Commission Regulation (EC) No 1069/2007 of 17 September 2007 imposing a provisional anti-dumping duty on imports of polyvinyl alcohol (PVA) originating in the People's Republic of China
Date: 2007-09-17
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, chemical alcohol, import, originating product

18.9.2007

EN

Official Journal of the European Union

L 243/23

COMMISSION REGULATION (EC) No 1069/2007

of 17 September 2007

imposing a provisional anti-dumping duty on imports of polyvinyl alcohol (PVA) originating in the
People's Republic of China

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

1.2. Parties concerned by the proceeding

(3)

(4)

(5)

(6)

(7)

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:

(1)

(2)

1. PROCEDURE

1.1. Initiation

On 19 December 2006, pursuant to Article 5 of the
the Commission announced by a
basic Regulation,
initiation) published in the Official
notice (notice of
the initiation of an
Journal of
anti-dumping proceeding with regard to imports into
the Community of polyvinyl alcohol (PVA), originating
in the People's Republic of China (PRC) and Taiwan (the
countries concerned).

the European Union (2),

initiated following a complaint
The proceeding was
lodged on 6 November 2006 by Kuraray Specialties
Europe GmbH (the complainant), since January 2007
referred to as Kuraray Europe GmbH, representing a
major proportion, in this case more than 25 %, of the
total Community production of polyvinyl alcohol (PVA).
The
evidence of
dumping of PVA originating in the countries concerned
injury resulting therefrom, which was
and of material
a
considered sufficient
proceeding.

contained prima

to justify the

initiation of

complaint

facie

(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 311, 19.12.2006, p. 47.

of

representatives

complainant
The Commission officially advised the
and other known Community producers,
producer
exporting producers in the countries concerned,
im-
porter/traders and users known to be concerned and
the
countries
concerned, of the initiation of the proceeding. Interested
parties were given the opportunity to make their views
known in writing and to request a hearing within the
time limit set in the notice of initiation. All
interested
parties, who so requested and showed that there were
reasons why they should be heard, were
particular
granted a hearing.

exporting

the

if

treatment

In order to allow exporting producers in the PRC to
submit a claim for market economy treatment (MET)
the
(IT),
or
individual
exporting
claim forms
Commission sent
producers known to be concerned as well as to the
authorities of the PRC. One exporting producer in the
PRC claimed MET pursuant to Article 2(7)(b) of the basic
Regulation, or IT should the investigation establish that
they did not meet the conditions for MET.

they so wished,

to the

the apparent
the
in

large number of exporting
In view of
producers
the
importers
PRC and
Community, sampling for those parties was envisaged
in the notice of
the determination of
dumping and injury,
in accordance with Article 17 of
the basic Regulation.

initiation for

in

However, as far as the exporting producers in the PRC
are concerned, given that only three exporting producers
cooperated,
it was subsequently decided that sampling
would not be necessary.

As concerns the importers of PVA,
the Commission
requested all known importers to provide information
concerning imports and sales of the product concerned.
On the basis of the information received from 14 coop-
erating importers, the Commission selected a sample of
five importers, of which two were based in Germany, one
in Italy, one in the Netherlands and one in the United
represented the
States of America. These importers
the
volume
largest
in
sales
of
cooperating
Community
80 %)
importers, which could be
investigated
within the time available.

representative
(around

the
reasonably

of

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Official Journal of the European Union

18.9.2007

(8)

The Commission sent questionnaires to all parties known
to be concerned and to all other companies that made
themselves known within the deadlines set out in the
notice of initiation. Questionnaire replies were received
exporting
from two Community producers,
producers
in
Taiwan, the five sampled importers and seven users in
the Community.

in the PRC, one exporting producer

three

(9)

As concerns
received from
the questionnaire replies
users, two of those were incomplete and therefore had
to be disregarded. In addition, several users submitted
comments without replying to the questionnaire.

(12)

(e) Users in the Community:

— Cordial

Beheer
Winschoten, the Netherlands,

en

Registergoederen

BV,

— Wacker Chemie AG, Burghausen, Germany.

In light of the need to establish a normal value for the
exporting producers in the PRC which did not request
MET or to which MET might not be granted, a verifi-
cation to establish normal value on the basis of data
from the analogue country envisaged in the notice of
initiation,
the
following producer:

the premises of

took place at

Japan,

(10) One of the sampled importers cancelled twice at a very
late stage an agreed verification visit. As a consequence,
the data submitted by this company could not be verified
and it provisionally had to be disregarded.

(11)

The Commission sought and verified all the information
it deemed necessary for the purpose of MET/IT in the
case of the PRC and for a preliminary determination of
dumping, resulting injury and Community interest for
both countries
concerned. Verification visits were
carried out at the premises of the following companies:

— Kuraray Japan, Tokyo.

1.3. Investigation period

(13)

The investigation of dumping and injury covered the
period from 1 October 2005 to 30 September 2006
(the investigation period or
IP). The examination of
trends relevant for the assessment of injury covered the
period from 1 January 2003 to the end of the investi-
gation period (period considered).

(a) Community producers:

2.1. Product concerned

2. PRODUCT CONCERNED AND LIKE PRODUCT

— Kuraray Europe GmbH, Frankfurt, Germany,

(14)

— Celanese Chemicals Ibérica S.L., Tarragona, Spain;

(b) Exporting producer in Taiwan:

— Chang Chun Petrochemical Co. Ltd., Taipei;

(c) Exporting producer in the PRC:

— Shanxi Sanwei Group Co., Ltd., Hongdong;

(d) Unrelated importers in the Community:

— Cordial

Beheer
Winschoten, the Netherlands,

en

Registergoederen

BV,

— Menssing Chemiehandel & Consultants GmbH,

Hamburg, Germany,

— Omya Peralta GmbH, Hamburg, Germany;

in the form of homopolymer

The product concerned is certain polyvinyl alcohols
(PVA)
resins with a
viscosity (measured in 4 % solution) of 3 mPas or
more but not exceeding 61 mPas and a degree of
hydrolysis of 84,0 mol % or more but not exceeding
99,9 mol % originating in the People's Republic of
China and Taiwan (‘the product concerned’), normally
declared within CN code ex 3905 30 00.

(15)

PVA is produced by the hydrolysis of polyvinyl acetate
which is manufactured by the polymerisation of vinyl
acetate monomer
(the latter being produced from,
mainly, ethylene and acetic acid). PVA has a wide
variety of applications. In the Community,
it is mainly
used for the production of polyvinyl butyral (PVB) (25 %-
29 % of consumption), polymerisation aids (21 %-25 %),
paper coatings (17 %-21 %), adhesives (13 %-17 %) and
for textile sizing (8 %-12 %).

(16) One Community user claimed that a specific product it
purchased from the PRC should not be considered as the
product concerned, as (i) it is not a standard PVA model
and has different and very specific chemical and physical
characteristics; and (ii) it has different uses or applications
from commodity PVA.

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Official Journal of the European Union

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(17) As concerns the first argument,

it was found that this
model falls within the product description as described in
recital 14 and that
it shares its basic physical and
technical characteristics with the other models falling
within the product definition. As concerns the second
argument, this particular PVA model was used for the
production of PVB, which is not only, as indicated in
recital 15, the most important application but also the
fastest growing market for PVA in the Community. It
would be unrealistic to characterise such a market as
not standard. Moreover,
it was found that the average
prices paid for PVA for the different applications were
within the same range. In view of all these findings, it
was considered that there were no grounds to exclude
this model from the product definition and therefore the
claim was dismissed.

2.2. Like product

(18)

The investigation showed that PVA produced and sold in
the Community by the Community industry, PVA
produced and sold on the domestic markets of Taiwan
and the PRC, and PVA produced in the PRC and Taiwan
and exported to the Community, as well as
that
produced and sold in Japan, have essentially the same
basic chemical and physical characteristics and the
same basic uses. They are therefore considered to be
alike within the meaning of Article 1(4) of the basic
Regulation.

3. DUMPING

3.1. Taiwan

3.1.1. Normal value

the like product

For the determination of normal value, it was first estab-
lished whether domestic sales of
to
independent customers of the sole exporting producer
i.e. whether the total
in Taiwan were representative,
volume of such sales represented at
its
least 5 % of
total export sales volume of the product concerned to
the Community, in accordance with Article 2(2) of the
basic Regulation.

(19)

(20)

(21)

The Commission subsequently examined whether the
domestic sales of each product type sold domestically
in representative quantities could be regarded as being
sold in the ordinary course of trade pursuant to Article
2(4) of the basic Regulation. This was done by estab-
lishing for each exported product type the proportion
of profitable domestic sales to independent customers
during the IP.

(22)

For those product
types where more than 80 % by
volume of sales on the domestic market were not
below unit cost 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.

(23) Where the volume of profitable sales of a product type
represented 80 % or less of the total sales volume of that
type, or where the weighted average price of that type
was below the cost of production, normal value was
based on the actual domestic price, calculated as a
weighted average of profitable sales of that type only,
provided that these sales represented 10 % or more of
the total sales volume of that type.

(24) Where the volume of profitable sales of any product type
represented less than 10 % of the total sales volume of
that type, it was considered that this particular type was
sold in insufficient quantities for the domestic price to
provide an appropriate basis for the establishment of the
normal value.

(25) Wherever domestic prices of a particular product type
sold by the exporting producer could not be used in
order to establish normal value, the normal value was
constructed in accordance with Article 2(3) of the basic
Regulation.

For each product type sold by the exporting producer on
its domestic market and found to be directly comparable
with the product type sold for export to the Community,
it was established whether domestic sales were sufficient-
ly representative. Domestic sales of a particular product
type were considered sufficiently representative when the
total volume of that product type sold on the domestic
market
to independent customers during the IP re-
presented at least 5 % of the total sales volume of the
comparable product type exported to the Community.

(26) When constructing normal value pursuant to Article 2(3)
of the basic Regulation, the amounts for selling, general
and administrative costs and for profits have been based,
pursuant to Article 2(6) of the basic Regulation, on the
actual data pertaining to the production and sales, in the
ordinary course of trade, of the like product, by the
exporting producer under investigation.

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3.1.2. Export price

(27)

The sole exporting producer exported the product
concerned directly to independent customers
in the
Community. Export prices were therefore established on
the basis of the prices actually paid or payable by these
independents customers for the product concerned,
in
accordance with Article 2(8) of the basic Regulation.

3.1.3. Comparison

(28)

The normal values and the export prices of the sole
exporting producer were compared on an ex-works
basis. For the purpose of ensuring a fair comparison
between the normal value and export prices, due
allowance in the form of adjustments was made for
differences in transport and insurance costs, handling,
loading and ancillary costs, packing costs, credit costs,
after sales costs (warranty and guarantee) and other
factors (bank charges) where applicable and justified, in
accordance with Article 2(10) of the basic Regulation.

3.1.4. Dumping margin

(29)

The comparison of the normal values with the export
prices showed a dumping margin of – 2,30 % for the
sole Taiwanese exporting producer, Chang Chun Petro-
chemical Co. Ltd., during the IP.

(30)

Considering that the sole cooperating company is the
only exporting producer of the product concerned in
Taiwan and that it accounts for 100 % of Taiwanese
exports to the EC during the IP, it was concluded that
no dumping was found for Taiwan.

3.2. People's Republic of China (PRC)

3.2.1. Market Economy Treatment (MET)

(31)

Pursuant to Article 2(7)(b) of the basic Regulation,
in
anti-dumping investigations concerning imports orig-
inating in the PRC, normal value shall be determined
in accordance with paragraphs 1 to 6 of Article 2 for
those producers which have shown that they meet the
criteria laid down in Article 2(7)(c) of the basic Regu-
i.e. where it is demonstrated by such exporting
lation,
in
producers that market economy conditions prevail
respect of the manufacture and sale of the like product.
Briefly, and for ease of reference only, these criteria are
set out in summarised form below:

— business decisions are made in response to market
signals, without significant State interference, and
costs reflect market values,

— firms have one clear set of basic accounting records,
which are independently audited in line with inter-
national accounting standards and are applied for all
purposes,

— there are no significant distortions carried over from

the former non-market economy system,

— bankruptcy and property laws guarantee stability and

legal certainty,

— exchange rate conversions are carried out at market

rates.

(32) One Chinese exporting producer and its related trading
company requested MET pursuant to Article 2(7)(b) of
the basic Regulation and replied to the MET claim form
for exporting producers within the given deadlines. The
producer manufactures the product concerned, while its
related trading company is involved in the export sales of
it is the Commission’s
the product concerned. Indeed,
consistent practice to examine whether a group of
related companies as a whole fulfils the conditions for
MET.

(33)

(34)

(35)

For the exporting producer and its trading company
information
claiming MET, the Commission sought all
information
deemed
submitted in the MET claim at
the
companies in question as deemed necessary.

the premises of

necessary

verified

and

the

The investigation revealed that MET could not be granted
to the Chinese exporting producer as it did not meet
criterion 1 set out in Article 2(7)(c) of the basic Regu-
lation.

The exporting producer, as well as its related trading
company, was found to be controlled by fully State-
owned companies which were represented by a decisive
majority of the members of the Board of Directors at a
ratio which was disproportionate to their shareholding.
In addition, the majority of the shares were owned ulti-
mately by the State during the IP. As the companies
concerned failed to present evidence that could be
to remove doubts of significant
considered sufficient
it was
State interference in management decisions,
determined that
this group of companies was under
significant State control and interference. The interested
parties were given an opportunity to comment on the
above findings. The comments received were not of a
nature to change the conclusions.

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(36) On the basis of

the above,

the Chinese exporting
producer and its related trading company have not
shown that they fulfil all the criteria set out in Article
2(7)(c) of the basic Regulation and, thus, could not be
granted MET.

3.2.2. Individual treatment (IT)

(37)

to Article 2(7)(a) of

the basic Regulation, a
Pursuant
countrywide duty,
is established for countries
falling under that Article, except in those cases where
companies are able to demonstrate that they meet all
criteria set out in Article 9(5) of the basic Regulation.

if any,

(38) As far as the PRC is concerned,

the sole exporting
producer
company, who
requested MET, also claimed IT in the event that they
would not be granted MET.

trading

related

and

its

data in that country might be distorted by dumping.
Therefore,
Japan was
the parties were informed that
selected as analogue country because it was not subject
to the investigation, there was representative production
of the like product and the conditions of competition
seemed appropriate.

(43)

The Commission sought cooperation from four known
producers in Japan and sent the relevant questionnaire to
them. Two of the four Japanese producers replied to the
them did not submit
questionnaire. However, one of
complete data and did not accept a verification visit.
The data submitted by the
fully cooperating
Japanese producer were verified on the spot.

sole

(44) However, after the verification visit at

the exporting
producer in Taiwan, it was found that Taiwan was not
dumping during the IP. The question of the choice of
analogue country was therefore reconsidered.

it was established that

(39) On the basis of the information available, it was found
the exporting producer and its trading company
that
failed to demonstrate that they cumulatively met all the
requirements for IT as set forth in Article 9(5) of the
basic Regulation. Namely,
the
exporting producer and its trading company failed to
the
the criterion stipulated in Article 9(5)(c) of
meet
basic Regulation that the majority of the shares belong
to private persons and that state officials appearing on
the Board of Directors or holding key management
positions shall either be in the minority or it must be
demonstrated that the company is nonetheless sufficient-
ly independent from State interference, for the reasons
explained in recital 35.

(45)

3.2.3. Analogue country

(40) According to Article 2(7)(a) of

the basic Regulation,
normal value for the exporting producers not granted
MET has to be established on the basis of the prices or
constructed value in an analogue country.

(46)

(41)

In the notice of initiation, the Commission indicated that
it envisaged using Japan as an appropriate analogue
country for the purpose of establishing normal value
the PRC and interested parties were invited to
for
comment on this. Some of
interested parties
objected to this proposal and proposed the use of
India or Taiwan instead.

the

(42)

In India, there was no significant production of the like
product. Taiwan was subject to the investigation and thus

exports of

In this regard, it was found that the production volume
in Taiwan constitutes more than 100 % of the volume of
Chinese
concerned to the
the product
the Taiwanese market can be
Community. Moreover,
characterised as open, given that the import duty level
is low (MFN duty of 5 %). The investigation also showed
the like
that
sufficient
product
imports into the Taiwanese market. Therefore, Taiwan
was deemed a competitive market and sufficiently rep-
resentative for the determination of normal value for the
PRC.

there were significant domestic sales of

in Taiwan and that

there were

imports of PVA into Taiwan represent
In addition,
around 15 % of domestic consumption compared to
only around 3 % in the case of Japan,
indicating that
the Japanese market is less appropriate than Taiwan in
terms of competition from imports. In view of the above,
it was provisionally decided that Taiwan be used as
analogue country, as it constitutes the most appropriate
analogue country within the meaning of Article 2(7)(a) of
the basic Regulation.

3.2.4. Normal value

(47)

Following the choice of Taiwan as analogue country as
indicated in recital 46, and pursuant to Article 2(7)(a) of
the basic Regulation, the normal value established for
Taiwan in recitals 19 to 26 was used in the dumping
calculation for the PRC.

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3.2.5. Export price

(48)

Since the three Chinese cooperating exporting producers
accounted together for almost the totality of the exports
of the product concerned to the Community during the
IP, their own export data were used to establish the
export price. The reliability of the information provided
was nevertheless cross-checked with Eurostat import data
which showed reasonable agreement.

(49)

The three cooperating exporting producers in the PRC
made export sales to the Community either directly to
independent customers in the Community or through
their related trading companies located in the exporting
country.

(50)

For all export sales, export prices were established on the
basis of the prices actually paid or payable, in accordance
with Article 2(8) of the basic Regulation.

3.2.6. Comparison

(51)

The normal values of the sole producer in the analogue
country, Taiwan and the export prices of the three coop-
erating Chinese exporting producers were compared on
an ex-works basis. For the purpose of ensuring a fair
comparison between the normal value and export
prices, due allowance in the form of adjustments was
made for differences in transport and insurance costs,
handling,
loading and ancillary costs, packing costs,
credit costs and commissions where applicable and
justified,
in accordance with Article 2(10) of the basic
Regulation.

3.2.7. Dumping margin

(52)

In the absence of MET or IT being granted to any of the
cooperating Chinese exporting producers, a countrywide
dumping margin was calculated for the whole of the PRC
using the weighted average of the ex-works export prices
of the three cooperating exporting producers.

(53)

The comparison of the weighted average Chinese export
price and the weighted average normal value of
the
analogue country showed a dumping margin of 10,06 %.

4. INJURY

4.1. Community
industry

production

and

Community

(54) Within the Community, the like product is manufactured
for sale by three companies: Kuraray Europe GmbH

Celanese

in Germany,

in Spain and a

Chemicals
(KEG)
(Celanese)
third producer which
produces very limited volumes but did not cooperate
in the investigation. KEG and Celanese fully cooperated
in the investigation.

Ibérica

(55)

In addition to the production mentioned above, three
Community producers produce the like product
for
captive use only. Two of these companies cooperated
in the investigation as a user as they also purchased
significant quantities of the product concerned for the
production of their downstream products.

(56) As the two cooperating producers mentioned in recital
54 accounted for 80 % of the total (captive and non-
captive) Community production during the IP,
is
considered that they account for a major proportion of
the like product.
the total Community production of
They
the
to
deemed
therefore
Community industry within the meaning of Article 4(1)
and Article 5(4) of the basic Regulation and will here-
inafter be referred to as the ‘Community industry’.

constitute

are

it

(57) Given that the Community industry comprises only two
producers, data relating to the Community industry had
to be indexed in order
to preserve confidentiality
pursuant to Article 19 of the basic Regulation.

(58)

(59)

In order to establish whether or not the Community
industry suffered injury and to determine consumption
and the various economic indicators relating to the
situation of the Community industry,
it was examined
whether and to what extent the subsequent use of the
Community industry’s production of the like product had
to be taken into account in the analysis.

PVA is used as an intermediate material for a variety of
other products. In the Community, it is often consumed
in the production of polyvinyl butyral (PVB), used as an
adhesive, for paper coating, as a polymerisation aid and
for textile sizing. It was found in the investigation that
one of the Community producers, which sold most of its
own-produced PVA on the open market, also used
significant volumes of
its produced PVA for further
downstream processing within the same company. Such
situation is referred to as captive use. As explained in
recital 55,
three other companies in the Community
produced PVA for captive use only and in addition to
this production for captive use, at least two of them also
purchased significant volumes of PVA on the market as a
user for further downstream processing.

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(60)

(61)

It was found that the quantities used for captive use, by
the companies concerned in the Community, could in
principle be substituted by purchased PVA, e.g.
if
market circumstances and/or
financial considerations
would trigger such a change. They have therefore been
included in the Community market analysis.

4.2. Community consumption

captive use of

the Community industry,

Community consumption was established on the basis of
the free market
the Community
sales volumes of
industry’s own production on the Community market,
the
the
production quantities of the other (smaller) Community
producers as obtained from the most widely used
database in this particular business, the captive use of
the two users referred to in recital 55,
the verified
the sole Taiwanese producer, and
import volumes of
Community import volumes data concerning all other
countries obtained from Eurostat.

Eurostat data

(62)

Regarding the Community import volumes data obtained
from Eurostat, as mentioned in recital 14, the product
declared within CN code
concerned
is presently
ex 3905 30 00. The Eurostat data
this
ex CN code also include certain niche products not

concerning

covered by the product scope. As it was not possible
to retrieve from the broader category of products the
data
they were
therefore adjusted based on information on imports of
these niche products provided in the complaint.

concerned only,

the product

for

(63) Also with regard to the Eurostat data it is to be noted
that certain imports of
the product concerned were
reported under ‘secret extra’ and, therefore, no details
on origin were available in the public database. Details
on the countries of origin of the imports declared as such
have been acquired from the relevant customs authorities
and they therefore have been included in all relevant
tables and analyses.

(64) On the basis of

the above,

it was found that

the period considered,

the
consumption of PVA has increased strongly during the
period considered and especially between 2004 and
the consumption
2005. Over
increase was 14 % which was mainly due to a fast
raw material
growing demand for PVA as
the
production of polyvinyl butyral
(PVB), which is used
for the production of PVB film or sheets. PVB film is
used as an interlayer in the production of
laminated
safety glass,
in automotive and architectural markets,
which is a strongly growing market in the Community.

for

Consumption in tonnes

142 894

148 807

163 851

163 096

Index (2003 = 100)

100

104

115

114

2003

2004

2005

IP

4.3. Imports from the countries concerned

(65) As the dumping margin found for Taiwan is below de minimis, imports originating in this country

should be provisionally excluded from the injury assessment.

(a) Volume and market share of the imports concerned

(66)

The volumes of imports of the product concerned decreased by 39 percentage points between 2003
and 2004, then increased by 29 percentage points in 2005 after which they went slightly down,
resulting in a decrease of 11 % during the IP as compared to 2003.

Imports

2003

2004

2005

IP

PRC tonnes

24 067

14 710

21 561

21 513

Index (2003 = 100)

100

61

90

89

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18.9.2007

(67)

The market share held by imports from the PRC also first sharply decreased and then went up.
During 2005 and the IP imports from the PRC accounted for 13 % of the whole Community market.

Market share PRC

Community market

Index (2003 = 100)

2003

17 %

100

2004

10 %

59

2005

13 %

78

IP

13 %

78

(b) Prices

(68)

Between 2003 and the IP, the average price of imports of the product concerned originating in the
PRC decreased by two percentage points.

Unit prices

PRC (EUR/tonne)

Index (2003 = 100)

2003

1 150

100

2004

1 115

97

2005

1 164

101

IP

1 132

98

(69)

(70)

(c) Price undercutting

For the determination of price undercutting the price data referring to the IP were analysed. The
relevant sales prices of the Community industry were net prices after deduction of discounts and
rebates. Where necessary, these prices were adjusted to an ex-works level, i.e. excluding freight cost in
the Community. The import prices of the PRC were also net of discounts and rebates and were
adjusted where necessary to cif Community frontier with an appropriate adjustment for the customs
duties (6,5 %) and post-importation costs, as incurred by importers in the Community.

The Community industry's sales prices and the import prices of the PRC were compared at the same
level of trade, namely to independent customers within the Community market. As it was considered
that the comparison per model had to be meaningful and fair, and, therefore, no comparison
between a standard grade and a special grade falling within the product definition should be
allowed, it was considered appropriate to exclude a limited number of models from the comparison.
These models represented 35 % of
imports from the PRC but only a very small quantity of
Community industry sales on the Community market.

(71) During the IP, the weighted average price undercutting margin thus calculated, expressed as a

percentage of the Community industry's sales prices, was 3,3 % for the PRC.

4.4. Situation of the Community industry

(72)

In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped
imports on the Community industry included an evaluation of all economic factors having a bearing
on the state of the Community industry during the period considered. For confidentiality reasons,
given that the analysis concerns only two companies, most indicators are presented in indexed form
or ranges are given.

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(a) Production, capacity and capacity utilisation

2003

2004

2005

IP

Production in tonnes (ranges)

60 000-80 000

65 000-85 000

70 000-90 000

75 000-95 000

Production (index)

100

103

119

126

Production capacity in tonnes
(ranges)

60 000-80 000

65 000-85 000

70 000-90 000

75 000-95 000

Production capacity (index)

Capacity utilisation (index)

100

100

107

97

129

92

133

94

(73)

The Community industry’s production increased by 26 % during the period considered. The
significant
increase in production capacity, notably in 2005, was triggered by the increasing
demand on the Community market.

(74)

Between 2003 and the IP, additional production capacity was installed by the Community industry.
During the same period, capacity utilisation decreased by 6 %.

(b) Sales volume and market shares in the Community

(75)

The table below shows the Community industry's performance in relation to its sales to independent
customers in the Community:

Community Industry

Sales volume (index)

Market share (index)

2003

100

100

2004

110

104

2005

112

97

IP

122

104

(76)

Sales volumes of the Community industry to independent customers in the Community went up by
22 % from 2003 to the IP. This has to be seen in the light of an increasing consumption in the
Community.

(77)

The market share of the Community industry increased in 2004, then decreased sharply in 2005 and
during the IP it was four percentage points higher than in 2003.

(c) Prices in the Community

(78)

The main raw material used for the production of PVA is vinyl acetate monomer or VAM. VAM is a
commodity product and, as such, prices of VAM are determined based on the balance in the market
between demand and supply. Moreover, the market price of VAM is heavily influenced by the
development of the oil and gas prices as the major inputs for the production of VAM are acetic
acid (the production of which is natural gas intensive) and ethylene (produced from distillation of
hydrocarbons). In addition, energy is also a major cost in producing PVA from VAM. The total
weight of energy cost in the production of PVA subsequently amounts to 50 % to 60 % and
therefore, in normal circumstances, a significant change in the oil and gas prices can be expected
to have a direct impact on the PVA sales price.

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(79)

It was found that world market prices of these raw materials went up significantly between 2003 and
the IP. During this period VAM prices increased by 20 % to 30 % and the increase in energy prices
was even much higher. However, this dramatic price evolution of the main raw materials cost was
not reflected in higher sales prices of the Community industry: sales prices of the Community
industry decreased during the same period by 5 %, with a particularly bad year in 2004 (– 7 %).
Thus, instead of passing on the overall cost increase to their customers, the Community industry had
to decrease prices in order not to lose customers.

Unit prices in EUR (ranges)

1 300-1 800

1 100-1 600

1 200-1 700

1 200-1 700

Unit prices (index)

100

93

95

95

2003

2004

2005

IP

(d) Stocks

(80)

The figures below represent the volumes of stocks at the end of each period.

2003

2004

2005

IP

Stocks in tonnes (ranges)

10 000-15 000

8 000-13 000

9 000-14 000

8 000-13 000

Stocks (index)

100

87

96

87

(81)

The level of stocks remained rather stable overall. It decreased by 13 % between 2003 and 2004,
subsequently increased by nine percentage points until the end of 2005 and then decreased again by
nine percentage points.

(e) Investments and ability to raise capital

Investments (index)

2003

100

2004

369

2005

177

IP

62

(82)

Investments peaked in 2004 and 2005, when the production capacity of the Community industry
was increased following the increasing demand on the market. During the investigation it was found
that investments in buildings, plants and machinery in 2003 as well as during the IP were mainly to
maintain the production capacity.

(83)

The investigation showed that the financial performance of the Community industry deteriorated but
it did not reveal that its ability to raise capital was seriously affected yet during the period considered.

(f) Profitability, return on investment and cash flow

(84)

In view of very high and distorting extraordinary costs incurred by the main Community producer
during the period considered, it was not considered reasonable to establish the profitability on the
basis of the pre-tax net profit. These extraordinary costs were related to the change of ownership of
the main Community producer in 2001. Therefore, the profitability of the Community industry was
established by expressing the operating profit on the sales of the like product to unrelated customers
as a percentage of the turnover of these sales.

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2003

2004

2005

IP

Profitability on EC sales (range)

7 %-17 %

3 %-13 %

2 %-12 %

(– 5 %)-(+5 %)

Profitability on EC sales (index)

100

38

29

8

Return on total investments (range)

(80 %)-(100 %)

(10 %)-(30 %)

(5 %)-(20 %)

(0 %)-(15 %)

Return on total investments (index)

Cash flow (index)

100

100

17

55

12

26

4

– 7

(85)

The decline in sales prices between 2003 and the IP significantly affected the profitability achieved by
the Community industry. This profitability dropped by more than 10 percentage points during the
period considered. The return on total investments was calculated by expressing the operating profit
of the like product as a percentage of the net book value of fixed assets allocated to the like product.
This indicator followed a similar trend as profitability, decreasing significantly over the period
considered. With regard to the cash flow generated by the Community industry, a similar negative
trend was found, resulting in a dramatic overall deterioration of the Community industry's financial
situation in the IP.

(g) Employment, productivity and wages

Number of employees (index)

Average labour cost per employee (index)

Productivity (index)

2003

100

100

100

2004

100

105

103

2005

97

97

123

IP

96

95

132

(86) Due to serious efforts to cut costs, the number of personnel employed by the Community industry
declined by 4 % since 2004. From 2003 to the IP, the Community industry managed to increase the
productivity per employee by 32 %. During the same period the average labour cost per employee
decreased by 5 %. It can therefore be concluded that, during the period considered, the Community
industry made very significant progress in terms of cost efficiency.

(h) Magnitude of the dumping margin

(87) Given the volume and the price of the dumped imports, the impact of the actual margins of dumping

cannot be considered negligible.

(i) Recovery from past dumping

(88)

In the absence of any information on the existence of dumping prior to the situation assessed in the
present proceeding, this issue is considered irrelevant.

(j) Growth

(89)

The investigation showed that during the period considered the Community industry increased its
Community market share with 1 % to 2 %.

4.5. Conclusion on injury

(90)

Between 2003 and the IP, a number of injury indicators developed positively: the Community
industry managed to increase its sales volumes and market share, and it invested significantly in
additional production capacity.

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(91) However,

its financial

indicators developed dramatically: the reasonable profit margin achieved in
2003 decreased very rapidly and continuously as from 2004 to the end of the IP. Return of
investment and cash flow situation developed exponentially negative. The reason for this devel-
opment is that the steep increase in raw material prices could not be reflected in the sales prices
of the like product. Whereas, in view of the increase of raw material prices, in a normal market
situation an increase of the PVA sales price by 10 % to 20 % could have been expected, the sales
prices of the like product produced by the Community industry decreased by 5 %, to the detriment of
its profitability. Still, during the IP, the prices of the imports from the PRC undercut those of the
Community industry, on a weighted average basis by 3,3 %.

(92)

In the light of the foregoing, it is provisionally concluded that the Community industry has suffered
material injury within the meaning of Article 3(5) of the basic Regulation.

5.1. Introduction

5. CAUSATION

(93)

In accordance with Article 3(6) and (7) of the basic Regulation, the Commission has examined
whether dumped imports of the product concerned originating in the PRC have caused injury to
the Community industry to a degree that may be considered material. Known factors other than the
dumped imports, which could at the same time have injured the Community industry, were also
examined to ensure that possible injury caused by these other factors was not attributed to the
dumped imports.

5.2. Effects of the dumped imports

(94)

Imports from the PRC were at significant levels during the period considered, i.e. constantly rep-
resenting 10 % market share or more. At the same time, average prices of all exporting producers in
the PRC decreased by 2 % and they undercut the average Community industry prices by 3,3 % in the
IP. The Community industry, in order to assure its presence on its home market and due to the very
low market prices set by imports from the PRC, felt obliged to decrease its sales prices by 5 % during
the period considered.

(95)

Therefore, the effect of this unfair pricing behaviour of the dumped imports from the PRC was that
the Community industry's prices were suppressed and that they could not cover the substantial
increase of cost of raw materials. This was confirmed by the significant reduction in profitability
by the Community industry.

(96)

Based on the above considerations, it was found that the low-priced imports from the PRC which
significantly undercut the prices of the Community industry have had a determining role in the
deterioration of the situation of the Community industry, which is reflected in the sharp decrease of
profitability and strong deterioration of the other financial indicators.

5.3. Effects of other factors

(a) Imports originating in third countries other than the PRC

(97) According to Eurostat and the information collected during the investigation,

the main third

countries from which PVA is imported are the USA, Japan and Taiwan.

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Imports originating in other third countries (quantity)

Import (tonnes)

USA

Index (2003 = 100)

Japan

Index (2003 = 100)

2003

11 313

100

13 682

100

2004

21 207

187

11 753

86

2005

22 919

203

12 694

93

IP

22 638

200

14 151

103

Taiwan (ranges)

11 000-14 000

13 000-16 500

10 000-13 000

9 000-12 000

Index (2003 = 100)

100

118

88

83

Imports originating in other third countries (average price)

Average price (EUR)

USA

Index (2003 = 100)

Japan

Index (2003 = 100)

Taiwan

Index (2003 = 100)

Market share (%)

USA

Japan

Taiwan (ranges)

2003

1 334

100

1 916

100

1 212

100

2003

7,9 %

9,6 %

100

2004

1 282

96

1 532

80

1 207

100

Market shares

2004

14,3 %

7,9 %

113

2005

1 298

97

1 846

96

1 308

108

2005

14,0 %

7,7 %

77

IP

1 358

102

1 934

101

1 302

108

IP

13,9 %

8,7 %

73

(98)

the bulk of

Imports from the USA have strongly increased since
2003 and during the IP they had amounted to more
than 22 000 tonnes, accounting for almost 14 % of the
total (captive and non-captive) Community market. The
sales
investigation showed that
concerned sales between related parties and that
the
average unit prices of
sales were,
throughout
the period considered, between 15 % and
20 % above the average cif prices of Chinese imports.
Moreover,
the quantities were
resold to independent customers at prices 10 %-20 %
higher
import
prices. As the market prices of PVA originating in the
USA were consequently in the same ballpark as sales

aforementioned transfer

it was established that

than these

transfer

these

these

prices of PVA produced by the Community industry,
they did not play a role in the price depression
observed during the period considered.
It is therefore
concluded that these imports did not have a significant
effect on the situation of the Community industry.

(99) During the period considered there were also significant
imports from Japan, accounting for almost 9 % of the
Community market during the IP. After Japanese imports
had dropped in 2004, they increased again as from 2005
and they were 3 % higher during the IP as compared to
these
2003. However, analysis of

the sales prices of

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imports showed that the average import prices of these
imports were above the prices that
the Community
industry could obtain and they therefore have not
contributed to the negative price trend which led to
the serious deterioration of the Community industry's
situation.

(100)

in 2004, decreased gradually

Imports from Taiwan are from one producer only which
fully cooperated with the investigation. These figures
were found to be more reliable than Eurostat data
given that the CN code covers other products than the
product concerned. They are for confidentiality reasons
presented in indexes or ranges. Taiwanese imports, after a
sharp increase
and
accounted for 6 % to 7 % of
the entire Community
market during the IP (around half of the market share
imports from the PRC). During the same period,
of
average prices of these imports increased by 8 % which
is opposite to the price trend observed as regards imports
from the PRC. Consequently, the price difference between
PVA imported from the PRC and PVA imported from
Taiwan increased from 12 % to 18 % during the IP. In
view of these findings, it is provisionally concluded that
these imports did not have a significant impact on the
state of the Community industry.

(101) Further to the imports from the USA, Japan and Taiwan,
there are no significant imports from other countries. On
the basis of the findings with regard to these imports, as
described under recitals 97 to 100,
it can thus pro-
visionally be concluded that imports other than from
injury
the PRC did not contribute to the material
suffered by the Community industry.

(b) Eventual Community sales of other Community producers

are

there

known to be

(102) As stipulated in recitals 54 and 55, apart from the two
producers comprising the Community industry,
in the
four more
Community
companies producing the product concerned. Three of
them, out of which two cooperated with the investi-
gation as a user, consume all their own produced PVA
in the manufacturing of downstream products. The
fourth one is producing very limited quantities only. In
view of the above, the other Community producers are
deemed to have played no role in the price depression on
the market and the subsequent injury suffered by the
Community industry.

(c) Self-inflicted injury due to cost inefficiency

(103) Several interested parties claimed that any injury suffered
by the Community industry was linked to the fact that
the Community industry had not managed to stay cost
taken unreasonable
competitive

it had

that

and

the

shown that

investment decisions. In this respect, as described under
recital 86,
the
investigation has
Community industry, during the period considered, has
significantly increased its productivity, due to an increase
in production output and a decrease in workforce. It was
further established that the investments involved with the
increase in production capacity (see recital 73) did not
significantly influence the dramatically negative trend
observed in the development of the financial position
of the Community industry.

(104) The sole factor significantly affecting in a negative way
the cost of production of the like product during the
period considered, therefore, was the steep rise in the
main raw material prices used for the production of
the like product, as explained in recitals 78 and 79.
The investigation showed that the development of the
Community industry's purchase prices of VAM and
energy was proportional to the development of these
raw material prices on the global market and they
the
therefore
Community industry purchased these. The argument is
therefore dismissed.

to the way

attributed

cannot

be

(d) Time lag for price adjustment

(105) An important user of PVA submitted that it would be
normal, for this particular sector, for the increase in VAM
purchase price not
led to an upward
to have yet
the PVA sales price. This would be
adjustment of
explained by the fact
long-term contracts are
that
standard in the sector and, therefore, a significant time
In this respect,
lag would be a normal phenomenon.
whilst
the
Community industry are done via long-term agreements,
it is not common that such agreements include a fixed
price for a period of more than one year. Within these
agreements,
therefore, prices are renegotiated after a
certain period or if raw material prices have changed
significantly. Therefore, this argument is dismissed.

certain sales of

recognised that

is

it

5.4. Conclusion on causation

(106)

In conclusion, the above analysis has demonstrated that
imports from the PRC during the period considered
provoked
depression on the
Community market throughout that period. During the
IP, import prices from the PRC significantly undercut the
Community industry prices.

substantial

price

a

(107) This price depression led to a considerable decrease in
the sales prices of the Community industry, which in its
turn coincided with a strong drop in the Community
industry’s profitability, its return on investments and its
cash flow from operating activities.

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(108) On the other hand, the examination of the other factors
which could have injured the Community industry
revealed that none of these could have had a significant
negative impact.

(113)

In conclusion, the imposition of anti-dumping measures
would allow the Community industry to recover from
the effects of injurious dumping found.

(109) Based on the above analysis which has properly dis-
tinguished and separated the effects of all known
factors on the situation of
the Community industry
from the injurious effects of the dumped imports, it is
provisionally concluded that the dumped imports origi-
nating in the country concerned have caused material
injury to the Community industry within the meaning
of Article 3(6) of the basic Regulation.

6. COMMUNITY INTEREST

on

injury

despite

dumping,

examined whether,

the
(110) The Commission
conclusions
causation,
compelling reasons existed which would lead to the
conclusion that it is not in the Community interest to
adopt measures in this particular case. For this purpose,
and pursuant to Article 21 of the basic Regulation, the
Commission considered the likely impact of measures for
all parties concerned.

and

6.1. Interest of the Community industry

(111) As indicated in recital 56, the Community industry is
composed of two companies, with production facilities
in Germany and Spain, which employs in the range of
200 to 300 persons directly involved in the production,
sales and administration of the like product. If measures
are imposed, it is expected that the price depression on
the Community market will come to an end and that
to
sales prices of
recover,
financial
a
situation of the Community industry will improve.

the Community industry will start
consequence of which the

as

(112) On the other hand, should anti-dumping measures not
be imposed,
it is likely that the negative trend in the
development of the Community industry's financial indi-
cators, and notably its profitability, will continue. The
Community industry will then lose significant market
share as it will no longer be able to follow the market
the
prices set by imports from the PRC. At worst,
Community industry would be forced to step out of
the free market and continue production of PVA for
captive use only. In both cases, cuts in production and
investments, closure of certain production capacities and
job reductions in the Community will be a likely result.

6.2. Interest of unrelated importers

(114) As described in recital 8, five sampled importers sent
questionnaire replies and they accounted for around
80 % of Community imports of the product concerned
during the IP. The information submitted by one of the
sampled importers had to disregarded at this stage as it
cancelled twice an agreed verification visit. Three of the
questionnaire replies were verified on the spot.

(115) The overall weight represented by PVA in the total
turnover of these importers' activities was very small.
On an average basis, 3 % to 4 % of these importers'
activities could be linked to imports of PVA from the
field of
PRC. The importers have a much broader
activities which can also include general
trading and
distribution. Certain importers purchase the product
under investigation not only from the PRC but also
from other sources in and outside the Community,
including from the Community industry. The average
profit margin attained by the sampled importers, on
their trading of PVA, is around 5 %.

(116)

Importers in the Community are not in favour of the
imposition of measures. The
cooperating importers
argued that the imposition of measures would seriously
harm their operations, as they would not be able to pass
on the price increase to users. In this respect, the impo-
sition of an anti-dumping duty on imports from the PRC,
as explained in recital 111, will most likely lead to a
slightly upwards correction of market prices. Therefore,
it can be expected that importers which buy the product
concerned from the PRC will be able to pass on these
duty costs to the final customer. The significant under-
cutting still found after adjustment of the cif Community
border prices for post-importation costs also suggests
that there is room for a price increase. In any event, in
view of the limited weight of sales of this product in the
importers' activities, and the profit margin currently
attained both overall and in view of their sales of PVA
only, it is expected that the duty as provisionally estab-
lished will not affect
these
economic operators to a significant extent.

the financial situation of

(117) Although importers/distributors are not

in favour of
measures, it can be concluded on the basis of the infor-
mation available that any advantage they may gain from
not
is
anti-dumping measures
outweighed by the interest of the Community industry
in having the effect of unfair and injurious trading
practices from the PRC neutralised.

imposed

having

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6.3. Interest of users

(118) Seven users filled in a users' questionnaire. The replies of
two of
these companies were incomplete and they
therefore could not be included in the analysis. The
five remaining companies were using PVA for a variety
of applications:
the
production of
the production of
PVB, textile sizing and finishing, and resin production.

for the production of adhesives,
industrial powders,

subsequently use the PVB for the production of PVB film,
suggested that eventual measures could trigger
the
company to move their production of PVB out of the
Community. This company also submitted that, in view
of the time it would take to qualify PVA for this appli-
cation, it was complicated and burdensome for them to
change supplier. The other PVB producer cooperating as
a user, which used PVA not only for the production of
PVB but mostly for the production of industrial powders,
also pointed to the difficult and lengthy process of
changing supplier and further expressed concerns about
the increased costs that measures might result in.

(119) Further to information on purchases reported in their
the purchases during
responses to the questionnaires,
the IP of the five cooperating users represented about
19 % of
total Community consumption of PVA and
their Chinese imports represented about 22 % of total
imports from the PRC.
to note that
the minor
imports from the PRC represent, overall,
part of their purchases, i.e. 15 %. However, this picture
is very mixed: one of
the cooperating users did not
import at all
from the PRC during the IP whereas
another cooperating user sourced its PVA exclusively
from the PRC.

is important

It

(120) The

cooperating users have

raised a number of

arguments against the imposition of duties.

(121) Two companies used PVA for

the production of
adhesives. It was established that, for the production of
such adhesives, PVA was a major cost
input which,
the blend, could
depending on the composition of
account for up to 80 % of the manufacturing cost. The
companies argued that, in view of the significant weight
of PVA in the production cost and the profit margins
attained on the sales of adhesives, an anti-dumping duty
might
lead to bankruptcy or force them to relocate
production outside the Community. These companies
expressed very strong doubts as
their
customers would be willing to pay an eventual price
In this respect, whilst it is
increase caused by duties.
acknowledged that the profit margins achieved in this
it should also be noted
particular sector are modest,
that
affecting
purchase prices of PVA with Chinese origin only,
which is one source of supply, and these prices signifi-
cantly undercut the Community industry's prices during
the investigation period. Therefore, the impact of the
duty on these companies' production cost of adhesives
is not insignificant but, also in view of the proposed duty
level, there appear to be no reasons as to why their
customers would not be willing to bear at least a good
part of this cost increase.

the measures proposed are directly

to whether

(123)

It is acknowledged that an increase in the purchase cost
of PVA will reflect in a higher manufacturing cost of
PVB. At the same time, however, as imports from the
PRC account for 13 % of the Community market, 87 %
of the PVA consumed in the Community will not be
directly affected by these measures. Moreover,
the
proposed duty rate is moderate. In view of the above
and taking into account
the good market conditions
for PVB, the effect of such a duty is considered bearable.

(124) As concerns the qualification procedure, it is recognised
that, in particular applications, the characteristics of PVA
can indeed be very demanding and tailor-made, resulting
lengthy qualification process which includes
in a
intensive testing. However,
it should be recalled that
anti-dumping measures are not meant to deny certain
suppliers
to the Community market. Any
measure proposed is only meant to restore fair trade
and correct a distorted market situation. Therefore, and
even more in view of the level of the duty rate proposed,
there is no reason why certain users would be obliged to
change supplier once measures are put in place.

access

(125) One cooperating user, a manufacturer of polyester/cotton
and cotton fabrics, which used PVA in the sizing and
finishing of greige fabrics, indicated that measures might
force the company to shift its spinning and weaving
activities outside the Community. In this respect, it was
established that the cost share of PVA in this company's
limited,
products manufacturing cost was
i.e.
the duty rate
between 0,2 % and 0,8 %.
proposed,
it is therefore considered that the impact of
such a duty is not significant.

In light of

rather

(122) Two other companies used PVA for the production of
PVB. In the case of the production of PVB also, PVA is a
major cost driver. One of these companies, which would

(126) Finally, the complainant, KEG, submitted that the non-
imposition of measures would be against the interest of

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users, as the poor financial results on its PVA activities
might trigger KEG to step out of the merchant market
and focus on the downstream markets. It argued that if
that were to happen, the user industry would be short of
supplies as KEG is a large and reliable supplier. Although
this argument has not explicitly been supported by the
users concerned, it is indeed confirmed that three of the
five users concerned do purchase significant quantities of
PVA from KEG and that this company can be considered
important supplier on the Community
as the most
market. Therefore,
if for whatever reason, KEG would
step out of the market, it cannot be excluded that the
user industry would be confronted with serious supply
problems.

(131)

6.4. Conclusion on Community interest

the injurious effect caused to the Community industry by
the dumped imports, without exceeding the dumping
margin found. When calculating the amount of duty
to remove
necessary
injurious
it was considered that any measures should
dumping,
allow the Community industry to cover its costs and
obtain overall a profit before tax that could be reasonably
achieved under normal conditions of competition, i.e. in
the absence of dumped imports.

effects of

the

the

industry,

absence of

It is considered that in 2003 there was a normal com-
petitive situation on the Community market where the
Community
injurious
in the
dumping, made a normal profit within the range as
described in recital 84 above. Consequently, on the
basis of the information available,
it was preliminarily
found that a profit margin corresponding to that level
could be regarded as an appropriate level which the
Community industry could be expected to obtain in
the absence of injurious dumping.

(127) The effects of

In view of

the Community industry,

the imposition of measures can be
expected to enable the Community industry to improve
the unfavourable financial
its profitability.
situation of
there is a real
in the absence of measures, the Community
risk that,
industry may close down production facilities and lay
off workforce. In general, the users in the Community
would also benefit from the imposition of measures, as
the supply of sufficient volumes of PVA will not be
jeopardised whilst the overall increase in purchase price
of PVA will be moderate.
it is
provisionally concluded that no compelling reasons
exist for not imposing measures in the present case on
Community interest grounds.

In light of the above,

7. PROPOSAL

FOR PROVISIONAL ANTI-DUMPING

MEASURES

(128)

the conclusions reached with regard to
In view of
dumping,
injury, causation and Community interest,
provisional measures should be imposed on imports of
the product concerned originating in the PRC in order to
prevent further injury to the Community industry by the
dumped imports.

(129) As far as imports of the product concerned originating in
Taiwan are concerned, no dumping was provisionally
found, as indicated at recital 30 above. Consequently,
no provisional measures should be imposed. In view of
the timing of
it was considered
appropriate to give a period of one month to interested
parties to comment on this provisional finding, with a
view to possibly terminating the proceeding in respect of
imports of the product concerned originating in Taiwan
thereafter.

this determination,

by

adjusting

(132) The required price increase was then determined on the
basis of a comparison, at the same level of trade, of the
weighted average import price, as established for the
price undercutting calculations, with the non-injurious
price of products sold by the Community industry on
the Community market. The non-injurious price was
each
the
obtained
Community industry producer to a break-even point
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.
Given that none of the cooperating Chinese producers
was granted MET or IT, and in view of the high level of
cooperation,
the provisional single countrywide injury
elimination level was calculated as a weighted average
of the injury margins of all three cooperating Chinese
exporting producers.

price

sales

of

(133) The injury margin thus established for the PRC was

significantly higher than the dumping margin found.

7.2. Provisional measures

(134)

In the light of the foregoing and pursuant to Article 7(2)
of the basic Regulation, it is considered that a provisional
anti-dumping duty should be imposed on imports of the
product concerned originating in the PRC at the level of
the lowest of the dumping and injury margins found, in
accordance with the lesser duty rule.

7.1. Injury elimination level

(130) The provisional measures on imports originating in the
PRC should be imposed at a level sufficient to eliminate

(135) On the basis of the above, the proposed duty rate for the

product concerned originating in the PRC is 10,0 %.

L 243/40

EN

Official Journal of the European Union

18.9.2007

7.3. Final provision

(136)

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 duties made for the purposes of this Regulation are
provisional and may have to be reconsidered for the
purpose of any definitive measures,

HAS ADOPTED THIS REGULATION:

Article 1

A provisional anti-dumping duty is hereby imposed on
1.
certain polyvinyl alcohols in the form of homopolymer resins
with a viscosity (measured in 4 % solution) of 3 mPas or more
but not exceeding 61 mPas and a degree of hydrolysis of 84,0
mol % or more but not exceeding 99,9 mol % falling within CN
code ex 3905 30 00 (TARIC code 3905 30 00 20) and origi-
nating in the People's Republic of China.

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

Unless otherwise

4.
concerning customs duties shall apply.

specified,

the provisions

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 rate of the provisional anti-dumping duty applicable
2.
to the net, free-at-Community-frontier price, before duty, of the
products described in paragraph 1 shall be 10 %.

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