Commission Regulation (EC) No 1472/2000 of 6 July 2000 imposing a provisional anti-dumping duty on imports of polyester staple fibres originating in India and the Republic of Korea
Date: 2000-07-06
Institutions: European Commission
Subjects: India, South Korea, anti-dumping duty, import, man-made fibre, originating product

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Official Journal of the European Communities

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I

(Acts whose publication is obligatory)

COMMISSION REGULATION (EC) No 1472/2000

of 6 July 2000

imposing a provisional anti-dumping duty on imports of polyester staple fibres originating in India
and the Republic of Korea

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1), as last
amended by Council Regulation (EC) No 905/98 (2) and in
particular Article 7 thereof,

After consulting the Advisory Committee,

Whereas:

(1)

(2)

(3)

A. PROCEDURE

In August 1999 and November 1999, the Commission
received complaints requesting the initiation of anti-
dumping proceedings with regard to imports into the
Community of polyester staple fibres (‘PSF’) originating
in the Republic of Korea and India, respectively.

These complaints were lodged by the International
Rayon and Synthetic Fibres Committee (‘CIRFS’) acting
the following companies: Tergal Fibres
on behalf of
(France), Du Pont de Nemours (Deutschland) GmbH,
Märkische Faser AG and Trevira GmbH and Co.
(Germany), Wellman International Ltd. (Ireland), Monte-
fibre SpA (Italy), Trevira Fibras (Portugal) and Catalana
de Polimers (Spain). These producers represented a
major proportion of the total Community production of
PSF.

The complaints contained evidence of dumping of the
product concerned and of material injury resulting there-
from, which was considered sufficient
to justify the
initiation of proceedings for both of these countries.
Accordingly,
the Commission announced by notices
published in the Official Journal of the European Commu-
nities (3) (4) the initiation of anti-dumping proceedings
and commenced investigations.

(4)

There are definitive anti-dumping measures currently in
force on imports of PSF originating in Belarus (Council

(5)

(6)

(7)

(8)

(9)

Regulation (EC) No 1490/96 (5)) and Taiwan (Council
Regulation (EC) No 1728/1999 (6)).

By Commission Regulation (EC) No 124/2000 (7) the
Commission imposed provisional anti-dumping duties
on imports of PSF originating in Australia, Indonesia
and Thailand.

By Council Regulation (EC) No 978/2000 (8) definitive
countervailing duties were imposed on imports of PSF
originating in Australia, Indonesia and Taiwan.

The definitive anti-dumping measures
imposed by
Council Regulation (EEC) No 54/93 (9) on imports of
PSF originating in India were allowed to lapse on 15
January 1998, while those concerning imports of PSF
from the Republic of Korea were repealed in August
1999 (Council Regulation (EC) No 1728/1999).

For administrative reasons and as the two current
proceedings were carried out using data for the same
investigation period,
it was considered appropriate to
merge them into one investigation.

The Commission officially advised the complainant
Community producers, exporting producers and im-
porters known to be concerned, the representatives of
the exporting countries as well as Community users and
suppliers of the initiation of the proceeding. The parties
directly concerned were given the opportunity to make
their views known in writing and to request a hearing
within the time limit set in the applicable notice of
initiation.

(10)

The Commission sent questionnaires
to all parties
known to be concerned and received replies from seven
complaining Community producers, as well as five
exporting producers, two importer/users and one user
for the proceeding concerning the Republic of Korea,
and three exporting producers one importer/user, two
importers and one user for the proceeding concerning
India.

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 128, 30.4.1998, p. 18.
(3) OJ C 285, 7.10.1999, p. 3.
(4) OJ C 369, 21.12.1999, p. 20.

(5) OJ L 189, 30.7.1996, p. 13.
(6) OJ L 204, 4.8.1999, p. 3.
(7) OJ L 16, 21.1.2000, p. 30.
(8) OJ L 113, 12.5.2000, p. 1.
(9) OJ L 9, 15.1.1993, p. 2.

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(11) A number of exporting producers in the countries
concerned, as well as complainant Community produ-
cers, Community users and importers made their views
known in writing. All parties, who so requested within
the applicable time limit and indicated that there were
particular reasons why they should be heard, were
granted a hearing.

(12)

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

dumping,

resulting

injury

of

(a) Exporting producers in the exporting countries

India

— Indian Organic Chemicals Limited, Mumbai,

— Reliance Industries Ltd, Mumbai.

The Republic of Korea

— Daehan Synthetic Fibre Co. Ltd., Seoul,

— Saehan Industries Inc., Seoul,

— Samyang Corporation, Seoul,

— SK Chemicals Co. Ltd., Seoul,

— Sung Lim Co. Ltd., Seoul.

(b) Trading company in an exporting country related to

an exporting producer

— SK Global Co. Ltd., Seoul, Korea.

(c) Importer in the Community related to an exporting

producer

— Saehan Deutschland GmbH, Eschborn, Germany.

(13) At this stage, it was not considered necessary to carry
out on-spot verification visits at the premises of the
Community industry. In any event, six months of the
investigation period in the current proceedings was ver-
ified in the context of a related proceeding.

(14)

The investigation of dumping and injury, for the current
proceedings, covered the period from 1 October 1998
to 30 September 1999 (hereinafter referred to as ‘the
investigation period’ or ‘IP’). The examination of trends
in the context of the injury analysis covered the period
from 1 January 1996 to the end of the IP.

(16)

(17)

(18)

(19)

The product is a basic material used at various stages of
the manufacturing process of
textile products. The
Community consumption of PSF is either used for spin-
ning, i.e. manufacturing filaments for the production of
textiles, mixed or not with other fibres such as cotton
and wool or for non-woven applications such as filling
(fibrefill), i.e. stuffing or padding of certain textile goods
such as cushions, car seats and jackets.

The product is sold in different product types which can
be identified through different specifications such as
thickness, length, tenacity, shrinkage, lustre and silicon
treatment or through their classification into product
families such as regular, hollow, spiral and bicomponent
fibres and specialities such as coloured, branded and
trilobal
fibres. From a production point of view, a
distinction can be made between virgin PSF, produced
from virgin raw materials,
and regenerated PSF,
produced from recycled polyester. Finally, quality may
be substandard or first grade.

The different types are considered as one product for the
purpose of the investigation in the sense that the basic
types do not
physical characteristics of
entail any significant differences, even though the uses
and the quality of PSF sold might differ. There exist no
clear dividing lines between the various types as there is
overlapping and consequently competition between
adjacent types.

the different

2. Like product

The Commission found that there were no differences in
the basic physical characteristics and uses of the PSF
imported into the Community originating in India and
the Republic of Korea and the PSF produced by the
complainant Community producers and sold on the
Community market. It was also found that there was no
difference between the PSF produced in India and the
Republic of Korea and exported to the European
Community and that sold on the domestic markets of
those countries. It was therefore concluded that both the
PSF produced and sold by the Community industry on
the Community market and the PSF produced and sold
on the domestic markets of India and the Republic of
Korea were, within the meaning of Article 1(4) of Regu-
lation (EC) No 384/96 (hereinafter ‘the basic Regula-
tion’), alike to the PSF imported into the Community
from the two countries subject to investigation.

B. PRODUCT UNDER CONSIDERATION AND LIKE

PRODUCT

C. SAMPLING OF INDIAN EXPORTING PRODUCERS

1. Product under consideration

1. Provision of basic information

(15)

The product under consideration is synthetic staple
fibres of polyester, not carded, combed or otherwise
processed for spinning, which is currently classifiable
under CN code 5503 20 00. It is commonly referred to
as polyester staple fibres (PSF).

(20)

In view of the large number of exporting producers in
India mentioned in the complaint,
the Commission
initially considered that it might be necessary to apply
sampling techniques in accordance with Article 17 of
the basic Regulation.

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(21)

(22)

(23)

the

to Article 17(2) of

In order to enable the Commission to select a sample,
pursuant
the basic Regulation,
exporting producers were requested to make themselves
known within 15 days of
the
proceeding and to provide basic information on their
export and domestic sales, their precise activities with
regard to the production of the product concerned and
the names and activities of all their related companies in
the PSF sector. The Indian authorities and the Indian
association of exporting producers were also contacted
in this regard by the Commission.

initiation of

2. Pre-selection of cooperating companies

Five exporting producers reported export sales of the
product concerned to the Community during the period
1 October 1998 to 30 September 1999.

imports from India into the Community.

The exporting producers, who made themselves known
within the fifteen-day period, accounted for up to 100 %
of total
In
these circumstances, the Commission decided not to
limit their investigation of dumping to a lower number
of exporting producers by using a sample in accordance
with Article 17(1) of the basic Regulation. Accordingly,
the Commission sent questionnaires to all five com-
panies who reported exports to the Community during
the investigation period.

(24) However, only three of these companies responded to
the questionnaire and are therefore considered as coop-
erating with the investigation.

(25)

The other two companies, along with exporting produ-
cers,
if any, which did not make themselves known
within the 15-day period, were considered as non-coop-
erating companies.

D. DUMPING

1. General methodology

(26)

This section explains the general methodology used to
establish whether the imports into the Community of
the product under consideration have been dumped.
Specific issues raised by the investigation for each
country concerned are described in recitals 45 to 59.

1.1. Normal value

1.1.1. O v e r a l l

r e p r e s e n t a t i v i t y

o f

d o m e s t i c

s a l e s

(27)

In accordance with Article 2(2) of the basic Regulation,
the Commission first examined whether the domestic
sales of PSF to independent customers by each exporting
the total
producer were representative,

i.e. whether

volume of such sales was equal to or greater than 5 % of
the total volume of the corresponding export sales to
the Community.

(28)

This assessment revealed that all investigated exporting
producers had representative sales of PSF on their
domestic markets during the investigation period.

1.1.2. P r o d u c t

t y p e c o m p a r a b i l i t y

(29)

The Commission considered domestically sold and
exported product types, which had similar use, quality,
denier,
lustre and silicon treatment as being directly
comparable.

1.1.3. P r o d u c t

t y p e

s p e c i f i c

r e p r e s e n t a t i v i t y

(30) Domestic sales of a particular product type were con-
sidered as sufficiently representative when the volume of
that product type sold on the domestic market to inde-
pendent customers during the investigation period
represented 5 % or more of the total volume of the
comparable product
to the
Community.

sold for

export

type

1.1.4. O r d i n a r y c o u r s e o f

t r a d e t e s t

(31)

(32)

The Commission subsequently examined whether the
domestic sales of each exporting producer could be
considered as being made in the ordinary course of trade
pursuant to Article 2(4) of the basic Regulation.

This was done by establishing the proportion of
to independent customers, of each
domestic sales
exported product
type, not sold at a loss on the
domestic market during the investigation period:

(a) For those product types where more than 80 %, by
volume, of sales on the domestic market were not
below unit costs and where the weighted average
sales price was equal to or higher than the weighted
average production cost, normal value, by product
type, was calculated as the weighted average of all
domestic sales prices of the type in question;

(b) For those product types where at least 10 %, but no
sales on the
more than 80 %, by volume, of
domestic market were not below unit costs, normal
value, by product
the
weighted average of domestic sales prices which
were made at prices equal to or above unit costs
only, of the type in question;

type, was calculated as

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(c) For those product types where less than 10 %, by
volume, was sold on the domestic market at a price
not below unit costs,
it was considered that the
product type concerned was not sold in the ordinary
course of trade and therefore, normal value was
constructed.

1.3. Comparison

(38)

For the purpose of ensuring a fair comparison between
the normal value and the export price, due allowance in
the form of adjustments was made for differences
affecting price comparability in accordance with Article
2(10) of the basic Regulation.

1.1.5. N o r m a l v a l u e b a s e d o n a c t u a l d o m e s t i c

p r i c e

(33) When the requirements set out in recitals 27 to 32(a)
and (b) were met, normal value was based for the corre-
sponding product type on the actual prices paid or
payable, by independent customers in the domestic
market of
the exporting country, during the invest-
igation period, as set out in Article 2(1) of the basic
Regulation.

(39) Accordingly,

allowances

for differences

in import
insur-
charges and indirect taxes, discounts, transport,
ance, handling,
loading and ancillary costs, packing
costs, credit costs, technical assistance and commissions,
have been granted where applicable and justified.

(40)

The comparison between normal value and export price
was made on an ex-factory basis.

1.4. Dumping margins

(34)

(35)

(36)

(37)

1.1.6. N o r m a l

v a l u e

b a s e d

o n

c o n s t r u c t e d

v a l u e

1.4.1. D u m p i n g m a r g i n f o r c o m p a n i e s i n v e s t i -

g a t e d

For product types falling under recital 32(c), as well as
for the product types which were not sold in repres-
entative
as
mentioned in recital 30, normal value had to be
constructed.

quantities on the

domestic market,

(41) According to Article 2(11) of the basic Regulation, the
weighted average normal value by product
type, as
determined under recitals 27 to 35, was compared with
the weighted average export price, as determined under
recitals 36 and 37.

For every cooperating exporting producer, their own
SG&A expenses incurred on representative domestic
sales of the like product and weighted average profit
realised on domestic sales of the like product,
in the
ordinary course of trade, during the investigation period,
was added to the average cost of manufacturing during
to determine
the
constructed normal value pursuant to Article 2(6) of the
basic Regulation.

investigation period

in order

(42)

(43)

1.2. Export price

For those sales made to independent customers in the
Community, the export price was established in accord-
ance with Article 2(8) of the basic Regulation, on the
basis of export prices actually paid or payable.

For sales made via a related importer, the export price
was constructed on the basis of resale prices to indepen-
dent customers. Adjustments were made for all costs
incurred between importation and resale by that
importer and for the profit margin found in the invest-
igation to have been attained by independent importers
of the product concerned,
in accordance with Article
2(9) of the basic Regulation.

1.4.2. D u m p i n g m a r g i n f o r n o n - c o o p e r a t i n g

c o m p a n i e s

For those exporting producers which neither replied to
the questionnaire nor otherwise made
themselves
known, the dumping margin was established on the
basis of the facts available, in accordance with Article
18(1) of the basic Regulation.

For both countries subject to investigation, the volume
of exports to the Community reported by the cooper-
ating exporting producers was compared with the
equivalent Eurostat import statistics in order to establish
the overall level of cooperation. In this respect, it was
found that the overall level of cooperation was high for
both countries. It was therefore considered appropriate
to set a residual dumping margin for the non-cooper-
ating exporting producers at the level of the highest
dumping margin established for a cooperating exporting
producer in the country in question. This approach was
taken, as there is no reason to believe that any non-
cooperating
country
concerned would have dumped at a lower level than a
cooperating exporting producer in the same country.

exporting

producer

the

in

(44)

The above approach with regard to non-cooperating
exporting producers was also considered necessary in
order to prevent non-cooperating exporting producers
benefiting from their non-cooperation.

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2. Specific issues raised by the investigation with
regard to the establishment of dumping for each
of the countries concerned

made themselves know, and cooperated in the invest-
igation.

2.1. India

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

(45)

In total, three exporting producers cooperated in the
investigation.

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

(46)

For most product types, normal value was based on
domestic prices in India. However, for a few product
types, of
two producers only, normal value was
constructed where there were no domestic sales of the
type concerned.

2.1.2. E x p o r t p r i c e

(47)

The export price was based on the prices paid or
payable.

2.1.3. C o m p a r i s o n

(48)

(49)

in import

To ensure a fair comparison allowances were made for
differences
taxes,
discounts, transport,
loading and
ancillary costs, credit costs,
technical assistance and
commissions, where applicable and justified.

insurance, handling,

and indirect

charges

Two exporting producers made a claim for duty draw-
back on the grounds that import charges were borne by
the like product when intended for consumption in the
exporting country but were refunded or not paid when
the product was sold for export to the Community. In
one case the amount claimed was found to be higher
than the amount of duty borne by the like product in
the domestic market and this claim was adjusted down-
wards. In another case, there was no evidence that the
duty was borne by the like product destined for
domestic consumption and this claim was rejected.

(52)

(53)

For those product types where the domestic sales were
insufficient or not made in the ordinary course of trade,
normal value was constructed.

Four exporting producers in the Republic of Korea
included certain sales made to Korean manufacturing
companies in their domestic sales listing where the
ultimately manufactured product was destined for
export. They argued that these sales should be treated as
domestic sales as they were intended for domestic
consumption. However,
to
administrative arrangements specific to export sales as
they were not subject to domestic sales tax, they were
normally invoiced in US dollars and paid for by letters
of credit, they were subject to duty drawback arrange-
ments and they were normally classified as local export
In these
sales in the companies' accounting records.
circumstances,
these sales were excluded from the
domestic sales listings.

these sales were subject

2.2.2. E x p o r t p r i c e

(54)

The export price was based on the prices paid or
payable, although it was constructed where sales were
made via a related importer.

2.2.3. C o m p a r i s o n

(55)

To ensure a fair comparison, allowances were made for
differences in import charges and indirect taxes, trans-
loading and ancillary costs,
port,
packing costs, credit costs and commissions, where
applicable and justified.

insurance, handling,

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

(50)

The provisional dumping margins established, expressed
as a percentage of the cif import price at the Community
frontier duty unpaid are the following:

— Indian Organic Chemicals Limited, Mumbai
— JCT Limited, New Delhi
— Reliance Industries Ltd, Mumbai
— Non-cooperating exporting producers

26,6 %,
32,6 %,
36,5 %,
36,5 %.

(57)

2.2. The Republic of Korea

(51)

In total, five exporting producers, together with one
trading company related to an exporting producer,
located in the Republic of Korea and one importer,
related to an exporting producer, located in Germany,

(56) All

five exporting producers made a claim for duty
drawback on the grounds that
import charges were
borne by the like product when intended for consump-
tion in the exporting country but were refunded when
the product was sold for export to the Community. In
each case the amount claimed was found to be higher
than the amount of duty borne by the like product in
the domestic market and therefore, the allowances were
adjusted accordingly.

In addition, all five exporting producers claimed credit
costs on the basis of the actual credit period taken by
customers under the ‘open account’ payment system
used on the Korean domestic market. It was found that
under such a system, generally, the exporting producers
did not actually grant specific credit periods and further-
more, the credit periods taken could not be accurately
determined, as receipts could not be linked to specific
invoices. In these circumstances, these allowances could
not be granted.

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

(58)

It is the consistent practice of the Commission to estab-
lish one single weighted average dumping margin for
related companies. This is because determining indi-
vidual dumping margins might encourage circumvention
of anti-dumping measures, thus rendering them ineffect-
ive, by enabling related companies to channel
their
exports to the Community through the company with
the lowest individual dumping margin. In accordance
with this practice, the two related exporting companies
belonging to the same group were attributed one single
dumping margin.

(59)

The provisional dumping margins established, expressed
as a percentage of the cif import price at the Community
frontier duty unpaid are the following:

— Daehan Synthetic Fibre

Co. Ltd., Seoul

— Saehan Industries Inc., Seoul

— Samyang Corporation, Seoul

— SK Chemicals Co. Ltd., Seoul

— SK Global Co. Ltd., Seoul

0,9 % (de minimis),

20,2 %,

5,7 %,

9,7 %,

9,7 %,

(64)

— Sung Lim Co. Ltd., Seoul

0,05 % (de minimis),

— Non-cooperating exporting producers

20,2 %.

E. DEFINITION OF THE COMMUNITY INDUSTRY

(60)

(61)

(62)

(63)

Both complaints were lodged on behalf of 8 of the 14
Community producers known to produce PSF in the
Community. One of these complainant producers with-
drew from cooperation and another had to be considered
as non-cooperating as it did not provide a sufficient
questionnaire response.

The share of total Community production of PSF held by
the six cooperating Community producers during the IP
was 71,5 %. On this basis, these six complainant produ-
cers constitute the Community industry within the
meaning of Article 4(1) of the basic Regulation. They are
referred to as the ‘Community industry’ hereafter.

It was argued that two of the six complainant producers
should not be included in the Community industry as they
were related to an exporting producer from Indonesia.
This country was involved in both an anti-dumping and an
anti-subsidy investigation involving PSF.

It should be recalled that the current proceeding invest-
igates a complaint against imports originating in the
Republic of Korea and India. It is further recalled that
producers related to exporters may be excluded from the
definition of the Community industry if the relationship
leads to a behaviour which is different to that of unrelated

Community producers because such related producers are
shielded from the effects of dumping, unduly benefiting
from the dumping practices or are even participating in
the dumping practices. No evidence was found during the
investigation that the two Community producers related
to the Indonesian exporters would fall under any of the
three aforementioned categories. In particular, it was not
found that the information relating to the various injury
indicators for these two companies was significantly
different to other complainants. This shows that the two
companies were not shielded from the effects of dumping,
unduly benefiting from the dumping practices or are even
participating in such practices. Consequently, these two
Community producers have not been excluded from the
definition of the Community industry.

F. INJURY

1. Community consumption

Community consumption of PSF was based on the actual
sales volume of the Community industry and the excluded
complaining producers, an estimate of the sales of the
remaining Community producers and Eurostat-informa-
tion on import volumes. On this basis, Community
consumption increased by 29 % over the period from
1996 to the IP. The main increase occurred between 1996
and 1998 when consumption grew from 454 470 tonnes
to 585 164 tonnes. During the IP it increased slightly to
588 466 tonnes.

2. Imports of PSF into the Community originating in

the Republic of Korea and India

2.1. Cumulative assessment

(65)

The Commission considered whether imports of PSF
originating in the countries under investigation should be
assessed cumulatively in accordance with Article 3(4) of
the basic Regulation. The examination showed that:

— the weighted average margin of dumping for each

country was above de minimis;

— the volume of imports from each country was more
not negligible when compared to Community
consumption;

— the analysis of the conditions of competition between
imported PSF and the like Community product and the
conditions of competition between imported PSF from
the two individual countries indicated that:

— the exporting producers

from the countries
concerned were selling the product concerned to
the same customers;

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— the exporting producers concerned sold PSF
directly to unrelated customers such as textile
manufacturers, cushion and quilt manufacturers
and PSF merchants and that
the Community
industry was selling the like product through the
same sales channels and to the same categories of
unrelated customers.

On this basis, sufficient grounds existed for making a
cumulative assessment of
the imports from the two
countries under investigation.

2.2. Volume, price and market share of

imports from the

Republic of Korea and India

(66)

(67)

The volume of imports from the countries concerned
significantly increased over the period from 1996 to the
IP, namely from 20 510 tonnes to 86 710 tonnes.
Between 1996 and 1997 imports rose by 62 % but the
main increase occurred between 1997 and 1998 when
imported volumes rose by 125 %. Between 1998 and the
IP it increased by a further 16 %.

The increase in import volume from India and the
Republic of Korea over the period from 1996 to the IP
coincided with a 31 % decrease in import prices. Over the
same period of time the average import price of all other
PSF imports into the Community decreased less, namely
by 25 %.

(68)

From 1996 to the end of the IP, the Republic of Korea
increased its market share from 4 % to 11,8 % and India
from 0,5 % to 2,9 %.

2.3. Price undercutting

(69)

For the determination of price undercutting the Commis-
sion analysed data referring to the IP. The relevant sales
prices of the Community industry were those to indepen-
dent customers, adjusted where necessary to an ex-works
level, i.e. excluding freight costs in the Community and
after deduction of discounts and rebates. Prices for the
different product families of PSF defined in the question-
naires, were compared with the sales prices charged by the
exporters to the same categories of customers, net of
discounts and rebates and adjusted where necessary to cif
Community frontier.

3. Situation of the Community industry

3.1. Preliminary remark

The examination of the situation of the Community
industry covered the period from 1996 until the end of the
IP (‘the period considered’). As mentioned in recitals 4 and
7, during this period definitive anti-dumping measures
were in force against Belarus and Taiwan. In addition,
definitive anti-dumping measures were also in force
against India until January 1998, and against the Republic
of Korea until August 1999.

3.2. Production, capacity and capacity utilisation

Community industry production increased by only 7 %
over the period considered. This is to be compared with
the 29 % increase in Community consumption over the
same period. Within the period considered, production
increased by 9 % between 1996 and 1997 but decreased
by 1,5 % between 1997 and 1998.

In parallel, a 5 % decrease in production capacity over the
period considered led to a higher rate of capacity utilisa-
tion, namely from 76,4 % to 85,9 %, in that period. The
overall decrease in capacity mainly occurred in the period
from 1996 to 1998. During the IP one Community
producer installed 7 500 tonnes extra capacity. Such an
increase in capacity was, however, exceptional since the
trend followed by the Community industry was to close
down certain production lines or plants or to convert
other lines to produce other products not covered by the
present investigation. The investigation showed that the
decrease in the Community industry's production capacity
was not the result of a declining market but was forced by
declining sales volume.

3.3. Sales volume

Indeed, Community industry sales did not follow the trend
in consumption over the period considered. On the
contrary, overall Community industry sales decreased in
volume by 2 %, namely from 259 939 tonnes to 255 420
tonnes, whereas as already said above, consumption
increased by 29 % over the same period.

From 1996 to 1997, when Community consumption rose
by 14 %, the Community industry sales volume followed
somewhat with a 5 % increase. From 1997 to the end of
the IP, however, consumption rose by a further 13,5 % but
Community industry sales dropped by 6,3 %.

(71)

(72)

(73)

(74)

(75)

(70) During the IP, the overall average price undercutting,
expressed as a percentage of the Community industry's
price, ranged from 6 % to 27,7 % for India and from
14,8 % to 56,7 % for the Republic of Korea. The weighted
average undercutting margin was 21,6 % for India and
23,3 % for the Republic of Korea.

3.4. Market share

(76)

It is evident from recitals 74 and 75 that the Community
industry lost significant market share, namely around 14
percentage points from 57,2 % in 1996 to 43,4 % over the
period considered.

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3.5. Stocks

(77) At the end of the IP stocks were 4 % lower than at the end
of 1996. However, the stock level at 30 September is
traditionally lower than that at fiscal year-end. Indeed, the
comparable figure at the end of 1999 showed a 17 %
increase in stocks compared to 1996.

product types represented 72 % of the Community indus-
try's production and 73 % of its sales during the IP.
Similarly, these types represented 71 % of the imports
from the countries under investigation. In contrast, profit-
ability of branded PSF and certain other special PSF, which
represented only 7 % of Community industry production
and 8 % of sales during the IP, was as high as 32 %. Such
product types covered less than 2 % of total imports of PSF
from the countries concerned during the IP.

3.6. Sales prices and cost of production

3.8. Investments

(78)

(79)

Sales prices obtained by the Community industry on the
Community market decreased by 9 % from 1996 to 1997
and stayed relatively constant over the period 1997 to
1998. From 1998 to the end of the IP, however, prices
dropped again by a further 12 %.

The investigation showed that PSF cost of production
(COP) was strongly influenced by the price of raw mate-
rials, given that the share of manufacturing costs was as
high as 84 % during the IP. The main raw materials such as
PTA, DMT and glycol (60 to 70 % of full COP), are highly
sensitive to fluctuations in the price of crude oil.

(80) A comparison of sales prices and cost of production shows
that from 1996 to 1998 the PSF COP decreased more
rapidly than the average sales price. However, this situa-
tion changed dramatically during the IP, where the COP
continued to decrease albeit less than sales prices.

3.7. Profitability

(81)

(82)

(83)

Similarly to the trends observed in sales prices and COP,
profitability was irregular during the period considered. It
increased from 2,3 % in 1996 to 8,9 % in 1997 but was
particularly advantageous at 15,4 % in 1998. The invest-
igation, however, showed that such high profits were
notably influenced by the exceptionally low crude oil
price. These low prices did not last and as a consequence
profitability dropped to 3,4 % during the IP.

The investigation showed that
the high profitability
obtained in 1998 was also the result of the restructuring
processes undertaken by the Community industry. Certain
production lines were closed down or converted and the
Community industry sought to increase production of
more specialised products with higher added value.

It should be underlined that the overall profitability of
3,4 % during the IP covered losses for standard product
families such as PSF for woven applications (–8 %), regular
non-woven fibres (–8 %) and hollow non-woven fibres
(–1 %). Only 27 % of the Community industry's sales were
found to be profitable during the IP. The above three

(84)

Investments during the IP were 17 % higher than in 1996
and amounted to ECU/17,9 million. Apart from 1997,
where downsizing was predominant, the majority of
investments over the period considered were either
replacement investments or investments aimed at restruc-
turing towards higher added value production.

3.9. Employment

(85)

The evolution of employment is a logical consequence of
downsizing and restructuring efforts, as illustrated by the
investment programmes of the Community industry. Over
the period considered, employment
for the product
concerned declined by 14 %, namely from 2 766 to 2 136.

4. Conclusion

(86)

The above analysis
showed that while Community
consumption rose by 29 % the Community industry did
not participate in the market growth. Indeed, it was found
that the Community industry's sales volume decreased by
2 % and that 13,8 percentage points market share were
lost. In addition, the increase in the Community industry
production was limited to 7 %. Accordingly, the reduction
in
in production capacity triggered an improvement
capacity utilisation.

(87) Over the period considered both PSF sales price and cost of
production significantly decreased. Prices decreased less
than costs and profitability during the IP was slightly better
than that obtained in 1996. However, this apparently
positive situation should not hide the fact that profitability
in the IP was not satisfactory. In addition, it covered high
losses in the regular PSF segments which represent the
large majority of both the Community industry sales and
imports from the countries concerned. It should also be
underlined that as much as 73 % of Community industry
sales were made at a loss during the IP.

(88)

(89)

(90)

(91)

(92)

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represented

Community industry average sales prices declined by 20 %
over the period considered. In the meantime, imports from
the countries concerned steadily increased on the
Community market;
4,5 % of
they
Community consumption in 1996 and as much as 14,7 %
during the IP. During the period considered, the decrease
in the price of PSF imported from India and the Republic
of Korea was as high as 30 %. Analysis within the period
considered showed that Community industry prices
decreased by 9 % between 1996 and 1998 whereas import
prices decreased by 21 %. Between 1998 and the IP,
import prices decreased by a further 13 % and Community
industry's prices followed with a reduction of 12 %.

Investments increased by 17 % over the period considered
but were predominantly aimed at downsizing and ration-
alising the production process towards higher added value
products. Accordingly, employment fell by 14 %.

Based on the foregoing,
in particular the decrease in
market share and the unsatisfactory level of profits, it is
considered that the Community industry suffered material
injury.

Weighted average undercutting margins are 21,2 % for the
Republic of Korea and 21,6 % for India. The Commission
therefore concluded that a significant downward price
pressure was exerted on the Community market by
imports from the Republic of Korea and India.

71 % of these imports and 73 % of the Community
industry's sales consist of PSF for woven applications and
of regular and hollow PSF for non-woven purposes. Given
the decrease in the Community industry's sales prices, the
profitability of these segments has become negative.

This is in contrast to the segment of branded PSF and other
special PSF where imports are less than 2 % of total
imports from the countries concerned and where the
Community industry obtains a profitability ranging from
14 % to 32 %. This part of the market, however, is not
large enough to ensure sufficient overall profitability
during the IP.

(94)

(95)

(96)

low-priced dumped
Based on these considerations,
imports from the countries concerned had a significant
negative impact on the situation of
the Community
industry.

G. CAUSATION

1. Introduction

In accordance with Article 3(6) and 7 of the basic Regula-
tion, the Commission examined whether the material
injury suffered by the Community industry had been
caused by the dumped imports or whether other factors
might have caused or contributed to that injury, in order to
ensure that injury from other factors was not attributed to
the dumped imports.

It is recalled that it was found in previous proceedings that
the Community industry suffered injury caused by
dumped imports from a number of countries, i.e. Belarus
and Taiwan (definitive findings) and Australia, Indonesia
and Thailand (provisional findings). This factor has to be
borne in mind in this examination.

2. Effect of the dumped imports

(93)

Imports from the two countries concerned by this invest-
igation have increased significantly over the period consid-
ered. While imports in volume quadrupled to reach
86 710 tonnes or 14,7 % of Community consumption,
the Community industry sales volume decreased by 2 %
and 13,8 percentage points market share were lost.

3. Impact of other factors

3.1. Development of consumption

(97) Over the period considered Community consumption
rose by 29 %. The evolution of consumption can therefore
not have been responsible for the injurious situation of the
Community industry.

3.2. Imports of PSF from other third countries

(98) Measures are currently in force against Belarus, Taiwan,
Australia, Indonesia and Thailand, which are intended to
remove injurious dumping from these countries.

(99) As to other countries not subject to measures, average
import prices are at a higher level than the Community
industry sales price on the Community market, indicating
that such imports did not contribute to the price deteriora-
tion suffered on the Community market.

(100) Although it was found that Saudi-Arabia exported PSF at a
price comparable to that of the countries under invest-
igation,
its market share represented 0,78 % and was
therefore negligible.

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3.3. Export activity of the Community industry

(101) The share of the Community industry's export sales in
total sales was 9 % in 1996, 10 % in 1997, 6 % in 1998
and 7 % during the IP. Given that export activity is a
relatively minor activity for the Community industry, any
injury, in terms of reduced production, caused by the slight
decline in export sales during the IP is not such as to
explain the material injury suffered by the Community
industry.

4. Conclusion on causation

(102) As already mentioned above, imports from the countries
on which anti-dumping and countervailing duties have
been imposed recently contributed to the injurious situa-
tion of the Community industry. However, the increase in
import volumes from the countries concerned coincided
with a reduction in Community industry sales volume and
a strong decline in market share. In addition, significant
price undercutting was found to exist during the IP. All this
had material negative consequences for the Community
industry. Therefore, these imports, taken in isolation, have
caused material injury to the Community industry.

available. For this reason, as illustrated in the investment
programmes, the Community industry is not ready to
abandon regular PSF production.

(105) The Community industry, by downsizing, has been able to
improve its capacity utilisation. At the same time, by
restructuring and specialising, profitability has been main-
tained. This strategy was especially successful in 1997 and
1998, but since the first quarter of 1999 pressure on prices
has become so strong that profits were not satisfactory.

(106) The Commission considers that, in the absence of the
imposition of anti-dumping measures, a further deter-
ioration of the situation of the Community industry is
probable, with a realistic possibility of a further reduction
of employment and the certainty that certain Community
producers will disappear. Since the objective of the adop-
tion of anti-dumping measures is to re-establish fair
competition in the Community market, this would be in
the interest of the Community industry which is suffering
low-priced dumped
because of massive presence of
imports.

H. COMMUNITY INTEREST

3. Impact on importers and users

1. Introduction

(103) The Commission examined whether, despite the conclu-
sions on dumping and injury, compelling reasons existed
which would lead to the conclusion that it is not in the
Community interest to adopt measures in this particular
case. For this purpose, and pursuant to Article 21(1) of the
basic Regulation, the Commission considered the impact
of measures for all parties concerned in the investigation.

2. Interest of the Community industry

(104) The Community industry has been suffering from low
priced dumped imported PSF, causing a situation in which
the majority of sales were made at a loss. Although the
Community industry is trying to further develop the
segment of higher added value PSF, such as bicomponent
or trilobal fibres, dyed fibres, fibres with specific character-
istics such as fire retardant fibres and by branding fibres,
the share of those fibres in overall sales is limited by
market demand. The core business therefore remains in
regular fibres for both woven and non-woven applica-
tions,
from the countries
concerned are increasingly present. The Community
industry should continue producing regular PSF because
their customers require that the whole range of PSF types is

segments where imports

(107) The Commission received three questionnaire replies from
companies, which are both importers and users of PSF,
two from user companies and two from importers. A
submission was also received by a users' association.

(108) All these interested parties took position against the
imposition of anti-dumping duties because it would
increase the purchase price of PSF imported from the
Republic of Korea and India. In addition, they put forward
three main reasons why measures should not be imposed.
First, it is allegedly impossible to buy comparable quality
from the Community industry at comparably low prices.
Second, a differentiation should be made according to the
use of PSF for spinning or non-spinning purposes. Third,
certain PSF types are not available from the Community
industry.

(109) The Commission established that the low priced PSF
resulted from dumping practice, in particular from the
countries concerned. The imposition of anti-dumping
duties shall restore effective market conditions and as
shown below, the overall impact on purchase prices will
be very limited. The relative importance of PSF in the cost
of production of
the three
cooperating users ranged from 24 % to 48 %. For the
countries concerned the weighted average duty proposed
is 16,7 % while the share of imports is 14,7 % in the IP.

the finished products of

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The proposed measures may thus have the impact of
increasing the cost of production of users by 0,6 % to
1,2 % on average. This likely maximum increase is consid-
ered to be relatively low when compared to the positive
impact of the proposed measures in restoring effective
competition on the Community market.

(110) The users argued that it was not in the Community interest
to impose measures on fibrefill and that a differentiation
should be made between PSF used for spinning applica-
tions (woven) and PSF used for non-spinning applications
(non-woven or fibrefill). They further argued that they had
invested in machinery which was only appropriate for the
production of certain types and that the Community
industry does not sell certain types of PSF on the
Community market, so no measures should be imposed
on those types.

(111) With regard to the first argument, no clear criteria were
put forward which would allow classification of PSF
according to this distinction. Indeed, the physical charac-
teristics do not necessarily determine the ultimate use of
the product. Moreover, the Commission has compared
export prices and Community industry sales prices on the
basis of product families, which were determined with
respect to the final use. Dumping, injury and causality
were found for all product families. With regard to the
second argument, changing the production installations
from one type to another requires only minor adjust-
ments, such as a different type of spinneret. This observa-
tion was also put forward by the users' association itself.
The Commission concluded that, if certain types have not
been available from the Community industry, this was not
for technical reasons but because the Community industry
was unwilling to deliver at the low prices quoted by the
potential buyers.

4. Conclusion

(112) On the basis of the above, the Commission concluded that
there were no compelling reasons not to impose measures.

(115) The removal of the injury requires that the industry should
be put in a position where the prices of imports of the
product concerned originating in the countries concerned
should be increased to a non-injurious level.

(116) The non-injurious price level was determined on the basis
of the full cost of production of the Community industry
and a 10 % pre-tax profit margin. The injury elimination
level was calculated by comparing the non-injurious price
with the sales prices charged by the exporting producers
following the same methodology as for the price undercut-
ting.

(117)

It was claimed that a 6 % profitability should be used as the
relevant profit as in the case against Belarus. However, it
was considered that the level of profit deemed reasonable
for the Community industry in 1994 does not bind the
Commission in the current investigation because firstly
the Community industry continued to incur financial
losses after 1994 and secondly because the relevant profit
in 1994 was determined having regard to the long term
needs in investments at that time, whereas in the present
case due account was taken of the long term losses
incurred by the Community industry and the level of profit
that could have been achieved in the absence of dumped
imports. In these circumstances, it was considered that
10 % was an appropriate profit margin.

(118) As a result, the injury elimination levels, expressed as a
percentage of the cif free-at-Community-frontier price
duty unpaid, were higher than the dumping margins
established.

2. Form and level of the provisional measures

I. PROPOSED MEASURES

(113)

In order to prevent further injury being caused by the
dumped imports concerned before the end of the invest-
igation,
it is proposed that provisional anti-dumping
measures be adopted.

(119)

In all cases the dumping margin has been found to be
lower than the injury elimination level. As a result, in
conformity with Article 7(2) of the basic Regulation, the
provisional measures to be imposed should correspond to
the dumping margins established.

1. Injury elimination level

(114) For the purpose of establishing the level of the provisional
measures, account has been taken of both the dumping
margins found and the amount of injury sustained by the
Community industry.

the present

(120) The individual company anti-dumping duty rates specified
in this Regulation were established on the basis of the
they
findings of
reflect the situation found during that investigation with
respect to these companies. These duty rates (as opposed
to the country-wide duty applicable to ‘all other compan-
ies’) are thus exclusively applicable to imports of products
originating in the country concerned and produced by the

investigation. Therefore,

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companies and thus by the specific legal entities
mentioned. Imported products produced by any other
company not specifically mentioned in the operative part
of this Regulation with its name and address, including
entities related to those specifically mentioned, cannot
benefit from these rates and shall be subject to the duty
rate applicable to ‘all other companies’.

J. FINAL PROVISION

(122)

In the interest of sound administration, a period should be
fixed within which the interested parties may make their
views known in writing and request a hearing. Further-
more, it should be stated that the findings made for the
purpose of this Regulation are provisional and may have
to be reconsidered for the purpose of any definitive
measures,

(121) Any claim requesting the application of these individual
company anti-dumping duty rates (e.g. following a change
in the name of the entity or following the setting up of new
production or sales entities) should be addressed to the
Commission (1) forthwith with all relevant information,
in particular any modification in the company's activities
linked to production, domestic and export sales associated
with e.g. that name change or that change in the produc-
tion and sales entities. The Commission, if appropriate,
will, after consultation of the Advisory Committee, amend
the Regulation accordingly by updating the list of compa-
nies benefiting from individual duty rates.

HAS ADOPTED THIS REGULATION:

Article 1

1.
A provisional anti-dumping duty is hereby imposed on
imports of synthetic staple fibres of polyesters, not carded,
combed or otherwise processed for spinning, currently classifi-
able within CN code 5503 20 00, originating in India and the
Republic of Korea.

The rate of the provisional duty applicable to the net
for products

2.
free-at-Community-frontier price, before duty,
produced by the following companies shall be as follows:

Country

Company

Rate of duty

TARIC additional code

India

The Republic of Korea

Indian Organic Chemicals Limited,
Bhupati Chambers,
3rd floor, 13 Mathew Road,
Mumbai — 400 004, India

JCT Limited,
Thapar House, 124 Janpath,
New Delhi — 110 001, India

All other companies

Daehan Synthetic Fibre Co. Ltd.,
162-1 Changchoong-dong
Chung-gu,
Seoul, Korea

Samyang Corporation,
263 Yeonji-Dong
Chongno-Gu,
Seoul, Korea

SK Chemicals Co. Ltd
948-1, Daechi 3-dong,
Kangnam-ku,
Seoul 135-283, Korea

SK Global Co. Ltd,
36-1, 2Ga, Ulchiro,
Chung-Gu,
Seoul, Korea

Sung Lim Co. Ltd,
Rum 502, Shinhan Building
Youido-Dong,
Youngdungpo-Ku
Seoul, Korea

26,6 %

A148

32,6 %

A149

36,5 %

0 %

A999

A150

5,7 %

A151

9,7 %

A152

9,7 %

A153

0 %

A154

All other companies

20,2 %

A999

(1) European Commission, Directorate-General Trade, Directorate C, DM
24 — 8/38, Rue de la Loi/Wetstraat 200, B-1049 Brussels/Belgium.

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3.

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

The release for free circulation in the Community of the product referred to in paragraph 1 shall be

4.
subject to the provision of a security, equivalent to the amount of the provisional duty.

Article 2

Without prejudice to Article 20 of Regulation (EC) No 384/96, the interested parties 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.

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

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

Article 1 of this Regulation shall apply for a period of six months.

Article 3

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

Done at Brussels, 6 July 2000.

For the Commission

Pascal LAMY

Member of the Commission