The Hindu Business Line : Row over dumping duty on EPDM rubber

The rubber goods manufacturing sector has reacted sharply to a proposal pending before the Finance Ministry, seeking levy of anti-dumping duty on EPDM (ethylene propylene diene monomer) rubber, a specialised basic raw material used mainly for the manufacturing of automobile channels, beadings, hoses, belts, sheetings, gaskets etc.

It is felt by the rubber consuming industry that if anti-dumping duty is levied on this raw material, it may make the input costlier than the finished product, thus opening the doors for import of cheaper finished goods, causing loss of jobs straightaway.

Anti-Dumping Duty

The rubber goods sector in a recent representation to the Government through the industry bodies has suggested that till such time the domestic manufacturers can produce the total required quantities and grades as required by consumers, anti dumping duty on EPDM rubber should not be levied.

Mr M.F. Vohra, Partner, Zenith Rubber and Plastic Works, and Chairman of Capexil's Rubber Products Panel, told Business Line that the sole domestic manufacturer of EPDM in the country Herdillia Unimers near Mumbai, had a capacity to produce only 4,000 to 5,000 tonnes a year against a total industry requirement of 18,000 to 20,000 tonnes.

Pointing out that the large deficit has to be met through imports, he said at the point of reference for such duty safeguard, import prices were around $1,400 a tonne, which now were ruling between $2,300 and $2,800 a tonne for different grades of EPDM rubber.

Suggesting that on this point alone, cause for injury to the domestic manufacturer does not arise, Mr Vohra said there had been a surge in demand for EPDM rubber worldwide as the automobile industry was now doing very well. The construction industry too needs this material for the channels and beadings required by the window frames.

Manufacturing problems

Suggesting that levy of such duty on a product, which the domestic manufacturer cannot produce in sufficient quantities owing to various manufacturing constraints was grossly unfair to consumers, Mr Vohra said some 14,000 tonnes of EPDM rubber will have to be imported owing to constraints faced by rubber goods manufacturers, and consumers will carry the burden of anti-dumping duty on products they are forced to import.

He said the plant operated by Herdillia was a small pilot plant, which can never be viable, and also does not manufacture grades like Gas Phase Black, Nordel IP, etc.

And levying anti dumping duty across the board would force domestic consumers to pay a levy on products not even manufactured by the domestic player. Global players in EPDM rubber operate manufacturing facilities with capacities of at least 40,000 tonne per annum.