Financial Daily from THE HINDU group of publications
Thursday, Sep 30, 2004
Industry & Economy
Dumping duty mooted on caprolactam
New Delhi , Sept. 29
THE Designated Authority in the Commerce Ministry has recommended imposition of definitive anti-dumping duty on 6-Hexanelactam from Japan, the European Union, Nigeria and Thailand.
6-Hexanelacatam is primarily used in production of Nylon-6, which, in turn, is used for production of nylon yarn. Nylon yarn is used for production of nylon fabric for use in apparel and tyre cord fabric.
6-Hexanelactam is produced and sold in both liquid and solid forms and producers in India use only solid form of the material. It is commercially also known as caprolactam.
The petition for seeking anti-dumping duty was made to the Authority by Gujarat State Fertilisers & Chemicals Ltd (GSFC), Vadodara, and was supported by Fertilisers and Chemicals Travancore Ltd (FACT).
Total capacity of caprolactam production in India is 1,20,000 tonnes. This is adequate to meet the needs of Nylon 6 producers.
It is understood that approximately 60 per cent of the Nylon 6 requirement is in textiles and allied sector, whereas only 40 per cent of the requirement is in industrial application and resin. Nylon tyre cord fabric comprises less than 10 per cent by weight of the tyres, which is bulk of the use of non-textile sector.
With demand of the Nylon 6 users increasing despite presence of other grades of Nylon in the market, which is produced from raw material other than caprolactam, the Authority is of the view that imposition of anti-dumping measures would remove the unfair advantages gained by the dumping practices and would prevent the decline of the domestic industry and help maintain the availability of a wider choice of the subject goods to the consumers.
In its final findings, the Authority held that the subject goods in all forms originating in or exported from the subject countries have been exported to India below its normal value.
As a consequence, the domestic industry has suffered material injury by way of financial losses due to suppressed Net Sales Realisation (NSR) on account of price undercutting/underselling triggered off by low landed prices of the dumped subject goods.
The net sales realisation was determined exclusive of rebates/discounts, commission, taxes and duties. Net sales realisation ranged between Rs 45,000 and Rs 65,000 per tonne.
Accordingly, it has recommended imposition of definitive dumping duty, which in the case of firms from the EU except DSM Netherlands is the difference between $1,394.05 (around Rs 63,987) and the landed value of the imported goods per tonne. For firms from Thailand, the definitive dumping duty is the difference between $1,421.09 (around Rs 65,228 crore) and the landed value of imported goods per tonne, while in the case of firms from Nigeria, the anti-dumping duty is the difference between $1,400.25 (around Rs 64,271) and the landed value of the imported goods per tonne. For firms exporting from Japan, the anti-dumping duty is the difference between $1,441.86 (around Rs 66,181) and the landed value of imported goods per tonne.
In its injury analysis and causal link between import and consequent dumping to the detriment of the domestic industry, the Authority said that the domestic sales of the domestic industry remained at almost similar levels, though the value of sales sagged.
Sales volume of domestic industry have not declined, given significant spurt in demand in automobiles and hence increase in tyre production.
Almost entire demand increase has gone to foreign producers, as there is no increase in sales of the domestic industry. Given the level of price undercutting and repeated pleas by the consumers to slash the prices in the face of cheaper imports, the potential decline in sales is also equally important, the Authority held.
According to the Authority, dumping margin has ranged between 10.11 per cent and 39.51 per cent from the subject countries with dumping margins in respect of imports from Japan, EU, Nigeria and Thailand remaining not only above de-minimis but also significant.
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