12.5.2023
EN
Official Journal of the European Union
L 127/77
(121) The Commission observed that the choice of the representative country was based on the three criteria: level of economic development, production of the product concerned and availability of relevant public data.
A potential impact of a devaluing currency or inflation level is not among those criteria.
In any event, the submitting party has not demonstrated how the depreciation of the Turkish Lira and high inflation would actually have affected the prices of inputs sourced in Türkiye, and if so what the real impact on the normal value that is calculated in CNY would be.
Moreover, the parties did not provide any information indicating that (and to what extent) Turkish lira would be used in import transactions for raw materials forming a basis for establishing the undistorted cost benchmarks in this case.
In addition, when establishing benchmarks on the basis of import prices for the calculation of normal value under Article 2(6a)(a) of the basic Regulation, the import values into the representative countries are ultimately converted into the currency of the exporting country, i.e. in this case CNY.
Therefore, the Commission found that this claim was unsubstantiated and rejected it.
(122) Regarding Kordsa Türkiye’s product portfolio and source of revenues, the Commission noted that in the event when no financial information is readily available specifically and solely in relation to product concerned by investigation (in this case HTYP), which is rarely the case, the Commission seeks to identify the closest readily available proxy, including consolidated information of producer(s) active, among others in the business of the product concerned.
In this case, as outlined in recital (112), approximately 86 % of Kordsa Türkiye’s external revenues in 2021 were generated in the segment covering HTYP.
Furthermore, contrary to what the parties submit, Kordsa Türkiye does indeed generate external revenue by producing and selling also polyester yarn (79).
In fact, Kordsa is “[o]ne of the leaders of the [...] HMLS polyester yarn market”, with “a portfolio of yarns that are suitable for use in such applications as cord fabrics, heavy-duty textiles, industrial fabrics, chafer fabrics, single-end cords and ropes” (80), hence for use also in industries other than the automotive industry.
This makes the parties’ argument on captive use of HTYP unfounded.
Moreover, tire reinforcement is one of the main applications for HTYP and the Chinese HTYP producers, including Hailide also produce HMLS yarn and serve customers in the automotive industry.
Hence it would be misleading to state that Kordsa Türkiye’s HTYP business is unrepresentative of the business activities of the Chinese HTYP producers.
Lastly, the parties did not propose as an alternative to Kordsa Türkiye any other suitable HTYP producer with readily available financial data specifically and solely for HTYP, let alone a HTYP producer with wider HTYP portfolio than that of Kordsa Türkiye.
(123) In these circumstances, the consolidated SG&A and profit identified for Kordsa Türkiye are therefore deemed sufficiently representative and suitable to be applied for the purposes of the present investigation and the arguments of the parties have to be dismissed.
It was further observed that, the target profit of 6 % proposed to be used by Hailide and the profit in the representative country refer to different concepts governed by different rules prescribed in different legal provisions.
In particular, the target profit is the profit achieved by the Union industry for domestic sales in the Union under normal conditions of competition and it is used to calculate the injury margin under Article 9(4) of the basic Regulation.
The profit in the representative country is used in the calculation of normal value by reference to the appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation.
This profit must reflect the profit achieved by a company producing the product under investigation or a similar product, in a representative country.
Since the concept of the target profit and of profit in a representative country are not comparable, the claim of Hailide was dismissed as irrelevant.
Moreover, Hailide provided no evidence suggesting that the amount for profit included in the constructed normal value was not undistorted and reasonable within the meaning of Article 2(6a)(a).
(124) Hailide took the view that the Commission should select Brazil as the suitable representative country instead of Türkiye, given that financial data are readily available for Kordsa group company in Brazil and because Brazil had hardly any imports from China concerning the key inputs for production of the HTYP (PTA, MEG, PET chips) compared to Türkiye in 2021 and therefore is less likely affected by the alleged distortions.
Hailide reiterated this argument in its response to the final disclosure, adding that if Kordsa Türkiye’s annual report for 2021 at company group consolidated level is acceptable as source for establishing the undistorted SG&A and profit in Türkiye, the same equally applies to Kordsa Brazil since the consolidated accounts also include the operational result of Kordsa Brazil.
(79) p. 133 of 2021 Annual Report.
(80) p. 61 of 2021 Annual Report available on https://www.kordsa.com/en/images/pdf/Kordsa_Annual_Report_EN_2021.pdf