Commission Regulation (EC) No 1066/2007 of 17 September 2007 imposing a provisional anti-dumping duty on imports of certain manganese dioxides originating in South Africa
Date: 2007-09-17
Institutions: European Commission
Subjects: South Africa, anti-dumping duty, anti-dumping legislation, import, manganese

18.9.2007

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Official Journal of the European Union

L 243/7

COMMISSION REGULATION (EC) No 1066/2007

of 17 September 2007

imposing a provisional anti-dumping duty on imports of certain manganese dioxides originating in
South Africa

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(6)

Having regard to the Treaty
Community,

establishing the European

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)
(the
basic Regulation), and in particular Article 7 thereof,

After consulting the Advisory Committee,

Whereas:

A. PROCEDURE

1. Initiation

lodged pursuant

On 10 November 2006 the Commission received a
complaint
the basic
Regulation by Tosoh Hellas AIC (the complainant) re-
in this case more than
presenting a major proportion,
50 %, of
the total Community production of certain
manganese dioxides.

to Article 5 of

This complaint contained evidence of dumping and of
material injury resulting therefrom, which was considered
sufficient to justify the opening of a proceeding.

Questionnaires were sent
to all parties known to be
concerned and to all other companies that made them-
selves known within the deadlines set out in the notice
of initiation. Replies were received from the exporting
the complainant producer,
producer in South Africa,
the importer of
the product concerned from South
Africa and four users of the product concerned.

(7)

The Commission sought and verified all the information
deemed necessary for a provisional determination of
dumping, resulting injury and Community interest and
carried out verifications at the premises of the following
companies:

(a) Community producers

— Tosoh Hellas AIC, Thessaloniki, Greece and its
International

agent Mitsubishi

related
GmbH, Düsseldorf, Germany

sales

(b) Exporting producer in South Africa

— Delta E.M.D.
(Delta)

(Pty) Ltd, Nelspruit, South Africa

(c) Related supplier of the exporting producer in South Africa

On 21 December 2006 the proceeding was initiated by
the publication of a notice of initiation in the Official
Journal of the European Union (2).

— Manganese Metal Company (Pty) Ltd, Nelspruit,

South Africa

2. Parties concerned by the proceeding

(d) Unrelated importer in the Community

The Commission officially advised the complainant, the
other Community producer, the exporting producer, the
importer, users known to be concerned and represen-
tatives of South Africa of the initiation of the proceeding.
Interested parties 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.

and users made

The complainant producer, the exporting producer, the
importer
their views known. All
interested parties who so requested and showed that
there were particular reasons why they should be heard
were granted a hearing.

— Traxys France SAS, Courbevoie, France

(e) Users in the Community

— Panasonic Battery Belgium NV, Tessenderlo,

Belgium

— VARTA Consumer Batteries GmbH & Co. KGaA,

Sulzbach, Germany

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation

(EC) No 2117/2005 (OJ L 340, 23.12.2005, p. 17).

(2) OJ C 314, 21.12.2006, p. 78.

— Duracell Batteries BVBA, Aarschot, Belgium.

(1)

(2)

(3)

(4)

(5)

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3. Investigation period

(8)

The investigation of dumping and injury covered the
period from 1 October 2005 to 30 September 2006
(investigation period or
the
trends relevant for the assessment of injury covered the
period from 1 January 2002 to the end of the investi-
gation period (period considered).

IP). The examination of

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

(9)

The product concerned is manganese dioxides manu-
factured in an electrolytic process, which have not been
heattreated after the electrolytic process (EMD), orig-
inating in South Africa. It is normally declared within
CN code ex 2820 10 00.

(10)

(11)

(12)

The product concerned comprises
two main types:
carbon-zinc grade EMD and alkaline grade EMD. Both
types are produced through an electrolytic process,
with an adaptation of certain parameters in the process
to obtain either carbon-zinc grade EMD or alkaline grade
EMD. They both normally have a high purity of
manganese
intermediate
and are generally used as
products in the production of drycell consumer batteries.

despite

shown that,

investigation has

The
some
differences in terms of certain specific physical and
chemical characteristics such as density, mean particle
size, Brunauer-Emmet-Teller
and
alkaline potential, both types of the product concerned
share the same basic physical, chemical and technical
characteristics and are used for
the same purposes.
They are therefore considered to constitute a single
product for the purpose of this proceeding.

surface

(BET)

area

there exist other

types of
It should be noted that
manganese dioxides which do not have the same basic
physical, chemical and/or technical characteristics as EMD
and have essentially different usages. They do not
therefore form part of
the product concerned. These
distinct products include: (i) natural manganese dioxides
impurities and are normally
which contain significant
classified under a different CN code,
i.e. 2602 00 00;
(ii) chemical manganese dioxides which are produced
through a chemical process and have a significantly
lower density as well as a significantly higher BET
surface area than EMD; and (iii) heat-treated electrolytic
manganese dioxides which, despite being manufactured
through an electrolytic process like EMD, differ from
EMD by a number of essential characteristics such as

and

crystal

content,

structure

alkaline
moisture
potential, making them suitable
for application in
lithium batteries, which are based on non-aqueous
systems and have lithium metal as the anode, but not
in carbon-zinc or alkaline batteries, which are based on
aqueous systems and have zinc metal as the anode, like
EMD.

(13)

It should also be noted that none of the interested parties
has contested the above definition or the distinction
between the two main types of the product concerned.

2. Like product

(14)

The investigation showed that the EMD produced and
sold by the Community industry in the Community
and that produced and sold on the South African
domestic market and/or imported into the Community
same basic physical,
from South Africa share the
chemical and technical characteristics, and have the
same uses.

(15)

It was
these
therefore provisionally concluded that
products are alike within the meaning of Article 1(4)
of the basic Regulation.

C. DUMPING

1. Normal value

(16) As far as the determination of normal value is concerned,
the Commission first established whether Delta’s total
domestic sales of EMD were representative in relation
to its total export sales to the Community. In accordance
with Article 2(2) of the basic Regulation, domestic sales
were considered representative, as the total domestic sales
volume of the exporting producer was more than 5 % of
its total export sales volume to the Community.

(17)

The Commission subsequently identified those product
representative
types sold domestically, having overall
directly
identical
domestic
or
sales, which were
comparable with the types
to the
sold for export
Community.

(18) Domestic

that product

type were
sales of a particular product
considered to be sufficiently representative when the
volume of
type sold on the domestic
to independent customers during the investi-
market
gation period represented 5 % or more of
the total
volume of the comparable product type sold for export
to the Community.

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(19)

type

types

the product

sold for export

to the
For all
Community, no product
identical or directly
comparable and sold on the domestic market in rep-
resentative quantities was found. Therefore, the normal
value had to be constructed for all exported product
types in accordance with Article 2(3) of the basic Regu-
lation.

(20) Normal value was

constructed by adding to the
exporter’s manufacturing costs of
the exported types,
adjusted where necessary, a reasonable amount
for
selling, general and administrative costs (SG&A) and a
reasonable amount for profit. The SG&A and the profit
were established pursuant
in
Article 2(6) of the basic Regulation. To this end, the
Commission
SG&A costs
incurred and the profit
realised by Delta on its
domestic market constituted reliable data.

to the methods set out

examined whether

the

(21) Actual domestic SG&A costs were considered reliable
since the total domestic sales volume of the company
concerned was representative when compared with the
volume of export sales to the Community, as mentioned
above.

(22)

constituted reliable data,

In order to assess whether the profit made by Delta on
its domestic market
the
Commission first examined whether the domestic sales
of each type of the product concerned sold domestically
in representative quantities could be regarded as having
been made in the ordinary course of trade pursuant to
Article 2(4) of the basic Regulation. This was done by
establishing the proportion of profitable sales to inde-
pendent customers on the domestic market of the type
in question.

(23) As there was no type for which the volume of profitable
the total sales
sales represented more than 10 % of
volume of that type on the domestic market,
it was
considered that domestic prices could not provide an
the profit
appropriate basis for the establishment of
margin to be used in the construction of the normal
value.

products for
described in Article 2(6)(b) of the basic Regulation.

the exporting producer

in question as

(26)

The reasonable profit needed to construct the normal
value was thus determined in accordance with Article
2(6)(c) of the basic Regulation.

(27)

In this respect,
information has been gathered on the
profitability of all other known producers of EMD in
other countries.
Information was found from publicly
available sources for one producer located in India, two
in Japan and two in the USA. However, for one producer
in the USA and for the two Japanese producers no infor-
mation was available on profitability for EMD or for a
division of
company where EMD would be
significant.

the

(28) An average profit margin for the IP was calculated based
on the publicly available sources for one Indian producer
and the remaining producer in the USA as well as the
information provided by Delta regarding the profitability
of its related company Delta EMD Australia Proprietary
located in Australia, on its domestic market. The
Ltd,
average profit margin calculated amounted to 9,2 %.
The methodology, given the information available, was
considered reasonable within the meaning of Article
2(6)(c) of
the basic Regulation and the result con-
servative. Publicly available information showed that
this profit margin was not exceeding the profit made
by other known producers of
same general
category of products (i.e. specialty chemicals) in South
Africa during the IP.

the

2. Export prices

(29) Delta made export sales to the Community exclusively
through an independent agent, Traxys France SAS.

(30)

The export prices were based on the prices actually paid
or payable for the product concerned when sold for
export
in
to the Community,
accordance with Article 2(8) of the basic Regulation.

from South Africa

the reasonable profit needed to construct

(24) As Delta is the only known producer of EMD in South
Africa,
the
normal value could not be based on actual profits
determined for other exporters or producers subject to
investigation in respect of production and sales of the
like product on the domestic market as described in
Article 2(6)(a) of the basic Regulation.

(31)

(25)

Furthermore, as EMD is the only product made and sold
by Delta, the reasonable profit needed to construct the
normal value could not be based on actual profits
applicable to production and sales,
in the ordinary
the same general category of
course of

trade, of

3. Comparison

The normal value and export prices were compared on
an ex-works 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 prices and price compar-
the basic
ability in accordance with Article 2(10) of
concerning
Regulation.
commissions,
and
ancillary costs, packing, credit and bank charges were
granted in all cases where they were found to be
reasonable, accurate and supported by verified evidence.

Appropriate
transport,

adjustments

insurance,

handling

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4. Dumping margins

(36)

(32)

The weighted average normal value of
the product
concerned exported to the Community was compared
with the weighted average export price of
the corre-
sponding type of the product concerned, as provided
for in Article 2(11) and (12) of the basic Regulation.

The complaint was only lodged by one producer, which
cooperated fully with the investigation. Although the
it did not oppose
other producer did not cooperate,
the complaint either. Due to the fact
that only one
company submitted a full reply to the questionnaire, all
data referring to the Community industry are either
presented in index form or given as ranges in order to
protect confidentiality.

(33) On this basis, the provisional weighted average dumping
margin expressed as a percentage of the cif Community
frontier price, duty unpaid, is:

Company

Provisional dumping margin

Delta E.M.D. (Pty) Ltd

14,9 %

(34) As regards the countrywide dumping margin applicable
to all other exporters in South Africa, the Commission
first established the level of cooperation. A comparison
was made between Eurostat data and the questionnaire
reply received from the cooperating exporting producer
in South Africa. This comparison showed that, from the
information available, Delta’s exports to the Community
the product
the
represented 100 % of
concerned from South Africa. The level of cooperation
found was thus very high and the countrywide dumping
margin was set at the same level as the dumping margin
calculated for Delta.

exports of

(37) Hence, the volume of Community production for the
the basic Regulation has
purpose of Article 4(1) of
been provisionally calculated by adding the production
the only cooperating Community producer to the
of
volume of production of
the other producer on the
basis of
the data supplied in the complaint. Total
Community production in the IP was in the range of
20 to 30 thousand tonnes.

(38)

The production of the cooperating Community producer
represented more than 50 % of the EMD produced in the
Community. It is therefore considered that this company
constitutes the Community industry within the meaning
of Articles 4(1) and 5(4) of the basic Regulation.

2. Community consumption

D. INJURY

(39)

1. Community production and Community industry

(35)

The investigation established that in the beginning of the
period considered the like product was manufactured by
three producers in the Community. However, one of the
producers ceased production in 2003; thus,
in the IP,
there were only two producers in the Community.

The apparent Community consumption was established
on the basis of the sales volume on the EC market of the
the other Community
complainant producer, sales of
the purchases
producers established on the basis of
reported by users
country
and imports
concerned based on the verified reply to the ques-
tionnaire
third countries obtained from
Eurostat.

and other

from the

(40) On this basis, Community consumption decreased by 7 % over the period considered. A particularly
steep increase occurred in 2003 and 2004, coinciding with the strongest increase in volume at very
low prices (– 35 %) of EMD imported from South Africa and with the closure of a major Community
producer.
In 2005 consumption returned to its previous level and another significant decrease
occurred in the IP. The trend in consumption seems to have been influenced by the closure in
2003 of a major producer accounting for one third of Community production.

Community consumption
Index 2002 = 100

2002

100

2003

102

2004

113

2005

102

IP

93

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3. Imports into the Community from the country concerned

Volume and market share of imports concerned

(41)

The volume of imports from South Africa was based on verified figures supplied by the only
exporting producer. As mentioned above, for reasons of confidentiality, as the analysis concerns a
single company, most indicators are presented in index form or in ranges.

(42)

In terms of volume and market share the evolution of imports has been the following:

Import volumes
Africa (tonnes), 2002 = 100

from South

2002

100

2003

129

2004

156

2005

185

IP

169

Market share South Africa

30-40 %

40-50 %

44-54 %

60-70 %

60-70 %

Market
2002 = 100

share

South Africa,

100

126

139

181

181

(43) While consumption of EMD decreased by 7 % during the period considered,

imports from the
country concerned rose by 69 % during the same period. Consequently, the South African market
share increased dramatically during the period considered by around 81 % from a range of 30 to
40 % to a range of 60 to 70 %.

Prices of imports and undercutting

(44) Over the period considered the average import prices fell by 31 %, despite the increase in the price of

the main raw material.

Import
from South
Africa, EUR/tonne, 2002 = 100

prices

2002

100

2003

70

2004

65

2005

66

IP

69

(45)

For the determination of price undercutting during the IP, the relevant sales prices of the Community
industry were net prices to independent customers, adjusted where necessary to an ex-works level, i.e.
excluding freight costs in the Community and after deduction of discounts and rebates. These prices
were compared with the sales prices charged by the South African exporting producer, net of
discounts and adjusted, where necessary, to cif Community frontier prices with an appropriate
adjustment for customs clearance costs and post-importation costs.

(46)

The comparison showed that during the IP the weighted average price undercutting margin, expressed
as a percentage of the Community industry’s sales prices, was in the range of 11 to 14 %. There were
even higher levels of underselling because the Community industry was suffering substantial losses
during the IP.

4. Situation of the Community industry

(47)

In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped
imports from South Africa on the Community industry included an analysis of all economic factors
and indices having a bearing on the state of the industry from 2002 to the IP. As mentioned above,
for reasons of confidentiality, as the analysis concerns a single company, most
indicators are
presented in index form or in ranges.

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Production, production capacity and capacity utilisation

(48)

The evolution of production, production capacity and capacity utilisation for the Community
industry was as follows:

Production, 2002 = 100

Capacity, 2002 = 100

Capacity utilisation,
2002 = 100

2002

100

100

100

2003

87

100

87

2004

128

100

128

2005

135

100

135

IP

130

100

130

(49) Over the period considered, Community production increased by 30 %. However, the production
capacity remained stable throughout the whole period considered. The level of production reached a
peak in 2005 after a strong increase in consumption on the EC market in 2004, which was
combined with the liquidation of a major producer and the increase in demand on the export
market of the Community industry. From 2004 to the IP, when the raw material prices doubled,
the Community industry attempted to achieve economies of scale and reduce the unit cost of
production in the IP.

Stocks

(50)

Stocks increased by 32 % during the period considered, reflecting the Community industry’s
increasing difficulty in selling its products on the Community market due to the competition with
dumped imports.

Stocks, 2002 = 100

2002

100

2003

71

2004

48

2005

113

IP

132

Sales volume, market shares, growth and average unit prices in the Community

(51)

The figures below represent
Community.

the Community industry’s sales to independent customers in the

Sales volume in the EC market,
2002 = 100

Market share, 2002 = 100

Average sales prices,
2002 = 100

2002

100

100

100

2003

80

78

76

2004

152

135

71

2005

113

110

75

IP

91

97

75

(52) Against the background of the 7 % decrease in EC consumption, the market share of the Community
industry decreased by 3 %. In addition, in absolute terms, its overall sales volumes on the EC market
declined significantly by 9 % during the period considered, with a particularly sharp decrease of 22
percentage points in the IP.

(53) While in 2004 the Community industry was able to benefit briefly from the increase in consumption
by increasing its sales volume by 52 % and market share by 35 % compared to 2002,
in the
following years its participation in the market decreased in parallel to the sharp increase in the
volume of dumped imports from South Africa.

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(54)

There was a downward trend in average sales prices to unrelated buyers on the Community market
until 2004. This illustrates the Community industry’s attempts to compete with the dumped imports
and stay in the market. In 2004, however, prices reached an unsustainable low point. They then
increased by four percentage points in 2005. However, despite this small increase in prices in 2005,
which was confirmed in the IP, the Community industry was unable to reflect in its prices the
development in the price of manganese ore, the main raw material, which rose sharply, by almost
100 %, between 2004 and 2005.

Profitability and cash flow

(55)

The levels of profits and cash flow from the sale of EMD by the Community industry were strongly
negative.

Operating profit margin of
product concerned (range, %)

Operating profit margin of
product
index
concerned,
2002 = 100

2002

2003

2004

2005

IP

0 to 20

0 % to – 20

0 to 5

0 to 3

0 to – 20

100

– 85

20

13

– 72

(56)

Profitability deteriorated significantly by minus 172 % over the period considered. It reached its
in 2003 at the time of the strongest decrease in the prices of imports (– 30 %). It
lowest level
improved in 2004 and 2005, with an increase in quantities sold. In the IP profitability fell back
to its lowest level due to price pressure and increasing cost of raw materials.

(57)

Cash flow also deteriorated over the period considered,

in line with the decrease in profitability.

2002

Cash Flow, index 2002 = 100

100

2003

22

2004

46

2005

– 35

IP

– 8

Investments, return on investments, and ability to raise capital

(58)

Investments increased by 7 % over the period considered.
Community industry recorded a certain amount of
production and for
continued but at a lesser level.

the maintenance of new machinery.

In the middle of

this period the
investment in order to reduce the cost of
In the following years investments

Investments, 2002 = 100

2002

100

2003

67

2004

126

2005

109

IP

107

(59)

The return on investment from the production and sales of the like product followed the sales and
profitability trend and was negative in 2003 and at the end of the period considered.

Return on investment,
2002 = 100

2002

100

2003

– 58

2004

18

2005

10

IP

– 55

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(60)

The Community industry’s ability to raise capital was not found to be significantly affected during the
period considered, given the size of investments, which were sufficient to cover the necessary capital
investments.

Employment, productivity and wages

(61)

The evolution of employment, productivity and labour costs in the Community industry were as
follows:

Number of employees,
2002 = 100

Productivity (tonnes/employee),
2002 = 100

Total labour cost, 2002 = 100

Labour
2002 = 100

costs per

employee,

2002

100

100

100

100

2003

68

129

77

115

2004

69

184

79

114

2005

70

192

84

119

IP

67

195

82

123

(62)

(63)

The number of employees decreased by 33 % between
2002 and the IP. This was the result of both a decline in
sales and the efforts by the Community industry to
improve productivity. Indeed, the result of this rationa-
lisation process within the Community industry was
reflected in the rate of productivity, which showed a
considerable upward trend during the period considered.

5. Conclusion on injury

(66)

It is recalled that imports from South Africa increased
considerably, both in absolute terms and in terms of
market share.
Indeed, over the period concerned the
imports increased by 69 % in absolute terms and by
to Community consumption,
around 81 % relative
reaching a market share of 60 to 70 %.

The total
labour costs were reduced significantly, by
18 %. The average cost per employee increased relatively,
taking into account
inflation.
However, on the whole, the share of labour costs in
total
reduced
showing a clear improvement in efficiency.

the development of

significantly

costs was

production

(67) Moreover, in the IP, the sales prices of the Community
industry were substantially undercut by those of
the
the product concerned. On a
dumped imports of
weighted average basis, price undercutting during the IP
was in the range of 11 to 14 %.

Magnitude of the actual margin of dumping and recovery from
past dumping

(64)

The dumping margin is specified above in the dumping
de minimis.
section. This margin is
the
Furthermore, given the volume and the price of
dumped imports, the impact of the actual margin of
dumping cannot be considered negligible.

clearly above

(68) While over

the period considered the Community
consumption decreased by 7 %, the sales volume of the
Community industry decreased by 9 % and the market
share by 3 %. A dramatic deterioration in these indicators
occurred in the IP, with a fall of 22 percentage points in
sales and 13 percentage points in market share compared
with 2005.

(65)

There is no indication that the Community is recovering
from the effects of past dumping or subsidisation.

(69) With falling sales volume, market share and prices, the
Community industry was unable to pass on the global
increase in raw material prices to its customers. This
resulted in a very negative profitability situation (loss).

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(70) Notwithstanding the Community industry’s considerable
investments during the period considered together with
its continuing efforts to increase productivity and compe-
titiveness,
its profitability, cash flow and return on
investment declined sharply, reaching strongly negative
levels.

(75)

total

consumption,

The effects of dumped imports are clearly illustrated by
the decision of several major users representing more
than 60 % of
to switch their
purchases from the Community industry to the South
African product. While at the beginning of the period
considered these users purchased only marginal quan-
tities from South Africa, by the end of
the period
considered and in the IP, they were purchasing up to
70 to 100 % of their needs from South Africa.

(71)

The deteriorating situation of the Community industry in
the period considered is also confirmed by the negative
development of employment.

(72)

In the light of the foregoing, it is provisionally concluded
that
injury
the Community industry suffered material
within the meaning of Article 3 of the basic Regulation.

E. CAUSAL LINK

1. Preliminary remark

(73)

In accordance with Article 3(6) and (7) of
the basic
Regulation it was examined whether there was a causal
link between the dumped imports from South Africa and
the material injury suffered by the Community industry.
Known factors other than the dumped imports, which
could at the same time have injured the Community
industry, were
the
possible injury caused by these other factors was not
attributed to the dumped imports.

also examined to ensure

that

2. Effect of the imports from South Africa

(74) As established in recitals 43 and 44,

the imports
increased steadily and significantly during the period
considered, by 69 % in terms of volume and by 81 %
in terms of market share. The unit selling price of the
imports from South Africa decreased by 31 % over the
period considered. In the IP the prices of the imports
originating
in South Africa undercut Community
industry prices by 11 to 14 %.

(76) At the same time, the Community industry had to dras-
tically reduce its prices in order to keep its sales contracts
with other users.

(77)

(78)

The Community industry’s decreasing market share in the
period considered has to be seen in correlation with the
increase in volume and market share of the imports from
South Africa. Moreover,
in 2005 and the IP, when
Community consumption fell by 18 % compared with
its sharp rise in 2004, the imports from South Africa
increased by 8 % in absolute terms and by around 31 %
in market share. At
the Community
industry lost 28 % of market share and 40 % of sales.

the same time,

It is therefore provisionally concluded that the pressure
exerted by the dumped imports, which dramatically
increased their volume and market share from 2002
onwards, and which were made at dumped prices and
at significant
levels of undercutting and underselling,
played a determining role in the fall of the Community
industry’s sales and consequently in its profitability, cash
flow development and negative situation in return on
investment, employment and increase in stocks.

3. Effect of other factors

Imports from other third countries

(79)

The development of imports from other third countries
according to Eurostat data was as follows:

2002

Imports
countries

from other

third

5 541

Index, 2002 = 100

Market share

Index, 2002 = 100

Average prices of imports

Index, 2002 = 100

100

15 %

100

1 527

100

2003

4 677

84

12 %

82

1 204

79

2004

5 992

108

14 %

96

1 226

80

2005

2 876

52

7 %

51

1 550

101

IP

2 878

52

8 %

56

1 537

101

L 243/16

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Official Journal of the European Union

18.9.2007

(80) At the beginning of the period considered EMD imports
from other third countries represented 15 % of market
share.
In the following years these imports decreased
significantly, representing only 8 % of market share by
the end of the IP. The prices of those imports remained
largely at a higher level than the South African prices and
even increased by 1 %.

the latter company was involved both in battery and
EMD production. The majority of the EMD produced
by this company was apparently used in its own
battery production. However, this company played an
increasing role on the Community EMD market as well.

(81)

Several submissions have alleged that
the imports of
EMD from China, which is not a country concerned by
the investigation, have contributed significantly to the
injury suffered by the Community producer. However,
the imports from China in the IP, although at average
prices lower than the South African product, represented
only 0,6 % of all imports from third countries and can
link
therefore not be considered to break the causal
between the dumped imports and the material
injury
suffered by the Community industry.

(86)

It is clear that the general picture of other EC producers
is influenced by the fact that one ceased its activities in
2003 and the other did not sell any substantial quantities
on the EC market during the period considered.
However, from the data obtained in the investigation it
may be concluded that these Community producers were
also affected by the pressure exerted on prices by South
African imports and the developments on the market,
since their market share decreased from a range of 10
to 25 % to a range of 4 to 10 %. Consequently, the sales
of other Community producers
cannot have been
responsible for the injury suffered by the Community
industry.

Export performance of the Community industry

(82)

It was also examined whether or not the exports to non-
EU countries may have contributed to the injury suffered
during the period considered.

(87)

(83)

It was found that the export volumes of the Community
industry increased by 9 % over the period considered,
and though the export price decreased by 14 %, it was
well above the unit cost of production. Therefore, the
export performance of the Community industry could
not have contributed to the injury during this period.

Other Community producers

(84) As mentioned above, there were two other producers in
the period

the beginning of

at

the Community
considered.

(85) One of

the producers,

located in Ireland,

ceased
production in 2003, because of financial difficulties due
to important decrease in sales under strong price pressure
from dumped imports. The other one, located in Spain,
did not cooperate in the proceeding. As a result of this
lack of cooperation, data on the sales by other producers
on the Community market was obtained from user ques-
tionnaires. According to the findings of the investigation,

Contraction in demand

on

the Community market may

It was also examined whether or not the contraction in
have
demand
contributed to the injury suffered during the period
considered. This was not found to be the case. As estab-
lished in recitals 52 and 77, the Community industry’s
sales decreased by more than the total Community
share
consumption while the corresponding market
held by the South African imports increased significantly.

Increase in raw material prices

(88)

It was argued that injury had been caused mainly by the
worldwide increase in the price of the basic raw material:
manganese ore. Manganese ore prices which remained
stable until 2004 suddenly doubled in 2005 and
decreased slightly during the IP. This
increased the
Community industry’s unit cost of production by 19 %.

(89) However, as the prices of imports from South Africa only
increased by one percentage point during the same
the Community industry, which
period (2004/05),
attempted to compete with dumped imports and stay
in the market, could not pass on the total cost increase
to downstream users. The Community industry was only
able to increase its prices by four percentage points,
which thus remained below the cost of production.

18.9.2007

EN

Official Journal of the European Union

L 243/17

Total cost of production,
2002 = 100

Total unit cost per tonne,
2002 = 100

Unit sales price, 2002 = 100

2002

100

100

100

2003

89

98

76

2004

103

80

71

2005

110

85

75

IP

119

95

75

(90)

In these circumstances,
it was considered that the cost
increase was not per se the factor causing injury but the
fact that the Community industry was not able to pass
to its customers due to the
on the cost
downward price pressure
exerted by the dumped
imports from South Africa, which did not reflect the
rise in prices of raw materials. Therefore,
this claim
had to be rejected.

increases

light of the above, it was provisionally concluded that the
increasing competition among battery producers did not
break the causal
link between dumped imports from
South Africa and the injury suffered by the Community
industry.

4. Conclusion on causation

Global oversupply of EMD

(91)

It was argued by some parties that the global oversupply
of EMD caused by the increased production capacity in
China has depressed EMD prices and is thus the cause of
the injury to the Community industry.

(95)

share of

in the volume and market

there was a dramatic
The above analysis shows that
the
increase
imports originating in South Africa over
the whole
period considered, together with a considerable decrease
in their prices coupled with a significant price under-
cutting during the IP. This increase in the market share
the dumped imports coincided with a significant
of
decrease in the sales volume and market share of the
together with downward
Community industry. This,
pressure on prices, resulted,
in substantial
inter alia,
losses to the Community industry during the IP.

(92) However, given the low volume of imports from China
and despite their relatively low prices in the period
considered, this allegation was found not to be valid.

Increasing competition among battery producers

(93)

It was further argued by some parties that the decrease in
the Community industry’s sales prices of EMD was the
result of increasing competition among battery producers
and the price pressure suffered by them rather than of
dumped imports from South Africa.

(94)

The investigation showed that indeed battery producers
in the EC were subject to price pressure resulting from
raw materials and
global
increase in the costs of
found that
it was
increased competition. However,
given the low number of EMD producers operating on
the Community market, they had a significant power to
negotiate the prices of the product concerned with the
the
battery producers.
decrease in the Community sales prices of EMD directly
derives from the dumped imports and the undercutting
practised by the South African exporting producer from
the beginning of the period considered and not from the
alleged price pressure exerted by the battery producers. In

is therefore considered that

It

(96)

Furthermore, an examination of the other factors which
could have injured the Community industry revealed that
none of these could have had such a significant negative
impact on the industry as the dumped imports from
South Africa.

(97)

(98)

Based on the above, it is provisionally concluded that the
dumped
the
caused material
Community industry in the meaning of Article 3(6) of
the basic Regulation.

imports

injury

to

F. COMMUNITY INTEREST

1. General considerations

it has
Pursuant to Article 21 of the basic Regulation,
been examined whether, despite the conclusions on
dumping,
link, compelling reasons
exist that would lead to the conclusion that it is not in
the Community
anti-dumping
measures on imports from the country concerned.

injury and causal

to impose

interest

L 243/18

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Official Journal of the European Union

18.9.2007

(99)

The Commission sent a questionnaire to the sole
industrial
importer of EMD from South Africa and all
users known or
the
likely
measures. Replies to the questionnaire were received
from the importer and from four major users of the
product concerned in the Community.

concerned by

to be

2. Interest of the Community industry

(100)

It is recalled that the Community industry consists of one
producer with production facilities in Greece, whose sales
and profitability deteriorated significantly during the
period considered, with a consequent negative impact
on its market share, employment, return on investment
and cash flow.

(101)

If measures are not imposed it is likely that, as a result of
the price pressure from the dumped imports, the lack of
profitability will force the Community industry to cease
production of EMD in the Community. It is recalled that
the Community producers ceased production
one of
during the period considered. This
coincided with
increased pressure from South African imports on the
complainant
Community market. Moreover,
Community producer was forced to temporarily cease
production for one month in 2003, and has informed
the Commission of a similar situation for a longer period
in 2007.

the

(102)

is noted that,

It
like the South African exporting
producer, the Community industry produces only EMD
and the production lines cannot be used to produce any
other products.

following the imposition of anti-dumping
(103) However,
measures,
the sales volumes and
it
prices of the Community industry on the Community
the
market will
Community industry and preventing closure.

thus improving profitability of

is expected that

rise,

(104)

It is therefore clear that anti-dumping measures would be
in the interests of the Community industry.

3. Interest of users

(105) The only industry that uses EMD is primary cell alkaline

and carbon-zinc battery producers.

(106) As mentioned above, questionnaires were sent

to all
known battery producers in the Community. Replies

were received from four companies representing 93 % of
the Community consumption; three of the replies were
verified on the spot.

(107) As mentioned above,

of

the

that

increases

imposition

in prices of

it was found that

in a good financial

the battery
producers in the EC were under considerable pressure
raw
resulting from global
materials (zinc, nickel, copper and steel) and increased
competition on the battery market. They
global
submitted
anti-dumping
measures on imports from South Africa would increase
the existing price pressure and cause losses, since they
would not be in a position to pass any price increases on
it was found that they were
to their clients. However,
situation, with
generally still
substantial pre-tax profits
in the IP and they had
increased their sales volume over the period considered
thanks to the positive public image of their brands. Based
on the information received, it was possible to verify that
the cost of EMD for producing batteries can vary
between 10 and 15 % (depending on the size of the
battery) of
the total costs and it was possible to
estimate that the imposition of the anti-dumping duty
at the proposed level should not increase the estimated
level of the battery price by more than EUR 0,01 to EUR
0,02. The increase in battery prices which may result
from the
anti-dumping duties was
obtained by applying the proposed level of duty to the
costs of production for different sizes of batteries.

imposition of

admitted that disappearance of

(108) While generally opposing the imposition of measures,
several users
the
Community industry would probably have a negative
effect on their situation and competition on the EC
market, as the Community industry is a producer of
high
battery
quality
if the Community industry were to
production. Thus,
risk of becoming
disappear, users would run the
dependent on EMD from South Africa alone.

EMD suitable

high-end

for

(109)

the above,
it may be provisionally
In the light of
concluded that
the imposition of any anti-dumping
measures are unlikely to affect seriously the situation of
the user industry.

4. Interest of unrelated importers/traders in the

Community

(110) The sole Community importer of EMD from South
Africa cooperated in the investigation. On the basis of
this
the information submitted,
importer was Delta’s exclusive and independent agent.
imports of EMD from South Africa were sold in
All
trading
the Community through this company.
its turnover.
activities represented less than 20 % of
the possible
This importer expressed concerns about

found that

it was

Its

18.9.2007

EN

Official Journal of the European Union

L 243/19

its

sales
imposition of measures. However, even if
the imposition of measures and the
decreased after
agent’s commissions were reduced,
is expected to
the
remain financially healthy and it
the
importer would
measures. Thus, it is clear that the impact of the anti-
dumping duty would be borne by the users.

is unlikely that
by

significantly

affected

be

it

(111) On this basis,

it has been provisionally concluded that
the imposition of anti-dumping measures is not likely to
have a serious negative effect on the situation of
importers in the Community.

5. Conclusion on Community interest

(112) The effects of

In view of

the imposition of measures can be
expected to enable the Community industry to regain
lost sales and market shares and to improve its profit-
the
ability.
Community industry, there is a considerable risk that,
in the absence of measures,
the Community industry
might have to close down its production facilities and
layoff its workers.

the deteriorating situation of

(113) Given the use of

the product concerned in battery
production, where the cost of EMD is not significant
when compared with the value of the endproducts the
impact
should not be significant, as
explained in recital 107 above.

the users

for

(114)

In view of the above, it is provisionally concluded that
there are no compelling reasons not to impose anti-
certain manganese
dumping duties on imports of
dioxides originating in South Africa.

G. PROVISIONAL ANTI-DUMPING MEASURES

1. Injury elimination level

(115)

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

(116) The measures should be imposed at a level sufficient to
eliminate the injury caused to the Community industry
by these imports without exceeding the dumping margin
found. When calculating the amount of duty necessary to
remove the effects of
it was
considered
allow the
Community industry to cover its costs of production

the injurious dumping,

any measures

should

that

i.e.

and obtain an overall profit on sales of the like product
in the Community before tax that could be reasonably
achieved by this industry under normal conditions of
competition,
in the absence of dumped imports.
The pre-tax profit margin used for this calculation corre-
sponded to the profit achieved by the Community
industry at the beginning of the period considered, at a
time when EMD prices from South Africa were at the
same level as that of
the like product sold by the
Community industry.

(117) The necessary price increase was then determined on the
basis of a comparison of the weighted average import
price, as established for the price undercutting calcu-
lations (see recital 45), with the non-injurious price of
the like product sold by the Community industry on the
Community market. The non-injurious price has been
obtained by adjusting the sales price of the Community
industry by the actual loss/profit made during the IP and
by adding the above mentioned profit margin. Any
difference resulting from this comparison was
then
expressed as a percentage of the total cif import value.

(118) The injury margin was significantly higher

than the

dumping margin found.

2. Provisional measures

(119)

In the light of the foregoing,
it is considered that in
accordance with Article 7(2) of the basic Regulation, a
provisional anti-dumping duty should be imposed at the
level of the dumping margin since it is lower than the
injury margin calculated above.

(120) On the basis of the above, the proposed provisional duty

rates are:

Delta E.M.D (Pty) Ltd

All other companies

14,9 %

14,9 %

H. FINAL PROVISION

(121)

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
initiation may make their views known in
notice of
writing and request a hearing. Furthermore,
it should
be stated that the findings concerning the imposition
of anti-dumping duties made for the purposes of this
Regulation are provisional and may have to be recon-
sidered for the purpose of any definitive measures,

L 243/20

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Official Journal of the European Union

HAS ADOPTED THIS REGULATION:

Article 1

1.
A provisional anti-dumping duty is hereby imposed on
imports of electrolytic manganese dioxides (i.e. manganese
dioxides produced through an electrolytic process) not heat-
treated after the electrolytic process,
falling within CN code
ex 2820 10 00 (TARIC code 2820 10 00 10) and originating
in South Africa.

The rate of the provisional anti-dumping duty applicable
2.
to the net, free-at-Community-frontier price, before duty, of the
products manufactured by the companies below shall be:

Company

Anti-Dumping Duty

TARIC Additional Code

Delta E.M.D. (Pty) Ltd

All other companies

14,9 %

14,9 %

A828

A999

Unless otherwise

4.
concerning customs duties shall apply.

specified,

the provisions

18.9.2007

in force

Article 2

Without prejudice to Article 20 of Council 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 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 Union.

The release for free circulation in the Community of the
3.
to the
product referred to in Paragraph 1 shall be subject
provision of a security equivalent to the amount of the pro-
visional duty.

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

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

Done at Brussels, 17 September 2007.

For the Commission

Peter MANDELSON
Member of the Commission