Commission Regulation (EU) No 118/2011 of 10 February 2011 imposing a provisional anti-dumping duty on imports of certain ring binder mechanisms originating in Thailand

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Council Regulation (EC) No 1225/2009 of 30 November 2009 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) On 20 May 2010, the European Commission (the ‘Commission’) announced by a notice published in the Official Journal of the European Union (2) (Notice of initiation), the initiation of an anti-dumping proceeding concerning imports into the Union of certain ring binder mechanisms originating in Thailand (country concerned).

(2) The anti-dumping proceeding was initiated following a complaint lodged on 6 April 2010 by Ring Alliance Ringbuchtechnik GmbH (the complainant) on behalf of producers representing a major proportion, in this case more than 50 % of the total Union production of certain ring binder mechanisms. The complaint contained prima facie evidence of dumping of the said product and of material injury resulting there from, which was considered sufficient to justify the initiation of a proceeding.

(3) The Commission officially advised the complainant, other known Union producers, the known exporting producers in Thailand, the representatives of the country concerned, known importers and known users 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 out in the Notice of initiation. All interested parties who so requested and showed that there were particular reasons why they should be heard were granted a hearing.

(4) The Commission sent questionnaires to all parties known to be concerned and to all other parties that requested so within the deadlines set out in the Notice of initiation, namely the complainant, other known Union producers, the known exporting producer in Thailand, the representatives of the country concerned, known importers and known users. All parties who so requested within the time limit and indicated that there were particular reasons why they should be heard were granted a hearing.

(5) Replies to the questionnaires and other submissions were received from one exporting producer in Thailand, the complainant Union producer, five unrelated importers and traders (including one also producing in the Union) and one user.

(7) The investigation of dumping and injury covered the period from 1 April 2009 to 31 March 2010 (the ‘investigation period’ or ‘IP’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2006 to the end of the IP (the injury investigation period).

(8) The product concerned is ring binder mechanisms which consist of at least two steel sheets or wires with at least four half-rings made of steel wire fixed on them and which are kept together by a steel cover, they can be opened either by pulling the half rings or with a small steel trigger mechanism fixed to the ring binder mechanism, originating in Thailand (‘the product concerned’ or ‘RBM’) and currently falling within CN code ex 8305 10 00 . Lever-arch mechanisms, falling within the same CN code, are not included in the scope of this investigation.

(9) RBM are used to file different kinds of documents or papers. They are used, inter alia, by producers of ring binders, technical manuals, photo and stamp albums, catalogues and brochures.

(10) A large number of different models of RBM were sold during the IP in the European Union. The models varied by size, shape and number of rings, the size of the base plate and the system to open the rings (pull open or opening trigger). Given that all of them have the same physical and technical characteristics, and that the models of RBM can, within certain ranges, replace each other, the Commission established that all RBM constitute one single product for the purpose of the present proceeding.

(11) The product produced and sold on the domestic market of Thailand, as well as the product manufactured and sold in the Union by the Union producers were found to have the same basic physical and technical characteristics as well as the same basic uses. They are therefore provisionally considered as alike within the meaning of Article 1(4) of the basic Regulation.

(12) In view of the apparent high number of unrelated importers, sampling was envisaged in the Notice of initiation in accordance with Article 17 of the basic Regulation. In order to enable the Commission to decide whether sampling would be necessary and if so, to select a sample, all known unrelated importers were asked to make themselves known to the Commission and to provide, as specified in the Notice of initiation, basic information on their activities related to the product concerned (as defined in Section 2.1 above) during the period from 1 April 2009 to 31 March 2010.

(13) After examination of the information submitted and given the low number of importers which indicated their willingness to co-operate, it was decided that sampling was not necessary.

(14) One company in Thailand replied to the questionnaire for exporting producers. A company involved in the sales of the product concerned and located in Hong Kong related to this exporting producer also replied to the questionnaire. On the basis of import data reported by Eurostat, the exporting producer (together with its related company) accounted for all Thai exports to the Union.

(15) The investigation revealed that the exporting producer provided incomplete and incorrect information with regard to significant elements of its cost of production, such as the apparent nickel metal consumption and apparent consumption of other raw materials. Furthermore, other data reported with regard to production costs and production capacities were inconsistent and could not be reconciled. Finally, the investigation revealed that there was a related company located in the People's Republic of China, which contrary to what was originally claimed by the exporting producer, was involved in the sales and administration of the product concerned. The reported costs did not include the relevant costs of this related company and were therefore considered incomplete.

(16) On the basis of the above, it was concluded that the cost data submitted were not a sufficiently accurate basis for the determination of normal value. It was therefore considered to base findings at least partially on facts available in accordance with Article 18 of the basic Regulation.

(17) The company was informed forthwith and was given the opportunity to provide further explanations, in accordance with Article 18(4) of the basic Regulation. However, the explanations given by the company were unsatisfactory since it did not clarify the inconsistencies found. The company could also not refute the evidence showing that they had submitted incomplete, incorrect and misleading information. Moreover, the company failed to submit essential information of the above mentioned related company established in the People's Republic of China involved in the production and sales of the product concerned.

(18) In view of the above, it was considered that the normal value for the exporting producer should provisionally be determined on the basis of facts available, in accordance with Article 18 of the basic Regulation.

(19) In the absence of any other more reliable information, the normal value was provisionally calculated on the basis of the information relating to the cost of manufacturing in Thailand as provided in the complaint. In accordance with Article 18(5) of the basic Regulation, this information was cross-checked with verified information obtained during the investigation, including that relating to costs of personnel and energy in Thailand. Where considered appropriate, the information provided in the complaint was corrected by the verified information obtained during the investigation.

(20) A reasonable amount for SG&A and profits, respectively 16 % and 8 % were added to the manufacturing cost as established above, on the basis of the information submitted in the complaint.

(21) The exporting producer made export sales to the Union through its related trading company located outside the Union.

(22) The export price was established on the basis of the prices of the product when sold by the related trading company to the Union, i.e. to an independent buyer, in accordance with Article 2(8) of the basic Regulation on the basis of prices actually paid or payable.

(23) The comparison between normal value and export price was made on an ex-works basis.

(24) For the purpose of ensuring a fair comparison between the normal value and the export price, due allowance in the form of adjustments was made for differences affecting prices and price comparability in accordance with Article 2(10) of the basic Regulation. Adjustments for differences in transport and insurance costs and credit costs have been made where applicable and justified.

(25) Pursuant to Article 2(11) and (12) of the basic Regulation, the dumping margin for the cooperating exporting producer was established on the basis of a comparison of a weighted average normal value by product type with a weighted average export price by product type as established above.

(27) Since the cooperating exporting producer accounted for all Thai exports to the Union of the product concerned, it was considered that the residual dumping margin should be set at the level of dumping margin found for this cooperating exporting producer, i.e. 17,2 %.

(29) The first producer is the applicant and cooperated in the investigation. The investigation has established that the applicant represented more than 50 % of the total Union production of RBM in the IP.

(30) The second (smaller) producer is also an importer of RBM from Thailand and opposed the proceedings. On the basis of the information provided by the company, it was found that during the overall period considered for the injury analysis the volume of its purchases of Thai products was on average comparable to the volume of its own production.

(31) On the basis of the above it is considered that, pursuant to Article 4(1)(a), the second producer should be excluded from the definition of the Union industry, and therefore only the applicant producer should constitute the Union industry within the meaning of Articles 4(1) and 5(4) of the basic Regulation. It is hereinafter referred to as the ‘Union industry’.

(32) It should be noted that in the past, the Union industry was originally composed of two different producers (Koloman Handler — Austria and Robert Krause — Germany) that went bankrupt and taken over by an Austrian group. These companies were subject to a significant restructuring and the current structure ‘Ring Alliance Ringbuchtechnik GmbH’ was created in 2003. The head offices are located in Austria while production takes place in Hungary.

(35) The consumption declined by 5 % during the overall injury investigation period (3). It should however be noted that after an increase of around 10 % between 2006 and 2008, the consumption dropped by 15 % in the subsequent period.

(36) Imports from Thailand for the period 2008-IP are based on the questionnaire reply of the co-operating exporting producer — the sole known Thai exporter — and based on Eurostat data for the other years. On this basis, it was established that total import volume of RBM from Thailand increased by almost 20 % between 2006 and the IP. The level of imports however fluctuated significantly during this period, and the most important increase took place between 2007 and 2008, when imports more than doubled.

(37) The Thai market shares followed an overall increasing trend and gained 3 points between 2006 and the IP. Similarly to the sales volume, the market shares reached a peak in 2008, at a level of 16,5 %.

(38) Import prices first increased by more than 20 % between 2006 and 2008 and declined subsequently.

(39) Despite an overall increase of 13 % during the injury investigation period, the Thai prices significantly undercut the Union producers’ prices during the IP. The price comparison for corresponding models, duly adjusted where necessary, indeed showed that on average import prices were more than 30 % below the Union industry’s sales price during the IP. A comparison of the average price level during the other years suggests comparable undercutting rates for the years 2006-2009.

(40) The absolute level of Thai import prices was also systematically below the price of other imports and — to a larger extent — below the price of the other Union producer.

(41) During the overall period, both the production and the production capacity decreased respectively by almost 20 % and 25 %. The increasing capacity utilisation should only be seen as the result of a reduction of the production capacity by 25 % during the same period. This is mainly the result of lay-offs (see employment below).

(42) It should however be noted that production volume and capacity first improved until 2008, and then decreased significantly.

(43) In the injury investigation period, the Union industry's stocks increased overall by 26 %. A significant part of the RBM production consists of standard products, and the Union industry has to maintain a certain level of stock in order to be in a position to swiftly satisfy the demand of its customers. Any increase of the closing stock above the average level nevertheless indicates difficulties to sell the products.

(44) The Union industry’s sales volume on the EU market decreased by 23 % over the period analysed, which corresponded to declining market shares from 29,6 % to 24,0 %, i.e. a drop of more than 5 points. Sales volume and market shares in fact deteriorated as from 2008.

(45) The above development overall indicates an absence of Union industry growth between 2006 and the IP.

(46) The Union Industry's weighted average selling price was relatively stable until 2008. It then increased by 10 % in 2009 to decrease by 3 percentage points in the IP. This price increase is the result of a combination of two factors: a change of product mix due to the decreasing sales volume of the more standardised — and cheaper — products, and the Union industry’s attempt to compensate for the losses incurred in 2008. The latter was however not successful since the Union industry continued to operate at a loss in the subsequent period (see below).

(47) The Union industry was loss making during the overall injury investigation period, and the above trend shows an overall increase of the level of losses. While the situation slightly improved in 2007 (it became nearly break even), it however deteriorated as from 2008. While the decline in cash-flow could somehow be limited, it also remained negative as from 2007. The return on net assets was also negative during the overall period and constantly declined between 2006 and the IP.

(48) Investments followed a sharp decreasing trend, i.e. – 75 % during the overall injury investigation period.

(49) As stated above, given the weak financial situation of Union industry it can be concluded that its ability to raise capital from independent sources was seriously affected.

(50) During the overall period employment (full-time units) decreased by 13 % and the most important decline took place after the year 2008 when employment reached a peak. Wages mostly followed the same trend.

(51) Productivity, measured in thousand of pieces produced per employee during the period, generally followed the same trend as employment, but the decline could be limited during the IP.

(52) On the basis of the best facts available, the investigation has established the existence of dumping during the IP of 17,2 %, which is substantial.

(53) The Union industry has been suffering from the effects of dumped imports for several years. It could nevertheless benefit from relatively effective measures until the year 2008, but the situation deteriorated again thereafter. This is further explained in the section related to Union interest below.

(54) The economic situation of the Union industry clearly deteriorated between 2006 and the IP. This was especially characterised by a significant decrease of production and sale volume (respectively – 17 %, – 13 %), which also resulted in decline of market share from 29,6 % to 24 %. The financial situation of the Union Industry was also affected. The level of losses incurred by the company indeed increased, and both cash-flow and return on net assets followed the same negative trend. The attempt of the Union industry to limit the level of the losses by increasing its prices in 2009 was not successful, and the situation even worsened.

(55) Consequently, the investments were reduced to their minimum level, and the company had no choice but to lay off a substantial number of people in order to face the situation.

(56) It should nevertheless be noted that during the overall injury investigation period the situation of the Union industry somewhat improved between 2006 and 2008. Indeed, during this period, production, sales volume, and employment followed and increasing trend. Those indicators however significantly dropped since 2009. The profitability indicators on the other hand remained negative during the overall period; although profitability was close to break even in 2007.

(57) Considering the above, it is provisionally concluded that the Union industry suffered material injury within the meaning of Article 3(5) of the basic Regulation.

(58) In accordance with Article 3(6) and (7) of the basic Regulation, it was examined whether the material injury suffered by the Union industry has been caused by the dumped imports from the country concerned. Furthermore, known factors other than the dumped imports, which might have injured the Union industry, were examined to ensure that any injury caused by those other factors was not attributed to the dumped imports.

(59) It is to be noted that the Union market is characterised by a relatively small number of sources of supply (two in the Union, one in India, one in Thailand and still some supply from China) and that the market is therefore quite transparent in terms of prices, through price quotations. Furthermore a significant part of the demand in the EU concerns standard types of RBM, for which price is by far a decisive factor when purchasing the product.

(60) In this context, the investigation showed that the volume of imports of RBM from Thailand increased by almost 20 % during the injury investigation period, and reached a market share of 15 % during the IP. The Union industry lost a significant volume of sales during the same period. Furthermore it was established that, during the IP, RBM from Thailand undercut the Union industry's prices by more than 30 %, which is very significant for this kind of product.

(61) The combination of the important volume of import and of the low price level led to a significant price pressure on the Union market. In the absence of dumping, Thai prices would have been — at least during the IP — almost 20 % higher than their actual level, and this could have meant an overall higher Union market price.