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Government launches polypropylene dumping probe
The government has begun an investigation into the dumping of biaxially oriented polypropylene (BOPP) imported from Thailand and Vietnam, with the product allegedly sold below fair market price
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he government has begun an investigation into the dumping of biaxially oriented polypropylene (BOPP) imported from Thailand and Vietnam, with the product allegedly sold below fair market price.
The chair of the Trade Ministry's antidumping committee (KADI), Ernawati, said recently that the committee had started the investigation last Wednesday, aiming to ascertain whether Thai and Vietnamese makers were engaged in unfair trading practices.
'The investigation is being carried out at the request of local firms PT Trias Sentosa and PT Lotte Packaging,' Ernawati said recently.
Trias Sentosa, which produces BOPP and baxially oriented polyester (BOPET), saw its net sales drop by 0.8 percent to Rp 1.28 trillion (US$90.5 million) in the first half of this year from Rp 1.29 trillion in the same period last year, with domestic sales decreasing by 3.9 percent.
The company, listed on the Jakarta Stock Exchange (IDX) as TRST, also saw its net profit plunge by 72.8 percent year-on-year (yoy) to Rp 11.46 billion in the first six months of this year from Rp 42.14 trillion, partly as a result of ballooning foreign exchange losses, Trias' financial report shows.
Indonesian Olefin and Plastic Industry Association (Inaplast) chairman for business development Budi Sadiman, meanwhile, said that while the current economic slowdown and weakening local currency might be behind the surging losses experienced by the local polypropylene industry, it was possible that dumping practices committed by certain Thai and Vietnamese producers had contributed to the losses.
'It's possible that some Vietnamese producers, for example, sell their BOPP overseas at a lower price than at home as they currently have an abundant supply,' Budi told The Jakarta Post.
BOPP is widely used in cellophane, waxed paper and aluminum foil.
Last year alone, Budi said, Indonesia's total plastic consumption hit 4.6 million tons, with 2.1 million tons supplied by imported products including BOPP.
According to Trade Ministry data, total BOPP imports from Thailand and Vietnam stood at 26.487 metric tons in 2012, making up 60 percent of Indonesia's total BOPP imports at the time and last year hit 23.443 metric tons, or 65 percent of total BOPP imports.
Budi added that the association expected the government to thoroughly investigate the alleged dumping practices and formulate policy to protect the local industry.
The Trade Ministry has previously imposed a 14.5 percent import duty on steel wire rod, having found that surging imports of the commodity had eroded the market share of local industry players, eventually resulting in continuing losses.
'The ministry has proven that there is a causal relationship between surging import volume and the serious losses experienced by the local industry,' Ernawati said previously.
Steel wire imports incrementally increased to 677,965 tons in 2013 from 222,876 tons in 2010, with most of the imported products coming from China, Japan and Malaysia, data from the Trade Ministry show.
The ministry imposed the 14.5 percent import duty on steel wire rod for the period of Aug. 17, 2015, to Aug. 16, 2016.
The duty is set to gradually decrease to 10 percent for the period of Aug. 17, 2016, to Aug. 16, 2017 and to 5.5 percent for the period of Aug. 17, 2017, to Aug. 16, 2018.
