Commission Regulation (EC) No 367/2001 of 23 February 2001 imposing a provisional anti-dumping duty on imports of polyethylene terephthalate film originating in India and the Republic of Korea
Date: 2001-02-23
Institutions: European Commission
Subjects: India, South Korea, anti-dumping duty, originating product, plastics, thin sheet

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COMMISSION REGULATION (EC) No 367/2001

of 23 February 2001

imposing a provisional anti-dumping duty on imports of polyethylene terephthalate film
originating in India and the Republic of Korea

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

(5)

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1), as last
amended by Regulation (EC) No 2238/2000 (2) and in partic-
ular Article 7 thereof,

After consulting the Advisory Committee,

Whereas:

there were particular reasons why they should be heard
were granted the opportunity to be heard orally.

The Commission sent questionnaires
to all parties
known to be concerned and to all other companies
which made themselves known within the deadlines set
in the Notice of Initiation, with the exception of the
exporting producers not sampled and that did not
request individual treatment. Replies were received from
three complainant Community producers, from three
non-complainant Community producers,
from seven
exporting producers in the countries concerned, as well
as from their related importers in the Community, from
2 unrelated importers in the Community and from 23
users.

A. PROCEDURE

1. Initiation

(6)

The Commission sought and verified all the information
it deemed necessary for the purpose of a preliminary
determination of dumping,
injury and Community
interest. Verification visits were carried out at the prem-
ises of the following companies:

(1)

(2)

(3)

(4)

On 27 May 2000, the Commission announced by a
notice (‘Notice of Initiation’) published in the Official
Journal of the European Communities (3) the initiation of an
anti-dumping proceeding with regard to imports into
the Community of polyethylene terephthalate film (‘PET
film’) originating in India and the Republic of Korea
(‘Korea’).

initiated as a result of

The proceeding was
two
complaints (one against imports originating in India and
another one against imports originating in Korea) lodged
in April 2000 by four Community producers, Du Pont
Teijin Films Ltd, Mitsubishi Polyester Film GmbH, Nuroll
SpA and Fapack (‘the complainants’), representing more
than 50 % of the total Community production of PET
film. The complaints contained sufficient evidence of
dumping and of material injury resulting therefrom to
justify the initiation of an anti-dumping proceeding.

The Commission officially informed the exporting
producers,
importers, end-users and suppliers of raw
material known to be concerned, the representatives of
the exporting countries concerned and the complai-
nants, about the initiation of the proceeding. Interested
parties were given the opportunity to make their views
known in writing and to request a hearing within the
time limit set in the Notice of Initiation.

A number of exporting producers in the countries
concerned, as well as Community producers, end-users,
suppliers of raw material and importers made their
views known in writing. All parties who so requested
within the above time limit and who demonstrated that

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 257, 11.10.2000, p. 2.
(3) OJ C 148, 27.5.2000, p. 22.

(a) Complainant Community producers

— Du Pont Teijin Films Ltd, Contern, Luxembourg

and Wilton, United Kingdom,

— Mitsubishi Polyester Film GmbH, Wiesbaden,

Germany,

— Nuroll Spa, Caserta, Italy.

(b) Non-complainant Community producers

— 3M, Caserta, Italy

(c) Unrelated importers in the Community

— Coveme SpA, San Lazzaro di Savena, Italy

— Montefiore, Bioggio, Switzerland.

(d) Exporting producers in the exporting countries concerned

I n d i a

— Ester Industries Limited, New Delhi,

— Gareware Polyester Limited, Aurungabad,

— Flex Industries Limited, Noida,

— Jindal Polyester Limited, New Delhi,

K o r e a

— Toray Saehan Inc./Saehan Ind Inc., Seoul,

— Kolon Industries Inc., Kwacheon,

— SKC Co Ltd., Seoul.

(e) Related importers

— Gareware Polyester

International Ltd, Harrow

Middlesex, United Kingdom,

— SKC Europe GmbH, Frankfurt, Germany,

— Saehan Deutschland GmbH, Eschborn, Germany

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The investigation of dumping and injury covered the
period from 1 April 1999 to 31 March 2000 (‘the
investigation period’ or ‘IP’). With respect to the trends
relevant
the Commission
analysed data covering the period from 1 January 1996
to 31 March 2000 (‘period under consideration’).

for the injury assessment,

(12)

(7)

(8)

(9)

(10)

(11)

2. Existing countervailing duties against

imports

from India

Imports of PET film from India were recently subject to
an anti-subsidy investigation and definitive anti-counter-
vailing measures were imposed on imports of PET film
originating in India by Council Regulation (EC) No
2597/1999 (1).

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

(a) Product description

The product concerned is non-self-adhesive film of poly-
ethylene terephthalate, excluding film for the manufac-
ture of
flexible magnetic discs and photopolymer
printing plates imported in accordance with the end-use
provisions of the Community legislation. PET film is
always produced from PET polymer and consists of a
base film which may be subjected to further treatment
either during or after the production process. Such treat-
ments of the base film may typically include corona
treatment, metallisation or chemical coating.

PET film has specific physical, chemical and technical
characteristics which distinguishes it from other plastic
films. Some of these characteristics of PET film are e.g.
its high tensile strength, the very good electrical proper-
ties, low moisture absorption and humidity resistance,
low shrinkage and good barrier properties. Therefore,
while these specific characteristics determine various
types of PET film, they retain the same basic physical,
technical and chemical characteristics of base PET film.

PET film has five broad end-uses and fall within five
market segments, i.e. magnetic media, packaging, elec-
trical, imaging and industrial applications. However, the
same type of PET film can often be used for different
applications, thus indicating that there is a large degree
of interchangebility. For the purpose of the investigation,
the PET film was grouped in types according to market
thickness, coating properties, surface treat-
segment,

(1) OJ L 316, 10.12.1999, p. 1.

ment, mechanical properties and clarity/opacity, which
sought to reflect the above-mentioned characteristics.

The product is currently classifiable within CN codes
ex 3920 62 19 and 3920 62 90. The investigation has
shown that imports of the product concerned have also
taken place under CN code 3920 69 00. However this
has to be considered as a misclassification and cannot
constitute grounds to justify an extension of the scope
of the proceeding to different products falling under
other CN codes. It was also alleged that imports may
also have taken place under CN codes 3920 62 11 and
3920 62 13 but no evidence was found during the
investigation for misclassification under these codes.

(b) Arguments of the parties

(13)

(14)

(15)

(16)

Two sampled exporting producers alleged that metal-
lised PET film should be excluded from the product
scope of the current proceeding since it was not iden-
tical to nor alike to base PET film. It was argued that
metallised PET film is further processed on the basis of
an off-line production system, which applies particles of
metal, notably aluminium, to the base PET film. It was
also submitted that metallised film is correctly classifi-
able under HS code 3921 and that this code was not
mentioned in the Notice of Initiation.

It was also claimed that PET video film cannot be
considered alike to base PET film since video film is a
post-process coated PET film obtained on the basis of an
in the normal
off-line production system and not
production line.
its price would also be
higher than the price of base PET film.

In addition,

It was submitted that PET film for electrical applications
for insulation purposes was not interchangeable with
PET film for other applications and should therefore also
be excluded from the scope of the proceeding.

Certain sampled exporting producers claimed that the
proceeding should have been limited to PET film of a
thickness under 25 µ, i.e. so-called ‘thin film’ and conse-
quently should have excluded PET film above 25 µ,
(‘thick film’).
they are used in
different market segments and that the machinery to
manufacture thin and thick film were different. It was
also argued that the Commission made a distinction
between thick and thin film in past investigations.

It was claimed that

(17) One sampled exporting producer argued that

the
product scope of the investigation should have been
limited to those thickness of PET film, i.e. 12 µ to 15 µ,
where, according to the complaint,
injury to the
Community industry would exist.

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(c) Findings of the investigation

(18)

It was found that PET film is produced in a wide range
of
types by both the Community industry and the
exporting producers. However, despite the existence of
differences in the properties of the various types of PET
film such as thickness, coating or surface treatment (e.g.
metallisation) as well as uses of PET film,
it was
concluded that the different types of PET Film constitute
one single product.

(19) With regard to metallised film,

two layers of metal,

it was found that the
such as
addition of one or
aluminium, to the base PET film does not markedly alter
the basic physical, technical and chemical characteristics
of the product. Indeed, the actual composition of metal-
lised film shows little variation from that of base film
given that the quantity of metal actually applied to the
base PET film is minuscule (typically of the order of 20
grams of aluminium per tonne of film). Moreover, base
and metallised PET film are in many applications inter-
changeable and therefore have the same or a similar use.
While it is true that metallised PET film may be intended
for particular applications, the fact remains that other
standard types of PET film could also be used in a
number of those particular applications, for instance in
food packaging applications, showing the existence of a
certain degree of competition and interchangeability
between the product types. For all of the above reasons
metallised film is considered to fall under the definition
of the product concerned. It was also found that metal-
lised film based on polyethylene terephthalate is classi-
fied under CN codes 3920 62 19 and 3920 62 90.

(20) With regard to PET video film, it was found that (similar
to the addition of metal to the base PET film) the off-line
addition of a layer of magnetic coating to the base PET
film does not alter the fundamental characteristics of
base PET film, and that PET video film and other types
of PET films should therefore be considered as the same
product.

(21)

In respect of PET film for electrical applications (namely
for insulation purposes) it was found that whilst this
type of PET film is specifically used for certain applica-
tions, its basic physical, technical and chemical charac-
teristics are the same as that of the other types of PET
film. Just as with metallised film, PET film for electrical
applications is a surface treated base PET film. The
surface
a minuscule
percentage of the final weight of the PET film for elec-
trical application and therefore does not change the
physical characteristics of the base PET film.

represents

treatment

only

(22) As regards the distinction between so-called thick and
thin PET film and the contention that the complaint
appeared to be based on PET film of thickness 12 µ to
15 µ, it was found that no clear dividing line existed
between the suggested ‘thick’ and ‘thin’ groupings or
between PET film within the range 12 µ to 15 µ and
other PET film. The previous investigations had focused
either on all imports of PET film (1989) or on specific
segments of the PET film industry, notably so-called
‘thin film’ (1991) and video film (1996). In the current
contained
proceeding,
substantiated evidence justifying that the full range of
PET film thicknesses constituted a single product.
Accordingly, the investigation was initiated on that basis
and subsequently confirmed that PET film of various
thicknesses were one single product as explained above.

complaints

submitted

the

2. Like product

(23)

and Korea

PET film produced and sold on the domestic market in
India
and PET film exported to the
Community from India and Korea as well as PET film
produced and sold by the Community industry on the
Community market were found to have the same phys-
ical and technical characteristics and uses. It was there-
fore concluded that they are a like product within the
meaning of the basic Regulation.

C. SAMPLING OF INDIAN AND KOREAN EXPORTING

PRODUCERS

(24) Given the number of exporting producers both in India
and Korea, the Commission decided to apply sampling
techniques in accordance with Article 17 of the basic
Regulation. In order to enable the Commission to select
a sample for each country concerned, exporting produ-
cers were requested, pursuant to Article 17(2) of the
basic Regulation, to make themselves known within two
weeks of the initiation of the proceeding and to provide
basic information on their production, domestic sales
and exports for the investigation period as well as the
names and activities of all
related companies. The
companies were also asked to indicate whether they
intended to submit a request for an individual dumping
margin.

(25)

12 exporting producers reported export sales to the
Community during the IP and expressed their willing-
ness to participate in the sample. The selection of the
samples was made in consultation and with the consent
of the parties concerned. According to Article 17(1) of
the basic Regulation, the selection was based on the
largest representative volume of exports which could
reasonably be investigated within the time available. The
following exporting producers were selected for the
samples (‘the sampled exporting producer/s’):

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I n d i a

— Ester Industries Limited, New Delhi,

— Gareware Polyester Limited, Mumbai,

— Flex Industries Limited, Noida,

— Jindal Polyester Limited, New Delhi.

K o r e a

— Toray Saehan Inc./Saehan Ind Inc., Seoul,

(31)

— Kolon Industries Inc., Kwacheon,

— SKC Co. Ltd, Seoul.

(26)

The volume of exports to the Community by the
sampled exporting producers during the investigation
period represented nearly 90 % for both India and Korea
of all PET film originating in these countries exported to
the Community during the investigation period.

(27) Apart from one exporting producer, all of the compa-
nies which expressed willingness to participate in the
sample also requested that, should they not be selected,
an individual margin be calculated for them pursuant to
Article 17(3) of the basic Regulation. However,
indi-
vidual dumping margins could not be established for
these cooperating companies because individual exami-
nations would have been unduly burdensome and would
have jeopardised the completion of the investigation in
good time.

D. DUMPING

1. General methodology

those product

types where the
domestic sales. For
volume of profitable transactions was equal to or lower
than 80 %, but not lower than 10 % of sales, normal
value was established on the basis of
the weighted
average prices actually paid for the remaining profitable
domestic sales.

in the

For those product types where the volume of domestic
sales in the ordinary course of trade was lower than 5 %
of the volume exported to the Community, or where the
volume of profitable domestic sales was less than 10 %,
domestic sales of that product type were considered
insufficient within the meaning of Article 2(4) of the
basic Regulation and were therefore disregarded. In these
cases, where possible, normal value was based on the
weighted average of the prices charged by other produ-
representative
country concerned for
cers
domestic sales of the corresponding product type made
in the ordinary course of
trade in accordance with
Article 2(1) of the basic Regulation. Where, for any
product type, neither the exporting producer in question
nor any other cooperating exporting producer in the
country concerned had sufficient sales in the ordinary
course of trade, normal value was constructed on the
basis of the costs of manufacturing incurred by the
exporting producer concerned for the exported product
type in question plus a reasonable amount for sales,
general and administrative costs and for profits in
accordance with Article 2(3) and (6) of the basic Regula-
tion. The sales, general and administrative costs were
based on representative domestic market sales of the like
product and the profit on domestic sales which were
made in representative quantities and in the ordinary
course of trade.

(a) Normal value

(b) Export price

(28)

(29)

(30)

In order to establish normal value,
it was first deter-
mined for each sampled exporting producer whether the
total volume of domestic sales of the product concerned
were representative in accordance with Article 2(2) of
the basic Regulation, i.e. whether these sales represented
more than 5 % of
the product
concerned exported to the Community.

the sales volume of

It was then ascertained whether or not total domestic
sales of each product type constituted 5 % or more of
the same type exported to the
the sales volume of
Community during the IP and were thus representative.

For those product types passing the 5 % test,
it was
established whether sufficient sales had been made in the
ordinary course of trade in accordance with Article 2(4)
of the basic Regulation. Where, for any product type, the
volume of domestic sales above unit cost represented at
least 80 % of sales, normal value was established on the
basis of the weighted average prices actually paid for all

(32)

In all cases where PET film was directly exported to
independent customers in the Community, the export
prices were established in accordance with Article 2(8)
of the basic Regulation, namely on the basis of prices
actually paid or payable.

(33) Where the export sale was made to a related importer,
the export price was constructed pursuant to Article 2(9)
of the basic Regulation, namely on the basis of the price
at which the imported products were first resold to an
In such cases, adjustments were
independent buyer.
made for all costs incurred between importation and
resale by that
importer and for a reasonable profit
margin. The latter was assessed on the basis of the profit
achieved by independent
the product
concerned.

importers of

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(c) Comparison

(34)

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.

(40)

(d) Dumping margins

(i) D u m p i n g m a r g i n f o r t h e s a m p l e d c o o p e r -

a t i n g e x p o r t i n g p r o d u c e r s

(35) According to Article 2(11) of the basic Regulation, the
weighted average normal value per product type was
compared with the weighted average export price on an
ex-works basis and at the same level of trade. Whenever
it was established that there was a pattern of export
prices which differed significantly among different
purchasers, regions or time periods and that the above
mentioned method did not reflect the full degree of
dumping,
the weighted average normal value was
compared with the prices of all individual transactions
to the Community.

(ii) D u m p i n g m a r g i n

c o o p e r a t i n g
f o r
c o m p a n i e s n o t i n c l u d e d i n t h e s a m p l e b u t
w h i c h r e q u e s t e d i n d i v i d u a l

t r e a t m e n t

t h e

(36)

The weighted average dumping margin of the sampled
cooperating exporting producers was applied to the
cooperating exporting producers, which were not
included in the sample.

(37)

(38)

(iii) 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.

subject

to the investigation,

the level established for

Taking into account the high level of cooperation in
it was
both countries
decided to set, in each country, the residual dumping
margin at
the exporting
producer with the highest dumping margin. This
approach was taken, as there is no reason to believe that
any non-cooperating exporting producer in the coun-
tries concerned would have dumped at a lower level
than a cooperating exporting producer in the same
country.

producers could only be used for a limited number of
models, mainly due to the lack of identical models. For
the remaining models, normal value was constructed.

Three out of the four Indian sampled exporting produ-
cers claimed that their raw material costs should be
adjusted by the amount of export subsidies received on
exportation under
the Duty Entitlement Passbook
Scheme (‘DEPB’) on post-export basis (see recitals 49 and
50). This adjustment could not be granted since the
accounting records of the companies (where the raw
material costs were accounted at their full purchasing
value without DEPB benefits) were found to reflect the
the
cost associated with the production and sale of
product. Likewise, Article 2(10) of the basic Regulation
only contemplates the possibility of adjustments that
affect price comparability. As the DEPB scheme did not
affect price comparability (see recitals 49 and 50), there
is no legal basis to adjust costs by the amount of the
DEPB scheme.

(41) One exporting producer claimed that the cost of manu-
facturing incurred in one plant did not reflect adequately
the costs associated with manufacturing because the very
low capacity utilisation implied the overstatement of the
cost of manufacturing. No adjustment could be granted
in this regard as it was found that the low utilisation of
capacity was not due to investments in new production
lines and therefore did not correspond to the situation
contemplated by Article 2(5) of the basic Regulation.

(b) Export price

(42)

The procedures and methodologies followed by the
Commission services in order to determine the export
price of products originating in India were those
explained in recitals 32 and 33.

(c) Comparison

(43) Allowances

for differences

insurance,
handling, loading and ancillary costs, packing, credit and
commissions have been made where applicable and
justified.

in transport,

2. India

(i) I n d i r e c t

t a x e s

(a) Normal value

(39)

For about half of the models, domestic prices of the
sampled exporting producers could not be used to estab-
lish normal value because of a lack of sales in the
ordinary course of trade or insufficient representativity.
The price of models sold by other sampled exporting

(44) One sampled exporting producer claimed an adjustment
to the normal value, pursuant to Article 2(10)(b) of the
basic Regulation, for sales taxes (a tax imposed by Indian
regional authorities) paid on domestic sales. During
some months of the IP the company was exempted from
the sales tax. This sales tax exemption is given to
companies which invest in the region concerned. The

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exporting producer claimed an adjustment calculated as
the total sales tax charged to its customers and paid to
the regional authorities during the IP, divided by the
total domestic sales over the IP. The adjustment should
then be applied to all domestic sales during the IP, both
to transactions for which sales tax was paid as well as to
those which were exempted. The reason for the claiming
of an adjustment of the sales transactions where no sales
tax was paid was that, allegedly, the sales tax was paid
implicitly by undertaking investments in the region.

prices should be converted into Indian rupees using the
exchange rate of the date of payment; and (ii) that if the
first claim was rejected, a currency conversion adjust-
ment be made. The first claim could not be granted as
Article 2(10)(j) does not provide for an adjustment
which takes into account exchange rate variations that
occur after the date of sale. The second claim was also
rejected as no sustained movement in exchange rates
between the currencies of
the Community and the
Indian rupee existed during the IP.

(45)

It was found that the company was indeed exempted
from the sales tax for some months during the IP and
for the rest of the IP sales taxes had to be paid. For those
transactions for which no sales tax at all was paid no
adjustment could be made because such sales tax was
not ‘borne by the like product’ sold in the domestic
Indian market. For those transactions where it was
found that the sales tax was paid and that an adjustment
was in principle justified it was found that the domestic
sales prices provided by the company for those transac-
tions were already net of these sales taxes and therefore
no further adjustment needed to be made.

(ii) L e v e l o f T r a d e

(46) One sampled exporting producer claimed an adjustment
for differences in the level of trade pursuant to Article
2(10)(d) of the basic Regulation. The adjustment could
not be granted, since the company could not demon-
strate that the export price was at a different level of
trade from the normal value and that price compar-
ability was affected. In fact, two different levels of trade
were argued to exist, both on export and domestic
market, but no consistent and distinct differences in
functions and prices of the sellers for the different levels
of trade in the domestic market of India could be found.

(iv) O t h e r a l l o w a n c e s

(49) All

Indian sampled exporting producers claimed an
adjustment on the export price pursuant
to Article
2(10)(k) of the basic Regulation for the benefits received
under
the (‘DEPB’) scheme on a post-export basis.
During the IP the Indian exporting producers of PET
film were entitled to receive credits under the DEPB
scheme when exporting the product concerned. For
metallised PET film the rate was 20 % for the period 1
April 1999 to 28 February 2000 and was amended to
20 % but with a total cap of 85 rupees per kg. For all
other types of PET film, the credits amounted to 19 % of
the fob value of the export transactions of the product
concerned during 1 April 1999 to 28 February 2000
and 15 % thereafter. The credits received during the IP
could be used to offset customs duties normally due on
imports of any goods or freely sold to other companies.
It should be noted that the duty-free imported goods
could be sold on the domestic market or used in any
other way and no restriction existed to use the imported
goods only in the production of the exported product.

(47) Another sampled exporting producer alleged that the
traders in the Community bought higher quantities than
the domestic traders and therefore that domestic selling
prices were higher, which would justify a level of trade
adjustment pursuant
the basic
Regulation. This adjustment could not be granted, since
the company could not demonstrate that there was a
difference in the functions performed by the alleged
various categories of traders.

to Article 2(10)(d) of

(50)

(iii) C u r r e n c y c o n v e r s i o n s

It should be noted that, in a previous anti-subsidy invest-
igation (1) on the same product, the Commission found
the DEPB scheme to be an export subsidy. The exporting
producers did not demonstrate that the export subsidy
under the DEPB scheme on post export basis affected
price comparability, and in particular that the customers
paid different prices on the domestic market because of
the DEPB benefits. Therefore this claim was rejected.
However no product should be subject to both anti-
dumping and countervailing duties for the purpose of
dealing with the same situation arising from dumping or
export
in accordance with
Article 14(1) of the basic Regulation, the export subsi-
dies accounted for by the existing countervailing duty
shall be deducted from the anti-dumping duty.

subsidisation. Therefore,

(48) One sampled exporting producer presented two claims
under Article 2(10)(j) of the basic Regulation: (i) export

(1) Regulation (EC) No 2597/1999 imposing a definitive countervailing
duty on imports of polyethylene terephthalate (PET) film originating
in India.

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(d) Dumping margin

(51) As provided by Article 2(11) of the basic Regulation, the
weighted average normal value of each type of
the
product concerned exported to the Community was
compared to the weighted average export price of each
corresponding type of the product concerned.

(52)

(53)

(54)

For two sampled exporting producers, it was found that
their export prices had varied by purchaser, time-period
and region. However, given that
the comparison of
weighted average normal value per product type with
the weighted average export price reflected the full
degree of dumping practice, the dumping margins for
these companies were calculated as explained above.

The dumping margin for the cooperating exporting
producers not part of the sample and for the non-coop-
erating companies was established in accordance with
the methodology described in recitals 36, 37 and 38.

The comparison showed the existence of dumping in
respect of the sampled cooperating exporting producers.
expressed as a
The provisional dumping margins
percentage of the cif import price at the Community
frontier, duty unpaid are for:

Ester Industries Limited

Flex Industries Limited

Gareware Polyester Limited

Jindal Polyester Limited

Dumping margin for cooperating companies
not part of the sample

71,0 %

48,3 %

69,5 %

10,6 %

55,0 %

Residual dumping margin for non-cooperating
companies

71,0 %

(57)

already a significant shareholder of the Korean company
prior to the set up of the joint venture, and the manu-
facturing assets of the joint venture were the same as
those of the preceding Korean company in respect of the
product concerned. It was further noted that the joint
venture continued to sell the product concerned under
the brand name of the former exporting producer. There
was no evidence of a clear change in pricing policy
within the IP and since the set up of the joint-venture. It
was therefore concluded that the joint venture was effec-
tively a continuation of the previous operation and that
the data relating to the entire investigation period should
be used.

(b) Normal value

For the large majority of types, normal values were
based on the domestic sales price. Wherever domestic
prices of a particular model could not be used to estab-
lish normal value, normal values were constructed given
that no domestic sales of
identical models by other
sampled exporting producers could be found. Two
sampled exporting producers reported as domestic trans-
actions certain sales made to Korean manufacturing
companies where ultimately the manufactured product
was destined for export. It was argued that these sales
they were
should be treated as domestic sales as
these
intended for domestic consumption. However,
arrangements
sales were
specific to export sales. They were not subject
to
domestic sales tax,
they were often invoiced in US
dollars and paid for by letters of credit, they were subject
to (transferable) duty drawback arrangements and they
were normally classified as local export sales in the
companies' accounting records. In these circumstances,
these sales could not be considered to have been made
in the ordinary course of trade or permitting a proper
comparison, and thus were not considered for the deter-
mination of normal value.

to administrative

subject

3. Korea

(c) Export price

(a) Company structure issue

(55) One of the Korean sampled exporting producers claimed
that a determination of dumping and injury in its regard
should be limited to the last four months of the IP. The
request was based on the claim that four months prior
to the end of the IP, control of the PET film division of
the original exporting producer was transferred to a
joint-venture between that company and a Japanese
company and consequently the commercial strategy of
the operation (including its pricing policy) was substan-
tially changed.

(56) On the basis of the information submitted in respect of
the ownership structure and nature of the operation, the
the Japanese company was
Commission noted that

(58) All of the sampled exporting producers export some of
the product concerned to the Community through
related importers in the Community. One of
those
related importers transforms the imported base film. In
transforming the product by various processes signifi-
cant value is added by the related importer at consider-
able cost. Given the complexity of this transformation, it
would have been difficult to arrive with a sufficient
degree of precision at a constructed export price.
However, since export sales to unrelated importers in
sampled exporting
the Community made by this
producer accounted for around 63 % of that sampled
exporting producers sales, it was considered that these
transactions to unrelated importers were representative
and it was decided to establish the export price on the
basis of these exports to unrelated importers only.

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(d) Comparison

(59) Allowances

for differences

insurance,
handling, loading and ancillary costs, packing, and credit
have been made where applicable and justified.

in transport,

(i) E x c h a n g e r a t e f l u c t u a t i o n

(60) One sampled exporting producer claimed an adjustment,
pursuant to Article 2(10)(j) of the basic Regulation, for
sustained fluctuations in the exchange rate between the
Korean Won and the Euro, and the Korean Won and the
US Dollar during the last four months of the invest-
igation period. The claim was found to be justified and
an adjustment was made in respect of all of the sampled
exporting producers.

(ii) D u t y d r a w b a c k

(61) All sampled exporting producers claimed an adjustment
to the normal value to account for refunds of import
duty received under the national duty drawback scheme
on the grounds that import charges were borne by the
like product when consumed in the exporting country
but were refunded when the product concerned was sold
for export. The claims were based on an average of the
duty refunded per kilogram exported.

(62)

The requested adjustment could not be granted in full.

(63)

It was

found that

the following should be noted. The
In this respect
exporting producers had two sources of supply for their
main raw materials, i.e. imports and purchases on their
domestic markets.
the sampled
exporting producers could not establish which deliveries
of raw materials were incorporated into any individual
production of PET film, and thus could not identify the
duties that were attributable to export or domestic sales.
The national duty drawback scheme permitted exports
to be imputed against any valid import certificate
showing duty paid. It was also found that the duty paid
(per kilogram) varied considerably for one and the same
type of raw material, as a reflection of market price
variations, currency fluctuations and the quantities of
local inputs incorporated into the raw materials deliv-
ered to the producers.

(65)

In each case the amounts claimed were found to be
higher than the amounts of duty borne by the like
product in the domestic market, as determined using the
above method, and the allowances were adjusted accord-
ingly.

(e) Dumping margin

(66) As provided for by Article 2(11) of the basic Regulation,
the weighted average normal value of each type of the
product concerned exported to the Community was
compared to the weighted average export price of each
corresponding type of the product concerned.

(67) One sampled exporting producer indicated that its prices
had varied by purchaser and by time-periods. A second
company indicated that
its prices had varied by
purchaser, time-periods and by region. For one of these
companies it was found that the weighted-average to
weighted-average method did not
the
amount of dumping and the dumping margin for this
company was therefore calculated on the basis of a
comparison of the weighted average normal value with
the prices of
to the
individual
all
Community. For the other company,
the weighted-
average to weighted-average method fully reflected the
amount of dumping and the dumping margin was estab-
lished accordingly.

fully reflect

transactions

(68)

(69)

In the case of Korea it was considered reasonable to
attribute the highest dumping margin found to non
cooperating companies.

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

Kolon Industries Limited

SKC Industries Limited

Toray Saehan Industries

Dumping margin for cooperating companies
not part of the sample

3,5 %

12,4 %

3,5 %

7,8 %

Residual dumping margin for non cooperating
companies

12,4 %

(64) As far as the determination of the allowable duty draw-
the following approach was
back was concerned,
adopted. The exporting producers are able to claim from
the national customs and tax authorities a duty refund
upon proof of export and thus, as rational economic
operators, they would seek to maximise their duty draw-
back by claiming this refund at the highest duty rates
possible. Effectively this would mean allocating to
domestic sales, firstly any domestically produced raw
materials, and thereafter any imported raw materials
carrying the lowest duty rates. Accordingly, the duty
drawback adjustment was determined on this basis.

E. COMMUNITY INDUSTRY

1. Community production

(70) Within the Community, the product under consideration

is manufactured by:
— three operators, i.e. DuPont Teijin Films, Mitsubishi
Polyester Films and Nuroll SpA, who lodged the
complaint and cooperated in the investigation (‘the
cooperating complainants’);

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Official Journal of the European Communities

24.2.2001

— one operator, Fapack, who participated in lodging
the complaint but only provided some basic infor-
mation,
the
expressly
proceeding;

supporting

although

2. Community consumption

— other operators, 3M, Agfa Gevaert and Kodak
Eastman Ltd, which are not complainants, which
submitted some basic information even though not
fully replying to the questionnaire but which did not
oppose the proceeding, and

— one operator, Toray Plastics Europe SA, which only
replied in its capacity as a related importer but not as
a producer in the Community.

(76)

The apparent Community consumption was established
on the basis of:

— information reported by the Community industry, by
other cooperating Community producers and by
cooperating exporting producers concerning their
volume of sales in the Community;

The Commission assessed whether the above companies
could be considered as constituting the Community
production within the meaning of Article 4(1)(a) of the
basic Regulation.

— Eurostat information and Regulation (EC) No 1810/
1999 as regards non cooperating exporting produ-
cers in the countries concerned and imports from
third countries; and

(71)

(72)

Toray Plastics Europe was found to be related to a
cooperating exporting producer, i.e. Toray Saehan Indus-
tries, as from December 1999. It refused to cooperate as
regards its production activities in the Community and
its sales of own-manufactured products. Given its rela-
tionship with the exporting producer, and in the absence
of any cooperation, findings had to be made on the
basis of
it was provisionally
concluded that
this operator must be considered as
shielded from the negative consequences of the injurious
dumping found. It should therefore not be considered as
a Community producer.

facts available. Thus,

(73) None of the other companies mentioned above was
found to import from the countries concerned during
the investigation period. Accordingly it is considered
that, except for Toray Plastics Europe, all the above
operators are Community producers and thus constitute
the Community production within the meaning of
Article 4(1) of the basic Regulation.

2. Definition of the Community industry

(74)

The three cooperating complainant Community produ-
cers fulfil the requirements of Article 5(4) of the basic
Regulation, since they account for more than 70 % of
the total Community production of PET film. They are
therefore deemed to constitute the Community industry
within the meaning of Article 4(1) of the same Regula-
tion and will hereinafter be
‘the
Community industry’.

referred to as

F. INJURY

1. Preliminary remarks

(75)

The imposition of provisional and definitive counter-
vailing duties on PET film originating in India (1), took
place during the investigation period, from 1 April 1999
to 31 March 2000, and is therefore relevant for the
analysis of the trends relevant for the injury assessment.

(1) By means of Commission Regulation (EC) No 1810/1999 (OJ L
219, 19.8.1999, p.14) which was confirmed by Regulation (EC) No
2597/1999.

— Regulation (EC) No 1810/1999 and information
from the complaint were used in accordance with
Article 18 of the basic Regulation as regards sales in
the Community by Toray Plastics Europe which as
mentioned below only cooperated as a related
importer but not as a producer in the Community.

(77)

Captive production, which amounted to over 75 000
tonnes during the investigation period, was not taken
into
consideration when establishing Community
consumption since this production is not sold on the
free market as PET film but further processed and sold
on the market in the form of end-products other than
PET film, for which the product under consideration is
only one of the components. Sales of PET film produced
for and used in the captive market were not
in
competition with sales of PET film produced for and
sold in the non-captive market and were thus not likely
to be subject to the effects of the dumped imports.

(78)

In this respect, PET film exceptionally used for captive
purposes by the Community industry until 1998 was
not included in the Community consumption, whilst
there were certain sales made by captive producers in
the non-captive market which were included in the
Community consumption.

i.e.

(79) On this basis, the apparent Community consumption of
from
PET film has increased by around 36 %,
183 923 tonnes in 1996 to 249 544 tonnes during the
investigation period.
It went up particularly between
1996 and 1997, i.e. to 212 845 tonnes, and between
1998 and 1999, i.e. from 216 729 tonnes to 241 188
tonnes, and continued to increase until the investigation
period when it reached 249 544 tonnes. The growth of
the Community market by 36 % between 1996 and the
investigation period is due to the very strong develop-
ment of certain end uses, such as packaging or other
industrial applications.

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3. Imports concerned

(85)

is provisionally concluded that
For these reasons,
imports originating in the countries concerned should
be assessed cumulatively.

it

(a) Cumulative assessment of

the

effects of

the

imports

(b) Volume and market share of the imports concerned

concerned

(80)

since

Certain Korean exporting producers argued that imports
originating in Korea should not be cumulated with
imports originating in India
conditions of
competition between imports originating in these two
countries are different in view of the higher prices on
average of imports of PET film originating in Korea and
of the fact that Indian exporting producers had benefited
from national
as
regional
concluded in Regulation (EC) No 1810/1999 and
confirmed by Regulation (EC) No 2597/1999.

subsidies

export

and

(81)

The Commission examined these claims, taking account
of the conditions set out in Article 3(4) of the basic
Regulation. The dumping margins were found to be
more than de minimis as defined in Article 9(3) of the
basic Regulation and the volume of imports from each
of these two countries was not negligible.

(82) As regards the conditions of competition, as mentioned
above, PET film imported from the two countries
concerned was found to be alike in all respects, and also
to PET film manufactured and sold in the Community.
Import volumes from the two countries concerned were
substantial and increased, from both countries, between
1996 and the investigation period. During the same
period, their corresponding market shares also increased.
Moreover, both Korean and Indian prices have consider-
ably decreased since 1996 and they have undercut in
both cases the sales prices of the Community industry,
while being sold via the same or similar channels of
trade and with similar commercial conditions.

(83)

as

the

has

concerns

established

claim that

Furthermore,
Indian
exporting producers had benefited from national and
it should be noted that the
regional export subsidies,
of
Commission
competition were similar for imports originating in both
countries as concerns sales prices, channels of trade and
commercial conditions. The fact that Indian exporting
producers had benefited from subsidies is not relevant in
this context and in any event, countervailing duties were
imposed in 1999 in order to compensate the amount of
subsidies found during that investigation.

conditions

that

(84)

The cumulative assessment of imports from the coun-
tries concerned also appears appropriate in view of the
conditions of competition both between the imports
concerned and between these imports and the like
Community product.

(86)

(87)

The volume of imports from the countries concerned
increased by 83 %, i.e. from 27 624 tonnes in 1996 to
50 590 tonnes during the investigation period, whereas
apparent Community consumption increased by 36 %.
Imports concerned significantly increased between 1996
and 1997, from 27 624 tonnes to 40 344 tonnes and
went up again in 1998, reaching 46 793 tonnes. They
increased in 1999 to 48 067 tonnes and went up even
further during the investigation period.

The share of the Community market held by imports
from the countries concerned increased between 1996
and the investigation period by around five percentage
points from 15,0 % to 20,3 %.
increased between
1996 and 1997 from 15,0 % to 19,0 % and again in
1998 reaching 21,6 %. It went down slightly between
1998 and 1999 to 19,9 % reflecting the imposition of
countervailing duties on imports originating in India,
and increased again towards the investigation period,
reaching 20,3 %.

It

(c) Prices of the dumped imports

(i) P r i c e e v o l u t i o n

(88)

i.e.

Import prices from the countries concerned, as provided
by Eurostat, decreased by around 50 % over the period
under consideration,
from EUR 3 411/tonne to
EUR 1 692/tonne. Prices decreased by 26 % between
1996 and 1997, to EUR 2 516/tonne, they continued to
decrease in 1998 and 1999, when they reached
EUR 1 670/tonne and remained relatively stable, even
slightly increasing, during the investigation period at
EUR 1 692/tonne.

(ii) P r i c e u n d e r c u t t i n g

(89)

It was examined whether the exporting producers in the
countries concerned were undercutting the sales prices
the Community industry during the investigation
of
period.

(90) Weighted average export prices per PET film type
defined according to the criteria mentioned above under
B.1 were compared with the corresponding weighted
average sales prices of the Community industry, in both
cases to unrelated parties. When imports were made
through related companies, resale prices to first indepen-
dent customers were used.

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(91) Adjustments to the sales prices of the exporting produ-
cers to unrelated customers in the Community were
made, where appropriate, for transport costs, handling
and import charges in order to arrive at a free at
Community frontier level duty paid. The Community
industry's sales prices were similarly adjusted, where
appropriate, to arrive at ex-factory level.

(92)

(93)

Indian exporting producers requested a level of trade
adjustment. They argued that whereas they sold a major
proportion of
their PET film to wholesalers in the
Community, the Community industry was mainly selling
directly to users of PET film. Therefore, they claimed
that the comparison for the purposes of undercutting
should be made between prices at the same level of
trade.

The investigation showed that, as far as the Community
industry's sales are concerned, the average selling price
to distributors or to converters,
i.e. users, does not
depend on the type of customer but on the purchased
volumes. Indeed, prices to wholesalers are sometimes
higher than the prices charged to the users because the
latter buy larger quantities and therefore receive a
discount. It was also found that these two levels of trade
are not clearly separated due to the fact that some major
companies act both as a wholesaler and as a user.
Furthermore, no clear price difference was
found
between the two levels, either in the Community indus-
try's sales price or in the exporting producers' sales price
since, as mentioned above, the quantity purchased seems
to be a more important factor in the price fixing system
than the level of trade. Finally, and contrary to the
allegation put forward by the Indian exporting produ-
cers, the investigation has shown that the Community
industry also sells the product under consideration to
wholesalers and distributors and not only to users. On
this basis, it was concluded that there were no grounds
to grant Indian exporting producers any allowance for
the level of trade.

(94) On this basis, the price undercutting margins found per
country, expressed as a percentage of the Community
producers' prices, are as follows:

— Korea:

they ranged from 16,4 % to 37,9 %, on

weighted average 21,9 %,

— India:

they ranged from 36,7 % to 49,1 %, on

weighted average by 41,7 %.

(a) Production capacity, actual production and utilisation rate

(96)

Between 1996 and the investigation period, the total
production capacity of the Community industry, meas-
ured in tonnes which could be manufactured per year,
went up by around 37 % from 126 594 tonnes to
173 537 tonnes. It should be noted that a large capacity
increase took place in 1998 and 1999. Between 1999
and the investigation period, capacity remained stable.

(97) Actual production of the Community industry increased
by around 27 % over the period considered, going from
109 028 tonnes in 1996 to 138 216 tonnes during the
investigation period. It increased steadily between 1996
and 1998, to 118 190 tonnes and went up significantly
between 1998 and 1999, reaching 132 385 tonnes,
coinciding with the imposition of countervailing meas-
ures, increasing again during the investigation period to
138 216 tonnes since the new production capacity
installed by the Community industry in 1998 and 1999
had become operational during the investigation period.

(98)

The level of utilisation of the capacity decreased between
1996 and the investigation period from 86,1 % in 1996
to 79,6 % during the investigation period. It decreased
especially between 1997 and 1998 from 84,6 % to
73,9 %, increasing in 1999 to 77,1 % and again during
the investigation period, reaching 79,6 %.

(b) Stocks

(99)

The level of stocks of
the Community industry has
remained relatively stable over the period under consid-
i.e. from 15 077 tonnes in 1996 to 14 916
eration,
tonnes during the investigation period although it
decreased when expressed as a percentage of production
from 13,8 % in 1996 to 10,8 % during the investigation
period.

(c) Sales volume and market share of own-produced products

i.e.

(100) The sales volume of the Community industry increased
steadily between 1996 and 1998,
from 87 549
tonnes to 96 542 tonnes, went up significantly in 1999,
to 106 834 tonnes, and increased again during the
investigation
tonnes.
However, it should be noted that while the sales volume
of the Community industry increased by around 25 %,
Community consumption increased by around 36 %
between 1996 and the investigation period and the
volume imports originating in the countries concerned
also increased by 83 %.

109 675

reaching

period,

4. Situation of the Community industry

(95)

Pursuant to Article 3(5) of the basic Regulation, the
Commission examined all relevant economic factors and
indices having a bearing on the state of the Community
industry.

(101) This development should be seen in the light of the fact
that the Community industry, when faced with low-
priced imports originating in India and in Korea, had the
choice of either maintaining its sales prices at
the
expense of a negative development of its sales volume
and market share, or to lower its sales prices and follow

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L 55/27

the trend of the imports concerned at the expense of its
profitability. Most Community producers lowered their
sales prices as from 1997 trying to maintain or even
increase their volume of sales in order to reach the
critical mass of production needed to cover their fixed
costs.

(f) Employment

(105) The level of employment of the Community industry
during the period under consideration has decreased by
11 %,
from 2 165 employees in 1996 to 1 921
employees during the investigation period.

i.e.

(102) The corresponding share of

the Community market
decreased in overall terms between 1996 and the invest-
igation period from 47,6 % to 44 %.
It decreased
between 1996 and 1997 from 47,6 % to 43,8 %,
increased in 1998 to 44,5 %, and went down in 1999
and again during the investigation period,
reaching
it should be recalled that the
44 %.
growth of the Community market for PET film between
1996 and the investigation period was around 36 % and
that the share of the market held by imports concerned
increased by around five percentage points during the
same period.

In this context,

(d) Growth

(103) As mentioned above, while Community consumption
increased by around 36 % between 1996 and the invest-
igation period,
the Community
the sales volume of
industry increased by around 25 % and the volume of
imports concerned by 83 %. The growing trend of the
market as well as the decrease of imports originating in
third countries other than the countries concerned did
not translate into an increase of the Community indus-
try's share of the market. On the contrary, its market
share decreased between 1996 and the investigation
period from 47,6 % to 44 %, whereas the share of
imports concerned increased by around five percentage
points during the same period. Thus, the Community
industry could not fully benefit from the growth of the
market.

(g) Productivity

(106) Productivity of

the Community industry's workforce
linked to manufacturing of PET film has increased
between 1996 and the investigation period by around
27 %, from around 68 tonnes per employee in 1996 to
around 87 tonnes per employee during the investigation
period. The main increase took place between 1997 and
1998, from around 70 tonnes/employee to around 72
tonnes/employee and between 1998 and 1999, reaching
around 81 tonnes/employee. Productivity increased
again during the investigation period to around 87
tonnes/employee.

(h) Wages

(107) Between 1996 and the investigation period, average
wages per employee have increased by 21 %, i.e. from
around EUR 42 000 in 1996 to around EUR 51 000
during the investigation period,
following the same
trend as productivity.

(i) Investments

(108) Between 1996 and the investigation period, investments
of the Community industry went down in overall terms,
from around EUR 94 million in 1996 to around
EUR 14 million during the investigation period. This
shows that the Community industry took the decision to
invest in new production capacity in 1995/96, but given
the long time necessary for commissioning new plants,
they were installed only in 1997 and 1998. The level of
investments sharply decreased in 1999 and remained
stable during the investigation period.

(e) Sales prices of own produced PET film

(j) Profitability

(104) Weighted average

i.e.

from EUR 4 212/tonne

the Community
sales prices of
industry decreased between 1996 and the investigation
period from EUR 4 212/tonne to EUR 2 769/tonne, i.e.
by around 34 %. Prices decreased substantially between
1996 and 1997,
to
EUR 3 604/tonne, went down dramatically in 1998 and
in 1999, to EUR 2 830/tonne, and further decreased
during the investigation period reaching a level of
EUR 2 769/tonne. It should be noted that sales prices of
the Community industry followed the same evolution as
the
sales prices of
Community industry was not able to increase its sales
prices during the period under consideration, even
though the Community industry, as shown below, has
made losses on its sales of own produced PET film since
1998.

the imports concerned and that

(109) The financial situation of the Community industry dete-
riorated between 1996 and the investigation period. The
Community industry's profitability as return on sales
went down sharply between 1996 and 1997,
from
around 13 % to around 3 %. The Community industry
started to make losses in 1998 (around -7 %). These
losses reached a level of around -13 % in 1999 and only
slightly diminished during the investigation period
-11 %.

(110)

It should be noted that all the costs related to the
start-up costs of the new production lines as well as
those of the restructuring activities mentioned above
were excluded by the Commission in the calculation of
the Community industry's profitability for PET film.
These restructuring and start-up costs of the Community
industry were well over EUR 50 million in 1998.

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(k) Cash flow

(111) The development of the Community industry's cash flow
generated by the PET film manufacturing activities is
very similar to that of the profitability. Indeed, cash flow
has dramatically decreased from around EUR 100
million in 1996 to around -EUR 3 million in 1999,
improving only marginally during the investigation
period.

(l) Return on investments (ROI)

(112) The (‘ROI’), expressed as the relation between the above
net profits of the Community Industry for PET film and
the net value of its investments, followed the negative
trend of
i.e. ROI
the profitability described above,
sharply decreased from 21,2 % in 1996 to -12,4 % in
1999 and slightly improved towards the investigation
period, reaching -10,3 %.

(m) Ability to raise capital

(113) The investigation has

shown that

the Community
industry was not able to raise capital during the period
under consideration and will most likely be unable to do
it in the future due to its financial situation and,
in
particular, to its deteriorated profitability and to the
negative trend of the cash flow generated by its PET film
manufacturing activities.
it should be
noted that even if two of the three companies consti-
tuting the Community industry belong to globally orga-
nised groups of companies which have diversified activi-
ties in sectors other than PET film, the profit centres
dealing with the product under consideration are in
many aspects separate entities which have their own
administration and management.

In this respect,

(n) Magnitude of dumping margin

(114) As concerns the impact on the Community industry of
the magnitude of the actual margin of dumping, given
the volume and the prices of the imports from the
countries concerned, this impact cannot be considered
to be negligible.

(o) Recovery from past subsidisation

(115) As to the potential recovery from past subsidisation, it
should be noted that countervailing duties were provi-
sionally imposed in July 1999 and definitively confirmed
in December 1999 with regards to imports originating
in India. However, the Community industry does not
appear to have already benefited from the effect of these
measures.

5. Conclusions on injury

(116) The examination of the abovementioned factors shows
that between 1996 and the investigation period the
situation of the Community industry deteriorated. Even
though the Community industry increased its produc-
tion and sales volume during the period under consid-

it

could not

follow the growth of

the
eration,
Community consumption. This resulted in a loss of
market share over the period under consideration which
would have been even more severe had the Community
industry not lowered its sales prices by around 34 % at
the expense of its financial situation, i.e. profitability and
cash flow generated by PET film activity. These substan-
tially deteriorated between 1996 and the investigation
period,
-11 % in an
industry where a profit level of 6 % must be considered
as the minimum required to finance the investment and
R&D needed to keep up to date with technological
development and market requirements. The Community
industry also had to reduce the workforce linked to PET
film by 11 %.

the former reaching a level of

(117) Nevertheless, the Community industry restructured its
manufacturing activities for the product under consid-
eration both by installing new production lines and
dismantling old ones which were less efficient in order
to remain competitive in terms of productivity and effi-
ciency. The Community industry has nowadays some of
the most modern and efficient production lines for PET
film in the world.

(118) On the basis of the above, it was therefore provisionally
concluded that the Community industry has suffered
material injury within the meaning of Article 3 of the
basic Regulation.

G. CAUSATION

1. Introduction

(119) According to Article 3(6) and (7) of the basic Regula-
tion, the Commission examined whether the dumped
imports of PET film originating in the countries
concerned have caused injury to the Community
industry to a degree that enables it to be classified as
material. Known factors other than the dumped imports,
which could at
injuring the
same
Community industry, were also examined to ensure that
possible injury caused by these other factors was not
attributed to the dumped imports.

time be

the

2. Effect of the dumped imports from the countries

concerned

(120) The significant

increase in volume of

the imports
concerned by 83 %, i.e. from 27 624 tonnes in 1996 to
50 590 tonnes during the investigation period, and of
their corresponding share of the Community market, i.e.
from 15 % in 1996 to 20,3 % during the investigation
period as well as the substantial undercutting found (up
to 49 % during the investigation period) coincided with
the
the deterioration of
Community industry, in particular, in terms of loss of
market share, of price depression and suppression and
of a deterioration of profitability which turned into
significant losses since 1998 (around -11 % during the
investigation period).

the economic situation of

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the expense of

(121) The Community industry, when faced with low-priced
and dumped imports, had the possibility to either main-
tain its sales prices at the expense of a negative develop-
ment of its sales volume and market share, or to lower
its sales prices and follow the trend of the imports
its profitability. Most
concerned at
Community producers decided to lower their sales prices
as from 1997 trying to maintain or even increase their
volume of sales in order to reach the critical mass of
production needed by the Community industry to cover
its costs of production. This strategy resulted clearly in a
deterioration of
the
Community industry which decreased already between
1996 and 1997, and started to be at a loss as from
1998, reflecting the fact that the market for PET film is
price sensitive and import prices from the countries
concerned had decreased substantially,
i.e. by 40 %,
between 1996 and 1998.

the profitability situation of

(122) At the same time, the Community industry was not able
to benefit from the significant growth of the Community
market, which increased by around 36 % between 1996
and the investigation period, whilst the sales volume of
It
the Community industry only increased by 25 %.
should be noted that imports from countries concerned
increased by 83 % during the same period. However, as
mentioned before, had the Community industry not
lowered its sales prices in line with those of the imports
concerned, which went down by 50 % during the period
under consideration,
its market share
the decline of
would have been more pronounced.

(123)

It is therefore considered that the pressure exerted by the
imports concerned, which significantly increased their
volume and market share at low prices, as shown by the
significant price undercutting found, caused a price
depression for the Community industry resulting in a
deterioration of its financial situation.

3. Effects of other factors

(a) Imports from third countries

(124)

In overall terms, imports originating in third countries
not concerned by the current proceeding remained at a
lower level in terms of volume and market share than
the imports concerned since 1997.

(125) More particularly, during the investigation period, only
imports originating in two countries other than the
countries concerned had a share of
the Community
market beyond 2 %, i.e. the United States of America
and Japan.

(126)

it should be noted that

In this respect,
the
complainant Community producers belong to or have
recently merged with Japan or US-based companies. As
a consequence, these companies have a global organ-
isation of the production of their overall product range,

two of

i.e. production takes place in different production sites
world-wide. Thus,
the Community-based companies
have concentrated on the production of certain product
types and complement their own production with prod-
ucts manufactured by other companies belonging to the
same groups located outside the Community, mainly in
the USA and Japan. At
the same time, companies
outside the Community also purchase those product
types for which production is concentrated in the
Community in order
respective
to sell
geographical markets. These increasing trade flows are
reflected on import volumes originating in the USA and
in Japan as well as on the Community industry's export
volumes shown below.

it on their

(127) Moreover, the investigation also showed that some of
the exporting producers from the countries concerned
belong as well to groups with global organisation of
their production which also import some of the PET
film types sold on the Community market from the USA
and Japan in order to complement their range of PET
film types manufactured in the countries concerned.
This situation is also reflected in the figures below
regarding imports originating in the USA and Japan.

(128)

In terms of volume, imports originating in the USA have
increased over the period under consideration and, in
particular, they went up significantly between 1996 and
1997 from 14 968 tonnes
to 19 746 tonnes and
continued to increase in 1998 reaching 21 321 tonnes.
They slightly declined in 1999 to 21 037 tonnes and
increased again during the investigation period, reaching
22 113 tonnes. The
share
increased, by around two percentage points between
1996 and 1998, went down by around one percentage
point in 1999, to 8,7 %, and has remained stable during
the investigation period.

corresponding market

(129) Furthermore, between 1996 and the

investigation
period, average prices of imports originating in the USA
were higher than those of imports originating in the
countries concerned and also than the Community
industry's average sales prices, i.e. they went up from
EUR 4 693/tonne in 1996 to EUR 6 582/tonne during
the investigation period. It can therefore be concluded
that these imports were done at prices which did not
undercut sales prices of the Community industry.

(130) As regards imports originating in Japan, they decreased
in terms of volume between 1996 and 1999 from
14 012 tonnes to 7 523 tonnes, slightly increasing
during the investigation period to 8 091 tonnes. As to
their share of the Community market,
it went down
substantially between 1996 and 1998, i.e. from 7,6 % to
3,5 %, remaining stable since then.

(131) Moreover, these imports also took place at prices which
were on average higher than those of
the imports
concerned and of the Community industry during the

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Official Journal of the European Communities

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the period under

period under consideration. Import prices were relatively
stable over
consideration from
EUR 5 798/tonne in 1996 to EUR 5 129/tonne during
the investigation period, thus not undercutting the sales
prices of the Community industry.

(132) As concerns imports originating in third countries other
than the US and Japan, their market share has remained
by and large stable over the period under consideration,
and imports increased by 53 % in terms of volume from
7 088 tonnes in 1996 to 10 830 tonnes during the
investigation period. They accounted individually in all
cases for less than 1 % of the Community market. More-
over, the average price during the same period remained
at a higher level than those of imports originating in the
countries concerned, even though it decreased over the
period under consideration following the general trend
from 3 827 EUR/tonne in 1996 to
of
2 426 EUR/tonne during the investigation period. The
investigation showed the existence of imports origin-
ating in Switzerland and in Israel, with a share of the
market during the investigation period of 0,8 % and
0,7 % respectively. However, it has been found that no
significant production for PET film exists in those coun-
tries. It cannot be therefore excluded that some of these
imports from these countries originate in one of the
countries concerned by the current proceeding.

the market

(133) On the basis of the above, it is provisionally concluded
that imports originating in third countries other than the
countries concerned, and in particular those originating
in the US and in Japan, did not contribute to the
material injury suffered by the Community industry and
could in any event not break the causal link between the
dumped imports and that material

injury.

(b) Evolution of prices of raw materials

(136) The proportion of full manufacturing costs for PET film
represented by the cost of raw materials was around
35 % on average in 1996 and went down to around
30 % in 1998. However, as prices of raw materials
started to increase, this proportion increased to around
34 % in 1999 and to 37 % during the investigation
period. Thus, the development of the costs of raw mate-
rials per tonne sold does not justify a decline in sales
prices of the Community industry by 34 %.

(137) Therefore, even if the decline of prices of raw materials
might have had a certain impact on the decline in sales
prices until 1998, it cannot explain the overall decrease
of sales price by 34 %, or the negative development of
the Community industry's profitability.

(c) Development of

the consumption on the Community

market

(138) Given that the apparent Community consumption for
PET film increased by around 36 % during the period
under consideration, the material injury suffered by the
Community industry cannot be attributed to a contrac-
tion of demand on the Community market.

(d) Overcapacity of the Community industry and world-wide

oversupply

(139) Certain interested parties have argued that the injury
suffered by the Community industry was due to its
decision to increase capacity when the market for PET
film was not growing to the same extent. It has been
claimed that the Community industry could not justify a
claim of
injury on the grounds that an increase in
capacity had not been accompanied by a proportionate
increase in sales, resulting in lower capacity utilisation
levels at a time when there was an overcapacity for PET
film in the world market overall.

(134) A number of interested parties have argued that the
decrease in sales prices of PET film in the Community
market was mainly due to the world-wide decline of
prices of raw materials for PET film, i.e. dimethyl tereph-
thalate (‘DMT’), pure terephthalic acid (‘PTA’) and mono-
ethylene glycol (‘MEG’).

(140)

(135) The investigation showed that prices for raw materials
have indeed decreased between 1996 and 1998, but
started to increase in 1999 and continued to increase
during the investigation period. Moreover, costs of raw
materials per tonne sold of PET film produced by the
Community industry have also decreased until 1998 by
15 % and have started to increase as from 1999 and
during the investigation period. In overall terms, average
cost of raw materials per tonne sold have decreased by
10 % between 1996 and the investigation period, whilst
sales prices of the Community industry decreased by
34 % during the same period.

In this respect, it was found that the Community indus-
try's decision to increase capacity taken in 1995/1996
was based on a sound analysis of the evolution of the
Community market for PET film. Indeed, as stated in the
Regulation (EC) No 1810/1999 and confirmed by Regu-
lation (EC) No 2597/1999 of 6 December 1999
imposing a countervailing duty on imports of PET film
originating in India,
increase of Community
consumption in 1995 encouraged the Community
industry to invest in new production lines. This decision
had to be seen in the light of the significant capital costs
and the long periods of time for commissioning new
plants’.

‘the

(141) The new capacity installed by the Community industry
between 1996 and the investigation period was not only
the consequence of the decisions taken in 1995 but also
the result of replacing or modernising outdated produc-
tion lines as well as of the global production strategy of
complainant Community producers.
some of

the

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Between 1996 and the investigation period Community
consumption did indeed increase by around 36 %, i.e. to
a larger extent
the
Community industry during the same period. Further-
more, as explained above,
the Community industry
manufactures PET film also for export markets.

than production and sales of

(142) Furthermore, it was found that worldwide overcapacity
seems to be admitted by a number of
independent
sources for this product. However, the same sources
state that whereas in the case of the Community market
for PET film, the existent production capacity in the
Community is lower than the demand, the production
capacity which exists in the countries concerned is by
far too large in relation to their domestic markets.
Therefore, if a worldwide overcapacity for this product
was to exist, it is probably due to new capacities which
were built
in many cases also by
exporting producers concerned, in India, Korea and in
other third countries where the size of the domestic
market would not be able to absorb these new capaci-
ties.

in recent years,

(e) Competitiveness

and

export

performance

of

the

Community industry

(143)

In relation to the developments in technology and the
productivity of the Community industry,
it has been
established that the Community industry has tried to
maintain its production and sales levels between 1996
and the investigation period, has carried out investments
and installed new production lines,
increasing its
productivity in order to not to lose market shares and
competitiveness.

(144) As regards the export performance of the Community
industry, during the period under consideration,
the
Community industry has increased its sales in export
markets where it was likewise in competition with the
exporting producers concerned. This reflects as well the
global structure of two complainant Community produ-
cers which belong to US and Japan based companies
therefore,
with a global manufacturing strategy and,
manufacture in the Community PET film types which
are then exported to other parts of the world.

(145) Export sales of the Community industry increased by
49 % between 1996 and the investigation period, from
19 118 tonnes to 28 580 tonnes, the main increase
taking place between 1998 and 1999,
from 20 951
tonnes
to 26 743 tonnes. The volume of exports
continued to increase during the investigation period.
Furthermore, it should be noted that export sales repre-
sented around 18 % of the total sales of the Community
industry during the investigation period.

(146) On this basis, the Community industry has proven to be
competitive as shown by the performance of its export
activities.
therefore have
contributed to the injury suffered by the Community
industry.

Its export activity cannot

(f) Situation of other Community producers

(147) As concerns the situation of

the other Community
producers, their sales volume has decreased in overall
terms from 13 263 tonnes in 1996 to 12 235 tonnes
during the investigation period. Thus, the corresponding
market share of the Community market went down
from 7,2 % to 4,9 %. After a slight increase in sales
volume and the corresponding market share between
1996 and 1997, both indicators have decreased towards
the investigation period.

(148) Nevertheless,

it was also found that their production
volume has increased from 75 130 tonnes in 1996 to
91 654 tonnes during the investigation period. The
difference between production and sales volumes is
explained by the
these other
that
Community producers manufacture PET film essentially
for their own captive use and only sell a marginal
quantity of their production. It should be noted that PET
film used for captive purposes in the Community during
the investigation period amounted to more than 75 000
tonnes.

some of

fact

(149) Given the above, it is provisionally concluded that the
other Community producers have suffered the same
negative trend as the Community industry and have thus
not contributed to the injury suffered.

(g) Traded PET film by the Community industry

(150) Some interested parties claimed that

in view of

the
Community industry's gains on productivity and effi-
ciency during the period over consideration, its sales of
traded PET film sourced mainly in the USA and in Japan
may have contributed to the material injury suffered by
the Community industry.

(151) As mentioned

of

the

above,

complainant
two
Community producers belong to or have recently
merged with Japan or US based companies. They have
therefore a global organisation of the production of their
overall product range and the Community based compa-
nies complement their own production with products
manufactured by other companies belonging to the
same groups located outside the Community, mainly in
the USA and Japan.

(152) The investigation showed that the Community industry's
sales volume of traded PET film decreased continuously
from 15 236 tonnes in 1996 to 8 723 tonnes in 1999.
It increased during the investigation period, to 11 495
tonnes, due to a shutdown in one of the production
lines of one of the Community producers which had to
complement its production with PET film originating in
the USA. The share of sales of traded PET film in rela-
tion to total sales of the three complainant Community
producers in the EC decreased from 14,8 % in 1996 and
to 9,5 % during the investigation period.

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Official Journal of the European Communities

24.2.2001

(153) Thus, sales of

traded PET film by the Community
industry cannot have contributed to the injury suffered
by the Community industry.

4. Conclusions on causation

imports from the countries concerned,

(154) The substantial increase in terms of volume and market
share of
the
considerable decreases of their prices and the level of
price
negative
consequences on the situation of
the Community
industry. In addition, no other factors were found which
could have contributed to the injury suffered by the
Community industry.

had material

undercutting

found

(155)

It is therefore provisionally concluded that the material
injury suffered by the Community industry has been
caused by imports of PET film originating in India and
Korea.

H. COMMUNITY INTEREST

(156)

In order to assess the Community interest, the Commis-
sion carried out an investigation into the likely effects of
the imposition/non-imposition of anti-dumping meas-
ures on the economic operators concerned. Specific
questionnaires were sent
interested
parties which were deemed to be directly concerned by
the product subject
to the investigation, namely the
Community industry, other Community producers,
Toray Plastics Europe, suppliers of raw materials for PET
film, unrelated importers and traders dealing with the
product under consideration and users of PET film.

to a number of

1. The Community industry

(a) Nature and structure of the Community industry

(157) The Community industry is composed of three compa-
nies which are exclusively dealing with PET film. Indeed,
even if two of them belong to globally organised compa-
nies based in Japan and the USA, the profit centres
dealing with manufacturing and selling activities for PET
film are separate entities with administration and
research and development activities
located in the
Community.

(158) Production of PET film is capital intensive and highly
automated. The Community
industry's workforce
directly linked to PET film amounted to 1 921
employees during the investigation period.

— Position in the Community market: The Community
industry has a market share of 44 % and is thus a
firmly implanted player in the Community market
and partner of the user industry.

— Degree of investments and machinery replacement: The
Community industry has invested in new production
lines and has closed down those production lines
which were less efficient.

— Restructuring and efficiency gains: The Community
industry has rationalised its production, modernised
its machinery and increased its production capacity.
At the same time, it had reduced its workforce and
has thus increased productivity for PET film manu-
facturing activities by rendering the existing plants
more efficient. Furthermore,
it has managed to
reduce its cost of production per unit during the
period under consideration by around 16 %.

— Export performance: Exports of

the product under
consideration by the Community industry have
increased during the period under consideration and
amounted to 28 580 tonnes during the investigation
period.

the origin of key developments of

— Production technology: The Community industry has
been at
the
production technology for PET film. It keeps produc-
tivity and efficiency up to world-wide standards. The
Community industry has nowadays some of
the
most modern and efficient production lines for PET
film in the world.

(160) As mentioned above, due to the existence of dumping
the Community industry does not appear to have bene-
fited from the effect of countervailing measures imposed
in 1999 as it would have been expected.

(c) Possible effects of

taking measures or of not

taking

measures

(161) Should anti-dumping measures not be imposed,

the
Community industry will continue to face price under-
cutting and the consequent price depression which led
to the deterioration of its profitability. In the event that
such a situation would continue, the Community produ-
cers would be left with no other alternative but to close
down certain production lines or even entire plants
devoted exclusively to the production of PET film.

(b) Viability of the Community industry

(159)

In spite of the finding of material injury, the Community
industry appears to be viable and competitive. This
provisional assessment is based on an appreciation of
the following elements:

(162) Given that the companies constituting the Community
if not exclusively, manufacturing
industry are mainly,
PET film, even the survival of these companies could be
endangered in the long term. Therefore around 1 900
jobs directly linked to the manufacturing activities for
PET film would be also endangered if the Community
industry was to close down its plants.

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Official Journal of the European Communities

L 55/33

it can be expected that,

(163) On the other hand, should anti-dumping measures be
imposed,
firstly, prices will
increase, although most likely not by the level of any
anti-dumping duty since competition will still remain
amongst Community producers, imports originating in
the countries concerned and imports originating in other
third countries. Secondly, as it can be expected that the
utilisation of the capacity will increase, this will lead to
an increase in production, which in turn will allow the
Community industry to further reduce unit costs. Conse-
it can be also expected that the Community
quently,
industry increases its share of the Community market as
a consequence of increased sales.
In conclusion it is
expected that
the increase in production and sales
volume, on the one hand, and the further decrease in
unit costs, on the other hand, eventually combined with
a modest price increase, will allow the Community
industry to regain profitability and market share.

2. Other Community producers and Toray Plastics

Europe

(164) On the basis of the information submitted by these
companies, there are no indications that the effects of
the proposed measures on their situation will be signifi-
cantly different
the
Community industry, although in the case of captive
producers these effects will most likely be more limited.

from the abovementioned for

3. Suppliers of raw material for PET film

(165) Community interest questionnaires were sent

to 10
suppliers of raw materials for PET film, i.e. DMT, PTA
and MEG, which mainly sell to the Community industry
but also to some of the exporting producers. Only four
suppliers cooperated in the investigation.

(166) On the basis of the information provided by these coop-
erating suppliers,
it was found that sales of the raw
materials concerned to producers of PET film only repre-
sented a minor share of the total turnover of these
companies. It is therefore considered that the imposition
of any anti-dumping measures would have limited
effects on these companies, which could, nevertheless,
benefit from higher sales volumes and an improvement
of their profitability level, whereas in the event of non
imposition of anti-dumping measures, these companies
likely reduce or even close down their
would most
manufacturing activities for the raw materials concerned
if the Community industry reduces its purchases thereof.

4. Unrelated

importers

and

traders

in

the

Community

(a) Structure of the import and distribution channels

(167) The distribution of PET film in the Community is char-
acterised by a relatively small number of importers and

traders. Indeed, the investigation showed that PET film
producers and users have direct contacts, since the latter
do not always use intermediaries in their purchases of
PET film.

(b) Economic situation of importers/traders

(168) Around 20 questionnaires were sent to importers and
traders
in the Community. Only two replies were
received. On the basis of the information obtained, it
appears that importers in the Community purchase PET
film from a variety of sources, which include the coun-
tries concerned and the Community industry. It thus can
be concluded that, apart from importing the product
concerned originating in India and Korea, they also trade
in PET film purchased from the Community industry
and/or from other third countries. For those companies
who replied to the questionnaires PET film sales repre-
sented a significant part of their respective total turn-
over.

(c) Effect of imposition/non-imposition of measures

(169) The two cooperating importers have claimed that the
imposition of high anti-dumping measures would close
the Community market to the traditional suppliers from
the Far East. It is also alleged that since the Community
industry was incapable of meeting the Community
demand of PET film, should imports originating in the
countries concerned cease, the economic situation of
importers and traders would deteriorate since they
would not be able to meet the demand.

(170) As regards the closure of the Community market to
imports, the aim of any anti-dumping measures is not to
prevent imports from entering the Community market
but to re-establish fair conditions of competition on the
market. In this respect, it should be noted that imports
originating in one of the exporting countries concerned
are already subject to countervailing measures and have
nevertheless continued after the imposition of the meas-
ures. Furthermore, a number of alternative sources of
supply (i.e. third countries not concerned by the current
investigation) exist not subject to measures which repre-
sented around 19 % of the Community consumption
during the investigation period.

(171) The impact of any anti-dumping measures on the
economic situation of importers and traders in the light
of the measures already imposed in the countervailing
it is
proceeding was also examined.
worth noting that the level of cooperation in the current
proceeding is even lower than in the previous invest-
igation which could indicate that
the countervailing
measures imposed in 1999 did not have a significant
impact on them.

In this context,

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Official Journal of the European Communities

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(172) The impact of any anti-dumping duty on the situation of
importers and traders should also be seen in the light of
the fact that these parties trade in other products and
source themselves in different sources, i.e. Community
industry, countries concerned and other third countries.
The two cooperating importers have indeed stated that
price is not the only factor taken into consideration
when purchasing PET film, but also others such as
service, delivery terms, etc.

(173) Should any anti-dumping measures be imposed, prices
of PET film on the Community market may increase. It
cannot be therefore excluded that this increase in prices
will have a negative impact on importers and traders
who may see their margins reduced. However, it should
be noted that importers and traders may choose to
increase their purchases from the Community industry,
and obtain discounts for larger volumes, or to switch to
third countries. Indeed, as mentioned above, the two
importers which cooperated in the current investigation
do not only purchase PET film in the countries
concerned but also from the Community industry and
from other third countries.

(174) On this basis,

it

is provisionally concluded that

the
imposition of any measures is not likely to seriously
affect the situation of importers and traders of PET film
in the Community.

5. Users of PET film in the Community

(a) Nature and structure of user industries

(175) PET film has five broad uses which are typically identi-
fied within the industry, i.e. magnetic media, packaging,
electrical, imaging and industrial applications. PET film
is thus used in a wide variety of applications: packaging
for foodstuff, medical applications, household appli-
ances, automobile, motors, capacitors, electrical applica-
tions, credit cards, bank notes, security badges, video or
audio tapes, etc.
In view of the wide range of user
industries involved, PET film represents different propor-
tions of the costs of the final end-products.

(b) Effect of imposition/non-imposition of measures

(176) Questionnaires were sent to more than 80 users in the
Community. 23 replies were received, many of them
incomplete and one containing very limited information
which could not be taken into consideration. Some users
decided not to reply to the questionnaire but submitted
a number of comments. This
limited cooperation
suggests that the outcome of the investigation will most
likely not have an important impact on a number of
users, either because PET film as a raw material is not a
significant cost factor for them or because their produc-
tion of downstream products incorporating PET film
only accounts for a small proportion of
their total
production.

(177) The cooperating users represent a significant proportion
of the Community consumption. Indeed, on the basis of
those replies which provided purchase volumes of PET
film, it was established that purchases of PET film by 20
of the cooperating users accounted for around 28 % of
the Community consumption during the investigation
period and for around 40 % of the imports from the
countries concerned.

(178) On the basis of the information provided by 22 of the
cooperating users, it was found that their total work-
force was around 19 571 people during the invest-
igation period, of which approximately 7 390 were
directly or indirectly involved in the production of the
products incorporating PET film. Their total turnover
was around EUR 4 204 million during the investigation
period, of which around EUR 1 195 million related to
products incorporating PET film. Between 1996 and the
investigation period, sales in the Community of these
end-products
from around
EUR 1 196 million to around EUR 1 195 Million.

decreased

slightly

(179) As regards profitability on the sales of products incor-
porating PET film in the Community, 15 users provided
this information. On this basis, a weighted average profit
of around 4,3 % was found in the investigation period.
This weighted average profit reflects the situation of
certain users in declining market segments (magnetic
applications, video or audio film production). The
average profit for cooperating users in other segments
will be significantly higher,

i.e. over 10 %.

(180) Furthermore, on the basis of the information provided in
this respect by 16 users, it was found that for 11 users,
purchases of PET film accounted for less than 20 % of
the cost of production for the end-products whereas for
five users, it represented between 20 % and 54,6 % of
their costs. It was found that out of the latter five users,
four were
from
Community producers and one was purchasing from
both Community producers and countries concerned.

purchasing

exclusively

almost

(181) Users were found to purchase PET film from a variety of
sources. Indeed, during the investigation period, eight
users were found to purchase PET film exclusively from
countries
Community producers,
concerned and Community producers,
three users
purchased only from Community producers and third
countries and finally, three users were found to purchase
from Community producers, the countries concerned
and third countries. None of the users purchased exclu-
sively from the countries concerned.

from the

eight

(182) Thus, on the basis of the information provided by coop-
erating users, an average user of PET film would be
purchasing around 58 % of its PET film consumption
from the Community industry, around 28 % from the
countries concerned and around 14 % in other third
countries.

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Official Journal of the European Communities

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(183) On the basis of this information, it is concluded that the
outcome of the investigation will probably not have an
important impact on the user industries since, in certain
cases, PET film as a raw material is not a significant cost
factor for them and, in other cases, their production of
downstream products based on PET film only accounts
for a small proportion of their total production. Further-
more, users purchasing PET film from India and Korea
were found to purchase it as well from other sources,
including both Community producers and third coun-
tries other than the countries concerned.

(184) Furthermore, those users which claimed that there might
be a capacity shortage in the Community either in
general or for specific product
types which are not
manufactured in the Community, will be able to
purchase PET film either from the countries concerned
or from other alternative sources of supply.

(185) Should measures not be imposed, the eventual disap-
pearance of the Community industry's manufacturing
activities for PET film is likely to create severe supply
constraints which would have negative effects for users.
Indeed, a number of cooperating users, some of them
purchasing exclusively from Community producers and
some others having several sources of supply, have
stated their preference for PET film manufactured in the
Community due to a number of factors, such as the
quality of service and logistics, price stability, security
and proximity of supply, reliability on the product, the
possibility of developing tailor-made applications and
products, etc.

(186) On this basis,

it

is provisionally concluded that

the
imposition of any measures is not likely to seriously
affect
the situation of users of PET film in the
Community.

6. Competition and trade distorting effects

(187) With respect to the effects of possible measures on
competition in the Community, some interested parties
have argued that duties would lead to the disappearance
concerned from the
of
Community market,
considerably weakening
competition and increasing the already dominant posi-

exporting producers

thus

the

tion of the Community industry as a result of the recent
merger processes.

(188) However, it appears more likely that at least some of the
exporting producers concerned will continue to sell PET
film in the Community, albeit at non-injurious prices, as
they have a solid technological basis, a strong market
position in the Community. This
conclusion is
confirmed by the market developments further to the
imposition of countervailing duties on imports of PET
film originating in India in 1999. On the other hand,
should anti-dumping measures not be imposed,
it
cannot be excluded that the Community industry would
cease its manufacturing activities for PET film in the
Community, thus reinforcing the position of exporting
producers of PET film and considerably weakening
competition on the Community market.

certain

affecting

(189) Finally, as concerns the argument on the potential domi-
nant position of the Community industry, it should be
the Commission decisions (1) concerning
noted that
recent mergers
complainant
Community producers have concluded that those opera-
tions did not lead to the creation or the strengthening of
dominant positions under any market definition for
these companies. Furthermore, the investigation showed
that Community producers compete amongst
them-
selves both on the Community market and in export
markets. Moreover, the producers in the Community do
not have the production capacity to fully meet
the
overall demand in the Community market. Therefore,
imports will most certainly continue to take place after
the imposition of any anti-dumping measures.

(190) Given that, as mentioned above, imports originating in
the countries concerned will most likely continue to take
place, competition will still remain strong after the
imposition of any anti-dumping-measures. There will be
an important number of actors in the market who will
be able to satisfy demand and, amongst
the
Community industry will offer a wide range of product
types. Thus, the imposition of anti-dumping duties, if
any, will not limit the choice of the user industries or
weaken competition.

them,

7. Conclusion on Community interest

(191) Given the above reasons, it is considered that there are
no compelling reasons against the imposition of anti-
dumping duties.

I. PROVISIONAL ANTI-DUMPING MEASURES

(192)

the conclusions reached with regard to
In view of
injury, causation and Community interest,
dumping,
provisional measures
to
prevent further injury being caused to the Community
industry by the dumped imports.

should be taken in order

(1) Commission Decision of 2 October 1997, OJ C 4, 8.1.1998 (Case
No COMP/M.984 DuPont/ICI), Commission Decision
24
November 1999, OJ C 4, 7.1.2000 (Case No COMP/M.1599
DuPont/Teijin) and Commission Decision of 24 November 1999, OJ
C 16, 20.1.2000 (Case No COMP/M.1538 DuPont/Sabanci).

of

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Official Journal of the European Communities

24.2.2001

1. Injury elimination level

2. Provisional measures

(193) The provisional measures should be imposed at a level
sufficient to eliminate the injury caused by these imports
without exceeding the dumping margins found. When
calculating the amount of duty necessary to remove the
effects of the injurious dumping, it was considered that
any measures should allow the Community industry to
cover its costs and obtain overall a profit before tax that
could be reasonably achieved under normal conditions
of competition, i.e. in the absence of dumped imports,
on the sales of the like product in the Community.

(194) On the basis of the information available, it was prelimi-
narily found that a profit margin of 6 % of turnover
could be regarded as an appropriate minimum which
the Community industry could be expected to obtain in
the absence of injurious dumping, taking into account
its financial situation in previous years. It is also consid-
ered that this profit margin would allow the Community
industry to make the necessary investments.

(195) The necessary price increase was then determined on the
basis of a comparison of the weighted average import
price, as established for the undercutting calculations,
with the non-injurious price of the different models sold
by the Community industry on the Community market.
The non-injurious price has been obtained by adding to
the sales price of the Community industry an amount
equivalent to its average actual loss as well as the above
mentioned profit margin of 6 %. Any difference resulting
from this
a
percentage of the total cif import value. These differ-
ences were in all cases above the dumping margins
found.

then expressed as

comparison was

(196)

In the light of the foregoing and in accordance with
Article 7(2) of the basic Regulation, it is considered that
provisional anti-dumping duties should be imposed at
the level of
the dumping margins found, since as
mentioned above the injury elimination margins found
were in all cases above the dumping margins.

(197) As regards the residual duty to be applied to the non
cooperating exporting producers of the respective coun-
tries, as the level of cooperation was considered signifi-
cant in both countries, the residual duty should be fixed
on the basis of the highest duty rate established for the
sampled cooperating producers of these countries.

(198) Pursuant to Article 14(1) no product shall be subject to
both anti-dumping and countervailing duties for the
purpose of dealing with one and the same situation
arising from dumping or from export subsidisation.
Therefore, as regards duties for India, the countervailing
duty in force that corresponds to export subsidy was
deducted from the proposed anti-dumping duty to be
applied. For the non-cooperating companies, the deduc-
tion corresponds to the export subsidy of the cooper-
ating company on the basis of which the residual
dumping margin (and thus the residual duty) was estab-
lished.

(199) On the basis of the above, and taking into account the
findings of the previous anti-subsidy investigation, the
proposed provisional duty amounts, expressed on the cif
Community border price, customs duty unpaid, are as
follows:

INDIA

Company

Export
subsidy
margin

Total subsidy
margin

Dumping
margin

CVD duty

AD duty

Total duty
rate

Ester Industries Ltd

12,0 %

12,0 %

71,0 %

12,0 %

59,0 %

71,0 %

Flex Industries Ltd

12,5 %

12,5 %

48,3 %

12,5 %

35,8 %

48,3 %

Gareware Polyester Ltd

2,7 %

3,8 %

69,5 %

3,8 %

66,8 %

70,6 %

Jindal Polyester Ltd

MTZ Polyesters Ltd

7,0 %

8,7 %

7,0 %

10,6 %

7,0 %

3,6 %

10,6 %

8,7 %

55,0 %

8,7 %

46,3 %

55,0 %

Polyplex Corp. Ltd

19,1 %

19,1 %

55,0 %

19,1 %

35,9 %

55,0 %

All other companies

12,0 % (1)

19,1 %

71,0 %

19,1 %

59,0 %

78,1 %

(1) For the purpose of calculating the final anti-dumping duty, the export subsidy margin of the company on the basis of which the
dumping margin for the non-cooperating companies is based was taken into consideration (see also paragraph 8.2).

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EN

Official Journal of the European Communities

L 55/37

KOREA

Company

HS Industries

Hyosung Corp.

Kohap Corp.

Kolon Industries Limited

SKC Industries Limited

Toray Saehan Industries

All other companies

AD duty

7,8 %

7,8 %

7,8 %

3,5 %

12,4 %

3,5 %

12,4 %

(200) The individual company anti-dumping duty rates specified in this Regulation were established on the
basis of the findings of the present investigation. Therefore, they 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 companies’) are thus exclusively applicable to imports of products
originating in the country concerned and produced by the 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’.

(201) 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 production and sales entities. The
Commission, if appropriate, will, after consultation of the Advisory Committee, amend the Regula-
tion accordingly by updating the list of companies benefiting from individual duty rates.

J. FINAL PROVISION

(202)

In the interest of sound administration, a period should be fixed within which the interested parties
which made themselves known within the time limit specified in the notice of initiation may make
their views known in writing and request a hearing. Furthermore, it should be stated that the findings
concerning the imposition of duties made for the purposes of this regulation are provisional and
may have to be reconsidered for the purposes of any definitive duty,

HAS ADOPTED THIS REGULATION:

Article 1

1.
A provisional anti-dumping duty is hereby imposed on imports of polyethylene terephthalate (‘PET’)
film falling within ex CN code 3920 62 19 and ex CN code 3920 62 90 (TARIC codes: 3920 62 19 10,
3920 62 19 15, 3920 62 19 25, 3920 62 19 30, 3920 62 19 35, 3920 62 19 40, 3920 62 19 45,
3920 62 19 50, 3920 62 19 55, 3920 62 19 60, 3920 62 19 62, 3920 62 19 64, 3920 62 19 65,
3920 62 19 70, 3920 62 19 75, 3920 62 19 80, 3920 62 19 81, 3920 62 19 85, 3920 62 19 87,
3920 62 19 89, 3920 62 19 91, 3920 62 90 30 and 3920 62 90 91) and originating in India and the
Republic of Korea.

(1) European Commission

Directorate-General Trade
Directorate C
TERV 0/13
Rue de la loi/Wetstraat 200
B-1049 Brussels

L 55/38

EN

Official Journal of the European Communities

24.2.2001

The rate of the provisional anti-dumping duty applicable to the net, free-at-Community-frontier price,

2.
before duty, for the products manufactured by the companies listed below, shall be as follows:

Country

Company

Provisional duty

TARIC additional
code

India

India

India

India

India

India

India

Ester Industries Limited,
75-76, Amrit Nagar,
Behind South Extension Part — I,
New Delhi — 110 003 India

Flex Industries Limited,
A-1, Sector 60,
NOIDA, 201 301 (U.P.) India

Gareware Polyester Limited,
Gareware House,
50-A, Swami Nityanand Marg
Vile Parle (East)
Mumbai 400 057 — India

Jindal Polyester Limited
115-117 Indra Prakash Building
21 Barakhamba Road
New Delhi 110 001 India

MTZ Polyesters Limited
Saranath Centre, Upvan Area,
Upper Govind Nagar, Malad (E)
Mumbai 400 097 India

Polyplex Corporation Limited,
B-37, sector-1, Noida-201 301
Dist. Gautam Budh Nagar
Uttar Pradesh, India

All other companies

The Republic of Korea

HS Industries Co Ltd Seoul

The Republic of Korea

Hyosung corporation Seoul

The Republic of Korea

Kohap Corp. Kwacheon

The Republic of Korea

Kolon Industries Inc. Seoul

The Republic of Korea

SKC Co Ltd Seoul

The Republic of Korea

Toray Saehan Inc. Seoul

The Republic of Korea

All other companies

59,0 %

A026

35,8 %

A027

66,8 %

A028

3,6 %

A030

46,3 %

A031

35,9 %

A032

59,0 %

7,8 %

7,8 %

7,8 %

3,5 %

12,4 %

3,5 %

12,4 %

A999

A226

A225

A223

A244

A224

A222

A999

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

1. Without prejudice to Article 20 of Regulation (EC) No 384/96,
interested parties may request
disclosure of the essential facts and considerations on the basis of which this Regulation was adopted, make
their views known in writing and apply to be heard orally by the Commission within one month of the
date of entry into force of this Regulation.

Pursuant to Article 21(4) of Regulation (EC) No 384/96, the parties concerned may comment on the

2.
application of this Regulation within one month of the date of its entry into force.

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Official Journal of the European Communities

L 55/39

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

1.
of the European Communities.

2.

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, 23 February 2001.

For the Commission

Pascal LAMY

Member of the Commission