Dumping Complaint
Submitted By Alexandria Tyres Company
On The Procedures of Initiating Anti-Dumping Investigation Against Imports of Tires exported from or originating in China and India into Egypt
(Non Confidential Version)
Alexandria Tyres Company (S.A.E)
Non-official Translation
Dumping Complaint
This Complaint is submitted concerning the imposition of definitive anti-dumping duties on the imports of tires exported from or originating in China and India. 1/1 Contact Details Name : Alexandria Tyres Company Address : - Alexandria: - Alexandria Road 36 Kilo/ Desert Road- Al Ameria- Ard Al Nahda - P.O 651. - Cairo:- 10th Almesaha Square – Doki Telephone:Alexandria: 4540429,4540421, 4540433, 4540434. Cairo: 3381125 Fax:Alexandria: 4540422 Cairo: 3378589 1/2 Company Information - Alexandria Tyres Company has been established as a Joint stock Co. – in accordance with the provisions of law No. 230 of the year 1989 amended by Law No. 8 of the year 1997. - The company was registered in the Commercial Register No.1010 on 28th January 1990. - The Headquarter of the company is located in Alexandria. - Alexandria Tyres Company manufactures radial tires. - The company practices its activities in the Arab Republic of Egypt and its manpower exceeds 940 workers and employees. - The company has only one factory in Egypt located in Ard Alnahda in Al Ameria in Alexandria. - Up until 2005, new investments of LE 72.5 million were made for expansions to the factory. These expansions include installing new additional mixer, machines in the preparation section, building machines in the building section and a group of additional compressors in the curing section to increase production capacity of the company (as shown in the production statement). - The company has not established new factories for tires and has not merged with any other factories. - The company can't benefit from other production lines in producing other goods as such lines are integral and specialized in producing Tyres.
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Alexandria Tyres Company (S.A.E)
Non-official Translation
- The company is unable to make any amendments or additions to the machines and the equipments in the production stages to produce other goods.
Statement of Company Shareholders
Name ********************* ********************* ********************* ********************* ********************* Total Ownership Stocks Stocks Stocks Stocks Stocks Value/ 000 LE Xxxxxxx Xxxx Xxxxx xxxxxx Xxxx xxxxxxxx
Statement of Shares in Other Companies
Name ****************** ******************* Address Alexandria Alexandria Ownership Stocks Stocks Value/ 000 LE Xxxx Xxxx
1/3 Information on Contact Persons
Name Accountant/ Salah Eldin Said Husein Accountant/ Amr Said Accountant/ Usama Almenywe Mobile Number 0123936911 0122191292 0123921678
1/4 Brief Description on the Product The company produces the new pneumatic tires of rubber of a kind used on buses and lorries of radial type for the following sizes: 1000-20 1100-20 1200-20 10-22.5 11-22.5 12-22.5 295/80-22.5 315/80-22.5 - Leaflets and Pamphlets of the company are attached. 1200-24 13-22.5
2/1 The Imported Goods causing injury is new pneumatic tires of rubber of a kind used on buses and lorries. 2/2 The Company produces the new pneumatic tires of rubber of a kind used on buses and lorries of radial type for the following sizes: 1000-20 10-22.5 295/80-22.5 1100-20 11-22.5 315/80-22.5 1200-20 12-22.5 1200-24 13-22.5
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Alexandria Tyres Company (S.A.E)
Non-official Translation
For an integrated production process it consists of different stages as follows:(1) Mixing Stage: During which, compounds are produced from ingredients like (Natural Rubber, Synthetic rubber, carbon black, and other ingredients like chemical and filler like silica). These compounds are produced in the shape of slaps. (2) Preparation Stage This stage is responsible for manufacturing of the all the components of the tire, and it is some times called semi manufacturing. (3) Building Stage In this stage, all components of the tire, which has been manufactured in the preparation stage, are assembled to give the pre final shape of the tire. (4) Curing Stage The stage is responsible for transforming the state of the tire to the elastic state by curing the tire inside moulds at high temperature and pressure to activate the chemical process for the components of the tire to become one body. This stage is also responsible for the final stage of the tire including the tread pattern, and all the technical specification written on the tire. -Leaflets and Pamphlets of the Company are attached and an English version of the description of the production process is attached (Attachment No.1). 2/3 Our goods are identical to some of the imported goods or closely resembling the other imported goods in physical characteristics, manufacturing procedures and in uses. 2/4 The heading and subheading H.S. Tariff Item number of the imported product is 40 11 20 00. 2/5 There is no differences between the imported product and our product as the physical characteristics and end usage are the same.
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Alexandria Tyres Company (S.A.E)
Non-official Translation
3- Imported Goods 3/1 The Countries of origin of the imported goods causing injury are: China – India.
3/2 Names and Addresses of Known Foreign Producers & Exporters of the Product of Tyres to Egypt
Brand GT Aeolus Origin China China Manufacturer Global Traco International PTE LTD., Aeolus Tyre Co., LTD. Henan Province Jiaozuo Burnt southeast road 48; 454,003 Name of the company unknown No.1 Cang'an Road Qingdao Triangle Tyre Co., Ltd Qingdao-Middle East Road WeihaiChina Shandong Sangong Rubber Co., Ltd HuanGhua Town, Zhucheng Province, China Shandong Linglong Rubber Group Co.., No. 170, Jincheng Road, Zhaoyuan, Shandong Lieng Chung Corp., (Kowloon) Ltd 7/F., Flat A, Yee Lim Industrial Building, 32-40 Kwai Ting Road, Kwai Chung, NT. Hong Kong. Tel : 2480 6993, 2426 8121 Fax : 2489 2506 Chennai
Yellow Sea
China
Triangle Sangong
China China
LingLong Double Coin
China China
Miller MRF
India
3/3 Names of Other Known Countries Exporting the Subject Product/Goods to Egypt Germany, Taiwan, France, South Korea, European Union and Turkey. 3/4 Names and Addresses of some Importers of the Subject Products of Buses and lorries Tires to Egypt xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx
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Alexandria Tyres Company (S.A.E)
Non-official Translation
xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx
xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx
xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx
xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx
xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx
xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx
3/5 The Importers' Level of Trade is wholesale or Retail. 4- Domestic Industry 4/1 Statement concerning the total production volume of buses and lorries Tires
Statement Production Quantity of 2005 (Tire) xxxxxx xxxxxx xxxxxx Company Domestic Production Share About 84% About 16% 100% Company Domestic Market Share xxxxxxxxx xxxxxxxxx xxxx
Alexandria Tyres Company (ATCO) Transportation and Engineering Company (TRENCO) Total
It should be noted that Transportation and Engineering Company (TRENCO) supports the imposition of anti-dumping duties.
Tires used on Buses and lorries can be divided into three main types: Cross Ply Inner tube tires produced domestically by Transportation and Engineering Company (TRENCO). Radial inner tube tires produced domestically by Alexandria Tyres Company and Transportation and Engineering Company (TRENCO). Tubeless tires without inner tube produced domestically by Alexandria Tyres Company and Transportation and Engineering Company (TRENCO).
Such types could replace each other appropriately especially the first two types (cross ply and radial tires). The size of the third type (tubeless) could replace the first two types after changing the rim (frame). Generally all of the domestic market needs for the main types of Buses or lorries and buses are wholly domestically produced. Tires are produced in many countries and could be used as alternative for the domestically produced goods with different prices due to the difference in quality. The difference in quality is considered an essential factor in the sales of buses and lorries tires and in determining their prices. There are several factors determining the level of quantity of Tyres such as the life time of the tire. Such life time is determined through the distance by kilo meters run by such tire starting from the time of fitting the tire on the car until the ending of its life time. 6
Alexandria Tyres Company (S.A.E)
Non-official Translation
Such life time could be compared with other brands to measure the level of quality of a particular tire concerned. Tires produced by the factories of Alexandria Tyres Company are preferred by users of buses and lorries which is reflected in the sales of the company during the previous years. 4/2 Alexandria Tyres Company did not import any type or size of the product. Sometimes for the purpose of covering the need of one of the tenders for tyre size which is not produced by our company, we seek the assistance of another domestic company to import the product concerned. 5. Export Price 5/1 The Export Price of the of the imported product to Egypt is the price paid by the importer. The export prices were obtained from the export invoices based on CIF, C&F, FOB of China and India. (Attachment 4).
1- China
Value/Dollar
Size Average Price of Tire Set ($) Terms Value of the Flap and Tube ($) Inland Freight ($) ** Average Price of Tire of Factory (US$)
Radial R Average Size
**
**
**
**
**
2- India
Value/Dollar
Size Price of Tire Set ($) Terms Value of the Flap and Tube ($) Inland Freight ($) ** Price of Tire of Factory (US$)
Radial R Average Size
**
**
**
**
**
* Value of freight and insurance of tire for 20' container is excluded as follows: # Freight xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx # Insurance xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxx
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Alexandria Tyres Company (S.A.E)
Non-official Translation
** The inland transport cost of tire in the exporting country (China, India) is excluded xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxx 6- Normal Value A- China The domestic selling prices of imported product (normal value) in China were obtained based on the domestic selling prices of Buses and lorries tyres in India because China is considered a non-market economy country and India is a market economy country. The following tables show the normal values for each country separately: A-China (selling prices of India)
Indian Rupee
Size
Price of Tire Set (Indian Rupee)
Discount xxxx
Value Added Tax (VAT)
Tube and Flap Value xxxxx **
Wholesaler Margin
Inland Freight expense
Tire Price of Factory (Indian Rupee) **
Tire Price of Factory (US$)
Radial R Average Size
**
**
**
**
**
**
B- India The domestic selling prices of buses and lorries tyres (normal value) in India were obtained based on the domestic selling price offers of buses and lorries tyres in India. (Attachment No. 8).
Indian Rupee
Size
Price of Tire Set (Indian Rupee)
Discount xxxx
Value Added Tax (VAT)
Tube and Flap Value xxxxx **
Wholesaler Margin
Inland Freight expense
Tire Price of Factory (Indian Rupee) **
Tire Price of Factory (US$)
Radial R Average Size
**
**
**
**
**
**
China: Invoices and selling price statement of the subject product from India are attached. India: Invoice and selling price statement of the subject product from India are attached. Purchaser's level of trade in India is retailer. Retailer profit margin was estimated on the base of percentage xxxx according to the company experience in such industry in the market. Wholesaler profit margin was estimated by percentage xxxx according to what is shown in the price offer of India (Attachment No. 8).
Dumping Margin 8
Alexandria Tyres Company (S.A.E)
Non-official Translation
The comparison between normal value (Ex-Factory level) and export price (ExFactory level) has resulted in the following margins: Dumping amount= (Ex-Factory level/Normal Value– Ex-Factory level/Export Price) Dumping margin on CIF value basis = dumping amount / CIF export price Value/US$ Country
China India
Normal Value Ex Factory **** ****
Export Price Ex Factory **** ****
Dumping Amount
Export price CIF
Dumping Margin % 61 50
**** ****
**** ****
(8) Injury: Due to the notable, essential and expected increase in imports volume in the future either it is absolute or relative increase i.e. relative to production and consumption in Egypt. Which led to a significant and essential pressure to the domestic tyres selling price and prevention of prices increase (to face the increase of cost elements) which may take place in the absence of the significant increase in the imported tyres quantities?
All of the above factors led to the inability to increase the production volume, sales, company's share in the domestic market, profits and the utilized capacity either currently or in the future. The fact that lead also to the existence of expected and definite negative effect on the return on investment, cash flow, inventory, employment, wages, growth rate, the existence of new investments and the ability to increase capital. 8–1 Commencement of Injury: Injury started ****** after the significant customs deductions on the tyres importation which led to a tangible reduction in tyres importation cost. The fact that led to the increase of the competitive and price pressure on the selling price of the domestically produced lorry tyres which suffered by our company until now. 8-2 Injury Assessment:
A table of injury summary was prepared (Attachment 2) 8-3 The Increase of Unfair Dumped Imports:
Detailed information concerning the volume of the allegedly dumped imports in quantity and value for the last three fiscal years in addition to the currant year (Attachment 13).
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Alexandria Tyres Company (S.A.E)
Non-official Translation
8-4 Price Effects on the Egyptian Market: In spite of the increase of cost elements per tyre such as raw materials, wages, electricity, water, steam, spare parts expenses and maintenance materials; the company could not increase tyres selling prices ********* till the date of lodging this complaint due to the price suppression caused by dumped prices of the tyres imported from the countries under complain. Samples of tyres selling invoices are attached. 8-5 Sales & Production: Due to the price suppression suffered by our company, sustainable negotiations are taking place with the suppliers of the raw materials to the company in order to prevent price increase, in addition to the existence of negotiations with customers and agents of the domestic sales as an attempt to prevent the decline in domestic selling prices and the amendment of the reimbursement method. The Production of Alexandria Tyres Company from 2003 to 2006 Year Production Quantity (%) First half of 2003 100 Second half of 2003 104 First half of 2004 114 Second half of 2004 117 First half of 2005 121 Second half 2005 123 First half of 2006 124 Export Sales of Alexandria Tyres Company from 2003 to 2006 Year Quantity Price (%) (%) # First half of 2003 100 100 Second half of 107 108 2003 First half of 2004 120 109 Second half of 124 109 2004 First half of 2005 130 102 Second half 2005 130 103 First half of 2006 152 103
Export Sales Value (%) 100 117 132 139 133 136 158
#*************************************************************
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Alexandria Tyres Company (S.A.E)
Non-official Translation
8-6 Market Share Sales volume (quantity and value) in the Egyptian market: -Sales took place through the company. Domestic Sales of Alexandria Tyres Company from 2003 to 2006 Year Quantity Delivery Domestic Sales (%) Price Value (%) (%) # 100 100 100 First half of 2003 103 105 109 Second half of 2003 106 119 127 First half of 2004 109 131 143 Second half of 2004 113 133 151 First half of 2005 111 138 154 Second half 2005 101 138 139 First half of 2006 #************************* The company is marketing its production from its beginning since 1995 till now through the following main channels: 1. Direct marketing to the companies producing and manufacturing buses or lorries and buses. 2. Direct marketing to the public sector companies and the public business sector which have big transportation fleets. 3. Indirect marketing to the private sector transportation fleet and the rest of the public sector and the public business sector companies through a network of distributors all over the Republic.
Tire Delivery Cost (%) 100 103 108 116 124 132 143
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Alexandria Tyres Company (S.A.E)
Non-official Translation
Domestic Selling Prices (Set) Size First Second First half of half of half of 2003 2003 2004 100 100 100 10.00R20 107 107 105 11.00R20 143 142 139 12.00R20 186 185 185 12.00R24 178 150 162 11R22.5 195 171 181 12R22.5 173 181 315/80R22.5 295/80R22.5 Domestic Selling Prices (tyre) Size First Second First half of half of half of 2003 2003 2004 100 100 100 10.00R20 107 107 106 11.00R20 145 143 141 12.00R20 190 189 190 12.00R24 192 164 177 11R22.5 212 187 199 12R22.5 188 198 315/80R22.5 295/80R22.5
Second half of 2004 100 106 137 185 155 157 149 -
First half of 2005 100 106 170 171 127 136 142 -
Second half of 2005 100 104 171 172 135 115 146 -
First half of 2006 100 105 131 172 138 124 147 -
Second half of 2004 100 106 138 189 169 171 162 -
First half of 2005 100 106 135 174 138 147 154 -
Second half of 2005 100 104 133 176 147 125 159 -
First half of 2006 100 106 131 174 150 135 159 -
8-7 Profits and Losses Detailed information of the financial statements and balance sheets, cost of good statements and inventory equation from 2003 to 2006 (attachment 3). 8-8 Production Cost A detailed information of the production cost sheets from 2003 to 2006 (attachment 3). 8-9 Utilized Production Capacity Year Actual Available Capacity (tyre) First half of 2003 100 Second half of 2003 100 First half of 2004 113 Second half of 2004 113 First half of 2005 119 Second half 2005 119 First half of 2006 121
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Alexandria Tyres Company (S.A.E)
Non-official Translation
8-10 Other Aspects of Injury * Inventory Year Inventory Quantity (tyre) Inventory Value (000 LE.) 30/6/2003 100 100 31/12/2003 45 45 30/6/2004 71 74 31/12/2004 58 67 30/6/2005 50 63 31/12/2005 124 186 30/6/2006 101 159 The inventory is evaluated in accordance with tire cost or selling price whichever lowest. Rate of the return on net invested capital Year % 2003 100 2004 160 2005 199 2006 138 The ratio is calculated by dividing net profit over the net invested capital. *Employment Year Industrial Industrial Other Total direct indirect employme employment employment nt First half of 2003 100 100 100 100 Second half of 2003 99 99 100 99 First half of 2004 105 98 97 102 Second half of 2004 107 100 98 104 First half of 2005 110 101 100 106 Second half 2005 113 101 103 108 First half of 2006 148 101 106 128 The employment can not be shifted to produce other products. Impact on Employment Decline in or non-existence of the monthly production incentive. Decline in or non-existence of the annual profits. Decline in or non-existence of the additional working hour's wages. Laying off a significant number of workers. Decline in Wages.
13
Alexandria Tyres Company (S.A.E)
Non-official Translation
Industrial Industrial Other direct indirect employment employment employment 100 100 100 First half of 2003 99 103 103 Second half of 2003 106 110 104 First half of 2004 253 117 214 Second half of 2004 110 116 100 First half of 2005 326 136 297 Second half 2005 136 135 146 First half of 2006 Data concerning income statements and cash flows herein attached. Casual link
Year
000 LE. Total
100 101 107 199 110 255 138
The notable increase in the imports from China and India into Egypt at dumped prices resulted in negative effects on profit, return on investment, quantity and value of the domestic sales, and an increase in the inventory volume . The dumped imports led to the company's inability to increase the prices of domestic tires to cover the significant increase in COP and the company's inability to increase its production volume.
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Attachments
1. Catalogues including detailed information concerning tyres produced by Alex Tyres Company which is considered one of the pioneers in the Egyptian lorry tyres industry. 2. Injury summary statement. 3. Copies of balance sheets, cost statements from the beginning of 2003 to 30/6/2006. In addition to detailed data concerning production, sales, value and volume of the inventory from the beginning of 2003 to 30/6/2006. 4. Cases and samples that clarify the methods of constructing the normal value, export price, dumping amount, and dumping percentage in details. Substantiated by copies of the relevant invoices and documents. 5. Statement of Freight inside and outside China and India. 6. Table of tyres loading sizes. 7. Statement of the insurance prices of tyres imported from China and India. Equation of construction tyres insurance cost. 8. Statement of tyres selling prices inside India (normal value). 9. Statement of foreign currency conversion prices closing of June 2006. 10. Letter concerning the representation percentage of Alex Tyres Company in tyres industry in the Egyptian market. 11. Invoices of tubes and tyre flaps. 12. Letter identifying the percentage of the additional value tax inside India. 13. Statement of tyres imports obtained from the Central Agency for Mobilization and Statistics concerning the period starting from 1/1/2003 until 31/5/2006.
Attachment No. (1) The following stages are carried out to produce an integrated product: Mixing Stage: During which, compounds are produced from ingredients like (Natural Rubber, Synthetic rubber, carbon black, and other ingredients like chemical and filler like silica). These compounds are produced in the shape of slaps. Preparation Stage This stage is responsible for manufacturing of the all the components of the tyre, and it is some times called semi manufacturing. Building Stage During which, all components of the tyre, which has been manufactured within the preparation stage, is assembled to give the pre final shape of the tyre in the plastic state. Curing Stage The stage is responsible for transforming the state of vt6he tyre from plastic state to the elastic state by curing the tyre inside moulds at high temperature and pressure to activate the chemical process for the components of the tyre to become one body. This stage also is responsible for the final stage of the tyre including the tread pattern, all the technical specification written on the tyre.
Attachment No. (2) Injury Summary (%) Years
Quantities (Domestic Sales) Revenue Cost of Production Gross Profit S,G &A Cost of Sales Net Profit/Loss Per Unit (Tyre) Revenue Cost of Production Gross Profit S, G & A Sales Cost Per Unit Net Profit/Loss Per Unit
First half of 2003 100 100 100 100 100 100 100 *** *** *** *** *** *** *** Second half of 2003 104 110 112 105 110 112 104 *** *** *** *** *** *** *** First half of 2004 107 128 128 127 128 128 127 *** *** *** *** *** *** *** Second half of 2004 109 144 138 158 109 137 164 *** *** *** *** *** *** *** First half of 2005 113 151 134 192 106 133 203 *** *** *** *** *** *** *** Second half of 2005 112 155 144 182 111 142 191 *** *** *** *** *** *** *** First half of 2006 101 140 134 154 92 132 162 *** *** *** *** *** *** ***