Commission Regulation (EC) No 1412/2002 of 29 July 2002 imposing a provisional anti-dumping duty on imports of polyester textured filament yarn (PTY) originating in India
Date: 2002-07-29
Institutions: European Commission
Subjects: India, anti-dumping duty, import, plastics, textile fibre

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COMMISSION REGULATION (EC) No 1412/2002

of 29 July 2002

imposing a provisional anti-dumping duty on imports of polyester textured filament yarn (PTY)
originating in India

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

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

After consulting the Advisory Committee,

Whereas:

A. PROCEDURE

(1)

(2)

(3)

(4)

(5)

On 9 November 2001, the Commission announced, by a notice published in the Official Journal of
the European Communities (3), the initiation of an anti-dumping proceeding with regard to imports into
the Community of polyester textured filament yarn (hereinafter ‘PTY’) originating in India.

The proceeding was initiated as a result of a complaint lodged in September 2001 by the Inter-
national Committee of Rayon and Synthetic Fibres (CIRFS), acting on behalf of producers repre-
senting a major proportion of the total Community production of PTY. The complaint contained
evidence of dumping of the said product and of material injury resulting therefrom, which was
considered sufficient to justify the initiation of an anti-dumping proceeding.

There are definitive anti-dumping measures currently in force on imports of PTY originating in
Malaysia (Council Regulation (EC) No 1001/97 (4), as amended by Council Regulation (EC) No
1992/2000 (5)), Indonesia, Thailand (Council Regulation (EC) No 2160/96 (6), as last amended by
Council Regulation (EC) No 1078/2001 (7)) and Taiwan (Council Regulation (EC) No 3905/88 (8), as
last amended by Council Regulation (EC) No 2010/2000 (9)). The expiry of these measures regarding
imports originating in Malaysia (10), Taiwan (11),
is currently being
reviewed under Article 11(2) of Regulation (EC) No 384/96 (hereinafter ‘the basic Regulation’).

Indonesia (12), Thailand (13)

A parallel anti-subsidy proceeding concerning imports into the Community of the same product
originating in India and Indonesia was announced by a notice published in the Official Journal of the
European Communities (14) on the same date.

The Commission officially advised the complainant and other known Community producers,
exporting producers, their representative association, importers, users and suppliers known to be
concerned as well as the representatives of India of the initiation of the proceeding. The parties
directly concerned were given an opportunity to make their views known in writing and to request a
hearing within the time limit set in the notice of initiation.

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 257, 11.10.2000, p. 2.
(3) OJ C 315, 9.11.2001, p. 2.
(4) OJ L 145, 5.6.1997, p. 1.
(5) OJ L 238, 22.9.2000, p. 1.
(6) OJ L 289, 12.11.1996, p. 14.
(7) OJ L 149, 2.6.2001, p. 5.
(8) OJ L 347, 16.12.1988, p. 10.
(9) OJ L 241, 26.9.2000, p. 1.
(10) OJ C 135, 6.6.2002, p. 10.
(11) OJ C 170, 14.6.2001, p. 2.
(12) OJ C 316, 10.11.2001, p. 9.
(13) OJ C 316, 10.11.2001, p. 9.
(14) OJ C 315, 9.11.2001, p. 5.

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(6)

(7)

(8)

(9)

A number of exporting producers in India and their association, as well as Community producers,
users and importers/traders made their views known in writing. All parties who so requested within
the above time limit and indicated that there were particular reasons why they should be heard were
granted a hearing.

In view of the apparent large number of exporting producers in India, as set out in the complaint,
the application of sampling techniques for the investigation of dumping was applied in accordance
with Article 17 of the basic Regulation and as described more in detail in recital 14 et seq. of this
Regulation. The Commission sent questionnaires to, and received detailed information from, a
representative sample of exporting producers in India.

The Commission also sent questionnaires to all other parties known to be concerned. Replies were
received from two of
the six complainant Community producers and from one Community
producer who did not originally form part of the complaint. The Commission also received replies
from one user and two suppliers of raw material providing information, which was sufficiently
complete and representative to use in the assessment of Community interest. No importers in the
Community which were not related to exporting producers replied to the questionnaire or made
themselves known.

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

(a) Community producers

— Dupont SA, United Kingdom,
— Sinterama SpA, Italy;

(b) Exporting producers in India

— Indo Rama Synthetics Ltd, Nagpur,
— Reliance Industries Ltd and its related companies, Mumbai and Nagpur,
— Welspun Syntex Ltd, Mumbai.

(10)

The investigation of dumping and injury covered the period from 1 October 2000 to 30 September
2001 (hereinafter referred to as the investigation period or IP). The examination of trends relevant
for the assessment of injury covered the period from 1 October 1997 to the end of the IP (analysis
period).

B. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT

1. Product under consideration

(11)

The product under consideration is polyester textured filament yarn (PTY) originating in India which
falls within CN code 5402 33 00. It is directly derived from partially oriented polyester yarn and
It is used in both the weaving and the knitting sectors to make polyester or
then textured.
polyester/cotton fabric. The product is sold in different product types which can be identified
through different specifications such as the weight (denier), the number of filaments, the nature of
the yarn as flame retardant, the colouring, the twisting. There are also different qualities, depending
on the efficiency of the production process. However, no significant differences exist in the basic
physical characteristics and uses of the different types and qualities of PTY. In these circumstances, all
types of PTY should be considered as one product for the purposes of this proceeding.

2. Like product

(12)

The investigation showed that PTY produced and sold on the domestic market of India has similar
basic physical characteristics and uses compared with that exported from this country to the
Community. Similarly, the PTY manufactured by the complainant Community producers and sold
on the Community market has similar basic physical characteristics and uses when compared to that
exported to the Community from the country in question.

(13)

Consequently, PTY sold on the domestic market of India and exported to the Community as well as
PTY produced and sold in the Community are considered as a like product within the meaning of
Article 1(4) of the basic Regulation.

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C. SAMPLING

1. Sampling of Indian exporters

(14)

(15)

(16)

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

In order to enable the Commission to select a sample, pursuant to Article 17(2) of the basic
Regulation, exporting producers were requested to make themselves known within three weeks of
the initiation of the proceeding and to provide basic information on their export and domestic sales,
their precise activities with regard to the production of the product concerned and the names and
their related companies in the production and/or selling of PTY. The Indian
activities of all
authorities and the Indian association of exporting producers were also contacted in this regard by
the Commission and raised no objection against the use of sampling.

2. Pre-selection of cooperating companies

Twelve companies in India came forward and provided the requested information within the
three-week period set in Article 17(2) of the basic Regulation. However, only nine were producers
reporting exports to the Community during the investigation period. Those producers that exported
the product concerned to the Community during the investigation period and expressed a wish to
participate in the sample were initially considered as cooperating and were taken into account in the
selection of the sample. They represented up to 98 % of total exports of the product concerned from
India to the Community. As to the remaining three companies, two were traders that could not be
taken into account in the selection of the sample and one was an exporting producer with no
exports to the Community during the IP.

(17)

Companies, which did not make themselves known within the three-week period, were considered as
non-cooperating companies.

3. Selection of the sample

(18) According to Article 17(1) of the basic Regulation, the selection was based on the largest repres-

entative volume of exports, which could reasonably be investigated within the time available.

(19) On this basis three exporting producers were chosen to constitute the sample in agreement with the
Indian association of exporting producers and the Indian authorities. The three companies selected in
the sample represented around 70 % of Indian PTY exports to the Community and around 65 % of
PTY domestic sales in India.

(20)

The six cooperating exporting producers, who were not finally retained in the sample, were informed
that any anti-dumping duty on their exports would be calculated in accordance with the provisions
of Article 9(6) of the basic Regulation. Some of these companies initially indicated their intention to
claim an individual margin in accordance with Article 17(3) of the basic Regulation in case they were
not selected in the sample. However, no substantiated claim was received within the deadline
specified in the notice of initiation.

(21)

The exporting producer that was not related to any of the exporting producers subject to the
investigation and did not export the product concerned to the Community during the IP though it
had some exports after the IP, was also informed that any anti-dumping duty on its exports would
be calculated in accordance with the provisions of Article 9(6) of the basic Regulation.

(22) Questionnaires were sent for completion to all three initially sampled companies and a shorter

questionnaire was sent to the company that only exported subsequently to the IP.

(23)

The companies which finally constituted the sample and which fully cooperated with the invest-
igation were attributed their own dumping margin and individual duty rate.

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D. DUMPING

1. Normal value

(24)

In accordance with Article 2(2) of the basic Regulation, the Commission first examined whether the
domestic sales of PTY to independent customers by each exporting producer were representative, i.e.
whether the total volume of such sales was equal to or greater than 5 % of the total volume of the
corresponding export sales to the Community.

(25)

This assessment revealed that all investigated exporting producers had representative sales of PTY on
the domestic market during the investigation period.

(26)

The Commission subsequently considered whether domestically sold and exported product types had
similar quality, denier, filament, flame retardant characteristics, colouring and twisting and concluded
that they were identical or directly comparable.

(27) Additionally and for each product type sold by the exporting producer on the domestic market,
which was found to be directly comparable with the type sold for export to the Community, it was
established whether domestic sales were sufficiently representative for the purposes of Article 2(2) of
the basic Regulation. Domestic sales of a particular product type were considered as sufficiently
representative when the total domestic sales volume of that type during the IP represented 5 % or
more of the total sales volume of the comparable product type exported to the Community.

(28)

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

This was done by establishing the proportion of domestic sales to independent customers, of each
exported product type, sold at a loss on the domestic market during the investigation period:

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

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

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

(29)

(30)

For certain types sold for export to the Community by all three investigated companies, domestic
sales were found to have been made in the ordinary course of trade. Normal value was based for the
corresponding product type on the actual prices paid or payable, by independent customers in the
domestic market of India, during the investigation period, as set out in Article 2(1) of the basic
Regulation.

For sales of product types not made in the ordinary course of trade, as well as for product types
which were not sold in representative quantities on the domestic market, normal value had to be
constructed. All three investigated companies sold certain such product types for export to the
Community.

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(31)

To construct normal value pursuant to Article 2(6) of the basic Regulation, the selling, general and
administrative (hereinafter referred to as SGA) expenses incurred and the weighted average profit
realised by the cooperating exporting producers concerned on domestic sales of the like product, in
the ordinary course of trade, during the investigation period, was added to their own average cost of
manufacturing during the investigation period. Where necessary, the manufacturing costs and SGA
expenses reported were corrected, before being used in the ordinary course of trade test and in
constructing normal values.

2. Export price

(32) As all exports of the product under consideration by all three exporting producers were made
directly to independent customers in the Community, the export price was established in accordance
with Article 2(8) of the basic Regulation, on the basis of export prices actually paid or payable.

3. Comparison

(33)

The comparison between normal value and export price was made on an ex-factory basis. 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. For all
investigated exporting producers allowances for
differences in physical characteristics, transport costs, ocean freight and insurance costs, handling,
loading and ancillary costs, import charges and indirect taxes, credit costs, after-sales costs, commis-
sions, discounts and rebates have been granted where applicable and justified.

(34) All three investigated companies claimed a duty drawback adjustment pursuant to Article 2(10)(b) of
the basic Regulation on the grounds that import charges were allegedly borne by the like product
when intended for consumption in the exporting country but were refunded or not paid when the
product was sold for export to the Community. All companies made use of the Duty Entitlement
Passbook Scheme (DEPB) on post-export basis and/or Advance License Scheme (ALS) for that reason.
This claim was rejected because there was no evidence that any import charge was borne by the like
product when destined for domestic consumption. Alternatively, the companies claimed the same
adjustment pursuant to Article 2(10)(k). However, because the companies failed to demonstrate that
the DEPB on post-export basis and/or ALS schemes affect price comparability, and in particular that
customers consistently pay different prices on the domestic market because of the benefits of the
abovementioned schemes, the adjustment could not be accepted.

(35) One investigated company claimed an adjustment pursuant to Article 2(10)(b) for an amount
corresponding to an indirect tax borne by the like product when intended for consumption in India
and refunded in respect of the product exported to the Community. It was found that the company
was indeed refunded upon export of the product concerned. However, since the company failed to
demonstrate that the full amount of this indirect tax was refunded, the claim was adjusted down-
wards. Another investigated company claimed an adjustment pursuant to the same Article of the
basic Regulation for an amount corresponding to an indirect tax borne by the like product when
intended for consumption in India and not collected in respect of the product exported to the
Community. In this respect,
it was found that the company failed to duly report the relevant
quantities of the raw material used in the production of the like product. Consequently, there was no
evidence as to the precise amount of indirect tax borne by the like product and this claim was
rejected.

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(36) One investigated company claimed an adjustment pursuant to Article 2(10)(b) of the basic Regula-
tion for a sales tax (indirect tax) imposed by the Indian regional authorities and allegedly paid on
domestic sales. The company in question was exempted from depositing with the government
treasury the sales tax. This exemption is given to companies, which invest in the region concerned.
In this respect, it was not demonstrated that the company collected on domestic sales and deposited
with the government treasury the said tax and, therefore no such sales tax was ‘borne by the like
product’ sold in the domestic market. Thus, the claim was considered to be unfounded.

(37)

to Article 2(10)(d) of

Two investigated companies claimed an adjustment pursuant
the basic
Regulation for differences in the level of trade. The adjustment could not be granted since the
companies could not demonstrate that the export price was set at a different level of trade from the
normal value and that price comparability 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 companies concerned for the different levels of trade in the domestic
India could be found. Alternatively, both companies claimed the same adjustment
market of
pursuant to Article 2(10)(c) or Article 2(10)(k). The claim could not be granted under the provisions
of Article 2(10)(c) of the basic Regulation, since quantity discounts can only be considered for an
adjustment when they are actually given for differences in quantities directly linked to the sales under
consideration, and no such discounts were given by the companies concerned. Nor could the claim
be granted pursuant to Article 2(10)(k) since it was found that the pattern claimed by the companies
was not consistently applied to their sales in the domestic market and since it was found that these
were essentially the same claims under level of trade and quantity discounts, which had already been
rejected.

(38) One investigated company claimed an adjustment pursuant to Article 2(10)(f) of the basic Regulation
for differences in the directly related packing costs between the exported and the domestically sold
products. In this respect, the company failed to demonstrate that a cost difference, affecting price
comparability, could be directly related to the packing cost for the product concerned. Thus, this
claim was rejected.

4. Dumping margins

(a) Dumping margin for companies investigated

(39) Dumping margins were established on the basis of a comparison of a weighted average normal value

by product type with a weighted average export price by product type.

(b) Dumping margin for cooperating companies not in the sample

(40)

The dumping margin for exporting producers, which made themselves known in accordance with
Article 17 of the basic Regulation but were not examined individually, has been established on the
basis of the weighted average of the dumping margins of the companies in the sample pursuant to
Article 9(6) of the basic Regulation.

(c) Dumping margin for non-cooperating companies

(41)

(42)

(43)

For those exporting producers which neither replied to the Commission's questionnaire nor other-
wise made themselves known, the dumping margin was established on the basis of the facts
available,

in accordance with Article 18(1) of the basic Regulation.

For the country subject to investigation, the volume of exports to the Community reported by the
cooperating exporting producers was compared with the equivalent Eurostat import statistics in
order to establish the overall

level of cooperation.

It was found that the overall level of cooperation was high and it was considered appropriate to set a
residual dumping margin for the non-cooperating companies at the level of the highest dumping
margin established for a cooperating company in the country in question.

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(44)

(45)

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

The provisional dumping margins, expressed as a percentage of
Community border duty unpaid, are the following:

the cif

import price at

the

Indo Rama Synthetics Ltd

Reliance Industries Ltd

Welspun Syntex Ltd

Cooperating exporting producers not in the sample

Non-cooperating exporting producers

15,7 %

19,1 %

17,2 %

17,7 %

19,1 %

E. COMMUNITY INDUSTRY

1. Community production

(46)

PTY is manufactured in the community by the following companies:

— three community producers, which fully cooperated with the Commission during the invest-

igation. Two of these community producers were party to the complaint,

— four community producers, out of the six who lodged the complaint, provided some general
information on their activities in the complaint. They did not fully cooperate in the investigation,
but supported the proceeding,

— two other non-complainant producers who provided some general information on their activities

and supported the complaint but did not supply detailed data,

— fourteen other non-complainant producers who neither cooperated in the investigation nor

expressed an opinion.

(47)

Therefore, the PTY produced by all these companies constitutes the Community production within
the meaning of Article 4(1) of the basic Regulation.

2. Definition of the Community industry

(48)

The cumulated production of the three cooperating producers was 85 238 tonnes in the IP out of an
estimated total Community production of around 228 491 tonnes, i.e. 37 %. However, when the
nine producers supporting the proceedings are considered together,
they represent 74 % of
Community production during the IP.

(49) One interested party claimed that only three Community producers cooperated in the investigation
and that their collective output did not constitute a major proportion of total Community produc-
tion. Furthermore, this party alleged that there were four out of the six Community producers that
lodged the complaint that eventually decided not to cooperate because they did not consider
themselves as being injured, therefore the case was initiated on a wrong basis and the data used to
assess the injury suffered by the Community industry was biased.

(50)

First of all it should be noted that all the companies explicitly supporting the complaint prior to
initiation represented approximately two-thirds of Community production and therefore support was
sufficient to initiate an investigation. Secondly, the three companies that fully cooperated in the
investigation represented more than 25 % of Community production and, therefore, a major propor-
tion within the meaning of Article 4(1) and Article 5(4) of the basic Regulation.

(51)

The Commission, therefore, provisionally considers that the three cooperating Community producers
constitute the ‘Community industry’ within the meaning of Article 4(1) and Article 5(4).

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F. INJURY

1. Preliminary remarks

Import data

(52)

Import trends in volume and prices were established using Eurostat information. All imported PTY
falls under the CN code 5402 33 00 and no other products is classified under this code. Eurostat
data for India was compared to data provided by exporting producers for the IP and was found to be
very close.

Community industry data

(53)

Community industry data were obtained from the verified questionnaire responses of the three
cooperating Community producers.

2. Community consumption

(54) Apparent consumption of PTY in the Community was established on the basis of the total imports
of the product concerned into the Community, total verified sales of the Community industry on the
Community market and estimated sales of other producers operating in the Community based on
replies to the Commission's questionnaires, evidence contained in the complaint and Eurostat export
statistics.

(55)

Community consumption of PTY reached approximately 340 000 tonnes during the IP. As shown in
the table below, it increased by 19 % over the analysis period. It should be noted that consumption
reached a peak in 1998 but subsequently fell back afterwards.

Community consumption

1996

1997

1998

1999

2000

IP

Tonnes

285 640

341 660

369 031

353 376

360 176

339 352

1996 = 100

100

120

129

124

125

119

3. Imports from India

Volume of imports

(56)

The volume of imports originating in India tripled during the analysis period from 7 583 tonnes
in 1996 to 22 683 tonnes in the IP. After a sharp rise between 1996 and 1998, imports fell back
in 1999 to recover in 2000. There was a further increase of 17 % during the IP compared to the
year 2000.

(57)

The market share of the imports concerned reached 7 % during the IP compared to 3 % at the
beginning of the analysis period.

Imports from India

Tonnes

1996 = 100

Market share

1996

7 583

100

3 %

1997

1998

1999

2000

IP

16 992

18 064

11 824

18 752

22 683

224

5 %

238

5 %

156

3 %

247

5 %

301

7 %

Prices of imports

(58)

The prices of the imports concerned decreased by 7 % over the analysis period. A steep drop in price
occurred in 1999 when volumes of imports dropped dramatically.

Prices cif

EUR/kg

1996

1,86

1996 = 100

100

1997

1,99

107

1998

1,69

91

1999

1,40

75

2000

1,77

95

IP

1,73

93

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Price undercutting

(59)

(60)

(61)

For the purposes of analysing price undercutting, the prices of the product concerned sold by the
Community industry were compared to the prices of Indian imports on the Community market
during the IP, on the basis of weighted average prices per type of PTY.

The elements taken into account when comparing the imported products with the PTY produced by
the Community industry were the decitex (number of grams for 1 000 metres of yarn), the number
of filaments, the chemical modification (e.g. flame retardant) and the colour of the yarn (non-died,
span-died or traditionally-died).

The prices of the Indian imports are those reported by the cooperating exporting producers in their
responses to the questionnaires on a cif basis at the Community border, duly adjusted, for customs
duties and post-importation costs. The prices of the Community industry are those reported in the
responses to the questionnaires for their sales in the Community to the first unrelated customer on
an ex-works basis.

(62) On this basis, the price-undercutting margin, expressed as a percentage of the Community industry's
prices was found to be in the range of 21 % to 36 % for the exporting producers who cooperated in
the investigation.

4. Situation of the Community industry

Production, production capacity and capacity utilisation

(63)

The Community industry's production increased by 18 % over the analysis period but decreased by
3 % in the IP compared to 2000. The production capacity increased by 33 % over the same period.
Capacities were continuously extended and modernised in order to increase the competitiveness of
the Community industry. Capacity utilisation rates that were fairly high until 1998 but then
decreased by 11 percentage points during the following periods.

Production tonnes

72 330

80 130

83 860

79 607

88 189

85 239

1996

1997

1998

1999

2000

IP

1996 = 100

100

111

116

110

122

118

Capacity tonnes

76 104

84 685

88 240

91 506

98 713

101 400

1996 = 100

100

111

116

120

130

133

Capacity utilisation

95 %

95 %

95 %

87 %

89 %

84 %

Stocks

(64)

Year-end stock levels varied across the years with a tendency to decrease in relation to production
levels.

Stocks

Tonnes

1996

5 958

1997

4 791

1998

3 627

1999

1 824

2000

1 794

IP

5 184

1996 = 100

100

80

61

31

30

87

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Sales volume, market share and growth

(65)

The sales made by the Community industry on the Community market during the analysis period
increased by 8 % in volume terms. However, the Community industry's sales did not grow as much
as consumption which increased by 16 % over this period. Therefore, the Community industry lost
two percentage points of market share over the analysis period.

Sales volume in tonnes

72 318

82 501

85 434

82 749

84 964

77 846

1996

1997

1998

1999

2000

IP

1996 = 100

100

Market share

25 %

114

24 %

118

23 %

114

24 %

117

24 %

108

23 %

Factors affecting prices

(66)

The selling prices of the Community industry decreased by 9 % over the analysis period. The
increasingly high level of imports originating in India, their low prices and their declining price trend
created a substantial price depression for the Community industry which was obliged to lower its
prices in order to try and maintain its market share.

Average selling price
delivered

EUR/kg

1996

2,94

1996 = 100

100

1997

3,00

102

1998

2,93

100

1999

2,69

91

2000

2,58

88

IP

2,68

91

Profitability

(67)

The Community industry's profitability expressed in terms of return on net sales in the Community
market fell sharply over the analysis period from a figure of + 3 % in 1996 to – 12 % in the IP.

Profitability

1996

3 %

1997

7 %

1998

8 %

1999

2 %

2000

– 7 %

IP

– 12 %

Investments and ability to raise capital

(68)

Investment was sustained over the analysis period but it reached a lower level in the IP. The majority
of these expenditures were recorded under the category machinery, equipment and other items. In
1998, investments were particularly high which corresponds to the creation of a new PTY plant by
one Community producer at a time when the Community industry financial prospects were still
good.

Investment

1996

1997

1998

1999

2000

IP

EUR 1 000

35 997

30 138

57 567

39 158

33 884

23 051

1996 = 100

100

84

160

109

94

64

(69)

The Community industry's ability to raise capital, either from external providers of finance or parent
companies, was not seriously affected at the beginning of the analysis period. However, having
regard to the level of losses in the IP, the ability to raise capital was seriously jeopardised in the IP.

Return on investments (ROI)

(70)

In assessing the impact of the dumped imports on the Community industry's return on investments,
the Commission examined the pre-tax profit or loss compared to the total assets of the Community
industry.

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(71)

(72)

(73)

(74)

The sales of PTY constitutes the largest part of the turnover of the Community industry ROI was
thus apportioned to reflect this share.

The evolution of the ROI was consistent with the profitability figures and showed the clear
deterioration of the financial situation of the Community industry.

Return on total assets

1996

20 %

1997

25 %

1998

19 %

1999

4 %

2000

– 3 %

IP

– 10 %

Cash flow

The sales of PTY constitute the major part of the turnover of the Community industry. Cash flow
was thus apportioned to reflect this share.

The figures in the table below concerning the cash flow of the Community industry clearly
confirmed the deterioration of its financial situation.

1996

1997

1998

1999

2000

IP

23 014

30 128

14 778

38 113

15 427

15 836

cash

Net
(outflow)
activities EUR/1 000

inflow
from all

Index

100

131

64

166

67

69

Employment, productivity and wages

(75)

The following table shows the number of people employed by the Community industry in the area
of the product concerned and their associated employment cost.

Number of employees

1 180

1996

1997

1 260

1998

1 419

1999

1 482

2000

1 487

IP

1 403

1996 = 100

100

107

120

126

126

119

Employment
EUR/1 000

costs

27 362

32 522

35 035

38 864

39 861

40 832

1996 = 100

100

119

128

142

146

149

Productivity

61 297

63 595

59 098

53 716

59 307

60 755

1996 = 100

100

104

96

88

97

99

(76)

The number of people employed by the Community industry at the end of the IP was 1 403, an
overall increase by 19 % over the analysis period but following an important increase in 1999 when
the Community industry decided to substantially develop its production capacities. This extension
was planned when prospects were still good (see recital 68). Employment costs in relation to the
number of employees increased by 30 % over the same period.

(77)

Productivity in the IP was approximately the same as in 1996. In 1999 when production capacities
increased as well as the number of employees, productivity had temporarily deteriorated.

Recovery from past dumping

(78)

In 1997 and 1998, the financial results of the Community industry were satisfactory showing that it
had recovered from past dumping from imports originating in third countries for which anti-
dumping measures were put in force (see recital 3).

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Actual margin of dumping

(79)

The dumping margins are specified in the dumping part (see recital 45). These margins established
are clearly above de minimis. Furthermore, given the volume and the price of the dumped imports,
the impact of the actual margin of dumping cannot be negligible.

5. Conclusion on injury

(80)

(81)

Between 1996 and the IP, the volume of imports of PTY originating in India was multiplied by three
from under 7 500 tonnes to over 22 000 tonnes. This resulted in an overall increase in the market
share of the imports concerned of 4 percentage points at a time when consumption grew by 19 %.
The prices of the imports concerned remained below those of the Community industry throughout
the period considered with a price undercutting ranging between 30 % and 45 %.

Simultaneously, between 1996 and the IP the situation of the Community industry deteriorated most
notably in terms of market share, sale prices, profitability, return on investments, cash flow and
ability to raise capital. The poor financial results of the Community industry resulted from the
depression of its prices.

(82)

In view of the above it is provisionally concluded that the Community industry has suffered material
injury within the meaning of Article 3 of the basic Regulation.

G. CAUSATION OF INJURY

1. Introduction

(83)

In accordance with Article 3(6) of the basic Regulation, the Commission examined whether the
material injury suffered by the Community industry had been caused by the dumped imports from
the country concerned. In accordance with Article 3(7) of the basic Regulation, the Commission also
examined other known factors which might have injured the Community industry in order to ensure
that any injury caused by those factors was not wrongly attributed to the dumped imports.

(84) Measures are currently in force against imports originating in Thailand, Indonesia, Taiwan and
Malaysia, which are intended to remove injurious dumping from these countries. Furthermore, the
PTY imports originating in these four countries are presently subject to anti-dumping investigation
(see recital 3). This element was borne in mind in this examination.

2. Effect of the dumped imports

Volume

(85)

(86)

The imports of PTY originating in India tripled over the analysis period to reach a level of 22 683
tonnes during the IP.

The substantial increase in the volume of imports originating in India and their gain in market share
over the analysis period, at prices which remained well below those of the Community industry
coincided in time with a serious deterioration of the situation of the Community industry notably in
terms of market share, sale prices, cash flow, ability to raise capital, return on investments and
profitability.

(87)

This deterioration was most marked between 2000 and the IP as the volume of dumped imports
increased by a further 17 % to reach record levels.

Prices

(88)

From 1996 to the IP, prices of dumped imports decreased by 7 % while their market share increased
by 4 percentage points. At the same time, the Community industry decreased its selling prices by
9 % in an unsuccessful effort to maintain its market share.

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(89)

(90)

(91)

(92)

Prices of dumped imports were constantly below the Community industry's prices with an undercut-
ting margin in the range of 30 % to 45 % for the investigated exporters during the IP.

It is therefore considered that the pressure exerted by the imports concerned, which significantly
increased their volume and market share from 1996 onwards and which were made at particularly
low dumped prices, resulted in price depression for the Community industry and a deterioration of
its financial situation.

3. Effect of other factors

Imports originating in other third countries

Four countries exporting PTY to the Community are subject to anti-dumping duties: Indonesia,
Malaysia, Taiwan and Thailand. These four countries represented a market share of 18 % during the
IP. Over the analysis period, the volume of imports originating in these countries increased by 41 %
from a level of approximately 43 000 tonnes in 1996 to 61 000 tonnes in the IP. Average cif prices
of these imports are clearly below the Community industry prices. The exporting producers in
Indonesia and Taiwan benefiting from 0 % anti-dumping duty rates are those which effectively
increased their sales on the Community market. It cannot be excluded that these imports have
contributed to the injury suffered by the Community industry. This is currently being investigated
within review investigations initiated both on 31 May 2002 (1) on the basis of Article 11(3) of the
basic Regulation.

Imports originating in other third countries represented a market share of 19 % during the IP and
increased, in volume, by 47 % over the analysis period. The most significant volumes originated in
the United States of America, Turkey and South Korea. Average cif prices of these imports are
slightly below ex-works prices of the Community industry. However,
if one takes into account
customs duties and post importation costs, they are approximately at the same level as the
Community industry prices. These imports cannot be considered as having injured the Community
industry.

1996

1997

1998

1999

2000

IP

Indonesia, Malaysia, Taiwan and Thailand

Quantity (in tonnes)

43 443

50 030

55 778

61 485

62 450

61 193

Market share

cif prices EUR/kg

15 %

1,88

15 %

2,02

15 %

1,66

17 %

1,38

17 %

1,81

18 %

1,85

Other third countries

Quantity (in tonnes)

41 574

61 630

73 575

75 912

68 209

61 377

Market share

cif prices EUR/kg

15 %

2,30

20 %

2,30

20 %

2,09

22 %

1,86

19 %

2,29

19 %

2,30

Prices of raw materials

(93)

The main raw material used in the production of PTY is polyester oriented yarn (POY).

(94)

The Community industry is buying POY both inside and outside the Community. Some POY is also
purchased from related companies. A detailed comparison Decitex by Decitex between intra-group
prices paid on the market and prices published by specialised press (PCI) proved that the purchases
from related companies are done on an arm's length price. Selling conditions are also similar to
general market conditions.

(1) OJ C 129, 31.5.2002, pp. 2 and 5.

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(95)

The actual price paid by the Community industry for its POY, as shown in the table below, increased
considerably in 1997 to 1998 and then decreased to levels which were lower than at the beginning
of the analysis period. It cannot thus be considered that costs of raw materials caused injury to the
Community industry.

Average cost of POY
EUR/kg

1996

1,5

1997

2,0

1998

1,7

1999

1,4

2000

1,4

IP

1,4

The export performance of the Community industry

(96)

The volume of the Community industry's exports increased by nearly 400 % over the analysis period
to reach a figure of 5 200 tonnes, as the Community industry has developed long term trade
relations with partners outside the Community. It should be noted that the actual tonnage concerned
remains marginal when compared to the volume of total sales of the Community industry.

(97)

In conclusion,
responsible for the injury suffered by the Community industry.

it is considered that as exports have increased over the period, they cannot be

Changes in the pattern of consumption

(98)

Consumption of the product concerned in the Community increased by 19 % over the analysis
period. It is therefore considered that this factor did not contribute to the injury suffered by the
Community industry.

Conclusion on causation

(99)

The substantial increase in the volume and market share of imports from the country concerned,
over the analysis period and most notably in the IP and their level of price undercutting during the
IP, had material negative consequences on the market share and selling prices of the Community
industry's. This in turn affected a number of the Community industry's economic indicators, in
particular profitability and return on investments. Given the above analysis, it is considered that
imports of PTY originating in India had a significant negative impact on the situation of the
Community industry and that the effect of other factors, notably imports from third countries
including Indonesia, Malaysia, Taiwan and Thailand, was not such as to alter the finding of a genuine
and substantial relationship of cause and effect between the dumped imports from India and the
material

injury suffered by the Community industry.

In view of the analysis which has properly distinguished and separated the effects of all the known
factors on the situation of the Community industry from the injurious effects of the dumped
imports, it is hereby concluded that these other factors as such do not reverse the fact that the
material

injury found may be attributed to the dumped imports.

(100)

It is therefore provisionally concluded that the dumped imports from the country concerned have
caused material injury to the Community industry within the meaning of Article 3(6) of the basic
Regulation.

H. COMMUNITY INTEREST

1. General remarks

(101) The Commission examined whether, despite the conclusion on injurious dumping, compelling
reasons existed that could lead to the conclusion that it is not in the Community interest to adopt
measures in this particular case. For this purpose and in accordance with Article 21(1) of the basic
Regulation, the determination of Community interest was based on an appreciation of all the various
interests involved, i.e. those of the Community industry, other Community producers, the importers/
traders as well as the users and suppliers of the product under consideration.

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2. The investigation

(102) The Commission sent questionnaires to importers, suppliers of raw materials and industrial users of
the product concerned. In total, 13 questionnaires were sent to suppliers, 21 to users, 14 to
importers and 16 to other producers of PTY.

(103) Questionnaire responses were received within the time limits from:

— one direct supplier of raw materials, supplying MEG and PTA to the Community industry:

— BP Chemicals Ltd (United Kingdom),

— one user of the product concerned, producing textiles to be used mainly in the automotive and

upholstery sectors:

— Mattes & Ammann KG (Germany),

— two other producers of PTY:

— FITEXAR SA (Portugal), and

— Manifattura di Stabbia SpA (Italy),

no importers of the product concerned has sent a questionnaire response.

3. Likely effect of the imposition of measures on the Community industry and other

Community producers of PTY

(104) The Community industry is viable and capable of supplying the market. Indeed, the Community
industry has made a great effort to meet the requirements of the users, and particularly of the car
industry, demanding high quality products to be delivered at their convenience. The Community
industry has shown a willingness to maintain a competitive presence on the Community market.
Examples of steps taken are:

(a) develop specific products to supply niche markets;

(b) improve productivity,

including a widespread use of modern production techniques (e.g.

increased mechanisation and computerisation).

(105)

It is clear that the proposed measures would benefit the Community industry. There is no reason to
doubt the viability and competitiveness of the Community industry in a situation where normal
market conditions apply. This is supported by its profitability level between 1996 and 1999 and by
its position on the Community market in the specialities sector, which are not yet targeted by the
dumped imports.

(106) The Community industry has suffered from injurious dumping. The dumped imports from India
undercut and depressed the Community industry selling prices, caused a slight reduction of its
market share and did not allow it to grow as fast as the market. The dumped imports from India
eroded severely the profitability and return on investment of the Community industry. Investments
were also reduced particularly during the IP. If this situation remains unchanged, losses at the levels
reached during the IP will persist and the long-term viability of the Community industry will be
endangered. The other producers that answered the Commission's questionnaire supported these
views.

(107)

It is therefore provisionally concluded that it would be in the interest of the Community industry
and of the other Community producers that measures are imposed.

4. Likely effects of the imposition of measures on importers

(108) No answers were received from any importer or trader.

(109) The non-cooperation of importer in this case leads to the conclusion that the imposition of measures
on imports originating in India is not likely to have any significant impact on the situation of
unrelated importers and traders of PTY in the Community.

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5. Likely effects of the imposition of measures on suppliers of raw materials

(110) Community producers are mainly buying mono ethylene glycol (MEG), purified terephthalic acid
(PTA) or dimethylterephthalate (DMT) to produce polyester oriented yarn (POY), to subsequently
texture it to make PTY. Some Community producers are also buying POY directly.

(111) The supplier that cooperated in the investigation is employing more than 300 persons dedicated to

the production of PTA and MEG.

(112) The cooperating supplier worked closely with Community producers, deriving a substantial part of
its turnover from sales to them. Therefore any reduction in the Community industry's purchases
would have a dramatic effect on this company.

(113)

It is clear that the imposition of measures would help to maintain the level of activity of the
Community industry and by extension of its suppliers. The Commission has therefore provisionally
concluded that the imposition of anti-dumping measures is in the interest of the upstream industries.

6. Likely effects of the imposition of measures on users

(114) As mentioned only one user cooperated. This user is mainly concerned by the possible further
concentration of the PTY sector if measures are imposed as a certain movement of concentration
took place within large multinational companies.

(115) This argument is not persuasive because there were 23 producers in the Community Industry during
the IP. Furthermore, if measures were not imposed, the difficult financial situation of the Community
industry is likely to lead to further worldwide concentration. Moreover, the very existence of the
Community industry might be at stake, making the users completely dependent on imports. On the
contrary if measures are imposed the various Community producers are likely to continue competing
among themselves and with non-dumped imports, assuring the best market conditions to users.

(116)

It is therefore provisionally considered that, in view of the low level of response to the Commission's
questionnaires and the comments made by the company that did respond, the imposition of
anti-dumping measures would not be prejudicial to the viability and competitiveness of users.

7. Conclusion

(117) The imposition of anti-dumping measures is in the interest of the Community industry, other
Community producers of PTY and suppliers of raw materials. It will allow these sectors to improve
profitability and to have the possibility of making the new investments, which are crucial for their
viability.

(118)

If measures are not imposed, the continued decline in the profitability of the Community industry
observed over the analysis period will be seriously jeopardised.

(119)

It has also be concluded that the imposition of anti-dumping measures on users would not be
prejudicial to their viability and competitiveness.

(120)

In view of the above, the Commission provisionally concluded that no compelling reasons exist not
to impose provisional anti-dumping measures in the present case.

I. PROVISIONAL ANTI-DUMPING MEASURES

1. Injury elimination margin

(121)

In order to prevent further injury being caused by the dumped imports, it was considered appro-
priate to adopt anti-dumping measures in the form of provisional duties.

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(122) For the purpose of determining the level of these duties, the Commission took account of the
dumping margins found and the amount of duty necessary to eliminate the injury sustained by the
Community industry.

(123) To this end, the Commission determined a non-injurious price based on production costs of the
Community industry, together with a reasonable profit margin of 8 %, this being considered
necessary to ensure the viability of the industry and being a profit which this industry experienced in
1998 when the dumped imports from India had not such a depressing effect on the Community
industry's prices and where the imports from the countries subject to measures were already at a
level similar to that prevailing in the IP. The non-injurious price was compared with the prices of the
dumped imports used to establish undercutting, as outlined above. Differences resulting from this
comparison were then expressed as a percentage of the total cif import value to establish the injury
elimination margin.

(124)

In order to calculate the injury elimination margin applicable to exporting producers that cooperated
but were not part of the sample, the weighted average injury elimination margin of the companies
included in the sample was used.

(125) For those exporting producers in India which neither replied to the Commission's questionnaire nor
otherwise made themselves known, the countrywide injury elimination margin was established on
the basis of the facts available, in accordance with Article 18(1) of the basic Regulation. In view of
the high level of cooperation it was considered appropriate to set the injury elimination margin for
the non-cooperating companies at the level of the highest injury margin established for a cooper-
ating company in the country in question.

2. Provisional measures

(126) Since dumping margins have been found to be lower than injury elimination margins, the provi-
sional duties to be imposed should correspond to the dumping margins established, in accordance
with Article 7(2) of the basic Regulation.

(127) However, with regard to the parallel anti-subsidy proceeding in respect of India, in accordance with
Article 24(1) of Council Regulation (EC) No 2026/97 (1) (hereinafter ‘the basic anti-subsidy Regula-
tion’) and Article 14(1) of the basic Regulation, 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 export subsidisation. It is therefore necessary to determine whether, and to what extent,
the subsidy amounts and the dumping margins arise from the same situation.

(128) A provisional countervailing duty corresponding to the amount of subsidy, which was found to be
lower than the injury margin, was proposed in accordance with Article 12(1) of the basic anti-
subsidy Regulation. All subsidy schemes investigated which were found to be countervailable
constituted export subsidies within the meaning of Article 3(4)(a) of the basic anti-subsidy Regula-
tion. As such, these subsidies could only affect the export price of the Indian exporting producers,
thus leading to an increased margin of dumping. In other words, the provisional dumping margins
established for the cooperating exporting producers in India are partly due to the existence of export
subsidies. In these circumstances, it is not considered appropriate to impose both countervailing and
anti-dumping duties to the full extent of the relevant export subsidy amounts and dumping margins
provisionally established. Therefore, the provisional anti-dumping duty should be adjusted to reflect
the actual dumping margin remaining after the imposition of the provisional countervailing duty
offsetting the effect of the export subsidies. Consequently, the anti-dumping duty rate has been set at
the level of the dumping margin minus the rate of countervailing duty of the export subsidies as
indicated in the following table:

(1) OJ L 288, 21.10.1997, p. 1.

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Company name

Dumping margin

Rate of provisional
countervailing duty
of export subsidies

Provisional anti-dumping
duty

Indo Rama Synthetics Limited

Reliance Industries Limited

Welspun Syntex Limited

15,7 %

19,1 %

17,2 %

companies

not

17,7 %

Cooperating
included
in the sample

4,1 %

0 %

9,1 %

5,0 %

11,6 %

19,1 %

8,1 %

12,7 %

All other companies

19,1 %

9,1 %

10,0 %

(129) 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 countrywide
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’.

(130) 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, for example, 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 Regulation accordingly by updating the list of companies benefiting from individual duty rates.

3. Final provisions

(131)

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 a request for a hearing. Furthermore, it should be stated that the
findings concerning the imposition of duties made for the purposes of this Regulation are provi-
sional and may have to be reconsidered for the purposes of any definitive duty,

HAS ADOPTED THIS REGULATION:

Article 1

A provisional anti-dumping duty is hereby imposed on imports of polyester textured filament yarn

1.
falling within CN code 5402 33 00 originating in India.

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

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

(1) European Commission

Directorate-General for Trade
Directorate B
J-79 5/17
Rue de la Loi/Wetstraat 200
B-1049 Brussels.

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Company

Rate of duty
(%)

TARIC additional code

Chhabria Polyester Corporation
Mehta House, 1st Floor, 91, Bombay Samachar Marg,
Mumbai 400 023, India

Indo Rama Synthetics Limited
51-A, Industrial Area, Sector III, Pithampur, 453 001, Distt.
Dhar, Madhya Pradesh, India

Microsynth Fabrics Limited
6, Jai Tirath Mansion, Barrack Road, Behind Metro Cinema,
Mumbai 400 020, India

Modern Petrofils
NH No 8, Baman Gam, Taluka: Karjan, Distt: Baroda 391
210, India

Nova Petrochemicals Limited
402, Trividh Chambers, Ring Road, Surat, India

Parasrampuria Industries Limited
208, Nariman Point, Bombay 400 021, India

Reliance Industries Limited
Maker Chambers IV, Nariman Point, Mumbai, 400 021, India

Sarla Polyester Limited
304, Arcadia, 195 Nariman Point, Mumbai, 400 021, India

Supertex Industries Limited
Balkrishna Krupa, 2nd Floor, 45/49, Babu Genu Road, Prin-
cess Stree, Mumbai, 400 002, India

Welspun Syntex Limited
Kamani Wadi, 1st Floor, 542, Jaganath Shankar Sheth Road,
Chira Bazar, Mumbai, 400 002, India

All others

12,7

11,6

12,7

12,7

12,7

12,7

19,1

12,7

12,7

8,1

10,0

A388

A389

A390

A391

A392

A393

A394

A395

A396

A397

A999

3.

Unless otherwise specified, the provisions in force concerning custom 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 provisional duty.

Article 2

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 20 days of the date of entry into
force of this Regulation.

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

Article 3

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

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

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

Done at Brussels, 29 July 2002.

For the Commission

Pascal LAMY

Member of the Commission