Commission Implementing Regulation (EU) 2023/111 of 18 January 2023 imposing a definitive anti-dumping duty on imports of fatty acid originating in Indonesia

• (246) The development of profitability, when seen together with the sales prices and production cost in Table 7 and the low prices of the Indonesian imports, shows evidence of significant price suppression. The Union industry was unable to raise its prices to sufficiently reflect cost increases in order to sell at reasonably profitable prices. This meant that the profitability of the Union industry remained low throughout the period considered, when Indonesian dumped imports already started at a high penetration (17,1 % market share) and were able to increase in volume by 22 % and reach a 20,3 % market share as shown at Table 2. In addition, despite significant raw material price increases, the average price of these imports increased by only 12 % as shown at Table 3. Over the same period, Union industry prices had to increase by 25 % only to sustain costs. As also concluded in recital (210), there was continuous downward pressure exerted by imports from Indonesia (both in terms of constant high volumes and in terms of low prices) already from the beginning of the period considered. Indeed, Indonesian prices were consistently lower than Union industry prices as of 2019 and possibly before (see recital (302)). This resulted in depressed and inadequate profit levels throughout the period considered and, in particular, during the investigation period.

• (247) Wilmar made comments on the lack of price suppression, however, its conclusion was based on indexed trends, rather than on the actual level of profitability of the Union producers.

• (248) The Commission found that the conclusions reached by Wilmar were incorrect as it did not take into account the penetration of the dumped imports during the whole period considered and the resulting low profitability levels of the Union industry. Therefore, the claim was dismissed.

• (249) Musim Mas group submitted the annual reports of two Union producers and argued that the information contained therein, in particular the indicators of profitability during the IP, shows a lack of injury to these companies.

• (250) In this respect, the Commission notes that the scope of these reports is substantially wider than the business of the two Union producers related to the product under investigation. Therefore, the claim was rejected.

• (251) The net cash flow reflects the ability of the Union producers to self-finance their activities. The trend in net cash flow developed in a similar manner to the return on turnover, falling in 2019 and 2020 and experiencing a modest increase in the IP. Overall, the cash flow showed a negative trend over the period considered, it decreased by 16 %.

• (252) The return on investments is the profit as a percentage of the net book value of investments. The trend in return on investments also developed in a similar manner to the return on turnover, falling in 2019 and 2020 and experiencing a modest increase in the IP.

• (253) The sampled Union producers continued to invest during the period considered, as demonstrated by the investment figures above. Investments were between 7 and 12 million EUR per year and were mainly made in order to make efficiency gains and maintain existing facilities. The Union industry is serving a diverse customer base, which has continuously developing requirements. The Union industry has to remain flexible in its ability to manufacture the range and quantity of products it can offer to the market. Such investments are threatened by a decreasing ability to raise capital.

• (254) The investigation also showed that other investments to increase capacity had not gone ahead as planned during the period considered. Whilst those investments are essential to ensure the perennity of the industry, all sampled companies, including those that are part of larger groups, had to delay investments in that period. The inadequate level of the return on investments also jeopardises the future ability of the Union industry to raise capital and thus its survival in the medium and long term.

4.4.4.   Conclusion on injury

• (255) The development of stocks and captive use showed a modest improvement in the period considered. The increase in captive consumption was limited to 2 % and stock levels decreased. The investigation showed that the captive use is not directly affected by the dumped imports and that stocks are less relevant for the fatty acid industry, which is mainly working on orders. This means that these factors are not key factors in the injury analysis.

• (256) Some other indicators, such as sales prices, profitability, return on investment and investment, showed an apparently positive trend during the period considered. The investigation, however, showed that the positive development of sales prices was related to the development in raw material prices, which significantly increased in that period. Also, the modest improvement in profitability and return on investment did not change the fact that the performance during the period considered remained at a level that was inadequate to ensure the viability of the Union industry in the medium and long-term (see also recitals (266) to (269)).

• (257) In fact, the low profitability, when seen together with the trends in sales prices and costs of production is a clear demonstration of price suppression. In particular, throughout the period considered, when the dumped imports remained at increased levels and low prices, the Union industry was unable to raise prices to a level that would allow it to cover its costs and reach the target profit margin (6 %).

• (258) Despite keeping investments as high as possible in order to maintain efficiency, the Union industry was clearly not delivering sufficient profits to encourage investments to develop their businesses during the period considered and, in particular, in the investigation period. The deterioration in the economic situation of the Union industry took place in a market with a relatively stable consumption (the decline in consumption in 2020 and the IP were largely temporary because of the impact of the Covid-19 pandemic). The Union industry market share declined by 5 % over the period considered, from 72,1 % in 2018 to 68,3 % in the IP.

• (259) Although, the injury in this investigation consisted mainly of price and performance indicators such as profitability and ability to raise capital, the Union industry also suffered a decline in the volume indicators examined. Production, capacity, capacity utilisation, sales volume and market share on the Union market all declined over the period considered. Furthermore, declines were also seen in employment and productivity, which were related to the lower levels of production and sales volume.

Comments after disclosure

• (260) In its comments following final disclosure, the GOI commented on certain injury indicators and concluded that the Union industry was not injured over the period considered. This opinion was made on the basis that: (1) Table 4 showed an increase in production and capacity from 2020 to the IP; (2) Table 5 showed an increase in market share, including captive use, from 2020 to the investigation period, (3) Table 7 showed an increase in selling price over the period considered which was followed by an increase in profits from – 2,1 % in 2020 to 2,5 % in the IP, (4) Table 9 showed a decrease in stocks over the period considered, and (5) Table 10 showed an increase in profitability, cash flow and return on investment from 2020 to the investigation period. The GOI also claimed that the Commission used arbitrarily a target profit of 6 % without any basis and that that the increase in profit of the Union industry from – 2,1 % in 2020 to 2,5 % in the investigation period was significant, unprecedented and it was achieved during the Covid-19 pandemic. Wilmar claimed that the Commission did not analyse Table 10 correctly, claiming that profitability increased over the period considered and was high in the investigation period.

• (261) The Commission disagreed with the claim that the relevant data failed to show material injury. As mentioned in recital (202), while during the period considered consumption decreased by 5 %, the volume of imports from Indonesia increased by 13 %. Indonesian imports also managed to increase their market share in such a context. Furthermore, as explained in recital (192), Union consumption is generally stable ³⁷ and is expected to recover following the temporary decrease of 2020 and the IP, which was due to factors relating to the Covid-19 pandemic ³⁸.

• (262) Similarly, as concerns market share of the Union industry, the market share including captive use indeed increased from 70,6 % to 70,8 %. However, the market share of the Union industry sales on the free market, which is the relevant indicator, decreased from 68,4 % in 2020 to 68,3 % in the investigation period. During the whole period considered the market share of the Union industry sales on the free market continuously decreased from 72,1 % in 2018 to 70,8 % in 2019, to 68,4 % in 2020 and to 68,3 % in the IP. Contrary to this, at the same time, the market share of the Indonesian imports continuously increased from 17,1 % in 2018 to 19,0 % in 2019, to 20 % in 2020, and to 20,3 % in the investigation period.

• (263) Likewise, the claim concerning the increase of the average selling price must be seen in the context of a significant increase of the cost of raw material, as explained in recital (256). Furthermore, as explained in recital (243), the closing stocks as a percentage of production remained rather stable over the period considered and the industry operated on a production to order basis, so stocks were kept at a low level.

• (264) The allegation about the performance indicators in Table 10 ignored the full context. For example, the level of cash flow in the period considered constantly decreased from 2018 to 2020, turning negative in 2020. In the investigation period, the cash flow increased and became positive as the Union industry managed to increase its profits as explained in recital (251) and (266). However, the cash flow in the IP was still substantially below the levels of cash flow in 2018. Overall, the cash flow decreased by 16 %.

• (265) As concerns the level of the target profit, the Commission considered that using a 6 % as the minimum profit was appropriate. Article 7(2c) of the basic Regulation considers 6 % as the minimum level of profitability to be expected under normal conditions of competition for the calculation of the injury margin. This level was set on the basis of the long-term profitability figures established for the industries in the Union. No evidence was put forward that such a level was manifestly inappropriate for the industry at issue (see recital (268)). Therefore, this claim could be dismissed on this basis.

• (266) Nevertheless, the Commission noted that the profit of the Union industry was slightly above break-even only in 2018 (1,9 %) and in the IP (2,5 %), whereas it was negative in 2019 and 2020 (– 0,5 % and – 2,1 % respectively). Furthermore, the positive level reached during 2021, which covers 9 months of the investigation period, must be seen in the context of significant supply chain disturbances on the market derived from the COVID-19 pandemic and severely affecting Indonesian exports to the Union. Fatty acid supply to the Union was hindered by vessel delays from Asia, caused by a lack of cargo ships, tankers and workers resulting from Covid-19, and extreme hikes in freight costs as a result ³⁹. These temporary disturbances affected prices globally in the industry, as well as imports from Indonesia, which decreased in absolute terms between 2020 and the IP. As a result, the Union industry explained that it was able to benefit from these specific temporary disturbances on the market by increasing prices to profitable levels on the Union market without major sacrifices to their market share Overall, the Union industry’s profitability oscillated around the breakeven point during the whole period considered, the volume of imports from Indonesia were significant and their market share increased significantly from 17,1 % and 20,3 % despite a slightly decreasing consumption. All the factors clearly show that profitability of the Union industry has been negatively affected throughout the period considered by the dumped Indonesian imports, and the peak in profitability at 2,5 % during the IP, was reached in a context of supply issues for Indonesian exporters, mainly due to the aftermath of Covid-19.

• (267) The profitability in Table 10 is calculated based on the cost of goods sold of the fatty acid produced and sold on the Union market to unrelated customers by the Union industry. While the Union industry in general produces based on orders, there are still small stocks as indicated in Table 9. Therefore, in an industry with small inventories, there is a small difference between unit cost of production and unit cost of goods sold. It follows, that although in 2019 and 2020, the Union industry average unit selling price was higher or equal to the average unit cost of production, the Union industry incurred losses as indicated in Table 10.

• (268) As for the standard level of profit of fatty acid in normal conditions of competition, the GOI did not explain why the profit level of 2,5 % achieved by the industry in the IP was allegedly sufficient. Also, the GOI failed to substantiate which level of profit should be used instead when criticising the legally mandated 6 % threshold used by the Commission, and it also failed to explain the alleged impact of Covid-19 pandemic on the level of profitability. The Commission noted that there is no other evidence on file on the level of historical profitability of the fatty acid industry in the absence of dumped imports from Indonesia that would support the GOI’s assertion that the 2,5 % profitability was sufficient, or undermine the choice of the 6 % level of profit used. By contrast, the Commission’s findings were supported by publicly available information and information on the open file. The Commission noted that according to a report prepared by the European Chemical Industry Council (‘CEFIC’) regarding, among other things, the profitability of the broader European chemical industry for 2020, the gross operating surplus ⁴⁰ as a percentage of turnover in the chemical industry is around 11 %. Furthermore, based on the statistics collected by CSIMarket ⁴¹, the pre-tax margins of a chemical manufacturing industry in 2021 was around 13 %. Moreover, in their comments on final disclosure, the Greven group stated that the EBIT margins (earnings before interest and taxes) of the chemical industry in Europe in 2020 was around 7 % (see in more detail recital (294). Thus, on the basis of available evidence, the Commission considered that the Union industry did not reach a profitability level in accordance with normal market conditions of competition throughout the entire period considered.

• (269) Even more significantly, the Commission noted that, as explained in recitals (253) and (254), the investments made by the Union industry were limited over the period considered, focusing on efficiency gains and maintaining a smooth running of the existing facilities. The Union industry, because of the negative or low profitability level throughout the period considered, was unable to undertake required investments to innovate and achieve required efficiency and productivity gains to be able to compete in the market. The Union industry is serving a diverse customer base which has continuously evolving requirements. During the period considered, the depreciation expenses represented only around 2 % of the cost of production. An increase of the depreciation expenses following investments to 4 % of cost of production would make the Union industry break even in the scenario that it will manage to maintain the higher prices of the investigation period, which is highly unlikely given the reasons for which these prices increased in the IP. Therefore, the profit level achieved by the industry throughout the period considered is insufficient to undertake the required level of investment needed in this sector. All these elements squarely contradicted the GOI’s unsubstantiated assertions on the required profitability level of the Union industry.

• (270) Finally, the Commission noted that its analysis was complete and comprehensive, because it covered all 4 years and all injury indicators required by Article 3(5) of the basic Regulation. In addition, the Commission used all data in its analysis whether developments were positive or negative. The Commission, therefore, demonstrated that its conclusion of material injury was legally and economically sound. Therefore, these claims were rejected.

• (271) The GOI also claimed that the finding of injury was inconsistent with the letter of KLK dated 19 August 2022 which commented on competition between KLK and Indonesian exporting producers and KLK’s profitability.

• (272) The Commission rejected this claim as the letter is from a single Union producer and does not constitute a full assessment of injury. Such a statement, therefore, cannot override the Commission’s conclusions on material injury.

• (273) The GOI also claimed that although fatty acid used for the production of biodiesel was excluded from the product scope, the Commission failed to adjust the import statistics accordingly.

• (274) The Commission rejected this claim, confirming that the import statistics do not include the imported quantities of fatty acid produced from waste and used for biodiesel production.

• (275) Wilmar claimed that the developments of production and capacity utilisation shown at Table 4 were not injurious.

• (276) The Commission noted that production fell by 7 % over the period considered and capacity utilisation by 3 % as mentioned in Table 4. Wilmar did not assess these trends in their proper context. In a market with a decreased consumption by 5 % in the period considered, the imports from Indonesia increased by 13 % and their market share increased from 17,1 % in 2018 to 20,3 % in the investigation period. Therefore, the Commission rejected the claims concerning production and capacity utilisation.

• (277) Wilmar claimed that the Commission was wrong to state that stock levels shown at Table 9 were of lesser importance in the injury analysis and claimed that lower stocks were a sign of increased sales.

• (278) The Commission noted that sales volumes fell throughout the analysis period as shown in Table 5. Also, bearing in mind the low closing stock levels, which were below 4,5 % of production volumes throughout the period, the Commission maintained its views on stock issues in the overall injury analysis.

• (279) Wilmar claimed that the developments of investments and return on investment shown at Table 10 were not injurious.

• (280) As concerns investments, the claim was addressed in recital (269). The return on investments is the value of the total profit of the product under investigation divided by the value of the total fixed assets used for the production of the product under investigation. During the period considered, the value of the total fixed assets was rather stable. Therefore, the trend of the return of investment follows the trend of the profitability. It follows that between 2018 and 2020 the return on investment decreased. In the investigation period the return of investment increased as the profitability of the Union industry increased as compared to the previous years. However, as explained in recital (266), the increase in profitability in the investigation period was only temporary. The Commission therefore maintained its conclusion that investment levels were inadequate for the future survival of the Union industry (see recitals (253), (254) and (269)) and therefore this claim was rejected.

• (281) In their comments following final disclosure the Musim Mas group claimed that there was no injury to the Union industry during the IP. Indeed, this group requested the Commission to focus the injury analysis on the investigation period claiming that in that year there were positive developments in production, production capacity, market share, average prices, return on investment, cash flow, profitability and stocks. In particular, the Musim Mas group pointed out that profitability was at its highest in the investigation period (2,5 %).

• (282) The Commission must carry out the injury assessment for the entire period considered and not only during the investigation period. The methodology suggested by the Musim Mas group, like the assessment of the GOI and Wilmar above, would not represent a full and accurate analysis of the injury situation of the Union industry as required by Article 3 of the basic Regulation. The small increase in production volume (1,2 %), production capacity (1,9 %), and the decrease in stocks was due to the temporary increase in profitability, as explained in recital (266). The cash flow and return of investment followed the development of profitability. The market share of the Union industry on the free market decreased in the IP as compared to 2020 from 68,4 % to 68,3 %. The selling price of the Union industry increased in line with the increased unit cost of production due to the increase in raw materials prices, which was rendered possible by the temporary supply disruptions and the effects of the COVID-19 pandemic in particular during the IP. Therefore, the claim was rejected.

• (283) The Musim Mas group also questioned the undercutting (mistakenly referred to by the Musim Mas group as ‘underselling’) calculations of the Indonesian imports arguing that the disclosure document regarding average unit values, in Tables 3 and 7, indicates a much more modest price effect on the Union industry’s prices, namely from an overcutting of 4 % in 2018 to a modest undercutting of 7 % in the IP.

• (284) This exporting producer reached a conclusion on price undercutting based on a straight comparison of the average import price of Indonesian producers to the Union with the average price of the Union industry, ignoring that all exporters and all producers in the Union have product mixes that can differ significantly. In order to reach more reliable undercutting margins, prices should be compared for comparable product types at the level of the exporting producers, where the dataset is available. During the IP, the exporter claim that price undercutting was 7 % on an average basis, whereas the comparison at product type level revealed an undercutting margin above 20 %. The comments of the exporter concerning undercutting margins were rejected.

• (285) In their comments following final disclosure CUTFA agreed with the Commission’s conclusions regarding injury and pointed out that the analysis of sales prices, undercutting, underselling, price suppression, unit costs and performance indicators such as return on turnover demonstrated that the Union industry had suffered injury over the period concerned. CUTFA also pointed to the Commission’s analysis of volume indicators such as production, capacity, capacity utilisation, sales volume and market share, which demonstrated that the Union industry suffered injury also in respect of volume indicators. Furthermore, CUTFA confirmed that slight improvement in profitability in the IP had not created a sustainable and competitive situation for the Industry on the Union market.

• (286) On the basis of the above, the Commission concluded that the Union industry suffered material injury within the meaning of Article 3(5) of the basic Regulation during the investigation period.

5. CAUSATION

• (287) In accordance with Article 3(6) of the basic Regulation, the Commission examined whether the dumped imports from the country concerned caused material injury to the Union industry. In accordance with Article 3(7) of the basic Regulation, the Commission also examined whether other known factors could at the same time have injured the Union industry. The Commission ensured that any possible injury caused by factors other than the dumped imports from the country concerned was not attributed to the dumped imports. These factors are: imports from other sources than Indonesia, the export performance of the Union industry, developments in captive use, developments in consumption, raw material issues and alleged inefficiencies of the Union industry.

5.1.   Effects of the dumped imports

• (288) As shown in Table 2, the volume of dumped imports from Indonesia increased from around 203 000 tonnes in 2018 to around 228 000 tonnes in the investigation period, an increase of 13 %. In terms of market share, the increase over the same period was from 17,1 % to 20,3 %, an increase of 19 %. These observations coincided with a 10 % decrease in the Union industry sales on the free market and a fall of market share from 72,1 % to 68,3 %, a fall of 5 %. In that period, the sales on the smaller captive market were stable. The investigation showed that dumped imports have also increased steadily on a year-on-year basis in terms of volume and market share. In absolute terms, the increase in import volumes in 2019 did not continue at the same pace in 2020 and in the IP because of problems relating to the Covid-19 pandemic. Nevertheless, despite a 5 % fall in consumption over the period considered, it is evident that it has been mainly imports from Indonesia which improved their situation on the market despite exporters experiencing supply difficulties as stated in recital (202).

• (289) As explained in recital (210), imports from Indonesia had caused a depression on prices of the Union industry already in the beginning of the period considered. Moreover, in a context of a significant worldwide fluctuations in raw material costs, Union producers have been unable to adjust their prices in a way that would allow them to reach reasonable profit levels, or even to remain profitable at all.

• (290) The penetration of Indonesian imports over the period considered was possible because the product under investigation is a commodity and price plays a major role in the decision making of customers. The coincidence in time between the deterioration in the economic situation of the Union industry and the significant presence of dumped imports from Indonesia, undercutting the Union industry’s prices, and supressing EU market price levels, confirms a causal link between the two.

• (291) Finally, as explained above, supply problems for the exporting producers temporarily lessened the pressure on the Union industry in the investigation period. This allowed the Union industry to increase prices to a level whereby some profit was made, but not sufficiently to allow them to reach a reasonable profit level under normal conditions of competition.

• (292) Furthermore, the Commission found that between 2018 and 2020, when consumption in the free market decreased by 3 %, Indonesian imports grew by 14 % and prices were reduced by 12 %. In the same period, the Union industry saw its sales volume shrinking by 8 % and its prices reduced by 2 %. This led to financial losses, which also affected the financial situation of the Union industry in the investigation period where pressure from dumped imports persisted.

• (293) In their comments following final disclosure CUTFA agreed with the Commission’s analysis of causation in light of the injury indicators and price comparisons established above and the volumes, market share and prices of the imports from Indonesia. CUTFA pointed out that the price pressure exerted by the imports from Indonesian had prevented adequate price increases needed due to the increase in raw material prices. In addition, CUTFA mentioned that the increase of imports from Indonesia had contributed to the injury suffered.

• (294) In their comments following final disclosure, the Greven group commented on the profitability of the Union industry, arguing that it followed the general trend of the European chemical industry over the period considered. To support this argument, the Greven group provided a chart with the EBIT margins (earnings before interest and taxes) of the European chemical industry, which showed a decline of 33,9 % or 3,4 percentage points, from 10,4 % in 2018 to 7,0 % in 2020. In light of this information, the Greven group concluded that the profitability decline of the Union industry must be considered as average for the European chemical industry and therefore, it was immaterial and could be attributed to factors other than the dumped imports from Indonesia.

• (295) The Commission noted that the Greven group used for comparison the period from 2018 to 2020. Considering as a starting point the actual Union industry profitability of 1,9 % in 2018, a decline of 33,9 % would mean a drop to 1,26 % in 2020. Instead, the Union industry profitability dropped to negative levels (– 2,1 %) in 2020. Such decline cannot be considered immaterial, or as being even close to the trend of the (broader) European chemical industry. More importantly, the claims by the Greven group are based on profitability trends of relative changes in profitability, while completely ignoring the actual, absolute levels of profitability of the chemical industry. Furthermore, a decrease in percentage points from 10,4 % to 7,0 % does not have the same impact on the activity of a company whose profits decrease from 1,9 % to – 1,5 %. In the first scenario, the company simply recorded less profits, while in the second scenario the company became loss making, jeopardizing its future. It is undisputable that these negative or low absolute levels of profitability of the fatty acid industry are below the normal profit averages of the European chemical industry. As explained at recitals (266) and (269), the negative or very low levels of profitability throughout the period considered were insufficient for the Union industry to continue their business activity under normal conditions, as they could not raise prices to the necessary level to absorb the increase in cost of raw materials and achieve a regular profit. Nor could the industry effect the necessary investments to innovate and keep up with demand from their customers for specific products (see recitals (253), (254) and (269)). The Greven group did not show how such negative or low profitability levels of the fatty acid industry in absolute terms could be justified under normal conditions of competition, nor did they substantiate which specific factors other than dumped imports from Indonesia affected the Union industry profitability, other than by generically referring to the profitability trends of the chemical industry. Based on all these elements, the Commission concluded that the assertion that that the low profitability was attributable to other factors unrelated to the dumped imports of fatty acid from Indonesia is not only unsubstantiated, but also baseless in substance as the above arguments demonstrate, and therefore must be rejected.

• (296) Wilmar claimed that the growth of imports from Indonesia had no impact on the volume of sales of the Union industry. In particular, Wilmar claimed that Table 2 showed no significant increase in imports within the meaning of Article 3(3) of the basic Regulation. Wilmar claimed that imports from Indonesia were stable apart from 2019 when they increased by 25 384 tonnes, which was insignificant against the total consumption of 1 295 034 tonnes. The volumes of imports remained relatively stable since then, growing by 1 % in 2020 and decreasing by 1 % in the investigation period, which, according to Wilmar, amounted to standard market fluctuations. Furthermore, Wilmar claimed that the overall growth of import over the period considered was 13 % and took place only in 2019, i.e. there was no growth of import in subsequent years, despite the alleged dumping. By comparison, imports from Malaysia, showed a steady growth between 2018 and 2020. Wilmar argued that an increase in imports, which happened in 2019, did not affect the sales of the Union industry in absolute terms in the same year. Furthermore, Wilmar claimed that the major downturn of sales of the Union industry took place in 2020 and the investigation period, in a period when import from Indonesia did not increase. Wilmar added that the market share of imports from Indonesia increased by 1,9 % in 2019 and further by 1 % in 2020. The overall increase between 2018 and the investigation period was 3,2 %. Such an increase took place against the background of a decrease in the Union consumption in 2020 and further in the investigation period due to the effects of COVID, economic slowdown and downturn in specific industries (e.g. automotive).

• (297) The Commission noted that during the period considered the imports from Indonesia increased by 13 % and their market share increased by 19 %. Furthermore, between 2018 and 2019, on a rather stable market when the consumption increased by 1 %, the imports from Indonesia increased by 13 %, while the sales of the Union industry remained almost constant. This was translated into an increase in market share of the Indonesian imports from 17,1 % to 19,0 %, while the Union industry’s market share decreased from 72,1 % to 70,8 %. While in absolute terms, the sales of the Union industry did not decrease between 2018 and 2019, the Union industry lost market share and was not able to maintain prices at profitable levels in 2019 and 2020. It follows that during this period, the increase in imports from Indonesia, contrary to what Wilmar claimed, had impacted the Union industry as the Union industry lost market share and became loss making.

• (298) Between 2019 and 2020, on a market with a decreased consumption (by 4 %), the volume of imports from Indonesia continued to increase, but to a lower degree, by 1,4 % and gaining an additional 1 percentage point market share. On the other hand, the Union industry lost even more market share, that is, 2,4 percentage points, but had to decrease their prices even more not to lose more market share and therefore incurred higher losses as compared to 2019, that is, – 2,1 %. Therefore, between 2019 and 2020, the Indonesian exports continued to increase market share, while the Union industry lost more market share and incurred higher losses than in 2019.

• (299) The Commission further noted that from the beginning of the period considered, the Indonesian imports had a significant market share, that is, 17,1 %. Therefore, it is not surprising that in a period with a slight decrease in consumption, the imports of Indonesia did not increase as of 2019, as sharp as between 2018 and 2019. The Union industry chose to maintain its market share and incurred losses due to the price pressure exercised by Indonesian imports. Had the Union industry chosen to maintain higher prices and sacrifice more market share, Indonesian fatty acid exporters would have increased their exports even more and established their position as suppliers of main customers in the Union. Therefore, the slower increase of imports from Indonesia between 2019 and 2020 as compared to 2018 and 2019 has to be seen in correlation with the Union industry’s response to protect its market share.

• (300) Between 2020 and the investigation period, the Union market changed because of the Covid-19 pandemic. The consumption decreased by 2,5 %, the volume of imports from Indonesia deceased by 2,3 % and the sales of the Union industry also decreased by 2,6 %. During this period of time, due to the Covid-19 pandemic that disrupted supply chains and increased prices globally, as explained in recital (266), the Indonesian imports even managed to slightly increase their market share by 0,3 percentage points while the Union industry decreased its market share by 0,1 percentage points. In the absence of the supply chain issues, the Indonesian imports would likely have increased even more. It is recalled that as stated at recital (259), the injury in this case relates mainly to price effects, although volume injury was also found. The significant level of price undercutting and price depression found during the investigation as detailed at recitals (209) and (210), as well as the change in the level of Indonesian imports and market shares throughout the period considered, confirm this. Therefore, the claim that the growth of import from Indonesia had no impact on the volume of sales of the Union industry was rejected.

• (301) Wilmar also claimed that the Union industry was not impacted by price effects caused by the imports from Indonesia. Wilmar used as evidence the information on average prices in Tables 3 and 7, and the price increases achieved by the Union industry. It also claimed that the imports from Indonesia did not compete with those of the Union industry and therefore could not exert price pressure. Wilmar further claimed that the Commission relied solely on ‘end to end’ (i.e. price comparisons from 2018 to the end of the investigation period) to reach its conclusions on price.

• (302) As concerns import prices from Indonesia, the Commission established the volume and prices of imports from Indonesia on the methodology stated in recitals (195) and (199). While this methodology is highly accurate for volume of imports, as concerns prices, after the comments received from parties, the Commission considers it necessary to compare the prices in Table 3 with the export prices reported by Wilmar, especially for 2018. In 2018, Wilmar exported the vast majority of total imports from Indonesia on the Union market and therefore its export price is a reasonable benchmark for the import price in 2018. The average unit export price of Wilmar in 2018 was lower than the imports price in Table 3 and lower than the unit selling price of the Union industry in Table 7.

• (303) Furthermore, it should be recalled that the Commission’s analysis of price trends and price suppression in this case pointed out that increases in raw material prices must also be taken into account. Therefore, the Commission analysis took into account Union industry unit costs, profitability and the prices of both the Union industry and prices of imports from Indonesia. The price increase that the Union industry managed to achieve during the IP was just sufficient to be able to compensate for the increase in cost of production due to the increase in price of raw materials borne by the industry. Furthermore, the industry managed to increase prices in the IP just due to the supply chain issues suffered by the Indonesian exporters linked to the Covid-19 issues, as explained at recital (266). As stated by the Union sampled producers, absent the temporary situation of the market derived from the effects of the COVID-19 pandemic, the industry would have been unable to raise the prices in the IP in line with the higher cost of production, and the injury suffered would have been even more significant. Furthermore, the fact that the Indonesian exporting producers managed to maintain their exports and increase their market share in the IP, despite these supply chain issues, further shows that the injurious effects of their dumped imports can and will likely continue to inflict injury to the Union industry.

• (304) In addition, a price undercutting analysis was performed for the investigation period on a type by type basis. This demonstrated that competition between the Union industry and imports from Indonesia was strong, and the majority of imported product types competed with identical types sold by the Union industry. Also taking into account that fatty acids are commodities sold mainly on the basis of price, it was considered that the price pressure on the Union market was very strong. The fact that price increases took place over the period considered, as raw material costs increased, is not a sign of health, if, as is the case here, those increased prices are at levels to simply cover costs and without achieving the necessary profit levels. This is demonstrated by the fact that over the period considered Union industry growth and sales stagnated because of inadequate prices leading to insufficient profitability levels. Therefore these claims were rejected.

• (305) Wilmar also claimed that the development of cash flow was not injurious and suggested that cash flow problems derived from Union industry customers delaying payment of invoices or from large investment projects.

• (306) These allegations are unsubstantiated and speculative. No evidence was provided to support either of these allegations. On the contrary, the low and falling cash flow situation of the industry is consistent with the return on turnover and other indicators, which were essentially created by low sales prices and low profitability levels. Therefore, the Commission rejected these claims.

• (307) Wilmar also claimed that the development of employment and productivity did not correlate with the trend in import volumes from Indonesia.

• (308) First, it should be stated that not all injury indicators need to show a direct correlation with imports from Indonesia in order for an overall determination of material injury within the context of Article 3 of the basic Regulation. Also, both employment levels and productivity fell during the period considered, and the Commission gave adequate consideration to these factors in the Section ‘Conclusion on Injury’. However, as stated at recital (259) the dumped imports caused negative price effects to the Union industry suffering material injury as they could not increase their prices to a level allowing for a reasonable level of profits. Therefore, the Commission rejected the claims concerning employment and productivity.

• (309) Wilmar also compared prices on the Union market to the export prices of the Union industry during the period considered, and suggested that they were very similar. Making the assumption that the Union industry’s export prices were set at the level of global market prices, Wilmar reached the conclusion that Union industry prices were not suppressed by the imports from Indonesia, but were set at the global price level.

• (310) The Commission noted that the assumption that the Union industry’s export prices were set at a global price level was not explained or substantiated. The Commission directly compared Union industry’s sales prices and Wilmar’s export sales prices on a PCN per PCN basis, and showed that Wilmar prices significantly undercut the Union industry’s prices. Therefore, the Commission rejected this claim.

• (311) In their comments following final disclosure the Musim Mas group submitted comments and analysis of volume of imports from Indonesia and average prices, and made comparisons with Union industry average prices and profitability in order to demonstrate that imports from Indonesia were not a cause of the injury suffered by the Union industry.

• (312) However, being based on average prices, the comparisons and conclusions reached are less accurate than the findings made on the basis of specific undercutting calculations, which show clear price pressure. In addition the comment that profitability was highest in the investigation period ignores the fact that, even in this particular year, the profitability was too low to ensure the viability of the industry, as explained at recitals (266) and (269). Contrary to what this party claims, these circumstances show precisely the causal link between Indonesian dumped exports and the injury suffered by the EU industry. Indeed, the slight recovery of the Union industry because of this temporary shortage from Indonesia and the insecurities of the Indonesian exports arriving on the Union market permitted that the users were led to purchase fatty acid from Union producers rather than Indonesian exporters as explained in recital (266). These comments were therefore rejected.

• (313) Based on the above, the Commission concluded that the dumped imports from Indonesian caused material injury to the Union industry.

5.2.   Effects of other factors

5.2.1.   Imports from third countries

• (314) The volume of imports from other third countries developed over the period considered as follows, following the calculation methodology outlined at recital (195):

Table 11

Imports from third countries

• (315) Import volumes from Malaysia were relatively stable over the period considered. In terms of volume they were at a similar level in the IP as they were in 2018 at around 88 000 tonnes. The market share of these imports was between 7,5 and 8,3 % during the period considered, although overall there was an increase in market share of 5 %, due to the fall in consumption.

• (316) Imports from Malaysia entered the Union market mainly under CN codes 3823 11 00, 3823 12 00 and 3823 19 10. These were also the main codes used by Indonesian imports. The information available suggests that the product mix of the imports from the two countries remained stable over the period considered. Average import prices from Malaysia were at levels consistently higher than those of both Indonesia (by more than 10 % each year) and the Union industry.

• (317) Import volumes from other third countries increased by 2 % over the period considered. Throughout the period these imports remained stable at around 40 000 tonnes and represented together less than 4 % in terms of market share.

• (318) Imports from other countries were also made mainly under CN codes 3823 11 00, 3823 12 00 and 3823 19 10, suggesting a similar product mix. Average import prices from these other third countries were at levels consistently higher than those of both Indonesia and the Union industry.

• (319) Wilmar claimed that the import prices from Argentina were causing injury to the Union producers.

• (320) However, bearing in mind that such imports were negligible, accounting for only around 4 000 tonnes and 0,4 % market share in the IP, this claim was rejected.

• (321) Therefore, the Commission concluded that the imports from third countries did not cause material injury to the Union industry or attenuate the causal link with respect to the imports from Indonesia.

5.2.2.   Export performance of the Union industry

• (322) The volume of exports of the Union producers developed over the period considered as presented in Table 12. This figure was obtained using the exports of the sampled Union producers and extrapolating the figure so that it represents the whole Union industry ⁴².

Table 12

Export performance of the sampled Union producers

• (323) The export volume of the Union industry decreased by 6 % over the period considered. The sales prices of these exports increased by 19 % over the same period, considering that those prices were also affected by the development in costs shown in Table 7.

• (324) Bearing in mind that export volumes represented only around 10 % of Union sales volumes and that the trend of sales volumes and prices were similar to those observed for Union industry sales on the Union free market, it is evident that the export performance of the Union industry is not a key element in the overall assessment of the economic situation of the Union industry.

• (325) Therefore, the Commission concluded that the export performance of the Union industry did not cause material injury to the Union industry or was able to attenuate the causal link with respect to Indonesian imports.

5.2.3.   Consumption

• (326) Consumption fell by 5 % in the free Union market over the period considered as shown in Table 1. When captive use is also taken into account, the total Union market also fell by 5 %. The investigation showed that the decrease in consumption was mainly due to factors relating to the Covid-19 pandemic and its impact on user sectors in the Union, such as home care, as stated in recital (191).

• (327) Wilmar and P&G submitted that developments in the automotive sector during the Covid-19 pandemic were partly responsible for the fall in consumption. In addition, they claimed the introduction of legislation relating to maximum levels for 3‐monochloropropanediol (3-MCPD) had also impacted sales to the food sector.

• (328) The Commission found that the temporary decrease in consumption during the Covid-19 pandemic could not explain the material injury suffered by the Union industry. The developments in the automotive and food sectors did not play a big role in the overall development of consumption, whose decrease was limited to 5 %. The injury analysis showed that the material injury suffered by the Union industry was related to price issues, such as undercutting and price suppression, which prevented the Union from increasing price in line with costs to a level of adequate profits.

• (329) The investigation showed that the Union industry losses in terms of production and sales volume were greater than the fall in consumption over the period considered. In fact, despite the shrinking consumption, the main beneficiary from market developments were the dumped imports from Indonesia, which increased their market share by 19 % over the period considered, as shown above in Table 2.

• (330) Based on the above, is the Commission concluded that the development in consumption was not a cause of the material injury to the Union industry.

5.2.4.   Raw material issues

• (331) The main raw materials of the product under investigation are tallow, a material derived from animal fat, and/or vegetable oils such as CPO. These make up around 70 % of total costs for the production of fatty acids.

• (332) The Union producers used tallow as a major feedstock, but also use large quantities of vegetable oil, including CPO, which were sourced from the Union or from South East Asia, including Indonesia. Tallow is locally available and suitable for the production of most user segments of fatty acids. The exporting producers in Indonesia mainly used CPO, CPKO and small volumes of other locally available vegetable oils, such as coconut oil in their production. The investigation showed that in general terms, the quality and specification of the fatty acid depend on the raw material input, although there was a large interchangeability between tallow and CPO-based products. In addition, products manufactured can be further refined or developed into products with different characteristics by hydrogenation and fractionation in order to satisfy certain customer requirements.

• (333) Wilmar and P&G claimed that the Union industry’s dependence on tallow as a feedstock rather than CPO had a negative impact on their costs and profitability. It claimed that developments in the tallow market in the Union had increased competition for tallow and pushed up tallow prices. The Greven group argued that the increasing usage of rendered animal fats for biofuel production had an adverse impact on the availability of tallow for the oleochemical industry and the scarcity had caused drastic price increases.

• (334) The Commission noted that the cause of injury was the low prices of Indonesian imports. That these low prices are enabled by the possibility to source cheap raw materials ⁴³ is immaterial for the purposes of the injury analysis, given that the investigation has established that the Indonesian exporters have engaged in dumping practices.

• (335) Furthermore, the Commission noted that the Union industry’s raw material costs showed that the costs for both tallow and CPO had increased up to 40 % in the period considered. In addition, the average purchase prices of both tallow and CPO were very similar, as CPO had to be imported from South East Asia. Transport costs had increased for imported products, especially during the pandemic when logistics costs had been impacted by supply issues. The use of tallow by the Union industry (in addition to a mix of other types of raw materials) was thus a rational and efficient choice based on sound business logic and could not be considered to be a source of self-inflicted injury. The claims were, therefore, rejected.

• (336) Wilmar also claimed that the uses of the product under investigation were restricted if tallow was used as a raw material, because such products could not be used in the Halal and Kosher markets. In addition, fatty acids produced from tallow as feedstock could not be used as animal feed.

• (337) However, the investigation revealed that the home care sector was by far the largest buyer for such fatty acids, which represented over 50 % of Union consumption. In addition, Union producers were able to ensure compliance with requirements such as Kosher and Halal by dedicating part of their production facilities to exclusively produce fatty acids with vegetable oils as a feedstock. Therefore, the claim was rejected.

• (338) Wilmar also claimed that the unavailability of tallow meant that Union industry production and sales were restricted.

• (339) Wilmar did not provide any evidence to substantiate their point in the non-confidential version of its submission. In fact, the confidential evidence submitted showed an increase in the share of tallow consumption in the production of fatty acid over the period considered. Therefore, the claim was rejected.

• (340) Bearing in mind that tallow and vegetable oil feedstock prices were comparable, in particular in the investigation period, the large interchangeability for tallow and CPO-based products, and the limited nature of the restrictions on the use of tallow based fatty acids, the Commission found that the use of tallow as a feedstock was not a cause of the material injury to the Union industry.

• (341) In their comments following final disclosure, the Greven group, Wilmar, the Musim Mas group and the Schill + Seilacher group commented on issues relating to the developments in the cost of tallow as a feedstock, due to its increased use by other industries, and on the reduced availability of raw materials for the Union industry. The main point made by these parties was that the Commission did not give enough weight, in the final disclosure, to the impact of the deterioration in tallow’s availability, which resulted in an increase in tallow costs in comparison to palm oil as a feedstock for fatty acid production. To support its views, the Greven group submitted statistics and analyses showing the evolution of the relationship between tallow and palm oil prices during the period from 2008 to 2022. Moreover, the Greven group argued that tallow prices would continue to increase in the future and that the Union industry failed to undertake the significant investments, required to allow a shift of their production to CPO as the main feedstock.

• (342) The Commission does not dispute that tallow availability in the Union has reduced over the years, that tallow prices have increased as a result, or that there has been a historical shift in the competitiveness of tallow prices as compared to vegetable oil feedstock prices. As in all industries, increases in raw material prices, especially for industries making low profits, need to be passed on to customers at some stage, in order that they remain viable. In the period considered, the Union industry experienced raw material cost increases of around 40 % for both palm oil and tallow. The Union industry was not able to increase fatty acid prices sufficiently to reflect these cost increases and to reach adequate profitability levels, while the raw material costs represent around 70 % of total costs. Also, the tallow costs were similar to CPO costs (including logistics costs) over the period considered, based on the verified cost data of the sampled Union producers. The reason why raw material prices had not been adequately passed on to customers is because of the price pressure on the like product caused by dumped import prices from Indonesia. In any event, as discussed above, CPO and tallow input prices (including transport costs) were very similar for Union producers of fatty acid.

• (343) As regards the ability of Union producers to shift their production from one type of feedstock to another, the Commission noted that all four sampled Union producers already make use of different types of feedstock, including tallow and palm oil, taking into account market conditions. In any case, expectations about future market developments, such as on the evolution of tallow prices, are not relevant to the assessment of injury and causation in the period considered.

• (344) Therefore, the Union sales prices increased because of the increase in the raw materials prices; yet, the Union industry could not set its prices at a reasonable level because of the low priced dumped imports. Therefore this claim cannot be accepted.

5.2.5.   Alleged inefficiencies of the Union industry

• (345) Wilmar and P&G submitted that Indonesian exporters were vertically integrated to the extent that they owned palm oil plantations and therefore enjoyed competitive advantages over the Union industry, which was inefficient.

• (346) The Commission considers that any alleged competitive advantage cannot justify the injurious dumping practiced by Indonesian exporters on the Union market. As explained in the Section ‘Dumping’ above, the Commission compared the price charged by the exporters concerned to EU-based customers with their normal value in Indonesia and found that significant dumping existed. This means that the dumping found is solely conditioned by the commercial behaviour of the Indonesian exporting producers who decided to export at prices below their domestic sales prices or costs. The investigation demonstrated that this behaviour caused material injury to the Union industry.

• (347) Wilmar also claimed that the Union industry was suffering from a lack of investment, which would explain the injury found.

• (348) As mentioned above, the Union industry mainly made investments in maintaining existing capacity and improving efficiency. The investigation concluded that the inadequate profitability levels and the reduced ability to raise capital caused by the dumped imports led to restricted investment levels. Thus, the alleged lack of investments were not the cause but rather the consequence of the material injury caused by dumped imports from Indonesia. The massive presence of dumped imports in the Union market had a negative impact on the Union industry’s profitability and ability to raise capital and certain structural investments could not go ahead as planned, in particular during the investigation period.

• (349) Wilmar claimed that certain Union producers, including KLK, had imported fatty acids from Indonesia during the period considered. Wilmar claimed that any injury must be considered to have been at least partially self-inflicted.

• (350) The investigation showed that the purchases of the sampled Union producers, including KLK, from Indonesia were negligible, namely less than 3 % of their production volumes per year and throughout the period considered. Therefore, the claim was rejected.

• (351) Wilmar also claimed that the Union industry suffered from poor geographical location, namely from locations not giving access to deep-water port facilities for the procurement of raw materials and sales of finished goods.

• (352) The Commission rejected this claim as the investigation showed that at least all four of the sampled Union producers which, as stated in recital (36), represented 61 % of the Union production, had access to deep-water sea or river port facilities during the period considered. Therefore, while certain smaller Union producers might not have access to deep-water port facilities, this is not true for the Union industry as a whole and, therefore, would not explain the material injury.

• (353) Wilmar also claimed that the acquisition of the Dusseldorf site by the KLK Group created further inefficiency within the Union industry. This claim is based on the fact that the site uses tallow as a feedstock.

• (354) However, as pointed out in recitals (331) to (340), tallow price is similar to the price of other feedstocks and tallow is technically suitable for the production of the majority of user segments. Therefore, this claim was considered to be without merit.

• (355) P&G and Wilmar claimed that the Union industry was inefficient and employed a large number of staff and thus suffered from high employment costs.

• (356) Bearing in mind that the Union industry employment costs (salaries plus all other employment related costs) represented only 7,2 % of total costs in the period considered, this cost was not considered to be potentially able to cause material injury to the Union industry. Thus, the claim was rejected.

• (357) Wilmar claimed that the Union industry was inefficient in terms of meeting delivery times and ensuring the delivery of relevant quantities demanded by the Union market. This claim was not accompanied by any evidence.

• (358) Nevertheless, it is clear from Table 4 above that the Union industry has over 200 000 tonnes of spare capacity which it could immediately use, should sufficient orders be received. In the absence of any evidence that the Union industry was unable or unwilling to supply, the claim was rejected.

• (359) Based on the above facts and considerations, the Commission concluded that any alleged efficiency and raw material issues were not such as to cause material injury to the Union industry or to have attenuated the causal link with respect to Indonesian imports.

• (360) In their comments following final disclosure Wilmar claimed that the reason for the injury suffered by the Union industry was increases in logistics costs resulting from the Covid-19 pandemic and in labour costs. It was claimed that these issues made the Union industry uncompetitive as compared to Indonesian exporting producers.

• (361) Logistics costs are a relatively small part in the total cost (below 5 %). Also, labour costs per employee rose by only 8 % over the 4 years of the period considered in accordance with negotiations with labour union and national administrations. Labour costs represented only around 7,2 % of total costs. Therefore, the Commission rejects the claim that increased logistics and labour costs caused injury.

• (362) Wilmar also claimed that the reason for the unprofitable sales in 2019 and 2020 was because of increases in SG&A and finance costs.

• (363) However, this claim was made due to a misunderstanding by Wilmar of Table 7 relating to production costs. In that table, the terms ‘production costs’ mean the full costs of the Union producers, including SG&A and finance costs. In fact, SG&A and finance costs were relatively stable over the period considered. Therefore, the Commission rejected the claim that increased SGA and finance costs caused injury.

• (364) In their comments following final disclosure, the Greven group questioned that Union producers have enough capacity to replace the imports from Indonesia, even though in theory a 20 % market share might be covered by the 20 % spare capacity of the Union industry. To support this claim, the Greven group provided data showing that the current capacity utilisation of the Union fatty acid industry (80 %) is already at the long-term average of the broader European chemical industry. In view of this, the Greven group argued that a 100 % capacity utilisation was neither sustainable, nor achievable over an extended period of time. Furthermore, the Greven group referred to its own demand, which as of 2020 could not be fulfilled by Union producers, because of either insufficient capacity, or insufficient supply in raw material. In particular for the pharmaceutical, feed and food sectors, the Greven group claimed that there was insufficient production capacity from Union producers, as fatty acids for these sectors could be produced only from vegetable or palm-based material and have to be RSPO (Roundtable on Sustainable Palm Oil) Mass Balance, Kosher and Halal certified.

• (365) The Commission recalled that the Union production capacity for fatty acid was calculated on the basis of an achievable maximum production in the long-term, taking into account maintenance. Therefore, the fact that the long term average capacity utilisation of the broader chemical industry is at 80 % does not call into question the ability of the Union fatty acid industry to fully utilise its spare capacity as calculated by the Commission in the present case. Moreover, the Greven group has not provided evidence that the alleged inability of the Union industry to serve its demand has been due to systematic rather than circumstantial factors and would persist in the long run. As regards fatty acids for the pharmaceutical, feed and food sectors, the Commission took the view that by restoring profitability, a level playing field in the Union fatty acid market would enable and incentivise the Union industry to undertake any investments required to address capacity gaps related to specific products. In view of the above, these arguments were rejected.

5.2.6.   Captive use

• (366) Captive use increased by around 2 % in absolute terms over the period considered and comprised around 10 % of total market consumption in each year of the period considered as stated in Table 5. The Commission, therefore, considered that developments in captive use were stable or slightly positive for the Union industry.

• (367) The development in captive use could therefore not have caused material injury to the Union industry or to have attenuated the causal link with respect to Indonesian imports.

5.3.   Conclusion on causation

• (368) There were 15 producers of fatty acids in the Union in the investigation period and they sold to a vast array of customers in many user sectors. The investigation showed that the presence of low price dumped imports from Indonesia had the effect of suppressing prices in the Union market during the period considered. This meant that the price level of the Union industry could not match the raw material price increases through the whole period considered. Consequently, the profitability of the Union industry sales was low, or even negative, throughout the period considered. Such profitability is below the profits that the industry should obtain under normal conditions of competition and is clearly inadequate to ensure the industry’s long-term survival. Investment by the Union industry had to be made to maintain the existing facilities but the reduced ability to raise capital threatened investment levels.

• (369) Significant quantities of Indonesian low-priced dumped imports were present in the Union free market. Whilst that market shrunk by 5 % over the period considered, the volume of Indonesian imports increased by 13 % and market share by 18 %. As a result, they represented around two thirds of all imports to the Union market in the investigation period. The investigation showed that this market penetration also had negative consequences on the Union industry, in particular on production and sales volumes, which respectively decreased by 7 % and 10 % over the period considered. This is shown in Tables 4 and 5.

• (370) Other factors examined were imports from other sources, the export performance of the Union industry, developments in captive use, developments in consumption and alleged inefficiencies of the Union industry.