I. The period of injury investigation: January 1, 1998 ~ December 31, 2001.
II. Date of the injury determination: June 21, 2002.
III. Type of injury found: Material injury.
IV. Reasons for the injury determination
A. Volume and import penetration of dumped imports Portland cement and clinker from South Korea and the Philippines amounted to 118,840MT in 1998, 284,991MT in 1999, 1,096,321MT in 2000, and 1,248,155MT in 2001, representing growth of 139.8% in 1999, 284.7% in 2000, and 13.8% in 2001 as compared to respective preceding years. The volume of the dumped imports relative to domestic consumption, i.e., import penetration (market share) was 0.7%, 1.7%, 6.5%, and 8.0% from 1998 to 2001 respectively. The data above show that the volume of the dumped imports, either in absolute terms or relative terms, exhibited a significant increase throughout the period.
B. Effect on domestic prices of the like product
1. Price undercutting The prices of the subject imports per MT from South Korea were lower than those of domestic like products by NT$689, NT$760, NT$511, and NT$145 from 1998 to 2001 respectively; the prices of subject imports per MT from the Philippines were lower than those of domestic like products by NT$465 and NT$337 in 2000 and 2001 respectively. The data above indicate that there has been a significant price undercutting by the subject imports as compared with the prices of domestic like products during the period.
2. Price depression The prices of the subject imports from South Korea were down 17.5% in 1999, up 3.6% in 2000, and up 19.2% in 2001 in comparison with the respective preceding years; the prices of the subject imports from the Philippines were down 1.4% in 2001 from 2000. In comparison, the prices of the domestic like products were down 8.1% in 1999, 11.2% in 2000, and 8.7% in 2001 as compared to the respective preceding years. The data above indicate that the price undercutting of the subject imports from South Korea and the Philippines during the period depressed the prices of the domestic like products to a significant degree.
3. Price suppression The manufacturing costs of the domestic like products declined by 8.5%, 5.9%, and 1.5% in 1999, 2000, and 2001 respectively. During the same period, their market prices decreased 8.1%, 11.2%, and 8.7% respectively. In other words, the price drop of the domestic like products was steeper than the manufacturing cost drop in 2000 and 2001. The data above indicate that the prices of the domestic like products were suppressed to a significant degree during the period due to subject imports from South Korea and the Philippines.
4.Conclusion There has been a significant price undercutting, price depression and price suppression by the dumped imports.
C. Evidence on the impact on domestic industry
1. Relevant economic factors affecting the domestic industry Changes in the domestic industry in 1999, 2000, and 2001 as compared to 1998 (dumping from South Korea and the Philippines began in 1999) were as follows:
a. Drop in production: The production of Portland cement and clinker decreased 3.4% in 1999, 5.7% in 2000, and 0.1% in 2001 respectively as compared to 1998.
b. Increase in productivity: The productivity in terms of production per thousand hours was up 1.5% in 1999, 4.9% in 2000, and 36.6% in 2001 respectively as compared to 1998.
c. Drop in capacity utilization: The capacity utilization of the domestic industry dropped 2.8% in 1999, 3.4% in 2000, and 9.8% in 2001 respectively as compared to 1998.
d. Increase/decrease in inventories: The inventories of the domestic producers increased by 7.8% in 1999, decreased by 18.0% in 2000, and increased by 11.6% in 2001 respectively as compared to 1998.
e. Decline in sales: The domestic sales of Portland cement and clinker by the domestic producers dropped 7.2% in 1999, 13.0% in 2000, and 12.2% in 2001 respectively as compared to 1998.
f. Increase in exports: The exports of the domestic industry increased by 29% in 1999, 66.8% in 2000, and 104.3% in 2001 respectively as compared to 1998.
g. Slide in market share: The market share of the domestic industry dropped 2.6% in 1999, 7.0% in 2000, and 1.2% in 2001 respectively as compared to 1998.
h. Decline in price: The domestic price of Portland cement and clinker charged by the domestic producers fell 8.1% in 1999, 18.4% in 2000, and 25.5% in 2001 respectively as compared to 1998.
i. Decline in export price: The export price of Asia Cement Corp. dropped 23.9% in 1999, 27.3% in 2000, and 17.4% in 2001 respectively as compared to 1998; the export price of Taiwan Cement Corp. fell 17.3% in 1999, 18.4% in 2000, and 22.6% in 2001 respectively as compared to 1998; China Rebar Co. Ltd. began developing export markets in 2001.
j. Steep drop in profits: Profits of the domestic industry fell an average of 39.8% in 1999, 85.5% in 2000, and 117.8% in 2001 respectively as compared to 1998.
k. Steep decline in return on investments: The average return on investments of the domestic industry dropped 31.1% in 1999, 115.2% in 2000, and 126.5% in 2001 respectively as compared to 1998.
l. Decrease in cash flow: The cash flow of all domestic producers in 1999 decreased in comparison with 1998; the decrease amounted to 38.2%, 19.6%, 52.4%, 34.7%, and 3.7% for Asia Cement Corp., Taiwan Cement Corp., Shing Ta Cement Co. Ltd., China Rebar Co. Ltd. and Southeast Cement Corp. respectively. The cash flow of all domestic producers in 2000 decreased in comparison with 1998; the decrease amounted to 44.2%, 10.7%, 3.9%, 197.5%, and 86.8% for Asia Cement Corp., Taiwan Cement Corp., Shing Ta Cement Co. Ltd., China Rebar Co. Ltd. and Southeast Cement Corp. respectively. The cash flow of most of these domestic producers in 2001 fell as compared to 1998: Asia Cement Corp., Taiwan Cement Corp., Shing Ta Cement Co. Ltd., and Southeast Cement Corp. fell 94.5%, 163.8%, 78.2%, and 101.7% respectively; only China Rebar Co. Ltd. grew 0.7%.
m. Decrease in employment: The number of employees of the domestic producers decreased by 3.7% in 1999, 8.5% in 2000, and 9.8% in 2001 respectively as compared to 1998.
n. Drop, then rise in wages: The wages of employees of the domestic producers fell 2.2% in 1999 and 2.7% in 2000, then rose 14.9% in 2001 respectively as compared to 1998.
2. Conclusion Based on all relevant economic factors and indices having a bearing on the state of the industry, it shows that the domestic industry has sustained material injury.
D. Evidence of causation of injury to domestic industry
1. Impact of the subject imports
a. Impact of the volume of the subject imports: The absolute volumes of imports from both South Korea and the Philippines grew by several multiples during the period. The market share of imports from the same countries jumped from 0.7% in 1998 to 8.0% in 2001, whereas the market share of the domestic producers dropped from 84.0% in 1998 to 78.1% in 2000, and then rose to 85.0% in 2001 as a result of decreased imports from Japan, although the adverse effect of the dumped imports persisted. These data thus indicate that the volume of the subject imports has produced a significant impact on the domestic industry.
b. Impact of the prices of the subject imports: The prices of the subject imports were lower than those of the domestic like products. The prices of the South Korean imports dropped and then rose; the imports from the Philippines entered the domestic market in 2000 at a price NT$465/MT lower than that of the domestic like products, which dropped 1.4% further in 2001. Meanwhile, the prices of the domestic like products maintained a downward trend of 8.1% in 1999, 11.2% in 2000, and 8.7% in 2001, which indicates that the dumping of the subject imports produced an adverse effect on the prices of the domestic like products.
2. Impact of other factors The investigation has shown that factors other than the dumped imports, including the substitution of Portland cement by slag and fly-ash, a slow economy, a depressed construction industry, Portland cement imports from Japan, the expiration of mining rights, oversupply, and imports by domestic producers, could have led to an unfavorable economic situation of the domestic industry during the period. However, those factors may have only contributed to the difficult state of the domestic industry.
3. Conclusion The above analysis indicates that the domestic sales dropped relatively due to the large volume of imports from the subject countries. The price of domestic like products also continued to drop steeply because of the dumped imports, which brought losses to the domestic producers and a significant rise in their inventories. To slow down the drop in capacity utilization, the domestic industry resorted to development of export markets. Therefore, it is concluded that the dumped imports caused material injury to the domestic industry.
Source: Excerpted from Taiwan's notification to the WTO Committee on Anti-Dumping Practices pursuant to Article 16.4 of the Agreement on Implementation of Article VI of the GATT 1994 upon taking the definitive action on Portland Cement and Clinker from South Korea and the Philippines.