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Notice
of Initiation
DIRECTORATE GENERAL OF SAFEGUARDS
CUSTOMS AND CENTRAL EXCISE
2ND FLOOR, BHAI VIR SINGH SAHITYA SADAN,
BHAI VIR SINGH MARG, GOLE MARKET
NEW DELHI-110001
Telefax: 23741542, 23741537
e-mail : dgsafeguards@nic.in
NOTICE OF INITIATION OF A SAFEGUARD INVESTIGATION
[Under Rule 6 of the Customs Tariff (Identification
and Assessment of Safeguard Duty) Rules, 1997]
New Delhi, 28th November, 2008
No. D-22011/ 32/08
Sub: Initiation of safeguard
investigation concerning imports of Phthalic Anhydride
into India
G.S.R
An application has been filed before me under Rule 5
of the Customs Tariff (Identification and Assessment
of Safeguard Duty) Rules, 1997 by M/s. Thirumalai Chemicals
Ltd, Ranipet Tamilnadu, M/s. IG Petrochemicals Ltd Raigad
Maharashtra M/s. Mysore Petrochemicals Ltd, Raichur
Karnataka and M/s SI Group India Ltd Navi Mumbai Maharashtra
for imposition of Safeguard Duty on imports of Phthalic
Anhydride into India to protect the domestic producers
of Phthalic Anhydride against serious injury caused
by the increased imports of Phthalic Anhydride into
India.
2.
Domestic Industry : The application
has been filed by M/s Thirumalai Chemicals Ltd, Ranipet
Tamilnadu, M/s. IG Petrochemicals Ltd Raigad Maharashtra,
M/s. Mysore Petrochemicals Ltd, Raichur Karnataka and
M/s. SI Group India Ltd Navi Mumbai Maharashtra for
imposition of Safeguard Duty on imports of Phthalic
Anhydride. The application has been made by four of
the five domestic producers of Phthalic Anhydride in
India accounting for 90% of the total production.
3. Product Involved
: The applicants have alleged serious injury
caused to the domestic producers by the increased imports
of Phthalic Anhydride into India. Phthalic Anhydride
classified under sub-heading No. 29173500 of Schedule
I of the Customs Tariff Act 1975, is the principal commercial
form of Phthalic Acid. It is produced by catalytic oxidation
of Ortho-xylene (OX) with air or by the catalytic oxidation
of naphthalene and is used in organic synthesis of plastics
(alkyd resins) and plasticizers, etc.
4. Increased
Imports: Phthalic Anhydride is imported
into India from Republic of Korea, Indonesia, Israel,
Taiwan and Pakistan. The imports Pthalic Anhydride have
shown an increasing trend in absolute terms as well
as compared to the domestic production. The imports
and domestic production of Phthalic Anhydride during
2005-06 to 2008-09 (first six months) remained as under:
| Year |
Imports
(MT) |
Domestic
Production (MT) |
| 2005-06 |
24,092 |
1,91,637 |
| 2006-07 |
14,133 |
2,22,959 |
| 2007-08 |
31,441 |
2,44,429 |
| 2008-09(First six months) |
22398 |
1,13,614 * |
*All plants of the applicants are
closed except one which is running partially from the
month of October-November, leading to Zero capacity
utilization of three plants which constitute 155500MT
of production capacity. The partially closed unit has
closed 50,000MT out of 110,000MT of production capacity.
5. Injury:
The increased imports of Phthalic Anhydride have caused
and are threatening to cause serious injury to the domestic
producers of Phthalic Anhydride as indicated by the
following factors:
a) Production : The
domestic production which increased from 1,91,637 MT
in 2005-06 to 2,22,959MT in 2006-07 and further to 2,44,429
MT in 2007-2008 has fallen to 1,13,614 MT in 2008-2009
(First six months). All plants of the applicants are
closed except one which is running partially from the
month of October-November, leading to Zero capacity
utilization of three plants which constitute 155500MT
of production capacity. The partially closed unit has
closed 50,000MT out of 110,000MT of production capacity.
b) Capacity
Utilisation: Out of the total capacity
of 2,65,500 MT, accounted for by the applicant domestic
producers, 2,05,500 MT has been shut down. The capacity
utilization of three plants has become zero. One plant
is running at around 55% of its capacity. As a whole
77.5% of existing capacity has zero percent of capacity
utilization.
c)
Share of domestic producers in
domestic consumption: Market share of
domestic producers has fallen significantly. Applicants
had a market share of 81% in 2005-06 which increased
to 90% during 2006-07 and then fell to 82% during 2007-08.
In the first half of 2008-09, market share went down
to 76%. As 77.5% of capacity is already closed, the
share of domestic production in domestic consumption
is likely to go down further. The closures of following
factories as mentioned below imply major reduction in
domestic production.
| |
Name of
the Plant |
Date of
Closure |
1. |
M/s Thirumalai Chemicals Ltd, Ranipet Tamilnadu |
7.10.2008 |
2. |
M/s. SI Group India Ltd Navi Mumbai Maharashtra |
11.10.2008 |
3. |
M/s. IG Petrochemicals Ltd Raigad Maharashtra
(partially closed) |
25.10.2008 |
4. |
M/s. Mysore Petrochemicals Ltd, Raichur Karnataka |
1.11.2008 |
6.
The domestic producers have requested for imposition
of Safeguard Duty on imports of Phthalic Anhydride for
a period of four years. They have also requested for
an immediate imposition of provisional Safeguard Duty
in light of critical circumstances, leading to irreparable
damage.
7.
The application has been examined and it is found that
prima facie increased imports of Phthalic Anhydride
have caused and are threatening to cause serious injury
to the domestic producers of Phthalic Anhydride and
accordingly it has been decided to initiate an investigation
through this notice.
8.
All interested parties may make their views known within
a period of 30 days from the date of this notice to:
The Director General (Safeguards)
Bhai Vir Singh Sahitya Sadan: 2nd Floor,
Bhai Vir Singh Marg,
Gole Market,
New Delhi-110 001
INDIA.
Telefax: 011-23741542/ 23741537
E-mail: dgsafeguards@nic.in
9. All known
interested parties are also being addressed separately.
10.
Any other party to the investigation who wishes to be
considered as an interested party may submit its request
so as to reach the Director General (Safeguards) within
21 days from the date of this notice.
sd-
(S. S. RANA)
Director General (Safeguards)
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