Proposal for a Council Regulation (EC) imposing definitive anti-dumping duties on imports of hardboard originating in Bulgaria, Estonia, Latvia, Lithuania, Poland and Russia and definitively collecting the provisional duties imposed
Date: 1999-01-06
Institutions: European Commission
Subjects: Brazil, Central and Eastern Europe, anti-dumping duty, building slab, wood fibre

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 06.01.1999 
COM(1998) 805  final 

Proposal for a 

COUNCIL REGULATION  (EC) 

imposing definitive  anti-dumping duties on imports of hardboard originating in 

Bulgaria, Estonia, Latvia, Lithuania, Poland and Russia and  definitively 

collecting the provisional duties imposed 

(presented by the  Commission) 

EXPLANATORY MEMORANDUM 

The  Commission  initiated  an  anti-dumping  proceeding  concerning  the  imports  of 

hardboard  from  Brazil,  Bulgaria,  Estonia,  Latvia,  Lithuania,  Poland  and  Russia  on 

7 November  1997  through  a  publication  in  the  Official  Journal  of  the  European 

Communities No C 336, page 2. 

Provisional anti-dumping measures were imposed by Regulation (EC) No 1742/98 on 

6 August 1998 after injurious dumping had been established. 

At  that  stage, except  for  the  Russian  producers,  all  exporting  producers  concerned 

offered  price  undertakings.  These  exporting  producers  undertook  to  sell  certain 

product-types  for  export to the Community, up to a pre-determined  annual  quantity 

exempted from anti-dumping valorem duty, at prices removing the injurious effect  of 

the  dumping.  For  export  sales  volumes  of  these  product-types  beyond  the  pre 

determined  annual  quantity-ceilings,  the  provisional  anti-dumping  ad  valorem  duty 

rates would apply. The Commission, being of the opinion that this system is workable 

and can be effectively  monitored, accepted these undertakings. 

Following the imposition of provisional anti-dumping measures, all interested parties 

were given the opportunity to request a hearing and to submit additional comments. 

For the definitive findings, the Commission made some adjustments to its analysis in 

accordance  with  some  of  the  interested  parties'  submissions.  In  particular,  the 

Commission decumulated Brazil from the analysis. 

The definitive findings confirmed the existence of dumping and resultant injury to the 

Community  industry  with  the  exception  of  Brazil.  As  regards  imports  from  this 

country,  these  were  not  found  to  have  been  a  cause  of  the  injury  suffered  by  the 

Community  industry.  The  Commission  therefore  proposes  the  termination  of  the 

proceeding  against  Brazil  without  measures.  As  to  the  imports  from  the  other 

countries  concerned,  however, these were confirmed  as having  been  a cause  of the 

material injury suffered by the Community industry. 

The investigation, taking into account all interests involved, with particular regard to 

the interests of the user industry, also led to the conclusion that it is in the Community 

interest to take definitive anti-dumping measures. 

Since  all  the  exporting  producers  concerned,  except  for  the  Russian  ones,  offered 

undertakings at the provisional stage, it is proposed that these undertakings continue, 

taking into account any adjustments  resulting from the definitive analysis. A separate 

Commission Decision detailing the changes to the undertakings is to be published on 

the same date as the Council Regulation imposing definitive  anti-dumping measures. 

With  the  termination  of  the  proceeding  as  regards  imports  from  Brazil,  the 

undertakings offered  by the Brazilian exporting producers will lapse. 

In the light of the above, and in accordance with Article 9 of Council Regulation  (EC) 

No 384/96,  the  Commission  therefore  proposes  that  the  Council  approve  the 

imposition  of  a  definitive  anti-dumping  duty  on  imports  from  Bulgaria,  Estonia, 

Latvia,  Lithuania,  Poland  and  Russia,  and  terminate  the  proceeding  against  Brazil 

without measures. The proposed duty rates are as indicated in the table below. 

Country 

Company 

Rate of duty 

Taric additional 

Bulgaria 

Fazerles AD 

All other companies 

Estonia 

Latvia 

All companies 

All companies 

Lithuania 

All companies 

Poland 

Alpex-Karlino  S.A. 

Ekopryta S.A. 

Zaklady Pryt Pilsniowych 

S.A., Przemysl 

(%) 

7.1 

7.2 

6.0 

4.7 

11.4 

22.4 

7.0 

9.1 

Koniecpolskie Zaklady Pryt 

11.4 

Pilsniowych  S.A 

Zaklady Pryt Pilsniowych 

11.0 

S.A w Krosnie Odrzanskim 

All other companies 

Russia 

All companies 

34.8 

30.6 

code 

8461 

8900 

-

-

-

8479 

8480 

8481 

8494 

8495 

8900 

-

COUNCIL REGULATION (EC) No ... 

of 

imposing definitive anti-dumping duties on imports of hardboard originating in 

Bulgaria, Estonia, Latvia, Lithuania, Poland and Russia and definitively 

collecting the provisional duties imposed 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on 

protection against dumped imports from countries not members of the European 
Community1, and in particular Article 9(4) thereof, 

Having regard to the proposal submitted by the Commission after consulting the 

Advisory Committee, 

Whereas: 

1  OJ  L  56,  6.3.1996,  p.  1. Regulation  as  last  amended  by  Regulation  (EC)  No  905/98  (OJ  L  128, 

30.4.1998, p. 18). 

h 

A.  GENERAL  INFORMATION 

1. Provisional  measures 

(1)  Provisional  anti-dumping  measures were  imposed  in the present  proceeding  on 
6  August  1998 by  Regulation  (EC) No  1742/982 (hereinafter  referred  to  as  the 

"provisional Regulation"). Undertakings were offered  and accepted  from  the co 

operating exporting producers in all the countries concerned except Russia. 

2. Subsequent  procedure 

(2)  Following  the  imposition  of  the  provisional  measures,  certain  exporting 

producers,  importers  and  Community  users of the product  concerned  submitted 

comments  in  writing.  Those  parties  who  so  requested  were  granted  an 

opportunity to be heard. 

(3)  Since the publication  of the provisional  Regulation,  investigations  were  carried 

out  at the premises  of the  following  companies  which  are users  of  the  product 

concerned in the manufacture  of doors: 

Svedex BV, Netherlands 

Swedoor, a division of Nobia Nordisk Bygginteriôr AB, Sweden (two 

-  production plants) 

Righini SA, France 

Huet SA, France 

Theuma Deurenindustrie NV, Belgium. 

A non-complainant producer of eucalyptus hardboard was also visited: 

Industria de Fibras de Madeira, Portugal, 

as was an unrelated importer of hardboard: 

Firma Christian Kroger GmbH & Co. KG, Germany. 

2  OJL218,  6.8.1998, p. 16. 

f 

J 

B. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 

1. Product under consideration 

(4)  The product under consideration in this anti-dumping proceeding is hardboard. 

Hardboard is defined as fibreboard of wood or other ligneous materials, whether 

or  not  bonded  with  resins  or  other  organic  substances  and  with  a  density 
exceeding 0.8 g/cm3, currently classifiable  under CN codes ex 4411 11 00 and 

ex 441119 00. 

Hardboard is exclusively obtained from a 'wet production process' (as opposed 

to dry-process fibreboards as described  below) and normally  has a density  of 
800 to 1050 kg/m3 and is made in thicknesses between 1.8 to 6.0 mm. 

Hardboard is typically used in the manufacture  of furniture,  in the construction 

and automotive industries, for door skins and for packaging, especially fruit and 

vegetable packaging. 

2. 'Thin' dry-process  fibreboards 

(5)  After  the  imposition  of  the  provisional  anti-dumping  measures,  a  number  of 

importers and users continued to argue for an extension to the product scope of 

the proceeding. In particular,  they  argued that the  so-called  'thin'  forms  (less 

than  6  mm  thickness)  of  dry-process fibreboards such  as  medium  and  high 

density fibreboard (thin  MDF  and  HDF)  and hardboard  have  essentially  the 

same end uses, and therefore  together  form  a single product.  It was  therefore 

alleged  that  the  scope  of  the  analysis  of  dumping,  injury  and  Community 

interest should also include all these products. 

G 

(6)  On  the  basis  of  the  information  submitted  up  to  the  provisional  stage  a 

preliminary  assessment  of  the  extent  to  which  the  end-uses  of  hardboard  and 

thin  dry-process  fibreboards  overlap  was  made.  Based  on  the  information 

submitted  since  the  provisional  Regulation  a  definitive  assessment  has  been 

made and it has become clear that, theoretically,  such overlap is substantial  and 

that  only  for  some  market  segments  are  the  two  products  not  at  all 

interchangeable. 

(7)  However,  similarity  of  end  uses  does  not  alone  determine  the  question  of  like 

product.  The  conclusions  of  the  provisional  investigation  that  hardboard  and 

thin  dry-process  fibreboards  were  not  a  single  product  were  based  on 

differences  of physical and chemical characteristics of the two products. Further 

investigation of the issues involved has allowed the following refinements  of the 

analysis: 

- 

it  is  confirmed  that  the  thin  HDF  variant  of  dry-process  fibreboards  can  be 

produced  in densities comparable to or higher than the density  of  hardboard. 

With its density  defined  as being above  800 kg/m  , it is thin HDF which  can 

be considered the closest to hardboard: 

? 

however,  the  average  prices  for  thin  HDF  were  higher  than  those  for  thin 

MDF  (10-15%  on  average)  and  for  most  hardboard  of  equivalent  board 

thicknesses  under  6mm,  so  that  over  the  period  investigated  it  was  mainly 
thin  MDF  (density  lower  than  800  kg/m3)  which  competed  on  the  market 

with hardboard  over a large part of its final uses, particularly  in the  furniture 

sector,  in part  of the  packaging  sector,  in the picture  frames  sector  and  in  a 

part of the doors sector; 

it was also  pointed  out  that  new, zero-emission  thin  dry-process  fibreboards 

are 

in  production, 

i.e. 

thin  dry-process 

fibreboards  containing  no 

formaldehyde.  This  development  allows  thin. dry-process  fibreboards  to 

compete  in  the  market  of  food  packaging  from  which  it  has  hitherto  been 

excluded because of its formaldehyde  content. However, these  zero-emission 

products  are  a  very  recent  innovation,  and,  although  it  is  conceivable  that 

thin  dry-process  fibreboards  could  in the  future  be  used  in  the  area  of  food 

packaging,  their  higher  price  would  probably  preclude  this  at  the  present 

time. As these developments relate to periods subsequent to the  investigation 

period, they could not be investigated; 

the fact  that thin dry-process fibreboards and hardboard  share  a number of 

end uses does not imply that the market considers them as a single product. 

Indeed,  most  operators  in  the  sectors  involved  have  confirmed  that,  in 

practice, they do not use the different  board-types  indiscriminately  because 

of  the  different  physical  characteristics  and  technical  performances  of  the 

two products; rather, they choose between them according to which best suits 

their  technical  requirements.  As  an  example,  thin  MDF  has  an  advantage 

when  it  has  to  be  laminated,  due  to  its  more  porous  and  matte  surface. 

Moreover, its internal structure is smooth and not layered like hardboard, and 

it  does  not  have  the  tendency  to  split  when  submitted  to  tension.  As  a 

consequence,  thin  MDF  is  generally  preferred  to  hardboard  for  the 

manufacture  of laminated  doors and furniture  elements. On the  other hand, 

hardboard  generally  has  a  distinct  advantage  in  those  uses  where  density 

and/or  suppleness  of the  panel  are required,  such  as  in  lacquered  and pre-

painted  doors  or  automobile  parts,  or  where  it  is  thought  that  the  resins 

contained in thin dry-process fibreboards would have, as explained above, a 

possible impact on health, such as in fruit and vegetable packaging. 

(8) 

In  conclusion,  the  definitive  analysis  confirms  the  provisional  findings  that 

hardboard  and  thin  dry-process  fibreboards,  although  they  are  theoretically 

interchangeable  for many end uses, are not, in practice, a single product  because 

of the differences  in their physical and chemical characteristics. 

(9)  Nevertheless,  although  thin  dry-process  fibreboards  do  not  form  a  single 

product  with  hardboard,  it  was  claimed  that  the  extent  of  the  overlap  in  their 

end-uses has important  implications  for the analysis of the causes  of  any  injury 

suffered  by  the  Community  industry.  This  issue  is  addressed  below  under 

causation. 

3. Plywood and chipboard 

(10)  Submissions were received clarifying  the arguments presented  at the provisional 

stage  of  the  investigation  that  plywood  and  chipboard  panels  were  also 

interchangeable  with hardboard  in many of their applications. However,  for  the 

same  reasons  as  were  outlined  for  thin  dry-process  fibreboards  above, 

theoretical similarity of end uses does not alone determine the question of single 

product.  Since  the  physical  and  chemical  characteristics  of  hardboard  are 

different  to  chipboard  and  plywood  panels,  it  cannot  be  considered  to  be  a 

single product with them. 

The provisional findings are therefore  confirmed. 

A o 

4.  Like product 

(11)  The  further  investigation  confirmed  that  there  were  no  differences  in  the  basic 

characteristics and uses of the hardboard imported into the Community from  the 

countries  concerned  and  the  hardboard  produced  by  the  Community  industry 

and  sold  on the  Community  market.  The  same  is true with regard  to  hardboard 

produced  and sold on the domestic markets of Brazil, Bulgaria, Estonia,  Latvia, 

Lithuania  and Poland  (the  latter  served  also as an analogue  country  for  imports 

from  Russia). It was therefore  concluded  that  both the hardboard  produced  and 

sold  by  the  Community  industry  on the  Community  market  and  the  hardboard 

produced  and sold on the domestic markets of Brazil, Bulgaria, Estonia,  Latvia, 

Lithuania  and  Poland  were,  within  the  meaning  of  Article  1(4)  of  Regulation 

(EC) No  384/96 (hereinafter  referred  to  as the "basic Regulation"),  alike to  the 

hardboard  imported  into  the  Community  from  the  seven  countries  subject  to 

investigation. 

(12)  However,  the  Brazilian  exporting  producers,  as  well  as  a  number  of  users  of 

hardboard,  in particular manufacturers  of doorskins, repeated  their  claims  made 

at the provisional  stage that Brazilian eucalyptus hardboard  is not a like product 

with the product  produced  by the Community  industry  and  should  be  excluded 

from  the scope of the investigation. 

M 

(13)  Among  the  exporting  producers  concerned  by  this  investigation,  only  the 

Brazilian  exporting  producers  supply  hardboard  made  from  eucalyptus  to  the 

Community  market.  There  are  also  two  producers  of  eucalyptus  hardboard  in 

the Community, both situated  in the Iberian peninsula, which did not participate 

in the complaint which led to the initiation of this proceeding. 

(14)  These  claims  in  respect  of  eucalyptus  hardboard  have  been  extensively 

investigated.  Following  the  imposition  of  provisional  measures,  a  number  of 

door  manufacturers  across  the  Community  were  visited.  In  addition,  one  non-

complainant  Community  producer  of  eucalyptus  hardboard  in  Portugal  was 

visited. These visits were aimed at clarifying  the issues concerning the  inclusion 

of Brazilian hardboard within the scope of this proceeding. 

From these visits, the following became clear: 

(a) The technical properties  and uses of eucalyptus hardboard 

(15)  Numerous  technical  submissions  were  received  from  the  Brazilian  exporting 

producers, Community door manufacturers,  and the complainant  concerning the 

properties  of  eucalyptus  hardboard.  The  exporting  producers  and  door 

manufacturers  argue  that  eucalyptus  hardboard  has  certain  unique  properties 

which set it apart from  any other hardboard types, whether made from  softwood 

or  hardwood  tree  species  other  than  eucalyptus.  They  claim  further  that  no 

viable  alternative  product  is  produced  by  the  Community  industry.  The  door 

manufacturers  in particular emphasise that the Community industry produces no 

eucalyptus  hardboard  for  doorskins;  indeed  they  point  out  that  the  only 

Community-based  producer  of  eucalyptus  hardboard  which  does  make 

doorskin-quality  boards,  and  is  based 

in  Portugal, 

is  not  one  of 

the 

complainants. 

fL 

(16)  It  was  found  that  hardboard  made  from  eucalyptus  wood  has  a  number  of 

technical characteristics which make it particularly well-suited  for  doorskins  for 

high-quality,  finished  doors.  First,  its  especially  short  fibres  give  the  finished 

hardboard  a  very  regular  appearance,  high  density  and  stronger  tensile 

properties  than  non  eucalyptus  hardboard.  Second, 

the  eucalyptus  tree  has 

hardly  any bark, a factor  which ensures that blemishes  in the pressed  board  are 

minimal. 

(17)  However,  it  should  be  borne  in  mind  that  the  eucalyptus  tree  is  not  the  only 

species to have  short fibres.  The complainants have  submitted that there  are 40 

other  species of tree growing in Western Europe which have fibres  of about the 

same length as eucalyptus, and in some cases even shorter. 

(18)  It  should  also be noted that the high  quality  required  by the door  manufactures 

is not limited to the type of wood  of which the hardboard  is made. Some of the 

chaïacteristics  required,  such  as  a  constant  and  reliable  thickness  of  the  board 

they  use,  a  high  density,  a  good  resistance  to  high  temperatures  (doors  are 

assembled  at above  100°C) and humidity  and the absence of surface  defects  are 

not necessarily  linked to eucalyptus, but can also be obtained with other woods, 

with a strictly-controlled  production process.  It can also be added that, as far  as 

the  suitability  for  lacquering  is  concerned,  it  was  found  that  some  hardboards 

made with wood other than eucalyptus can be lacquered with acceptable results, 

depending  on  the  technique  and  the  quantity  of  painting  material  used.  The 

advantage of eucalyptus and in general  of hardwood  hardboard  is mainly  in the 

smaller quantities of.paint needed to achieve a smooth result. 

^ 

(19)  Furthermore,  the  analysis  of  the  door  manufacturers'  activities  also  confirmed 

that  for  unfinished  doors, which  are  primed  or pre-painted  in white  but  which 

require  finishing  by the  final  customer,  doorskins  made with  different  types  of 

wood  are used.  It  was  also  found  that  some  door  producers  used  Community-

produced hardboard, not made with eucalyptus wood, to make lacquered doors. 

(20)  It was also found that during the investigation period, eucalyptus hardboard  was 

also  used  for  certain  applications  in  the  furniture,  roofing  and  automobile 

industries and, as far as off-cuts  of hardboard  sheets are concerned, for  fruit  and 

vegetable containers. 

(b) Conclusion on eucalyptus hardboard as like product 

(21)  The  examination  of  the  interested  parties'  submissions  confirms  that  the 

exceptional  properties  of  eucalyptus  hardboard  do  not  technically  rule  out  its 

use in those areas in which other hardboards  are also used;  indeed, the  fact  that 

it  is  not  widely  used  outside  the  doorskin  sector  is  simply  a  reflection  of  the 

relatively  higher  price  at  which  this  product  is  sold  on  the  market,  in 

comparison with other hardwood and softwood  hardboards. 

Although,  therefore,  the  eucalyptus  hardboard  produced  and  exported  by 

Brazilian  exporting  producers  has  certain  special  characteristics,  these  are  not 

sufficient  to lead to the conclusion that it is not a product alike to the  hardboard 

produced  by  the  Community  industry  with  which  it  shares  the  same  basic 

physical characteristics  and uses within the meaning of Article  1(4) of the basic 

Regulation. 

A 

C.  DUMPING 

1.  Specific  issues raised with regard to the establishment of dumping for 

each of the countries  concerned 

(a) Brazil 

(22)  In view of the findings on causation  in recitals  (53) to (56), it is not  considered 

necessary  to  set  out  any  findings  in  respect  of  dumping  of  imports  of  the 

product concerned from Brazil. 

(b) Bulgaria 

(23)  The Bulgarian exporting producers made no comments following  disclosure and 

the publication of the provisional  Regulation. 

The  dumping  margins  expressed  as a percentage  of the CIF import  price  at the 

Community  border  established  for  the  Bulgarian  exporting  producers  remain 

unchanged, i.e. 

FazerlesAD: 

Lessoplast AD: 

7,1% 

7,2% 

Non-cooperating exporting producers:  7,2% 

(c) Estonia 

(24)  The  Estonian  exporting  producer  made  no  comments  following  disclosure  and 

the publication of the provisional  Regulation. 

A*-

The dumping margins expressed as a percentage of the CIF import price at the 

Community  border  established  for  the  Estonian  exporting  producers  remain 

unchanged, i.e. 

AS Repo Vabrikud: 

Non cooperating exporting producers: 

6,0% 

6,0% 

(d) Latvia 

General 

(i) 

Product classification 

(25)  Following the adoption of provisional measures, the Latvian exporting producer 

requested a revision of the classification  of some of the company product codes 

into Product Control Numbers. The claim was based on the grounds that some 

company  product  codes,  which  were  originally  incorrectly  reported  by  the 

company as referring  to standard products, should be considered  as cut-to-size 

products. 

This  request  has been  granted  as the  company  product  codes  in  question  did 

indeed not cover standard dimensions. 

//6 

Normal value 

(i) 

Profit margin in constructed normal values 

The Latvian exporting producer claimed that when constructing normal values, 

the profit earned on sales in the ordinary course of trade should be expressed as 

a percentage of the total domestic turnover of the like product of the company -

including the turnover  of non-profitable  sales  -  instead  of the turnover  of the 

sales  in  the  ordinary  course  of  trade  only.  The  approach  adopted  by  the 

Commission  in the provisional  Regulation  inflates,  according to the  producer, 

the profit  margin. The Latvian producer  furthermore  asserted that there was a 

discrepancy between the methods used by the Commission to calculate, on the 

one hand, the profit margins by excluding non-profitable  transactions as well as 

the dumping amounts by excluding negative dumping and, on the other hand, 

the calculation  of the dumping margins expressed  as a percentage  of the total 

CIF value. 

AT-

This  claim  had  to  be  rejected.  The  methods  used  by  the  Commission  to 

construct  normal  values  and  to  determine  which  sales  had  been  made  in  the 

ordinary course of trade are described in recitals (29) and (31) of the provisional 

Regulation and are in conformity  with the rules set out in Articles 2(4) and  2(6) 

of the basic Regulation. In particular,  it should be added that: First, Article  2(6) 

of the basic Regulation  clearly  specifies  that "the  amounts  (...)  for  profits  shall 

be based on actual data pertaining to production and sales in the ordinary  course 

of trade, of the  like product...".  Second, the  aim  is to  establish  a profit  margin 

that  could  normally  be  attained  for  sales  of  a  given  product  on  the  domestic 

market.  Third,  Article  2(4)  of  the  basic  Regulation  provides  as  to  when  loss-

making  sales of a given product  may be treated  as being  in the ordinary  course 

of trade  i.e.  if the  quantity  sold  with  a  loss  is below  20% of the  total  quantity 

sold  of that product.  In that case, only the total  turnover  of a product  including 

loss-making transactions is the basis of the profit margin calculation. 

Comparison between normal value and export price. 

M 

(i) 

Allowance for currency  conversion 

The  Latvian  exporting  producer  had  claimed  an  allowance  for  currency 

conversion  based  on  a  comparison  of  the  amount  in  Lats  the  company  would 

have  obtained  using  the  exchange  rate  applicable  at the time  of the  conclusion 

of  the  respective  contracts  with  their  customers  and  the  amount  actually 

obtained.  This  claim  is based  on the assumption  that the date of  contract  is the 

date  of  sale.  In  the  provisional  Regulation,  the  Commission  had  rejected  this 

claim on the basis that the contracts submitted  did not reflect  the material  terms 

of sale and that the date of invoice more appropriately established these terms. 

The  exporting  producer  reintroduced  this  claim,  adding  that  contracts  could  be 

amended.  This  confirms  that  the  company  could  react  to  exchange  rate 

variations  by  amending  export  prices.  Therefore,  it  is  confirmed  that  such 

contracts  do  not  more  appropriately  establish  the  material  terms  of  sale  as 

compared  to  invoices,  in  particular  with  regard  to  the  price.  The  claim  could 

not, therefore, be accepted. 

(ii) 

Interest rates used for credit purposes 

(26)  With regard to the credit cost allowance, the Latvian  exporting producer  claims 

that the deposit rate instead of the credit rate should be used on the grounds that, 

the company having sufficient  liquidity, its credit costs are limited to the interest 

earnings not perceived on its bank deposit account. 

A°i 

Following  the  practice  consistently  applied  by  the  Community  institutions,  it 

was not found appropriate to base the calculation of the credit cost allowance on 

the  deposit  rate  on  the  grounds  that  these  constitute  opportunity  costs  as 

compared to actual costs. 

In this context it is noted that the interests customers would have to pay in case 

of  payment  delays,  as  stated  in  the  contracts  submitted  to  the  Commission, 

suggest that the company determined  such interests on the basis of credit rates 

rather than deposit rates. 

(iii) 

Depreciation of the machinery of the related domestic producer 

(27)  The Latvian exporting producer claims that the depreciation of the machinery of 

the related domestic producer should have been calculated on the basis of a 10-

year depreciation period instead of a 5-year depreciation period. 

Pursuant  to  Article  2(5)  of  the  basic  Regulation,  this  claim  could  not  be 

accepted as the amount used is in line with the amount declared  in the audited 

financial  statements  of  the  year  1997  and  the  application  of  the  20% 

depreciation  amount  per  year  seems  therefore  to  reasonably  reflect  the 

depreciation  costs  associated  with  the  production  of  the  product  under 

consideration. 

U> 

Dumping 

(28)  On the basis  of the  above, the  following  modified  dumping  margins  expressed 

as  a  percentage  of  the  CIF  import  price  at  the  Community  border  have  been 

established for Latvian exporting producers: 

AS "Bolderâja": 

4,7% 

Non cooperating exporting producers: 

4,7% 

(e) Lithuania 

(29)  The Lithuanian exporting producer made no comments following  disclosure and 

the publication of the provisional Regulation. 

The dumping  margins  expressed  as a percentage  of the  CIF  import  price  at the 

Community  border  established  for  Lithuanian  exporting  producers  remain 

unchanged, i.e. 

JSC Grigiskes: 

11,4% 

Non cooperating exporting producers: 

11,4% 

(f) Poland 

Normal value 

(i) 

Profit margin in constructed normal values 

(30)  The  Polish  exporting  producers  made  the  same  claim  as the  Latvian  exporting 

producer  with respect to the calculation  of the profit  margin when  constructing 

normal value (see recital (25) above). 

This request has been rejected  for the reasons given in recital (25) above. 

11 

(ii) 

Allocation of selling, general and administrative costs 

(31)  One  Polish  exporting  producer  claimed  that  the  turnover  based  allocation 

method  which  the  Commission  has  used  to  allocate  selling,  general  and 

administrative expenses relating to domestic sales should be revised and instead 

the  method  normally  applied  by  the  company  and  used  in  its  questionnaire 

response should be utilised. This method was based on sales volumes in tonnes 
to  which  conversion  factors  (i.e. the  factors  used  to  convert  tonnes  into  m2) 

relating to the thickness of a given hardboard type were applied. 

The request was examined and it was concluded that the allocation method used 

in the questionnaire response is in line with the normal cost accounting practice 

of the  company.  Consequently,  the  allocation  method  for  selling,  general  and 

administrative  expenses  has  been  changed  in  line  with  the  request  of  the 

company. 

(iii) 

Exclusion of specific transactions 

(32)  One  Polish  exporting  producer  questioned  the  methodology  employed  by  the 

Commission to determine normal value by excluding transactions of low quality 

hardboard.  According  to  this  company,  the  exclusion  of  these  transactions 

causes the artificial  overstatement of sales profitability  and consequently  affects 

their dumping margin. 

II 

As  stated  in  recital  (27)  of  the  provisional  Regulation,  it  was  established  that 

only  hardboard  panels  with  the  same  characteristics  and  the  same  quality  are 

directly  comparable. This is so because the quality  of the hardboard  determines 

to  a  substantial  degree  its  price  and  the  suitability  for  certain  uses.  Therefore, 

and  since  this  low  quality  hardboard  was  not  exported  to  the  Community,  the 

request made by the company could not be accepted 

(iv) 

Cost of production 

(33)  One Polish exporting producer proposed a different  way of calculating the costs 

of  cutting  standard-size  hardboard  into  cut-to-size  boards  as  compared  to  this 

producer's  questionnaire  response.  This  new  cost  allocation  also  took  into 

account  the  thickness  of  the  panels  cut  and  not  only  the  number  of  square 

meters  cut.  This  claim  was justified  on  the  grounds  that  the  cutting  machines 

can  cut  simultaneously  up  to  100mm  of  panels.  Therefore,  it  was  claimed,  in 

one  cutting  operation  the  company  was  able  to  cut  a  substantially  different 

number  of  square  meters  depending  on  the  thickness  of  the  panels  cut. 

Consequently, the claim was accepted. 

Comparison of Normal Value and Export Price 

9> 

(i) 

Start-up costs 

(34)  One  Polish  exporting  producer  referred  to  in  recital  (65)  of  the  provisional 

Regulation  disagreed  with  the  Commission  rejection  of  the  start-up  cost 

adjustment  to its worked hardboard  operations. However, as no new evidence 

was  submitted  by  this  producer,  the  findings  set  out  in  recital  (65)  of  the 

provisional Regulation are confirmed. 

Dumping 

(35)  One Polish exporting producer has put into question the methodology used by 

the  Commission  of  calculating  a  single  dumping  margin  for  all  hardboard 

product  types  instead  of  calculating  a  different  dumping  margin  for  raw 

hardboard and for worked hardboard. 

This claim could not be accepted. It is the constant practice of the Community 

institutions, in accordance with the provisions of Articles  1 and 2 of the basic 

Regulation, to establish a dumping margin for the product under consideration 

as a whole and not per category, type or model of the product concerned. The 

reason  is that  for  a product  like hardboard, which  exists  in a wide  variety  of 

types, the implementation of anti-dumping measures, in particular anti-dumping 

duties, on a per type basis is from a customs point of view impractical. 

(36)  On the basis of the above, the following  modified  dumping margins expressed 

as a percentage of the CIF import price at the Community border duty unpaid 

have been established for Polish exporting producers: 

<L\ 

EkopfytaS.A. 

Zaklady Pryt Pilsniowych S.A w Krosnie Odrzanskim. 

Czarna Woda Zaklady Plyt Pilsniowych: 

Alpex Karlino S.A.: 

Zaklady Pryt Pilsniowych S.A., Przemysl: 

Koniecpolskie Zaklady Pryt Pilsniowych S.A.: 

Non-cooperating exporting producers: 

20,6% 

11,0% 

34,8% 

22,4% 

9,1% 

11,4% 

34,8% 

With  regard to  Bulgaria,  Estonia,  Latvia,  Lithuania  and  Poland,  it  was  found 

that the overall level of cooperation was high. As mentioned  in recital (35) of 

the  provisional  Regulation,  it  was therefore  considered  appropriate  to  set  the 

dumping margin for the non-cooperating  companies in the countries with high 

cooperation at the level of the highest or the sole dumping margin established 

for a cooperating company in the country in question. 

(g) Russia 

(37)  No Russian exporting producer made any comments  following  disclosure and 

the publication of the provisional Regulation. 

Normal value for Russia was calculated on the basis of the weighted average of 

the normal values established for co-operating Polish companies. 

The dumping margin for  Russia has been recalculated  taking  into account the 

changes in the normal values established for the Polish companies as described 

in recitals (30) to (33) above. 

%f 

On this basis, a new single dumping margin expressed  as a percentage  of the 

CIF  import  price  at  the  Community  border,  duty  unpaid,  of  30.6%  has  been 

established for the Russian exporting producers. 

D.  INJURY 

1. Consumption 

(38)  The provisional findings are confirmed. 

2. Dumped imports 

(a) Cumulation 

(39)  The  Brazilian  exporting  producers  reiterated  the  claim  that  imports  into  the 

Community from Brazil  should not be cumulated with imports  from  the other 

countries concerned in the proceeding. They argued that hardboard produced in 

Brazil  and  exported  to  the  Community  does  not  compete  with  imports 

originating in the other countries concerned in that: 

- 

the level of its export prices is higher, on average, than the level found  for 

the  other  countries  concerned,  as  shown  by  the  lower  provisional 

undercutting margin found at the provisional stage; 

- 

the  volume  and  market  share  of  imports  showed,  during  the  period  under 

examination, a divergent trend from mat of the other countries concerned; 

l<o 

- 

it is sold to different  customers, mainly producers of lacquered doors. 

(40)  An examination of these claims resulted in the following  findings: 

The  quasi  totality  of  the  imports  from  Brazil  were  destined  for  particular  end 

uses  especially  the  manufacture  of  lacquered  doors,  a  sector  where  high  prices 

are obtained  and to which the other countries  concerned  do not  sell. In fact,  the 

users  of  Brazilian  hardboard  considered  imports  from  these  other  sources  as 

being  wholly  unsuitable  for  their  needs,  on  both  technical  and  economic 

grounds. 

The  above  findings  on  end  use  are  supported  by  Brazilian  price  levels,  which 

are  substantially  above  those  of  other  imports  from,  the  other  countries 

concerned.  Furthermore,  Brazilian  import  volumes  are  falling  while  others  are 

rising. 

(41)  In  the  light  of the  above,  it  is  not  unreasonable  in this  case  to  conclude  that  a 

cumulative  assessment  of  the  imports  from  Brazil  with  the  effects  of  imports 

from  other sources under investigation would be inappropriate. 

The effects  of imports from Brazil were therefore  examined  separately. 

%Y 

(b) Volume and price  development of the dumped imports 

(42)  The provisional findings  are  confirmed. 

However,  in  the  light  of  the  decision  to  analyse  the  effects  of  imports  from 

Brazil  separately  from  the  effects  of  imports  from  the  other  countries,  the 

analysis of import volumes and price trends is as follows: 

Imports from Brazil: 

1993 

1994 

1995 

1996 

IP 

QUANTITY  (tonnes) 

Indexed 

62,193 
100 

61,605 
99 

69,783 
112 

58,514 
94 

VALUE (000 Ecus) 

Indexed 

18,117 
100 

17,724 
98 

20,767 
115 

16,772 
93 

%  Market share 

Indexed 

6.3 

100 

5.4 
86 

6.0 
95 

5.2 
82 

Price per tone 

Indexed 

291 

288 

298 

287 

100 

99 

102 

98 

(43)  Import volumes and market share show a significant  decrease between  1995 and 

the  investigation  period,  while prices  remained  relatively  stable  throughout  the 

period  examined. 

%i 

Imports from other countries concerned: 

1993 

1994 

1995 

1996 

QUANTITY  (tonnes) 
Indexed 

171,890 
100 

192,165 
112 

253,041 
147 

209,727 
722 

w&itifi}'-

VALUE (000 Ecus) 

28,707 

33,919 

49,103 

43,461 

Indexed 

100 

118 

171 

151 

% Market share 

17.4 

16.9 

21.7 

18.5 

Indexed 

100 

97 

125 

107 

Price per tone 

Indexed 

167 

100 

177 

194 

207 

106 

116 

724 

Import  volumes  and  market  shares  substantially  increased  between  1993  and 

1995, fell back in 1996, and increased again in the investigation period. Imports, 

both  in  absolute  value  and  in  terms  of  market  share  were  higher  in  me 

investigation period than at the beginning of the period examined. 

Although prices rose significantly  over the period considered for the analysis of 

injury,  imports from all these countries were still substantially undercutting the 

Community industry's prices in the investigation period. 

tf 

(c)  Price  comparison 

(44)  Following  the  disclosure  of  the  provisional  findings,  comments  were  made  by 

the  Brazilian  exporting  producers  relating  to  the  methodology  used  for  the 

calculation of price undercutting. 

It was pointed  out that the price differential  between the Brazilian  export  prices 

and  Community  industry's  prices  were  mainly  due  to  a  small  part  of  the 

transactions  during the investigation  period,  accounting for  less than  1% of  the 

Community  production. 

One  of the  Brazilian  exporting  producers  requested  that  for  the  purpose  of  the 

comparison,  where  applicable, the price paid  by the  first  independent  customer 

in  the  Community  to  its  related  importer  be  used,  as  such  a  price  was  at  the 

same  level  of  trade  as  prices  of  the  Community  industry.  Furthermore,  it  was 

requested that the margins found  be expressed  as a percentage of the total  value 

of  imports  in  the  investigation  period,  including  those  omitted  from  the 

comparison  where  no  matching  models  had  been  sold  by  the  Community 

producers. 

(45)  The  latter  request  was  not  accepted.  It  is  standard  practice  of  the  Community 

institutions  to  use  only  the  OF  value  of  the  imports  during  the  investigation 

period  for  which an actual price-undercutting  analysis has been performed  and, 

consequently,  for  which  matching  Community-made  product  types  existed 

when determining the margins  found. 

¥> 

(46)  Furthermore, the Product Control Numbers (PCNs) provided by both exporting 

/ 

producers  and  Community  producers  were  carefully  examined  and  revised 

where necessary to ensure a fair comparison. The comparison was then made at 

the  same  level  of  trade  between  the  ex  works  prices  of  the  Community 

producers and either CIF export prices, Community frontier duty paid, when the 

sale was made directly by the exporting producers to an independent customer, 

or the ex-warehouse resale prices of the related importer to the first independent 

customer. 

(47)  The undercutting margin was calculated by weighting the type-by-type  average 

undercutting  rates by  the  quantities  of  the  dumped  imports  times  the  average 

prices of the matching Community-produced products. 

The same criteria were applied to the price comparisons for the other countries 

concerned. 

(48)  The  export  transactions  used  for  the  comparison  represented  at  least  74%  of 

total exports for each country concerned. 

(49)  The  revised  calculations  confirmed  the  existence  of  price  undercutting  for  all 

countries  except  Brazil,  for which  no  price  undercutting  was  found.  The  new 

levels of price undercutting are shown in the table below: 

W 

SUMMARY OF THE UNDERCUTTING MARGINS 
Country 

Weighted average undercutting on a direct 
product type-to-type comparison 

BRAZIL 
BULGARIA 
ESTONIA 
LATVIA 
LITHUANIA 
POLAND 
RUSSIA 

"~ 

. 

1 

44% 
65% 
48% 
45% 
53% 
65% 

___ 

3. Situation of the Community industry 

(50)  The provisional findings are confirmed. 

4. Conclusion on injury 

(51)  The  Polish  and  Latvian  exporting  producers  questioned  the  provisional 

conclusions  on  injury  on  the  grounds  that  the  developments  of  some  injury 

factors, such as production, market share and sales turnover of the Community 

industry were not sufficiently  negative to show the existence of material injury. 

These  contentions  were  examined,  but  could  not  be  accepted.  The  overall 

analysis at the Community level of all indicators relating to the situation of the 

Community industry, in particular in the light of the substantial deterioration of 

its sales prices and of its increasing financial losses, confirms the existence of 

injury. 

31 

(52)  Therefore the provisional findings on injury are confirmed. 

E.  CAUSATION OF INJURY 

1. Effect of the dumped imports from Brazil 

(53)  The  Brazilian  exporting  producers  claimed  that  imports  originating  in  Brazil 

could not have caused injury for the following reasons: 

- 

the quantities imported from Brazil decreased by 20% between  1995 and the 

investigation period; 

- 

the Brazilian product does not compete with Community production since it 

is  sold to  specialised  users, that  is manufacturers  of  lacquered  doors, table 

mats and the automotive industry which need Brazilian eucalyptus hardboard 

for their particular quality requirements, and cannot replace it, in spite of its 

higher prices, with other hardboard types; 

-  Brazilian  exports  do  not  undercut  the  Community  industry's  sales, 

particularly in the above-mentioned specialised sectors. 

(54)  As to the first claim, the decrease in the quantities imported does not preclude 

that injury has been caused in the investigation period by those imports; indeed, 

the  imports  were  still  substantial  and  well  above  the  de  minimis  limit  as 

provided in Article 5(7) of the basic Regulation. 

3^> 

(55)  As to the other claims, it was found that: 

-  around 68% of the imports from Brazil during the investigation period were 

destined  for  production  in  the  Community  of  lacquered  doors.  The 

Community  lacquered  door  industry  has  stringent  quality  requirements  for 

which  Brazilian  eucalyptus  hardboard  is  particularly  well-suited.  However, 

as  pointed  out  at recital  (18)  above,  the  high  quality  required  by  the  door 

manufacturers  is not strictly linked to the species of wood used, in this case 

eucalyptus.  Brazilian  hardboard 

is  well-suited 

to 

lacquered  door 

manufacture,  not  only  because  it  is  made  with  eucalyptus  wood,  but  also 

because  the  Brazilian  producers  carry  out  very  severe  quality  controls  on 

their exports to the Community; 

- 

in the investigation period only very small quantities of hardboard produced 

by  the  Community  industry  were  used  for  the  manufacture  of  lacquered 

doors; the demand was almost completely  satisfied  by eucalyptus hardboard 

either imported  from Brazil  or supplied by the Portuguese non-complainant 

producer.  The door manufacturers  explained  their choice  on the  grounds  of 

the high quality guaranteed by those suppliers; 

iH 

- 

the above argument on the special end-uses is supported by the fact that there 

is no undercutting by Brazilian exports destined for the manufacture  of door-

skins;  in  fact  their  prices  are  significantly  above  those  of  the  Community 

industry; 

- 

the  evidence,  therefore,  does  not  support  the  Community  producers'  claim 

that  market  prices  were  depressed  by  Brazilian  exports,  and  that  it  is  price 

depression which prevents them from  producing doorskins of a quality  equal 

to  that  of the  Brazilian  product  and  suitable  for  the  production  of  lacquered 

doors; 

-  as to  the  imports  from  Brazil  not  sold  to the  lacquered  doors  segment,  they 

did not undercut, on average, the prices of Community  production. 

(56)  The foregoing  leads to the conclusion that Brazilian exports were not a cause of 

material  injury  to  the  Community  industry,  and  that,  as  a  consequence,  the 

proceeding with respect to Brazil should be terminated without measures. 

3* 

2.  Effect of the dumped imports from the other countries subject to 

investigation 

(57)  The  volume  of  imports  from  the  other  countries  subject  to  investigation 

increased  by 29% between  1993 and  the  investigation  period.  Although  their 

prices increased, on. average, by 32% over the same period, they still undercut 

substantially the prices of the Community  industry  in the investigation  period. 

As  a  result  of  this  undercutting,  which  ranged  from  44%  to  67%,  the 

Community industry experienced  a  16% fall  in its selling prices and a serious 

deterioration of its financial situation. 

The  provisional  findings  that  the  dumped  imports  from  Bulgaria,  Estonia, 

Latvia, Lithuania, Poland and Russia caused material injury  to the Community 

industry are therefore  confirmed. 

3. Effect of imports from other third countries 

(58)  Although  certain  exporting  producers  in  the  countries  concerned  reiterated 

claims that injury  had been caused by the increase of imports from  other third 

countries, no new information  was made available in this respect which could 

alter the provisional findings. 

The provisional findings are therefore  confirmed. 

36 

4. Competition from non-complainant Community producers 

(59)  Some  of  the  exporting  producers  concerned  drew  attention  to  the  fact  that, 

although not undercutting the Community industry's prices in the investigation 

period,  non-complainant  Community  producers  had  been  undercutting,  on 

average, the Community industry's prices from 1993 to 1995, and that this may 

have been, in those years, a cause of injury. 

(60)  It should be noted that, although lower than those of the Community  industry, 

non-complainant  producers'  prices  were  substantially  higher  than  the  average 

prices of imports from the countries concerned with the exception of Brazil: the 

average  price  of  these  imports %was  167  Ecus  per  tonne  in  1993, while  the 
average  unit  price  for  non-complainant  producers  was  1.02  Ecu  per  m2, 
corresponding to more than 300 Ecus per tonne. 

(61)  In the light of these price relationships, it is considered unlikely that the pricing 

of  non-complainant  producers  was  a  source  of  injury  to  the  Community 

industry; in any event, such pricing effect  was considered insufficient  to break 

the  causal  link  between  the  dumped  imports  from  the  six  countries  and  the 

injury  suffered. 

5. Effect of dry-process  fibreboards 

(62)  After the imposition of provisional measures, various exporting producers again 

argued  that the injury  suffered  by the Community industry was not caused by 

the  dumped  imports,  but  by  the  competition  from  the  thin  dry-process 

fibreboards. 

n 

(63)  The  investigation  has  shown  that  thin  dry-process  fibreboard  could  be  used  in 

most  areas  where  hardboard  is  employed.  Nevertheless,  despite  the  strong 

growth  in  the  dry-process  fibreboard  market  in  recent  years,  as  shown  by  the 

growth  in  consumption  for  hardboard,  this  has  not  occurred  at  the  expense  of 

the hardboard  sector. 

(64)  Various  interested  parties  have  submitted  estimates  of the  size  of  the thin  dry-

process  fibreboards  sector.  On the  basis  of  statistics provided  by the  European 

MDF  industry,  the  volume  of  production  of  thin  dry-process  fibreboards  is 
estimated  at  between  500,000  and  600,000  m3  in  1997,  with  an  increase  of 

around  50% between  1993 and  1997. Separate  statistics on imports  of thin  dry-

process  fibreboards  are not  available, but  imports  of dry-process  fibreboards  of 

all thicknesses were reported to be minor until  1997. 

(65)  However,  at  the  provisional  stage  it  was  shown  that,  since  consumption  of 

hardboard  increased  by  20%  between  1993  and  the  investigation  period  (it 

should  be  recalled  that  consumption  was  around  1,2  million  tonnes  in  the 

investigation period, despite the rise of the thin dry-process  fibreboards  sector), 

it was  unlikely  that  the  increase  in the  demand  of thin  dry-process  fibreboards 

was  a  major  cause  of  injury.  The  injury  to  the  Community  industry  did  not 

consist  of  a loss  in  sales volumes, which might  indicate that  a  substitution  had 

occurred.  Injury  was  mainly  shown  by  financial  losses,  due  to  a  strong 

downward pressure on prices exerted by the dumped imports. 

# 

(66)  Indeed  the  data  available  show  that  the  average  price  of  thin  dry-process 

fibreboards  was  above  that  of  Community  produced  hardboard  of  equivalent 

thickness  for  all  of  the  period  1993  to  1996.  Only  during  the  investigation 

period  is  there  some  indication  that  one  type  of  thin  dry-process  fibreboard, 

namely  thin  MDF,  may  have  reached  the  price  level  of  Community  produced 

hardboard  in  parts  of  the  Community.  So  even  in  this  scenario,  hardboard 

imported  from  the countries concerned  during the investigation period was  sold 

at significantly  lower prices as outlined in recital (49). 

(67)  Given  the  interchangeability  between  all  types  of  wood-based  products,  thin 

dry-process  fibreboards  have  established  a  presence  on  all  markets  for  wood-

based panels, including the hardboard  market. However, the general  increase  in 

the  demand  for  wood  panels,  and  of  fibreboards  in particular,  has  allowed  the 

demand  for  hardboard  to  grow  in  spite  of  the  presence  of  the  competing 

products. 

(68)  No  new  information  has  been  made  available  which  changes  the  provisional 

finding  that, despite the growth  in demand  for  thin  dr^-process fibreboards,  the 

dumped  imports  of  hardboard  from  the  countries  subject  to  investigation,  with 

the  exception  of  Brazil,  in  isolation  caused  material  injury  to  the  Community 

industry, in terms of price depression and financial  losses. 

6. Conclusion on causation 

(69)  In  the  light  of  the  foregoing,  the  provisional  findings  on  causation  are 

confirmed, with the exception of those relating to imports from  Brazil. 

tf 

F.  COMMUNITY INTEREST 

1. The definitive investigation 

(70)  Following the imposition of provisional measures, the analysis of the impact of 

^ 

anti-dumping  measures  on  the  various  sectors  involved  in  the  investigation 

continued. Users of hardboard were visited, as indicated in recital (3) above, as 

well as a non-complainant Community producer of eucalyptus hardboard. 

2. Impact on the Community industry 

(71)  Subsequent to the imposition of provisional measures, several arguments were 

presented  on the likely  impact  of  any  definitive  measures  on the  Community 

industry. 

These  arguments  concerned  the  relationship between  hardboard  and  thin  dry-

prpcess fibreboards, as follows. 

(a) Arguments presented by interested parties 

(72)  It was claimed by certain interested parties that the Community industry could 

not benefit  from  any anti-dumping  measures  as a result  of the  substitutability 

between thin dry-process fibreboards and hardboard. 

Ho 

In support  of this view, it was alleged  that the price  level  of thin  dry-process 

fibreboards  has  reached  the  level  of  hardboard  of  equivalent  thickness. 

According to these claims, the imposition of anti-dumping  measures, with the 

intention of increasing the price of hardboard in the Community, would have the 

effect  of raising its price above that of competing thin dry-process  fibreboards. 

Where  the  two  products  are  interchangeable,  the  effect  of  the  anti-dumping 

measures  would  be  that  customers  will  choose  to  use  thin  dry-process 

fibreboards  instead  of  hardboard.  In  other  words, the  anti-dumping  measures 

would merely serve to reduce the consumption of hardboard by encouraging a 

switch to the consumption of thin dry-process  fibreboards. 

(73)  It  was  also  claimed  that  thin  dry-process  fibreboards  are  a  product  in  rising 

demand,  with  an  increasing  investment  in  production  capacity  and  with  the 

potential to replace  hardboard  in most end uses  if a  change  in relative  prices 

occurs. 

(b) The size of the thin dry-process fibreboards sector 

(74)  As  mentioned  in  recital  (64), production  of thin  dry-process  fibreboards  was 
between  500,000  and  600,000  m3  in  1997,  with  a  growth  of  around  50% 

between  1993 and  1997. However, the plants  specialised  in the production of 

these thin boards (that is, those equipped with the so-called 'calander press') are 

currently operating at near-full capacity, and most of the new investments in the 

sector of dry-process fibreboards relate to plants which are best employed in the 

production  of  'middle'  thicknesses,  that  is, between  6  and  30mm,  which  are 

outside the scope of this investigation. 

H1 

In the  short run, therefore,  an increase in output of thin dry-process  fibreboards 

is unlikely. 

(c) The competition between hardboard and thin dry-process  fibreboards 

(75)  As  explained  in  recitals  (5)  to  (9),  hardboard  and  dry-process  fibreboards  are 

theoretically  interchangeable  in  many  end  uses,  but  their  different  physical 

characteristics  imply that each has its specific  advantages  and disadvantages  for 

any particular end use. 

(76)  The  exporting  producers  claimed  that  if  there  is  a  sufficient  change  in  the 

relative  prices  of  the  two  competing  products, the  extra  costs  incurred  by  any 

technical  problems  associated  with  switching  to  the  use  of  thin  dry-process 

fibreboards  can  be  overcome  if  the  price  advantage  in  comparison  with 

hardboard becomes large enough. 

(77)  The  Community  industry  claimed,  however,  that  the  substitution  of  hardboard 

with  dry-process  fibreboards  has  already  taken  place  in  those  end  uses  where 

they have a technical advantage, and that at present the competitive  situation  on 

the  market  has  found  an  equilibrium,  which  is  not  going  to  be  substantially 

altered  by  the  proposed  anti-dumping  measures.  Since  consumption  of 

hardboard  continued to rise by 20% over the period examined, the data suggests 

that  hardboard  has  been  able  to  compete  effectively  with  thin  dry-process 

fibreboards,  lending  weight  to  the  arguments  submitted  by  the  Community 

industry.  Continual  technical  progress  in  the  manufacture  of  thin  dry-process 

fibreboards,  however,  makes  it difficult  to  assess the degree to  which  thin  dry-

process  fibreboards  might be used  in fields hitherto  dominated  by  hardboard  in 

the  future. 

\j{  2-

(78)  Thin  dry-process  fibreboards  have  been  priced  above  hardboard  of  equivalent 

thickness  for  most  of  the  period  examined,  but  as  technological  progress  has 

brought about cost reductions, their prices have declined steadily throughout the 

period, reaching approximately the levels of Community-produced  hardboard  of 

equivalent thickness by  1997. * 

It  is  unclear  whether  this  trend  decrease  in  the  price  of  thin  dry-process 

fibreboards,  as technological  progress  leads to continued  cost-reductions,  is  set 

to  continue  into the  near  future.  The  complainant  states that  further  substantial 

reductions  in  the  prices  of  thin  dry-process  fibreboards  in  the  Community  are 

not to be expected. The product is, it is claimed, now beyond the phase of rapid 

growth  experienced  in the last few years, which led to declining  unit  costs, and 

the mills are approaching  full  capacity utilisation, with a cost structure which  is 

similar to that of hardboard. Therefore, the price of thin dry-process  fibreboards 

is expected  to remain,  if definitive  anti-dumping  measures  are  imposed,  on  the 

same level as the price of Community produced  hardboard. 

(79)  On the other hand, the continuous-line  and calander-press production  processes 

which are used to manufacture  thin dry-process fibreboards are said by the dry-

processed  fibreboard  industry  to  be  more  efficient  than  the  multi-daylight 

presses  used  in  the  production  of  hardboard.  In  particular,  the  levels  of  waste 

and  offcuts  from  these  MDF production  processes  are  allegedly  far  lower  than 

with multi-daylight  presses, whilst the speed of manufacture  is greater.  Thus, it 

is claimed  that the prices of Community-produced  thin dry-process  fibreboards 

can continue their declining trend. The same prediction  is made by some of the 

interested  parties  concerning  the  price  trend  of  imports  of  thin  dry-process 

fibreboards from  outside of the Community. 

M2> 

These developments have implications for the use of hardboard in those sectors 

where its end-uses overlap with those of dry-process fibreboards, such as in the 

furniture  industry. If prices of dry-process fibreboards  continue to decline  after 

the imposition of definitive  anti-dumping measures, it is possible that a switch 

in consumption away from  hardboard in favour  of thin dry-process  fibreboards 

could  follow  in  those  market  segments  where  dry-process  fibreboards  are 

interchangeable with hardboard. 

(d) Conclusion on the impact of measures on the Community industry 

(80)  In view of the above analysis, it was found that the measures proposed will most 

likely have a beneficial  impact on the situation of the Community  industry. In 

case anti-dumping measures are not imposed, the dumped imports will continue 

undercutting substantially the Community industry's prices. Given the  financial 

difficulties  highlighted  by the injury  analysis, the continuation  of the business 

activity  of the Community  industry  would be seriously threatened  and  a large 

part  of  Community  production  of  hardboard,  which  guarantees  at  present  the 

coverage of a wide range of customers' demands,  would be put at risk, forcing 

users  to  choose  among  less  than  optimal  alternatives,  such  as  the  dumped 

imports and other wood panel products. 

It  should  also be borne  in mind  that,  although  it  is possible  that  some  of the 

benefits  of  anti-dumping  measures  may  accrue  to  industries  other  than  the 

hardboard  industry,  it  is  highly  unlikely  that  the  Community  industry  would 

have  sought protection  against  unfair  trade  had  it  not  expected  benefits  from 

measures. 

4^1 

The effectiveness  of the measures, however, may be reduced depending on the 

future  price  relationship  between  hardboard  and  the  dry-process  fibreboards, 

and a review under Article 11(3) of the basic Regulation may be justified  should 

developments in this context warrant such a review. 

3. Impact on upstream industries 

(81)  As  no  further  representations  were  received,  the  provisional  findings  are 

confirmed. 

4. Impact on importers 

(82)  In the absence of further representations, the provisional findings are confirmed. 

5. Impact on users 

(83)  All the users co-operating during the investigation were manufacturers  of doors 

using  only  hardboard  imported  from  Brazil.  It  was  found  that  imports  from 

Brazil have not caused injury to the Community industry and that no measures 

should be adopted in respect of that country. 

The  impact  oil  other  users  is  expected  to  be  minor,  given  the  rates  of  duty 

proposed and the small share of hardboard in the cost of production of most of 

such users. 

r 
Mi 

6. Conclusion on Community  interest 

(84)  In the light  of the  foregoing,  it  is concluded  that  there  is no  reason  to  consider 

that the imposition of definitive  anti-dumping measures on imports of hardboard 

originating  in  the  countries  for  whom  definitive  measures  are  to  be  adopted 

would be against the overall  interest of the Community. 

G.  MEASURES  PROPOSED 

1. Termination of the proceeding in respect of Brazil 

(85)  Based  on  the  conclusions  of  the  definitive  investigation,  the  proceeding 

concerning imports originating  in Brazil is terminated  by Commission  Decision 

... ?  without  the  imposition  of  measures.  The  amounts  secured  by  way  of  a 

provisional  anti-dumping  duty  shall  therefore  be  released.  The  undertakings 

provisionally  accepted  from  the  two  exporting  producers  in  Brazil  will 

automatically lapse in accordance with Article 8(6) of the basic Regulation. 

2. Definitive  measures 

(a) Injury elimination level 

(86)  The  injury  elimination  level  was  calculated  using  the  same  methodology  as 

described  in  the  provisional  Regulation  at  recital  (113)  with  a  level  of  trade 

adjustment  to reflect  sales made via traders. 

3  See page 

of this Official  Journal. 

1/& 

(87)  An injury  margin was established  for each of the exporting producers  concerned 

as a result  of these  comparisons  and this margin  was expressed  as a percentage 

of the CIF value of their exports to the Community  for product types for  which 

there were Community-made matches. 

(b) Form and level of the definitive measures 

(88)  Based on the above conclusions on dumping, injury, causal link and  Community 

interest, it was considered what form and level of anti-dumping measures would 

have  to  be  taken  in  order  to  remove  the  trade-distorting  effects  of  injurious 

dumping  and  to  restore  effective  competitive  conditions  on  the  Community 

market. 

Definitive  measures  should  take  the  form  of  ad-valorem  duties,  which  are 

deemed appropriate to remove the injury caused by the dumped imports. 

In  accordance  with  Article  9(4)  of  the  basic  Regulation,  as  the  injury  margin 

was  lower  than  the  dumping  margin  found  for  one  of  the  co-operating  Polish 

exporting producers, the definitive  anti-dumping  duty for that company  is set at 

the level of the former.  For all other exporting producers, the injury  margins are 

higher  than  the  corresponding  dumping  margins  and  measures  are  therefore 

based on the latter margins. The same applies for the residual duties. 

wr 

(c)  Undertakings 

(89)  It will be recalled from  recital (115) et seq. of the provisional  Regulation that 

undertakings  had  been  offered  by  the  co-operating  exporting  producers  in 

Brazil,  Bulgaria,  Estonia,  Latvia,  Lithuania  and  Poland,  and  provisionally 

accepted by the Commission. 

These  undertakings,  with  the  exception  of  those  offered  by  the  Brazilian 

companies, reflect the definitive findings of the investigation with respect to the 

minimum  prices  provided  therein  and  have. been  definitively  accepted  by 

Commission Decision 

«. 

3. Collection of the provisional duties 

(90)  In the light of the seriousness of the injury suffered  by the Community industry, 

it is considered  necessary that the amounts secured  by way of the provisional 

anti-dumping  duty  under  Regulation  (EC) No  1742/98 should  be  definitively 

collected to the extent of the amount of the definitive duties levied, 

4  See page 

of this Official Journal 

Ul> 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  hardboard, 

defined  as wet-processed fibreboard of wood or other ligneous materials, whether 

or not bonded with resins or other organic substances and with a density exceeding 
0,8  g/cm3,  falling  under  CN  codes  ex  4411 11 00  and  ex  4411 19 00  (TARIC 
codes: 4411 11  00* 10 and 4411 19 00* 10) originating in Bulgaria, Estonia, Latvia, 

Lithuania, Poland and Russia. 

2.  The rate of the definitive anti-dumping duty applicable to the net  free-at-

Community -frontier price to the products manufactured by the companies listed 

below shall be as follows: 

Country 

Company 

Bulgaria 

Estonia 
Latvia 
Lithuania 
Poland 

Russia 

Fazerles AD 
All other companies 
All companies 
All companies 
All companies 
Alpex-Karlino S.A. 
Ekopryta S.A. 
Zaklady Pryt Pilsniowych 
S.A., Przemysl 
Koniecpolskie Zaklady Pryt 
Pilsniowych S.A 
Zaklady Pryt Pilsniowych 
S.A w Krosnie Odrzanskim 
All other companies 
All companies 

Rate of duty 
(%) 
7.1 
7.2 
6.0 
4.7 
11.4 
22.4 
7.0 
9.1 

11.4 

11.0 

34.8 
30.6 

Taric additional 
code 

8461 
8900 
-
-
-
8479 
8480 
8481 

8494 

8495 

8900 
-

uf 

Article 2 

1.  Notwithstanding  Article  1,  the  definitive  duty  shall  not  apply  to  imports  of 

hardboard  produced  and  directly  exported  and  invoiced  to  an  importing  company 

in  the  Community  by  the  companies  listed  in  paragraph  3,  provided  that  the 

conditions of paragraph 2 are met. 

2.  When the  declaration  for  release  for  free  circulation  is presented,  exemption  from 

the  duty  shall  be  conditional  upon  presentation  to  the  competent  Member  State's 

customs  services  of  a valid  Undertaking  Invoice  issued  by  one  of  the  companies 

listed in paragraph 3. The Undertaking Invoice, the essential elements of which are 

listed  in the Annex, shall  conform  to the requirements  for  such  invoices  set out  in 
the undertaking accepted by Commission Decision 

5 

3.  Imports  accompanied  by  an  Undertaking  Invoice  shall  be  declared  under  the 

following Taric additional codes: 

5 See page 

of this Official Journal 

io 

Country 

Company 

Taric Additional 
Code 

Bulgaria 

Estonia 
Latvia 
Lithuania 
Poland 

FazerlesAD 
Lessoplast AD 
AS Repo Vabrikud 

- AS "Bolderaja" 
JSC Grigiskes 
Alpex-Karlino S.A. 
Czarna Woda Zaklady Pryt 
Pilsniowych 
EkoplytaS.A. 
Zaklady Pryt Pilsniowych 
S.A., Przemysl 
Koniecpolskie Zaklady Pryt 
Pilsniowych S.A 
Zaklady Pryt Pilsniowych S.A 
w Krosnie Odrzanskim 

. 

Article 3 

8496 
8497 
8498 
8499 
8510 
8511 
8600 

8513 
8545 

8546 

8547 

1. The amount provisionally secured by Regulation (EC) No 1742/98 with respect to 

imports  originating  in the  countries  mentioned  in  Article  1 shall  be  definitively 

collected to the extent of the amount of the definitive duties levied. 

2.  The amounts provisionally secured by Regulation (EC) No 1742/98 with respect to 

imports originating in Brazil shall be released. 

51 

Article 4 

This Regulation shall enter into force on the day of its publication in the Official 

Journal of the European Communities. 

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

States. 

Done at Brussels, 

For the Council 

ANNEX 

Elements to be indicated in an Undertaking Invoice referred to in Article 2(2): 

1.  the Product Reporting Code (as established in the undertaking offered  by the 

producing exporter in question); 

2.  The exact description of the goods, including: 

•  The Company Product Code (CPC); whether the hardboard is unworked or 

worked; the thickness and the precise measures of the panel, indicating in brackets 

whether it has standard measures (STA) or cut-to-size ones (CTS); 

•  CNCode; 

• 

the TARIC additional code under which the goods on the invoice may be customs 

cleared at Community borders (as specified in the Regulation); 

•  quantity (to be given in m2); 

3.  The description of the terms of the sale, including: 

•  Price per square meter1 ; 

• 

• 

• 

the applicable payment terms; 

the applicable delivery terms; 

total discounts and rebates; 

4.  Name of the importer to which the invoice is issued directly by the Company. 

5.  The name of the official  of the Company that has issued the Undertaking Invoice 

and the following signed declaration: 

1  For Undertaking  invoices  issued  by the Latvian  exporting  producer  AS "Bolderâja",  in  case of 
sales via  sales agents established in the Community the price per m2 may appear on an additional 
invoice issued by the agent instead of on the Undertaking invoice issued by AS "Bolderâja". If that 
is the case, the Undertaking invoice should also mention the name of the agent. 

ii> 

"I,  the  undersigned,  certify  that  the  sale  for  direct  export  to  the  European 

Community  of  the  goods  covered  by this  invoice  is  being  made  within  the 

scope  and under the  terms  of  the  undertaking  offered  by  «Company»,  and 
2  I declare 
accepted by the European Commission through Decision (EC) 

that the information provided in this invoice is complete and correct." 

2  See page .... of this Official Journal. 

^ 

ISSN 0254-1475 

COM(98) 805 final 

DOCUMENTS 

EN 

02  11  06  01 

Catalogue  number  :  CB-CO-98-813-EN-C 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg