Commission Implementing Regulation (EU) 2026/2107 of 22 September 2026 imposing a definitive countervailing duty on imports of continuous filament glass fibre products (GFR) originating in Egypt following an expiry review pursuant to Article 18 of Regulation (EU) 2016/1037 of the European Parliament and of the Council

• (151) First, the GOE provided the inbound and outbound transaction summaries of Jushi Egypt for the financial years 2023 to 2024 and 2024 to 2025. This information was, however, limited to the overall weight and value of all inputs imported and exports of products in the period. These files showed that certain sales of final products to the domestic Egyptian market took place. However, these files did not show any calculations of the amount of import duties that would need to be paid on inputs used in production of these products, described in recital (147) above.

• (152) The Commission received no verifiable documents that showed the calculations of the VAT and import duties that were levied on input materials that were imported by Jushi Egypt and subsequently used in the company’s production of goods that were destined for sales to the Egyptian domestic market.

• (153) Second, during the verification visits of the GOE and Jushi Egypt it was not possible for the Commission to see the functioning and interface of Nafeza system as described above. Therefore, the Commission was not able to verify how the system actually works and that import duties drawbacks could be or were being effectively monitored through the system.

• (154) Third, no documentary evidence was provided that the GOE performed any on-spot checks or audit of Jushi Egypt’s inventories of input materials in the review investigation period.

• (155) The GOE was requested in the deficiency letter to provide company-specific files mentioned in recitals (146) and (147) above for Jushi Egypt, showing the calculation of the amounts of VAT and import duties to be paid on imported raw materials used in the production of goods which have been sold on the domestic market. However, only after the verification visit the GOE submitted an electronic file listing all the transactions of imported materials and the amount of duties and VAT that would normally have to be paid on those imports, had they not been imported into the SCZone. While at face value it appeared to corroborate the existence of a system that calculates duties and VAT normally due on imported inputs into the SCZone, the Commission could no longer verify this document.

• (156) The Commission was therefore not able to confirm that a reliable verification system to monitor and prevent excess drawback of the import charges exists or is being effectively implemented. This was communicated to the GOE by means of a Note Verbale [^ntr42-L_202602107EN.000101-E0042], highlighting that the Commission intends to apply Article 28 of the basic Regulation and base its conclusions on the facts available with regard to this point.

• (157) In their comments objecting to the application of Article 28 of the basic Regulation provided after the deadline, as referred to in recital (51) above, the GOE claimed that the files with company-specific calculations of VAT and customs duty mentioned in recital (152) above, constitute internal company documents and were not in possession of the General Authority of the SCZone. However, the Commission considered this to be a moot point and not in line with previous explanations: the GOE stated in its questionnaire reply that the Customs Authority keeps these files. They could have, therefore, been provided in the course of the investigation.

• (158) The GOE also claimed that, during the verification visit, the Commission was granted access to the Customs Administration staff at the premises of the General Authority and was allowed to view the Nafeza interface. The Commission did not dispute that the case team was allowed access to the staff to discuss and observe the interface of the system and headline data for Jushi Egypt. However, it was explained by said staff that the Nafeza system functionalities, which show how the GOE calculates and monitors the collection of VAT and import duties, could not be accessed from that station. The Commission was therefore unable to verify the functioning of the system in real time during the verification visit.

• (159) Therefore, as described above, despite a new legislative framework for monitoring the duty drawback system being in place, the Commission was not provided with evidence showing that the new framework was effectively applied in practice. The Commission therefore concluded the duty exemption scheme did not have all the characteristics of a permissible duty drawback system within the meaning of Article 3(1)(a)(ii) of the basic Regulation, nor did the scheme conform to the rules laid down in Annex I item (I) and Annex II (definition and rules for drawback) of the basic Regulation. It was not demonstrated that there was an effective system or procedure in place to confirm which inputs were consumed in the production of the products sold to the domestic market and in what amounts. In addition, the GOE did not to carry out an examination or an audit of actual inputs involved.

• (160) As concerns the VAT treatment of imported materials, even if such a system would be in place, the Commission considered, just as in the original investigation, that the fact that VAT on raw materials imported into the SCZone was being withheld resulted in a positive impact on a cash flow of companies in the SCZone. Companies operating outside the SCZone must pay the VAT upfront, thereby preventing them from benefiting from interest on the withheld VAT. The Commission found no reason to change its conclusions in that regard.

• (161) As mentioned in recital (143), evidence collected in the investigation showed that Jushi Egypt imported raw materials into the SCZone during the period concerned and made sales to the domestic Egyptian market. As the legal framework governing VAT and import duty exemption has not changed from the original investigation, and no reliable verification system to monitor and prevent excess drawback of the customs duties for imports of raw materials was shown to exist, the Commission concluded that the company benefitted from this scheme in the same way as in the original investigation.

3.6.4.   Specificity

• (162) As was established also in the original investigation, excess remissions are specific within the meaning of Article 4(2)(a) of the basic Regulation as they are not generally applicable in Egypt and apply only to the companies located in the SCZone. Similarly, the cash flow benefit from the VAT exemption is specific since the legislation limits the VAT exemption only to enterprises that are located within the SCZone.

• (163) The Commission thus concluded that this subsidy continued to be specific within the meaning of Article 4(2)(a) of the basic Regulation, as it is not generally applicable in Egypt, and applies only to the companies located in Economic Zones of a Special Nature, such as the SCZone.

3.6.5.   Benefit

• (164) The amount of this countervailable subsidy is calculated in terms of the benefit conferred on the recipient, which is found to exist during the review investigation period.

• (165) Concerning the import duties, the benefit conferred on the recipient is considered to be the difference between the amount of import duties due during the review investigation period and the actual amount of import duties paid during the same period.

• (166) As was the case in the original investigation, to determine the amount of import duties due, it first established the quantity of materials imported during the review investigation period. Second, it calculated the ratio between the domestic sales in comparison with the total production of Jushi Egypt. Third, the Commission applied this domestic sales ratio to the total volume of imported materials, and it determined the quantity of imported materials for which import duties would be due.

• (167) Finally, in order to establish the amount of benefit regarding import duties, the Commission calculated the amount of import duty payable for the quantities of materials used for the production of goods sold on the domestic market.

• (168) Concerning the revenue foregone in the form of a de facto VAT exemption, as was the case in the original investigation, the cash flow benefit referred to in recital (160) was considered to be equivalent to the average interest rate on deposits in Egypt during the review investigation period (19,2 %) [^ntr43-L_202602107EN.000101-E0043], applied to the VAT amounts which were withheld for materials purchased since 2017. Specifically for VAT amounts that were withheld during the review investigation period, this amount was calculated pro rata to the number of days within the review investigation period.

• (169) The GOE also claimed during the review investigation that, as confirmed by WTO Appellate Body in EU – PET (Pakistan) (DS486) case, in the context of duty drawback schemes, the financial contribution element of the subsidy is limited to the excess remission or drawback of import charges on inputs and does not encompass the entire amount of the remission or drawback of import charges.

• (170) The Commission, however, did not consider this claim pertinent since the Commission cannot change the level of subsidy margins in expiry review investigations from the margins that were established in the original investigation The Commission merely examines if the same schemes are still in place, i.e., if there is a likelihood of continuation or recurrence of subsidisation. If these findings are affirmative, the level of duties calculated in the original investigation will be applied unchanged. Finally, in its calculations in the original investigation the Commission did, in fact, countervail only the excess drawback of the import charges, i.e. the charges which ought to have been levied on input materials processed into GFR which was then sold to the domestic market in Egypt [^ntr44-L_202602107EN.000101-E0044]. The Commission therefore dismissed this argument as moot.

3.6.6.   Comments on disclosure

• (171) First, in its comments on disclosure, the GOE reiterated the claim the VAT regime applicable in the Suez Canal Economic Zone forms part of Egypt's general taxation system and does not constitute government revenue otherwise due that is forgone. The GOE did not bring forward, however, any additional arguments or evidence to invalidate any of the conclusions the Commission reached in sections 3.5 and 3.6 above as concerns the VAT treatment of materials and machinery imported into the SCZone. This claim was therefore rejected.

• (172) Second, similarly to the above claim, the GOE reiterated its claim that the customs regime operates under a comprehensive monitoring and verification mechanism, and that the Commission failed to demonstrate any excess remission of duties taking place, without additional arguments or evidence to contest the Commission’s conclusions outlined in sections 3.5 and 3.6 above.

• (173) The Commission already explained why the exemption of machinery imported into the SCZone from import duties and taxes constitutes revenue forgone [^ntr45-L_202602107EN.000101-E0045] and why it did not consider that a reliable verification system to monitor and prevent excess drawback of the import charges on imported materials exists or is being effectively implemented [^ntr46-L_202602107EN.000101-E0046]. The Commission therefore rejected these claims as unfounded.

3.6.7.   Conclusion

• (174) In light of the above considerations, and absent any argument to the contrary, the Commission concluded that the GFR producer in Egypt continued to benefit from this scheme. In view of the existence of a financial contribution, a benefit conferred and specificity, this subsidy programme continues to be considered countervailable.

• (175) The subsidy rates established, as per recital (99), with regard to this type of subsidies regarding imported input materials was 1,57 % for VAT exemptions and 0,11 % for import tariff rebates.

3.7.   Government revenue foregone through Direct Tax Exemption and Reduction programmes

3.7.1.   Findings of the original investigation

• (176) The original investigation found that Jushi Egypt benefitted from enterprise income tax privileges [^ntr47-L_202602107EN.000101-E0047], based on a special accounting standard and a special tax rule for treating foreign exchange differences, which were introduced by the GOE. As referenced to in recital (289) of the original Regulation, this legislation was introduced in order to address sudden currency fluctuations caused by the introduction of a floating exchange rate for the EGP in 2016. As a result of these rules, companies were allowed to deduct foreign exchange differences due to the devaluation of the EGP from their taxable income more extensively.

• (177) Although this legislation was generally applicable to all companies in Egypt and was meant to offset the negative effects of the devaluation of the Egyptian currency, it de facto created a substantial benefit for the companies that are export oriented and operate their business almost entirely in foreign currencies such as USD or EUR, which was found to be the case for Jushi Egypt. This category of companies did not incur any significant actual losses as a consequence of the devaluation of the EGP but could benefit from the special accounting standard issued by the GOE for tax purposes. On the other hand, Egyptian companies operating their business in EGP had suffered actual losses that had a real impact on their business, which was addressed by the special tax rule issued by the GOE.

• (178) The Commission therefore examined whether the relevant legislation was still applicable and if Jushi Egypt continued to benefit from this scheme in the review investigation period.

3.7.2.   Legal basis

• (179) The GOE confirmed that the laws concerning corporate taxation remain the same as they were in the original investigation. The GOE also confirmed that the special accounting treatment continued to exist in the review period considered, with decrees in 2022, 2023, and 2024 reintroducing/extending this accounting standard. The legal basis applicable during the period considered therefore were:

• — The Income Tax Law as enacted by law 91 of 2005; and

• — Prime Ministerial Decree No. 4706 of 2022, and subsequent amendments thereof (Prime Ministerial Decree 1847 of 2023 and Prime Ministerial Decree 1711 of 2024).

• (180) Apart from limited amendments, the rules on corporate income tax have, thus, not substantively changed from the original investigation. As concerns the accounting standard itself, the GOE explained that the currency devaluation that took place in the review period considered resulted in abnormal currency fluctuations. For that reason, the GOE reintroduced the Annex ‘The Effects of Changes in Currencies Exchange Rates’ to the Egyptian Accounting Standard (EAS) No. 13.

3.7.3.   Continuation of subsidisation

• (181) Based on the regulations referred to in the previous section, the Commission concluded that rules allowing companies to deduct foreign exchange differences due to the devaluation of the EGP from their taxable income, as established in the original investigation, applied to the same effect in the review investigation period.

• (182) The Commission then sought to establish whether Jushi Egypt continued to operate its business almost entirely in foreign currencies. Based on the evidence collected during the review investigation, the Commission established that the external financing provided by Chinese entities during the review investigation period, referred to in recital (81) above, was provided to the company exclusively in foreign currency. The same conclusion applied to the company’s imports of equipment and input materials referred to in sections 3.5.3 and 3.6.3, which as well were purchased exclusively in foreign currency. Finally, the company’s records showed that a vast majority of its production is intended for export, and consequently a large proportion of its sales were conducted as well in foreign currency. In light of this, the Commission concluded that Jushi Egypt continued to conduct its business almost entirely in foreign currencies.

3.7.4.   Specificity

• (183) The Commission considered that this subsidy is de facto specific to the exporting producer Jushi Egypt, as this subsidy creates a substantial benefit for a limited group of companies operating almost exclusively in foreign currencies.

• (184) The GOE claimed in the course of the review investigation that this scheme could not be considered a subsidy, as it concerns a general accounting rule applicable to all companies in Egypt, which was introduced as a regulatory response to hyperinflationary pressures.

• (185) The Commission did not dispute the fact that this rule is generally applicable to all companies in Egypt. However, as in the original investigation, the Commission maintained that the companies that are mainly export oriented and operate their business almost entirely in foreign currencies such as USD or EUR benefited disproportionately from this legislation, while Egyptian companies that conduct their business only in EGP could not benefit from the legislation.

• (186) Namely, export-oriented companies which conduct their business mostly in foreign currencies would not incur any significant actual losses as a consequence of the devaluation of the EGP, since the exchange rate losses suffered on their purchases/liabilities in USD could be offset by the exchange rate gains on their sales in USD. As a result, instead of offsetting a loss, this legislation actually created a tax benefit, which this type of companies could specifically benefit from.

• (187) The Commission thus rejected the claim and concluded that this subsidy continued to be de facto specific to the exporting producers Jushi Egypt, in accordance with Article 4(2)(c) of the basic Regulation.

3.7.5.   Benefit

• (188) As in the original investigation, the Commission considered that the benefit conferred on the recipient is equal to the tax benefit incurred under this scheme.

• (189) The benefit to Jushi Egypt was established on the basis of the information contained in the company’s income tax declaration for the financial year 2024. First, the amount was established that was deducted from the taxable income under the accounting standard referred to in recital (180). Second, the generally applicable enterprise income tax rate of 22,5 % was applied to this deducted amount.

3.7.6.   Comments on disclosure

• (190) In its comments on disclosure, the GOE reiterated the claim that the tax treatment of foreign exchange losses, described in section 3.7 above, was adopted as a general response to exceptional macroeconomic circumstances, and it thus neither confers a specific benefit nor constitutes a countervailable subsidy. The GOE did not, however, bring forward any additional arguments or evidence in support of that claim. That claim was therefore rejected.

3.7.7.   Conclusion

• (191) In light of the above considerations, the Commission concluded that the GFR producer in Egypt continued to benefit from this scheme. In view of the existence of a financial contribution, a benefit conferred and specificity, this subsidy programme continues to be considered countervailable.

• (192) The subsidy rate established, as per recital (99), with regard to this type of subsidies regarding the enterprise income tax deduction was 7,35 %.

3.8.   Provision of land for less than adequate remuneration

3.8.1.   Findings of the original investigation

• (193) The original investigation found that Jushi Egypt was awarded land at less than adequate remuneration. In particular, Juhsi Egypt bought land from the Egypt China Joint Venture Company (‘ECJV’) and its successor TEDA Egypt at prices set in a non-transparent manner by public bodies or private bodies entrusted or directed by the State.

• (194) With the promulgation of Law 83/2002, the ownership of all state land in the SCZone was vested with the General Authority. Since the adoption of Law 27/2015, it is no longer possible to purchase the full ownership of land from the General Authority. The General Authority gives only usufruct rights of the land to the Main Development Company (‘MDC’), an Egyptian developer. The MDC then puts the usufruct of the land up for bidding to sub-developers such as TEDA Egypt. These sub-developers subsequently rent out the land to the companies located in the zone.

• (195) However, entities which owned land in the area prior to these legislative changes, retained and could transfer the ownership of that land. Jushi Egypt could thus buy a plot of land from TEDA Egypt in 2011, when it began setting up its plant. TEDA Egypt acquired this plot from its predecessor, ECJV, who in 1998 acquired it from the Suez Governorate at a low price (less than 1 USD/m²), and without any bidding procedure. Following the initial purchase in 1998, TEDA Egypt invested in basic infrastructure to make the undeveloped desert land viable for industrial projects.

• (196) In the original investigation the Commission also concluded that ECJV and TEDA Egypt were public bodies within the meaning of Articles 3 and 2(b) of the basic Regulation. Even if they had not been public bodies, they would at least have been considered entrusted or directed by the GOC and the GOE to carry out functions normally vested in the government within the meaning of Article 3(1)(a)(iv) of the basic Regulation. Thus, their conduct would be attributed to the GOE in any event [^ntr48-L_202602107EN.000101-E0048].

• (197) In addition, Jushi Egypt purchased another plot of land from another Egyptian development company – Wadi Degla – in 2016. The Commission considered that this developer had also been entrusted or directed by the State in the sense of Article 3(1)(a)(iv), first indent of the basic Regulation to pursue governmental policies and provide land at a preferential price to Jushi Egypt [^ntr49-L_202602107EN.000101-E0049].

• (198) The Commission therefore concluded that Jushi Egypt was receiving a benefit from the GOE in the original investigation period, in the form of provision of land for less than adequate remuneration, which should be considered a subsidy within the meaning of Article 3(1)(a)(iii) and Article 3(2) of the basic Regulation The programme was found to be specific within the meaning of Article 4(2)(a) as it had been directed only to certain companies in a particular geographical area [^ntr50-L_202602107EN.000101-E0050].

3.8.2.   Legal basis

• (199) This investigation confirmed that the legal framework remained the same as in the original investigation:

• — Law No 83/2002 on Economic Zones of a Special Nature (‘Law 83/2002’);

• — Decree of the President of the Arab Republic of Egypt on Law No 27/2015 Amending some Provisions of Law of Economic Zone of Special Nature issued by Law No 83/2002 (‘Law 27/2015’);

• — Law No. 8 of 1997 On Investment Guarantees and Incentives (‘Law 8/1997’)

• — Investment Law as Enacted by Law No. 72 of 2017; and

• — The Prime Minister’s Draft Resolution No. (2310) of 2017 Concerning issuing the Executive Regulations of Investment Law Issued by virtue of Law No. 72 of 2017.

3.8.3.   Continuation of subsidisation

• (200) As explained in recital (199) above, the rules governing land use in the SCZone have not changed since the original investigation, which was confirmed by the GOE. The General Authority of the SCZone cannot sell the land that it owns in the SCZone, but allocates it by means of usufruct or concessions to the development companies, who then market and develop the land, and grant use rights on this land to production companies for a price they consider appropriate.

• (201) TEDA Egypt has usufruct rights over the land it develops, as was already established in the original investigation. A committee of experts periodically valuates the land, which serves as the basis on which the General Authority establishes the price in usufruct contracts.

• (202) In the original investigation, the subsidy amount for Jushi Egypt was calculated by comparing the prices that Jushi Egypt paid per square meter of land in 2011 and 2016 with a benchmark price. This benchmark price was calculated on the basis of the usufruct contract for the 6 km² expansion zone signed between TEDA Egypt and the SCZone and a 2016 real estate valuation by the committee of experts, which established a pricing map for the usufruct of land in the SCZone. From this pricing map the average yearly value of usufruct for the land in SCZone was calculated. This average yearly price for usufruct was then multiplied by the duration of the said usufruct (50 years), and appropriate amounts for the costs of infrastructure works and profit of the developer were added, to calculate the benchmark price [^ntr51-L_202602107EN.000101-E0051].

• (203) Considering that the benchmark price was calculated on the basis of a usufruct of a duration of 50 years, the benefit for Jushi Egypt’s purchase of land continues to be applicable for that period of time. Jushi Egypt thus continued to benefit from this scheme in the review investigation period.

• (204) This investigation has furthermore shown that the land acquisition pattern found in the original investigation continued during the review investigation period.

• (205) More specifically, land purchase contracts and other evidence collected during this investigation showed that Jushi Egypt bought five additional plots of land after the original investigation, thereby nearly doubling the surface area owned by the company. The company purchased 4 plots of land of around 254 000 square meters from the sub-developer Red Sea Copper in the period 2019 to 2023. As explained in recital (207) below, this Egyptian sub-developer in turn appears to have purchased these plots of land from the ECJV, which were part of the larger plot of land that was transferred from the Suez Governate to the ECJV in 1998 that is referred to in the original investigation [^ntr52-L_202602107EN.000101-E0052]. In addition, Jushi Egypt purchased another plot of land of around 9 000 square meters directly from the ECJV in 2020.

• (206) The Commission analysed whether the Egyptian developer had been entrusted or directed by the GOE to grant land to Jushi Egypt at preferential terms within the meaning of Article 3(1)(a)(iv) of the basic Regulation.

• (207) The Commission requested from the GOE the land allocation agreements and land sale contracts between the Suez Governorate and subsequent parties, such as the ECJV and the sub-developer Red Sea Copper related to the plots of land that were purchased by Jushi Egypt as from 2019, but none were submitted during the investigation or in the deficiency process. Only after the verification visit, a document was submitted that appeared to be a land sale contract between the the ECJV and the sub-developer Red Sea Copper. However, it was not possible for the Commission to draw any conclusions relevant to the investigation from this document, since it was submitted in a heavily redacted format, information that would have enabled the Commission to ascertain whether the plot of land that was the subject of this contract included the plots of land purchased by Jushi Egypt after 2019 was missing, and was submitted only after the verification visit which made it impossible for the Commission to verify its contents. Further examination of the situation was also not possible due to non-cooperation of TEDA Egypt and TEDA Tianjin, as referred to in recitals (47) and (50).

• (208) The Commission therefore considered that it had not received the requested documentation and necessary information relating to the new acquisition of land by Jushi Egypt. The Commission informed the GOE on this matter by Note Verbale of 18 March 2026 [^ntr53-L_202602107EN.000101-E0053], indicating that it might resort to the application of Article 28 of the basic Regulation and base its findings on facts available in that regard.

• (209) Based on the land purchase contracts between Jushi Egypt and the sub-developer Red Sea Copper, the Commission noted that there was a clear involvement of the Authorities of the SCZone in the sales of land that were purchased by Jushi Egypt as from 2019. Similar to the original investigation, some of those contracts contained explicit references of the involvement of the Suez Canal General Authority in the sales process and the need to seek its approval on the contract details.

• (210) Given that Jushi Egypt was able to purchase land through channels that were very similar to the original investigation, that there was only partial cooperation from the GOE, and that there were clear indications of involvement of the Authorities of the SCZone in the sales of land in the SCZone, the Commission concluded that the Egyptian sub-developer Red Sea Copper had been entrusted or directed by the GOE to grant land to Jushi Egypt at preferential terms within the meaning of Article 3(1)(a)(iv) of the basic Regulation.

• (211) In addition, given that the legal framework regarding the purchases of land in the SCZone remained the same as in the original investigation and that no information was found during this investigation that contradicted the findings of the original investigation, the Commission considered that ECJV and TEDA Egypt were public bodies within the meaning of Articles 3 and 2(b) of the basic Regulation. As set out in recital (196) above, even if they had not been public bodies, they would at least have been considered entrusted or directed by the GOC and the GOE to carry out functions normally vested in the government within the meaning of Article 3(1)(a)(iv) of the basic Regulation. Thus, their conduct would be attributed to the GOE in any event.

3.8.4.   Specificity

• (212) The subsidy was considered specific within the meaning of Article 4(2)(a) of the basic Regulation, since the provision of land to companies in the SETC-Zone for less than adequate remuneration is reserved to certain companies in a particular geographical area.

3.8.5.   Benefit

• (213) The amount of the countervailable subsidy is calculated in terms of the benefit conferred on the recipients, which is found to exist during the review investigation period. The benefit conferred on the recipients is calculated by taking into consideration the difference between the amount actually paid by the exporting producer for land and the amount that should normally have been paid on the basis of a market-based benchmark. The benefit for the purchase of land by Jushi Egypt was calculated as follows.

• (214) Neither Jushi Egypt nor the GOE was able to provide reference prices for purchasing land in the SCZone. Therefore, as the benchmark for determining the market-based price of land purchases, the Commission continued to use the prices and duration of land leases (usufruct contracts) in the SCZone and SETC-Zone. Regarding the benchmark prices, the Commission continued to rely on the real estate valuation that was referred to in recital (202), since this was the most recent information made available by the GOE during the review investigation and adjusted this price for inflation.

• (215) In line with the above explanation, in the absence of an updated reference price, the Commission used the 2016 land benchmark as a basis. This benchmark price was adjusted to reflect inflation on the price of land as well as the cost of sub-developers that install basic infrastructure before selling the plots of land to the next sub-developer or final customer. To do this, the Commission applied to yearly inflation rate as published by the World Bank [^ntr54-L_202602107EN.000101-E0054] to the benchmark.

3.8.6.   Comments on disclosure

• (216) In its comments on disclosure, the GOE reiterated its position that the Commission has failed to establish that land sales or lease agreements within the Suez Canal Economic Zone were provided for less than adequate remuneration, while also claiming that the benchmarks prices that the Commission relied on in the original investigation did not reflect the prevailing market conditions.

• (217) The GOE did not bring forward any new arguments or evidence to invalidate the Commission’s conclusions outlined in this section, nor to demonstrate that the benchmark price did not reflect prevailing market conditions. At the same time, the Commission has described in detail why it considered the calculated benchmark price appropriate for a developed plot of land in that area [^ntr55-L_202602107EN.000101-E0055].

• (218) The Commission therefore rejected these claims as unfounded.

3.8.7.   Conclusion

• (219) In light of the above considerations, and absent arguments to the contrary, the Commission concluded that the GFR producer in Egypt continued to benefit from this scheme. In view of the existence of a financial contribution, a benefit conferred and specificity, this subsidy programme continues to be countervailable.

• (220) The subsidy rate established, as per recital (99), with regard to this type of subsidies regarding the provision of land for less than adequate renumeration was 2,29 %.

3.9.   Overall conclusion on continuation of subsidisation

• (221) In the original investigation the Commission established a total amount of countervailable ad valorem subsidy rate of 13,1 % for the sole known exporting producer. The same rate was imposed for all other exporting producers in Egypt.

• (222) The Commission found evidence that subsidisation of the GFR industry in Egypt, through the various subsidy schemes examined, continued during the review investigation period at a level exceeding the de minimis threshold. This is likely to continue in the future, bearing in mind that the legal framework of the investigated subsidy schemes has not fundamentally changed, and considering that in the review investigation period the exporting producer acquired additional plots of land for less than adequate renumeration to double its production capacity and continued to import the majority of its equipment and input materials from outside of Egypt.

• (223) The Commission concluded that the benefits to the Egyptian GFR exporting producers derived from those schemes will therefore likely continue in the future.

3.10.   Development of imports should the measures be repealed

• (224) Further to the finding of the existence of continued subsidisation during the review investigation period, the Commission investigated the likelihood of continuation of subsidised imports from the country concerned, should the measures be repealed. The following additional elements were analysed in recitals (225) to (229) of this Regulation: the production capacity, increases in exports, the continued attractiveness of the Union market and circumvention practices.

• (225) In this respect the following elements were analysed by the Commission: the production capacity in Egypt, the development in the post-RIP period of import volumes and prices, the continued attractiveness of the Union market and the role of circumvention.

• (226) The investigation determined that Jushi Egypt, the sole producer in Egypt, increased its capacity by 200 000 tonnes during the period considered and announced plans in 2025 for further expanding its production capacity.

• (227) Towards the end of the RIP and the post-RIP period (2024 Q3 – 2025 Q2), imports of GFR from Egypt increased by nearly 7 percentage points. In the same period, the average price of Egyptian GFR imports decreased by 25 %, reaching levels as low as €709/MT [^ntr56-L_202602107EN.000101-E0056] .

• (228) The continuing attractiveness of the Union market for Egyptian producers was demonstrated by the increasing level of import volumes during the period considered and in the post-RIP period.

• (229) Chinese investments in Egypt were made to circumvent the anti-dumping and countervailing measures imposed on Chinese GFR imports to the Union [^ntr57-L_202602107EN.000101-E0057] demonstrating that the Union is a long term, crucial export market for Egypt that would be targeted even more in case the measures were allowed to lapse.

• (230) Based on this analysis, the Commission found that the repeal of the countervailing measures would likely result in an increase of exports of subsidised GFR from Egypt to the Union market.

3.10.1.   Conclusion on the continuation of subsidisation

• (231) In view of its findings on the continuation of subsidisation during the review investigation period and on the likely development of increasing exports to the Union should the measures lapse, the Commission concluded that there is a strong likelihood that the expiry of the countervailing measures would result in the continuation of subsidisation.

4. INJURY

4.1.   Definition of the Union industry and Union production

• (232) The like product was manufactured by ten producers in the Union at the beginning of the period considered, while two of them ceased production during the RIP. They constitute the ‘Union industry’ within the meaning of Article 9(1) of the basic Regulation.

• (233) Total Union production during the review investigation period was established at 529 828 tonnes. The Commission established this figure on the basis of the information provided by GFE. As indicated in recital (24), three Union producers were selected in the sample, representing 63 % of the total Union production of the like product.

4.2.   Union consumption

• (234) The Commission established Union consumption on the basis of (i) the volume of sales of the Union industry on the Union market based on data provided by GFE; and (ii) imports from third countries based on data extracted from Eurostat.

• (235) Part of the Union industry is vertically integrated and GFR is used as an intermediate material for the production of various downstream products. As a result, captive and free market consumption were analysed separately.

• (236) The distinction between the captive and free market was relevant for the injury analysis because products destined for captive use were not exposed to direct competition from imports as they were sold within the same company or groups of companies on the basis of transfer prices set according to internal price policies thus not directly linked to prices on the free market. By contrast, production destined for free market sales was in direct competition with imports of the product concerned.

• (237) To provide a picture as complete as possible of the Union industry, the Commission requested data for the entire activity of GFR, including both captive use and the free market. This information was verified.

• (238) The Commission examined certain economic indicators relating to the Union industry on the basis of data for the free market only. These indicators were: sales volume and sales prices on the Union market; market share; export volume and prices; profitability; return on investment; and cash flow. Where possible and appropriate, the findings of the examination were compared with data for the captive market, in order to provide a complete picture of the situation of the Union industry.

• (239) Other economic indicators could be examined meaningfully only by referring to the whole GFR activity, including the captive use of the Union industry because they depended on the whole production activity, whether GFR was kept for captive use or sold on the free market. These indicators were: production; capacity and capacity utilisation; investments; stocks; employment; productivity; wages and ability to raise capital.

• (240) Union consumption developed as follows:

Table 1

Union consumption (tonnes)

	2021	2022	2023	Review Investigation Period
Total Union consumption	959 623	1 056 590	927 463	936 119
Index	100	110	97	98
Captive market	104 510	103 486	94 143	94 765
Index	100	99	90	91
Free market consumption	855 113	953 104	833 320	841 354
Index	100	111	97	98
Source: GFE, Eurostat.	Source: GFE, Eurostat.	Source: GFE, Eurostat.	Source: GFE, Eurostat.	Source: GFE, Eurostat.

• (241) As shown in Table 1, over the period considered, a maximum of 10 % of the Union consumption of GFR was destined for the captive market. The rest of the GFR was sold on the free market.

• (242) By the end of the period considered, total Union consumption decreased by 2 %. First, increasing from 2021 to 2022 by 10 %, followed by a decrease of 12 % in 2023 and a subsequent increase in the RIP to a level nearly equal to the start of the period considered.

• (243) Free market consumption also decreased by 2 % over the period considered and followed the same trend as total Union consumption, starting with an increase of 11 % from 2021 to 2022, followed by a decrease of 13 % and then an increase to the level close to that of the start of the period considered. The increase observed in 2022 in free Union consumption was mainly due to the economic recovery following the lifting of the COVID-19 measures, as users resumed placing orders to restock inventories and restarted production. In 2023, however, demand for GFR in the Union decreased resulting in a decline in consumption demonstrating that the recovery expected for that year was slow to materialize. In the RIP, however, Union consumption finally recovered nearly to the level recorded in 2021.

• (244) Captive consumption decreased over the period considered by 9 %. Since the absolute level of captive consumption was only approximately 10 % of the total, the impact of this decrease did not have a major impact on total Union consumption.

4.3.   Imports from the country concerned

4.3.1.   Volume and market share of the imports from the country concerned

• (245) The Commission established the volume of imports on the basis of Eurostat data. The market share of the imports was established by comparing the volume of imports with the Union consumption.

• (246) Imports into the Union from the county concerned developed as follows:

Table 2

Import quantity and market share

	2021	2022	2023	Review Investigation Period
Quantity of imports from Egypt (tonnes)	102 756	108 876	106 324	151 285
Index	100	106	103	147
Market share (%)	12	11	13	18
Index	100	95	106	150
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (247) Imports from the country concerned increased both in relative and absolute terms over the period considered by 47 %, with a slight drop in the year 2023. The increase was most significant from 2023 to the RIP.

• (248) Consumption remained relatively stable in the Union market when comparing the beginning and the end of the period considered, with a 10 % spike in 2022. The market share of Egypt increased from 12 % in 2021 to 18 % in the RIP, constituting a 50 % rise. In 2022, however, as consumption grew, Egyptian market share fell by one percentage point, recovering slightly in 2023 to a level just one percentage point above 2021.

4.3.2.   Prices of the imports from the country concerned and price undercutting

• (249) The Commission established the prices of imports on the basis of Eurostat data.

• (250) The weighted average price of imports into the Union from the country concerned developed as follows:

Table 3

Import prices (EUR/ tonne)

	2021	2022	2023	Review Investigation Period
Egypt	792	1 178	931	712
Index	100	149	118	90
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (251) The average price of imports into the Union from Egypt decreased over the period considered by 10 % and was consistently below the Union industry sales price level, see recital (285). The initial upward swing in import prices from Egypt in 2022 was attributed to the demand created by the attempt to restock inventories after the COVID slump, as mentioned in recital (243).

• (252) The Commission determined the price undercutting during the review investigation period by comparing:

• (1) the weighted average sales prices per product type of the sampled Union producers charged to unrelated customers on the Union market, adjusted to an ex-works level; and

• (2) the corresponding weighted average prices per product type of the imports from the cooperating exporting producer from the country concerned to the first independent customer on the Union market, established on a Cost, Insurance, Freight (CIF) basis with appropriate adjustments for customs duties, including countervailing duties, see recital (1), and post-importation costs.

• (253) The price comparison was made on a type-by-type basis for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts. The result of the comparison was expressed as a percentage of the sampled Union producers’ theoretical turnover during the review investigation period. It showed that during the RIP, imports of the product under investigation originating in the countries concerned undercut Union industry prices by 24,2 %.

• (254) In addition to price undercutting, it was established that significant price suppression and depression also took place. Due to the acute price pressure caused by the low-priced subsidised imports from Egypt, the Union industry was forced to reduce its price in order to compete with imports. Union producers were unable to raise prices throughout the RIP in line with the increase of costs of production, failing to achieve a reasonable level of profit, as set out in Table 12 below. The significant price suppression and depression was confirmed by the data in Table 3. As a result, the Union industry was forced to sell at prices insufficient to cover its costs, resulting in the deterioration of its financial situation.

4.4.   Imports from third countries other than Egypt

• (255) The imports of GFR from third countries other than Egypt were mainly from Malaysia, the PRC, Bahrain, the United Kingdom (‘UK’) and Thailand (in order of decreasing market share).

• (256) The volume of imports into the Union as well as the market share and price trends for imports of GFR from other third countries developed as follows:

Table 4

Imports from other third countries

Country		2021	2022	2023	Review Investigation Period
Malaysia	Volume (MT)	136 086	114 653	76 909	86 033
	Index	100	84	57	63
	Market share (%)	16	12	9	10
	Index	100	75	56	63
	Average price (EUR/MT)	1 049	1 389	1 146	967
	Index	100	132	109	92
PRC	Volume (MT)	44 137	94 916	78 515	78 586
	Index	100	215	178	178
	Market share (%)	5	10	9	9
	Index	100	200	180	180
	Average price (EUR/MT)	1 228	1 584	1 002	918
	Index	100	129	82	75
Bahrain	Volume (MT)	20 894	21 057	21 973	31 387
	Index	100	100	105	150
	Market share (%)	2	2	3	4
	Index	100	100	150	200
	Average price (EUR/MT)	892	1 359	953	823
	Index	100	152	107	92
UK	Volume (MT)	32 186	41 385	32 883	26 640
	Index	100	129	102	83
	Market share (%)	4	4	4	3
	Index	100	100	100	75
	Average price (EUR/MT)	1 024	1 327	1 426	1 244
	Index	100	130	139	122
Thailand	Volume (MT)	28	4 942	16 226	17 664
	Index	100	17 415	57 316	62 244
	Market share (%)	0	1	2	2
	Index	0	100	200	200
	Average price (EUR/MT)	1 693	2 065	859	830
	Index	100	123	51	49
Other third countries	Volume (MT)	113 784	128 451	121 643	111 861
	Index	100	113	107	98
	Market share (%)	13	13	15	13
	Index	100	100	115	100
	Average price (EUR/MT)	1 093	1 608	1 421	1 286
	Index	100	147	130	118
Total of all third countries except the country concerned	Volume (MT)	347 115	405 404	348 149	352 171
	Index	100	114	101	112
	Market share (%)	41	43	42	42
	Index	100	105	102	102
	Average price (EUR/MT)	1 010	1 435	1 145	954
	Index	100	142	113	94
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (257) Malaysian imports into the Union from 2021 to the RIP declined both in volume and market share, alongside fluctuations in pricing. Import volumes dropped sharply from 136 086 metric tonnes in 2021 to 76 909 metric tonnes in 2023, before a minor recovery to 86 303 tonnes in the RIP. Correspondingly, the market share of Malaysian imports decreased from 16 % to 10 % over the period considered. Although the average price per metric tonne rose by 32 % in 2022, there was a significant drop in the price in 2023 and in RIP.

• (258) Between 2021 and the RIP, Chinese imports into the Union rose by 78 %, increasing their market share from 5 % to 9 %. Import volumes more than doubled in 2022, falling back to a level 78 % higher than in 2021 in both 2023 and the RIP. Chinese prices, including duties in place, were above the Union industry level in 2021 and 2022, however, in 2023 and during the RIP they were below the Union industry price level.

• (259) Import volumes of GFR from Bahrain remained relatively steady during the period from 2021 to 2023 and increased by 100 % in the RIP. The absolute quantities remained low, accounting for only 4 % of market share in the RIP. Prices followed the same trend as seen for prices from other imports sources, rising significantly in 2022, followed by a slight dip in 2023 and a significant drop in the RIP.

• (260) Imports of GFR from the UK into the Union between 2021 and the RIP displayed a decrease in volume and a relatively steady market share. Import volumes from the UK increased from 2021 to 2022, before declining by around 27 % in 2023 and a further dropping by 19 % in the RIP. Market share decreased from 4 % to 3 % during period considered. Import prices from the UK first rose by 39 % from 2021 to 2023, before a decrease to EUR 1 244, close to double the Egyptian import price in the RIP.

• (261) The volume of imports of GFR from Thailand was insignificant at the beginning of the period considered but increased sharply in 2022. In 2023, imports almost quadrupled bringing their absolute number to 16 226 tonnes. This amount increased only marginally in the RIP. Despite of the significant increase in the volume of imports in the period considered, the market share of Thailand remained low, reaching 2 % of total consumption in 2023 and 2024. Prices peaked in 2022, dropping significantly in 2023 and the RIP.

• (262) Import volumes from other sources increased by 13 % in 2022, dropping somewhat in 2023, sinking in the RIP to a level that was 2 % lower than in 2021. Their market share reached 15 % in 2022 but otherwise it was stable capturing 13 % of the Union market. Prices followed the general trend of increasing in 2022, declining in 2023 and further dropping in the RIP.

• (263) Imports from all sources except Egypt, peaked in 2022, declined in the next year but managed to climb back in the RIP close to their maximum level. Due to a decline in Union consumption, see recital (240), the market share of imports, albeit lower in absolute volume than in 2022, peaked at 42 % of the market in the RIP. Import prices fluctuated following the general trend. They remain significantly higher than prices from Egypt, in the RIP the average import price of imports from other third countries was 34 % higher than the price of GFR imported from Egypt.

4.5.   Economic situation of the Union industry

4.5.1.   General remarks

• (264) In accordance with Article 8(4) of the basic Regulation, the examination of the impact of the subsidised imports on the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

• (265) As mentioned in recital (23), sampling was used for the determination of possible injury suffered by the Union industry.

• (266) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators, relating to all Union producers, on the basis of information provided by GFE. The Commission evaluated the microeconomic indicators on the basis of data contained in the questionnaire replies of the sampled Union producers.

• (267) The macroeconomic indicators are: production, production capacity, capacity utilisation, sales volume, market share, growth, employment and productivity.

• (268) The microeconomic indicators are: average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital.

4.5.2.   Macroeconomic indicators

4.5.2.1.   Production, production capacity and capacity utilisation

• (269) The total Union production, production capacity and capacity utilisation developed over the period considered as follows:

Table 5

Production, production capacity and capacity utilisation

	2021	2022	2023	Review Investigation Period
Production volume (tonnes)	616 388	620 455	528 204	529 828
Index	100	101	86	86
Production capacity (tonnes)	711 692	696 059	683 048	665 311
Index	100	98	96	93
Capacity utilisation (%)	87	89	77	80
Index	100	103	89	92
Source: GFE.	Source: GFE.	Source: GFE.	Source: GFE.	Source: GFE.

• (270) Production volume decreased by 14 % over the period considered. In 2022, it increased slightly in comparison to 2021 following relaxation of the COVID-19 measures which facilitated more stable production. Furthermore, in 2022 several sampled Union producers increased production in order to accumulate inventories of finished products as they were heading into planned furnace rebuilds. In 2023 and the RIP, however, there was a significant drop in production volume as amid the closure of some production facilities, see recital (271), Union producers were selling off accumulated inventories while the Union industry faced an increase in subsidised imports of GFR from Egypt.

• (271) Production capacity declined consistently throughout the period considered and contracted by 7 % by the end of the RIP. The decrease in production capacity from 2021 to the end of the RIP was partly due to some Union producers ceasing production, with Krosglass S.A. halting GFR production in Poland and Electric Glass Fiber NL, B.V. declaring bankruptcy.

• (272) Capacity utilisation decreased by 8 %, from 87 % to 80 %, over the period considered as production volume decreased more than production capacity.

4.5.2.2.   Sales volume and market share

• (273) The Union industry’s sales volume and market share developed over the period considered as follows:

Table 6

Free sales volume and market share

	2021	2022	2023	Review Investigation Period
Union industry free sales volume on the Union market (tonnes)	405 241	373 138	341 558	344 948
Index	100	92	84	85
Market share of free Union consumption (%)	47	39	41	40
Index	100	83	87	85
Source: GFE.	Source: GFE.	Source: GFE.	Source: GFE.	Source: GFE.

• (274) During the period considered, the sales volume on the Union free market of Union producers decreased by 15 %. Free market consumption decreased by 2 %, see recital (240), leading to a 15 % drop in their market share from the initial 47 % in 2021 to 40 % in the RIP.

• (275) As far as the captive market is concerned, captive volume and market share on the Union market developed over the period considered as follows:

Table 7

Captive sales volume and market share

	2021	2022	2023	Review Investigation Period
Captive volume (tonnes)	104 510	103 486	94 143	94 765
Index	100	99	90	91
Total production of the Union industry (tonnes)	616 388	620 455	528 204	529 828
Index	100	101	86	86
Share of captive market over total Union production (%)	17	17	18	18
Index	100	98	105	105
Source: GFE.	Source: GFE.	Source: GFE.	Source: GFE.	Source: GFE.

• (276) Captive market sales quantity on the Union market declined by 9 % over the period considered. While sales in both the free market and the captive market fell between 2021 to the end of the RIP, the decline in sales in the captive market was 6 percentage points less than in the free market.

• (277) The Union industry’s captive market share (expressed as a percentage of total Union production) was steady at 17 % in 2021 and 2022, increasing slightly and remaining stable at 18 % over the rest of the period.

4.5.2.3.   Growth

• (278) Union consumption remained relatively stable in 2023 and the RIP with an increase in 2022. The production and sales volume of the Union industry on the Union market decreased by 14 % and 15 % respectively over the period considered. As a result, the Union industry lost market share, as opposed to the increase of the market share of imports from the country concerned in the period considered.

4.5.2.4.   Employment and productivity

• (279) Employment and productivity developed over the period considered as follows:

Table 8

Employment and productivity

	2021	2022	2023	Review Investigation Period
Number of employees (FTE)	3 240	3 293	3 178	2 681
Index	100	102	98	83
Productivity (tonne/FTE)	190	188	166	198
Index	100	99	87	104
Source: GFE.	Source: GFE.	Source: GFE.	Source: GFE.	Source: GFE.

• (280) In the period considered, the number of employees in the Union industry decreased by 17 %, exhibiting an initial slight increase and subsequently, a considerable decline. The initial increase of 2 % in 2022, corresponded to the increased production and sales following the relaxation of COVID-19 restrictions. Subsequently, the Union industry had to reduce employment to adjust to the challenging market conditions and maintain operational efficiency resulting in an overall decrease of 17 % over the period considered. Plant closures were one of the causes of the reduction in employment.

• (281) Productivity increased over the period considered by 4 %. It decreased between 2021 and 2023 from 190 MT/FTE to 166 MT/FTE before picking up in the RIP to 198 MT/FTE. The latter is the result of a significant contraction in employment. Efficiency gains resulted from the investment in furnaces by several Union producers of GFR, as detailed in recital (270).

4.5.2.5.   Magnitude of subsidisation and recovery from past subsidisation

• (282) Subsidisation continued during the review investigation period, as explained under Section 3 above.

• (283) The subsidy margin was significantly above the de minimis level. The impact of the magnitude of the actual subsidisation on the Union industry was substantial, given the volume and prices of imports from Egypt.

• (284) Continuous unfair pricing by the exporter from Egypt made it also impossible for the Union industry to recover from the past subsidization practices.

4.5.3.   Microeconomic indicators

4.5.3.1.   Prices and factors affecting prices

• (285) The weighted average unit sales prices of the sampled Union producers to unrelated customers in the Union developed over the period considered as follows:

Table 9

Sales prices and cost of production in the Union

	2021	2022	2023	Review Investigation Period
Average unit sales price in the Union on the total market (EUR/tonne)	1 100	1 540	1 343	1 182
Index	100	140	122	107
Unit cost of production (EUR/tonne)	1 161	1 437	1 458	1 435
Index	100	124	126	124
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (286) The average unit sales price increased over the period considered by 7 %. It increased sharply with 40 % in 2022 in comparison to 2021, as sampled Union producers were able to pass the increase in costs driven by inflation onto customers due to a surge in demand. In 2023 and during the RIP, however, average sales prices decreased due to a decline in demand on the Union market, a partial recovery from the COVID-19 slump and the increased price pressure from imports. Prices in the RIP were only 7 % higher than in 2021 despite the significant 24 % increase in production cost in the Union, see recital (287).

• (287) Unit production costs increased by 24 % over the period considered. They increased 26 % from 2021 to 2023 due to an increase in labour and raw material costs. Additionally, energy costs have been volatile, significantly impacting industries that rely heavily on energy. The unit cost of production retracted slightly in the RIP compared to 2023, remaining far above the 2021 level, due to decreasing energy prices, improved energy efficiency and successful cost management strategies. Unit production costs increased by 24 % over the period concerned. Due to the price pressure of subsidised imports, the Union industry was unable to increase its sales prices in accordance with the increased cost of production.

4.5.3.2.   Labour costs

• (288) The average labour costs of the sampled Union producers developed over the period considered as follows:

Table 10

Average labour costs per employee

	2021	2022	2023	Review Investigation Period
Average labour costs per employee (EUR)	59 946	64 857	66 777	68 186
Index	100	108	111	114
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (289) Average labour cost per employee followed a consistent upward trend with an overall increase of 14 % during the period considered. The increase was mainly due to labour market pressures, as companies raised wages to retain and attract employees in a tight post-COVID job market marked by high inflation.

4.5.3.3.   Inventories/Stocks

• (290) Stock levels of the sampled Union producers developed over the period considered as follows:

Table 11

Stocks

	2021	2022	2023	Review Investigation Period
Closing stocks (tonnes)	41 544	68 278	51 620	56 678
Index	100	164	124	136
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (291) Closing stocks increased over the period considered by 36 %. The increase in 2022 was initially driven by a strategic stock buildup in anticipation of planned furnace rebuilds, see recital (294). This aligned with an earlier period during post-COVID-19 recovery when there was a significant surge in demand causing supply chain issues prompting Union producers to over-order raw materials to meet production requirements. Following the completion of furnace rebuilds, inventories decreased as sampled Union producers managed to sell off existing stocks in 2023. However, in the RIP compared to 2023, an increase in inventories of 9,8 % was found as consumption increased more strongly than Union sales, with imports gaining market share. As production exceeded sales growth, inventories accumulated.

4.5.3.4.   Profitability, cash flow, investments, return on investments and ability to raise capital

• (292) Profitability, cash flow, investments and return on investments of the sampled Union producers developed over the period considered as follows:

Table 12

Profitability, cash flow, investments and return on investments

	2021	2022	2023	Review Investigation period
Profitability of sales in the Union to unrelated customers (% of sales turnover)	-5,4	8,0	-7,3	-10,6
Index	- 100	148	- 136	- 178
Cash flow (EUR)	10 165 478	26 151 455	20 865 951	10 401 264
Index	100	257	205	102
Investments (EUR)	29 103 848	35 118 981	72 272 923	28 398 153
Index	100	121	248	87
Return on investments (%)	-6	13	-6	-8
Index	- 100	228	- 109	- 145
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (293) The Commission established the profitability of the sampled Union producers by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales. While the Union industry incurred losses in 2021, there was a temporary increase in profitability in 2022 as the sampled Union producers could pass the increase in unit production costs onto customers thanks to favourable market conditions linked to high demand. In 2023 and in the RIP, however, profitability dropped due to increased costs which could no longer be compensated with an increase in sales prices attributable to an increase in subsidised import volumes undercutting and suppressing the Union industry’s prices.

• (294) Investments decreased in the RIP after an increase of 21 % in 2022 and an increase of 148 % in 2023 in relation to 2021. In the RIP, however, investment decreased by 13 % in relation to 2021 and 60 % in relation to 2023. The initial increase in investments consisted mainly of the cost of rebuilding the furnaces of the sampled Union producers. These rebuilds are mandatory after a certain period of time for technical reasons. These necessary investments, planned according to a schedule based on the life cycle of the furnaces, took place against the background of unfavourable market conditions prevailing in 2023 and in the RIP.

• (295) From 2021 to the RIP, cash flow fluctuated driven by volatile market conditions. During the period considered, 2022 was the only year in which all sampled Union producers achieved significant profits leading to a positive cashflow. They were subsequently depleted in the build-up of inventories heading into planned furnaces rebuilds. In 2023 and in RIP, despite experiencing severe loss, cash flows remained positive. This seemingly contradictory situation could largely be attributed to the significant positive cash flow impact resulting from reductions in inventory levels that had been accumulated in 2022, i.e. the stocks built up during the period immediately after the recovery were sold off resulting in cash flow for the industry.

• (296) Return on investments stands for the profit as a percentage of the net book value of investments. Return on investment developed in line with profitability, first increasing in 2022 before deteriorating in 2023 and dropping even further in the RIP, making it more difficult for the Union industry to raise capital and grow.

4.6.   Conclusion on injury

• (297) During the period considered, the Union industry was only profitable in 2022, making losses in 2021, 2023 and the RIP. with an increase of imports from Egypt at prices below the Union industry’s average sales prices and costs of production. Prices, both for the Union industry and imports, were out of the ordinary in the year 2022 due to the high expectations of more consumption during the recovery from COVID and the increase in energy costs due to the war of aggression in Ukraine. In this period, the steep increase in prices allowed the Union industry to be profitable.

• (298) In 2023 and in the RIP, the difference between the Union industry sales prices and import prices from Egypt increased. Union prices increased by 7 % during the period considered, while import prices from Egypt decreased by 10 %. The presence of low-priced imports from Egypt available at increasing volumes in the Union market, forced the Union industry to lower its prices below its cost of production and to sell at a loss. Its market share declined from 47 % to 40 % at the end of the RIP.