exporting
dumped imports of
countries concerned have caused material injury to
the Community industry.

2. Other factors

(a) Other imports

(54)

The effect of imports other than those from the
exporting countries concerned on the situation of
the Community industry was also examined on the
basis of figures reported by Eurostat.

(57)

Imports from other countries not subject to the
present investigations amounted to 2 043 tonnes
during the investigation period, representing a total
market share of 4 %, decreasing from a level of
4,6 % in 1994. During the investigation period,
these imports were mainly from Costa Rica, USA,
Slovenia, Turkey and Switzerland and, with the
exception of imports from Costa Rica in 1996, were
usually made at prices higher than those of the
exporting countries concerned.

As far as Costa Rica is concerned, prices of imports
were found to be lower, in 1996, than those from
the countries concerned and its market
share
amounted to 2,2 %. However, as its prices were
higher
its market share decreased to
1,4 %.

in 1997,

(58)

In this context, it should be recalled that, during
the investigation period, prices of
the dumped
imports were found to be the lowest on the market.
Moreover, the volume of the dumped imports alone
was substantial throughout the period considered
and, during the investigation period, such imports
were found to represent 89 % of total imports.

It follows from the above that imports from coun-
tries other
than the four countries concerned
cannot have broken the causal link between the

dumped imports and the material injury suffered
by the Community industry.

(b) Development of consumption

(55) Community consumption of twines increased in
total by 31 % between 1994 and the investigation
period, with a tendency to stabilise after 1996. The
injury suffered by the Community industry cannot,
therefore, be attributed to the trend in demand.

(c) Export activity of the Community industry

(56) During

the

under

period

investigation the
Community industry’s exports of twines to third
countries, in terms of volume, remained stable. The
sales prices charged by the Community industry in
the export market were substantially higher than
those applied in the Community market. Sales
prices increased by 22 % on the export market in
comparison to 10 % on the Community market.
Thus,
the Community
industry did not contribute to the injury suffered by
the Community industry.

the export activity of

(d) Competitiveness of

the Community industry

to be put

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
in place. The Community
industry, moreover, continued its efforts in research
and development and in quality control throughout
the period considered. During the period under
investigation the Community industry decreased its
SGA costs by 8 %. The Community industry there-
fore improved its performance both in cost and in
quality terms over the period considered.

(e) Changes in the prices of raw material

The Commission also considered whether
the
injury suffered by the Community industry could
have been caused by fluctuations in the cost of raw
materials during the period considered, during
which significant fluctuations in the cost of raw
materials were found. Both Community producers
in the exporting countries
and the producers
concerned were
to such fluctuations.
Overall, the prices of polypropylene granulates, the
main raw material used in the production of the
increased by 39 % between
product concerned,
1994 and the investigation period. Considering that
this raw material accounts for approximately 55 %
of the total cost of production, the average sales

subject

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Official Journal of the European Communities

2. 10. 98

price charged by the Community industry should
have increased by 21,5 % over the period con-
sidered to cover the overall increase in raw material
costs. This should be compared with an overall
the Community
increase in the sales prices of
industry of 10 % and the significant undercutting
margins found for imports from the exporting
countries concerned, which made it impossible for
the Community industry to pass on the full
increase of raw material costs to their customers.

3. Conclusion

(59) Given the fact

that

twine is a commodity-type
product offered in a transparent market, and that
the Community-produced
imported
product are sold through the same sales channels
in the Community, the Commission considers that
dumped imports of
twines originating in the
exporting countries concerned had a significant
impact on the Community market.

and

the

Although it cannot be excluded that certain
imports from other third countries and variations
in the cost of raw materials may have had a slight
adverse effect on the situation of the Community
industry, this does not detract from the fact that
twines originating in the exporting
imports of
countries concerned,
taken in isolation, caused
material injury to the Community industry.

share of

This conclusion is drawn in particular from the loss
of market
the Community industry
combined with a deterioration in profitability,
coinciding with a significant
increase in the
volume and market share of dumped imports at
the
prices
Community industry, and which were indeed at
levels found to be the lowest on the market during
the investigation period.

that constantly undercut

those of

G. COMMUNITY INTEREST

1. Introduction

(60)

It has been further examined whether, despite the
conclusions on dumping and injury caused thereby,
compelling reasons exist which would lead to the
conclusion that it is not in the Community interest
to impose anti-dumping measures in this particular
case. For this purpose, and pursuant to Article 21(1)
of
the Commission con-
sidered the impact of measures for all parties
the
and
involved
consequences of not taking measures.

the Basic Regulation,

in the proceedings

also

In order to assess the likely impact of measures, the
Commission requested information from all inter-
the
known
parties
ested
Community industry,
the importers/distributors
and users of the product concerned. It is to be
noted that the Commission received only limited

including

to

it,

and generic replies. The parties examined in the
context of the present Community interest analysis
fall into the following categories: the Community
the importers/distributors and users. It
industry,
twines are sold in the
should be noted that
Community in their finished state, therefore no
downstream processing
such is
concerned by these proceedings.

industry

as

2. Interests of the Community industry

(a) Nature and structure of

the Community

industry

(61) Community producers

are

spread over most
Member States. A large concentration of companies
is, however, to be found in Portugal. The Portu-
guese producers accounted for approximately 60 %
of the production of the Community industry in
the investigation period.

family-owned small-

The Community industry is made up, for the most
part, of
to medium-sized
companies. The Community industry essentially
transforms the raw materials into twines through
the following main production phases: an extrusion
phase (the melting of the raw materials into useable
film), a stranding phase (creating strands from the
film) and a twisting or braiding phase (twisting or
braiding the strands to make up the twine).

(b) Viability of the Community industry

viable.

(62) Although the Community industry suffered finan-
cial shortfalls, this does not mean that it is not
the Community
structurally
Indeed,
industry invested significantly throughout
the
period considered in new machinery, which
enabled the introduction of more efficient produc-
tion processes. The Community industry also
invested in quality assurance and control and has
undertaken important research and development
efforts to introduce the production of new types of
twines providing a higher
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 the Community industry is a
reliable supplier.

added value

(c) Likely

the
non-imposition of measures

effects

of

imposition

or

(63)

If the pressure exerted by the dumped imports
were allowed to continue further (cid:190) in particular in
light of the significant increase in the market share
of these imports (cid:190) the financial situation of the
Community industry would continue to deteriorate.
The Community industry would then not be able
to finance its efforts in developing new products

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Official Journal of the European Communities

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and over the longer-term company closures could
follow. In this respect, it is noted that, in the course
of the investigation period, as a consequence of the
price pressure existing on the Community market
during the period considered, one of the compla-
inant Community producers stopped producing. It
is very likely that, without measures to correct the
effects of dumped imports, this negative trend will
continue. Thus, the existence of the Community
industry and 600 jobs, concentrated mainly in
Portugal, may ultimately be at risk.

5. Consequence

for

competition in the

Community market

(67) As far as the competitive environment

in the
Community market is concerned, the level and
nature of the measures are not such as to exclude
from the Community market
those exporting
producers under investigation and therefore the
measures will allow the continued presence of
these exporting producers in the market.

(64)

(65)

(66)

The
imposition of measures may allow the
Community industry to regain part of the previ-
ously held market share. Furthermore, the imposi-
tion of measures should enable the Community
industry to improve profitability. The imposition of
anti-dumping measures would therefore be in the
interest of the Community industry.

(68)

3. Interests of the importers/distributors

The distribution chain of the product concerned is
characterised by a small number of
importers/
distributors who hold significant levels of stocks of
the product concerned. The importers/distributors
generally act as intermediaries between the users
(agricultural cooperatives and bale contractors) and
both the Community industry and the exporting
producers. As the importers/distributors are gener-
ally free to determine the source of their supply
(Community-produced or imported), the Commis-
sion does not see that they would be significantly
affected by the imposition or non-imposition of
measures. Moreover, no evidence was submitted to
the Commission that this would not be the case.

4. Interests of the users

the impact of

The users of the product concerned mainly consist
of bale contractors or individual farmers. Given the
the Commission
the market,
price-sensitivity of
considers that
the imposition of
measures would in all likelihood take the form of a
price increase. It should be noted that twines are
only used for the production of bales and that the
costs relating to twines are peripheral to the main
costs incurred by the individual
farmer or bale
contractor, when compared to other costs such as
the depreciation of the baler machines, fuel, insur-
labour or maintenance. According to the
ance,
information available, the Commission considers
that the product concerned represents only a negli-
gible part of the overall costs of the individual
farmer or bale contractor, which may explain the
lack of cooperation by the users in the present
proceedings. Any expected price increase as a result
of the imposition of measures would, therefore, be
marginal for the users.

Thus, users will continue to benefit from a market
driven by a high number of suppliers.

6. Conclusion

The rate of increase of imports from the exporting
countries concerned during the period considered,
and the exporting producers’ behaviour on the
Community market,
i.e. constantly and signifi-
cantly undercutting the prices of the Community
industry, indicate that there is a likelihood, in the
absence of measures, that this trend will continue
and further aggravate the injury caused to the
Community industry.

The imposition of measures can be expected to
assist the Community industry to improve profit-
ability, 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. It is also expected
that measures will enable the Community industry
to take full advantage of the investments made in
recent years to continue developing new products
technology for new and specialised
of higher
applications. As regards the user industries, any
expected price increase would have only a marginal
impact. The Commission has concluded that, in
the circumstances, there are no compelling reasons
not to impose measures.

H. PROVISIONAL MEASURES

(69) On the basis of the conclusions on dumping and
injury set out above, the Commission considered
the level of the provisional measures to be adopted.
For this purpose, account has been taken of the
dumping margins found and of the amount of duty
necessary to eliminate the injury sustained by the
Community industry.

1. Injury elimination level

(70)

For the purpose of establishing the level of the
provisional measures to be imposed, the Commis-
sion considered that
the dumped
imports should be increased to a non-injurious

the prices of

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2. 10. 98

level. The necessary price increase or injury margin
was determined on the basis of a comparison of the
weighted average export prices for those product
types used in the determination of price undercut-
ting at the cif Community frontier level, with the
actual weighted average cost of production of the
Community industry plus a profit margin of 5 %.
This profit margin was considered, for the purpose
of a preliminary determination, to be the minimum
profit level necessary to make this sector viable. It
takes
the product
concerned is considered by the interested parties as
a commodity.

account of

that

fact

the

The resulting amount necessary to remove the
injury, or injury margin, was established for each of
the exporting producers concerned as a result of
this comparison and was expressed as a percentage
of
to the
Community.

the CIF value of

exports

their

2. Provisional duties

(71) According to Article 7(2) of the Basic Regulation,
the level of the provisional duty should be equal to
the margin of dumping or the amount necessary to
remove the injury, whichever is lower. For four
exporting producers, the provisional duty is equal
to the amount necessary to remove the injury, and
for seven exporting producers, it is equal to the
dumping margin. For the reasons set out in recitals
22, 29 and 34, the residual duty for the Czech
Republic, Hungary and Saudi Arabia was set at the
level of the highest margin found for a cooperating
exporting producer in each country in question.
For the reasons set out in recital 16, the residual
duty for Poland was set at the level of the highest
margin found for a representative type exported by
a cooperating exporting producer in Poland.

3. Undertakings

the undertakings offered by the exporting produ-
cers concerned were acceptable.

(73)

(74)

The Commission points out that in the event of a
breach or withdrawal of the undertaking, an anti-
dumping duty may be imposed, pursuant to Article
8(9) and (10) of the Basic Regulation.

the Basic Regulation,

Furthermore, it should be noted that, in accordance
with Article 8(6) of
the
investigation of dumping, injury and Community
interest will be completed, notwithstanding the
acceptance of undertakings during the course of
the investigation.

I. FINAL PROVISION

(75)

In the interest of sound administration, a period
should be fixed within which the parties concerned
may make their views known in writing and
request a hearing.

Furthermore, it should be stated that all findings
made for the purpose of this Regulation are provi-
sional and may have to be reconsidered for the
purpose of any definitive duty, which the Commis-
sion may propose,

HAS ADOPTED THIS REGULATION:

Article 1

1. A provisional anti-dumping duty is hereby imposed
on imports of polypropylene binder or baler
twine,
currently classifiable within CN code ex 5607 41 00
(TARIC code 5607 41 00*10), originating in Poland, the
Czech Republic, Hungary and Saudi Arabia.

(72) Certain exporting producers concerned by the
to the
proceedings offered price undertakings
Commission, in accordance with Article 8(1) of the
Basic Regulation. The Commission considered that

2.
The rate of provisional duties applicable to the net
the
free-at-Community-frontier price of
product concerned produced by the following companies,
before duty, shall be as follows:

imports of

Country

Company

Poland

BZLP Bezalin

CZWC Chemitex

PAT Defalin sa

Industrial Chemistry Research Institute

Terplast sp zo.o

Others

Provisional
duty
(%)

TARIC
additional code

20,1

22,7

16,3

12,8

7,7

30,6

8450

8568

8569

8578

8579

8900

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Country

Company

Czech Republic

Lanex a.s.

Others

Hungary

All companies

Saudi Arabia

All companies

Provisional
duty
(%)

TARIC
additional code

24,8

24,9

32,9

3,9

8580

8900

8900

(cid:190)

3. Unless otherwise specified, the provisions in force concerning duties and other
customs practices shall apply.

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

Article 2

1. Notwithstanding Article 1, the provisional duty shall not apply to imports of polypro-
pylene binder or baler twine produced and directly exported or invoiced to an importing
company in the Community by the companies specifically mentioned in paragraph 3, in
respect of which the price undertakings offered are hereby accepted.

2. However, in the event of a breach of the undertaking during any given reporting
period, i.e. quarter of a calendar year, all sales of that period shall be deemed to be not
subject to the undertaking, and the rate of provisional duties applicable to the net
free-at-Community-frontier price of imports of the product concerned, before duty, as set
out in paragraph 3, shall apply. This shall not prejudice the right of the Community
institutions to take any action warranted pursuant to Article 8(9) and (10) of Regulation
(EC) No 384/96.

Imports made within the context of the undertakings offered and accepted shall be

3.
declared under the following TARIC additional codes:

Country

Company

Hungary

Partium ’70 Rt.

Tiszai Vegyi Kombinat Rt.

Elso Magyar Kenderfono Rt.

Article 3

Provisional duty to
be imposed in the
event of a breach
of the undertaking
(%)

TARIC
additional code

12,1

26,4

32,9

8581

8582

8583

Pursuant to Article 20(1) of Regulation (EC) No 384/96 and without prejudice to Article
20(2) and (3) of that Regulation the interested parties which made themselves known
within the time limit specified in the notice of initiation may make their views known in
writing and apply to be heard by the Commission within one month of the date of entry
into force of this Regulation.

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2. 10. 98

In accordance with the provisions of Article 21(4) of Regulation (EC) No 384/96, the
parties concerned may provide comments on the application of this Regulation within one
month of the date of its entry into force.

Article 4

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

Article l shall apply for a period of six months.

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

Done at Brussels, 1 October 1998.

For the Commission

Leon BRITTAN

Vice-President