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)