Polyester makers file dumping claim with government

Polyester makers file dumping claim with government

JAKARTA (JP): The Indonesian Synthetic Fiber-Makers
Association has asked the government to impose a 40 percent
provisional antidumping duty on polyester staple fiber imports
from South Korea and Taiwan.

The association's chairman, A.A. Baramuli, said here yesterday
that the proposal was submitted on Wednesday to the minister of
industry and trade, who is also vice chairman of the Indonesian
antidumping committee. The aim is to defend the local polyester
fiber manufacturing industry from South Korean and Taiwanese
imports allegedly sold at dumping prices.

Baramuli said the imports are currently sold in Indonesia at
US$1 per kilogram, less than domestic polyester fiber, which has
dropped to $1.10 per kg from $1.40 in January due to the imports.

Prices in South Korea and Taiwan are presently $1.40 per kg.

"The association's proposal is the first to be submitted (to
the anti-dumping committee) and it may well be followed by other
industries," Baramuli told a press conference yesterday.

He was accompanied by executives of various fiber
manufacturing firms, including S.P. Lohia from PT Indo-Rama
Synthetics, T. Kondo from PT Indonesia Toray Synthetics and S.K.
Agrawal from the Shinta Group.

Baramuli said the alleged dumping practices, which started in
January, have forced local producers of polyester fiber to sell
products at prices significantly below the production cost of
$1.30 per kg.

"With a production of about 350,000 tons a year and a current
price of $1.10 per kg, we may be losing $70 million a year,"
Baramuli said, referring to the combined production capacity of
the association's 16 members.

He said that six Taiwanese firms and five South Korean firms
are guilty. However, antidumping measures -- once they are
reached -- will apply for all polyester fiber producers in those
two countries.

The government introduced antidumping and countervailing
measures in its most recent deregulation package issued earlier
this month, to counter unfair trade practices by foreign
entities. The measures conform to the rules of the World Trade
Organization.

Since then, an Indonesian antidumping committee -- headed by
the minister of finance -- was called for, but its establishment
has yet to be completed as its members have not been appointed.

Process

Roger D. Simpson, a lawyer from Roger D. Simpson & Associates,
which has been appointed to represent the association in this
case, said the low prices of polyester fiber in South Korea and
Taiwan are the result of decreasing demand from downstream
industries.

South Korea, for instance, produced 450,000 tons of polyester
fiber last year, but only 180,000 tons were used by the country's
downstream industries.

This situation, he said, has left substantial amounts of the
polyester fiber industry floating around, and has led producers
to enter the export market.

Simpson explained that the overall process will take at least
90 days.

After 30 days of the proposal being submitted to the
antidumping committee, the government is expected to be able to
comment on the validity of the claims.

The government will then inform the exporters and the
governments of the two countries of the result and give them
another 30 days to respond.

Following their responses, provisional antidumping measures
may be imposed on imports while the investigation is being
completed.

"We have proposed a provisional antidumping duty of 40
percent. This is expected to approximate the margin of dumping
and prevent further severe losses caused by dumping while the
claims are being investigated," Simpson said.

The government is expected to announce a final finding and the
possible imposition of antidumping duty 30 days after the
responses are given.

"A downward trend of prices is expected to continue and this
may severely injure Indonesia's polyester fiber industry. The
government has the right to protect this industry," Simpson said.
(pwn)