STAFF REPORT ON THE ANTI-DUMPING PROTEST AGAINST THE IMPORTATION OF CLEAR FIGURED GLASS FROM PEOPLE'S REPUBLIC OF CHINA
(HS Heading No. 7003.19 90)
Anti-Dumping Investigation No. 00-01

INTRODUCTION

1. The Anti-Dumping Protest

On 27 June 2000, Republic Asahi Glass Corporation (RAGC) filed with the Department of Trade and Industry - Bureau of Import Services (DTI-BIS) an anti-dumping protest against the importation of Clear Figured Glass from the People's Republic of China (PROC) on the ground that said products were imported at dumped prices and were causing injury to the domestic industry.

The PROC government were officially notified by the DTI-BIS of the anti-dumping investigation on 06 July 2000. Likewise, the protestant, exporters, foreign producers, importers, and other interested parties were notified of the initiation on the same date. Notices to initiate said anti-dumping investigation were also published in the Manila Standard and the Philippine Star on 11 July 2000.

The DTI-BIS preliminary investigation indicated an affirmative finding of the necessary elements of dumping which merit the imposition of the corresponding provisional bond for the identified exporters of clear figured glass from the People's Republic of China with thicknesses of 3mm, 5mm, 5.5mm manufactured/exported to the Philippines by Shanghai Ta-Yuan Glass Co. Ltd (STG) and Shanghai Cen Eagle Industrial Trading.

On 05 December 2000, the Tariff Commission received the request from the DTI-BIS to undertake the formal investigation of the case pursuant to Section 301 of the Tariff and Customs Code, as amended by RA 8752.

2. The Investigation

2.1 Period of Investigation

For dumping determination, the Commission’s investigation covered imports of clear figured glass for the 12-month period from 01 January to December 31, 1999. With respect to injury, the period covered were years 1997 to 1999.

2.2 Notifications (Annex A)

Notices of Formal Investigation were published in the Manila Times and the Philippine Star on 09 December 2000.

On 07 December 2000, notifications were sent to Ambassador Fu Ying of the People's Republic of China (PROC) and the Philippine Ambassador to PROC Mr. Agustin C. Mangila Jr. with the information that the Commission had assumed jurisdiction over the anti-dumping protest of RAGC for formal investigation. Also notified, through their embassies in Manila, were the governments of the trading firms whose clear figured glass exports from PROC were subject to provisional measures.

Individual notifications were likewise sent to the local manufacturer (RAGC), two (2) foreign manufacturers (STG & Shang-hai Cen Eagle Industrial Trading) and five (5) importers (Malabon Mirror Factory and Aluminum Inds. , Isla Industrial Sales, Philtech Glass, Comglasco Corp. and Vetro Aluminum Phils.).

2.3 Preliminary Conference

Preliminary conference was held on 12 December 2000 for the purpose of exploring the possibility of amicable settlement/price undertaking, and to apprise the parties on the procedure of investigation and other related matters necessary for the speedy disposition of the case.

Representatives and/or counsels for the domestic manufacturer and importer-protestees attended the consultation.

Public consultation which were tentatively set from 30 January to 3 February 2001 were postponed since RAGC did not submit data on injury before the scheduled hearing, a meeting was instead held on 30 January 2001 and interested parties agreed to reset the public hearings from 19 to 22 February 2001.

2.4 Submission of Initial Memoranda/Position Papers

On 22 December 2000, the Commission received the position paper of RAGC (local manufacturer) regarding product comparability, price difference, injury and causal linkage.

On 05 January 2001 STG (exporter) submitted initial memoranda regarding comparability, price difference, injury and causal linkage.

2.5 Plant Visits/Verification

2.5.1 Domestic Industry

On 05 January 2001, the Commission conducted an ocular inspection at the plant facilities of RAGC in Pasig City.

2.5.2 Exporter

From 03 to 07 January 2001, the Commission conducted an ocular inspection and verification of books of accounts at the plant and office facilities of STG in Shanghai, China.

THE DOMESTIC INDUSTRY AND MARKET

1. Product Under Consideration

The product, which has been imported and is subject of this protest, is hereafter referred to as the "product under consideration".

1.1. Local Product

Clear figured glass being manufactured by Republic Asahi Glass Corporation has attractive pattern on one surface to permit light to pass through but diffuse it so that the object are not clearly visible.

RAGC’s figured glass is the product of the most advanced roll-out process. This glass is specially used in windows, room partitions, light screens, fluorescent fixtures of residences, offices, hotels, shops, restaurants and commercial and industrial buildings.

It is available in different sizes and patterns such as Luningning (International name Mislite), Hasmin International name Nashiji), Sampaguita (International name Flora), Checkerlite, Karatachi, and Moran.

1.2 Imported Product

STG produces figured glass used for architectural application in buildings, furniture and decoration, windows and doors. It manufactures different patterns e.g., MORU, MISTLITE, FLORA, HISHICROSS, NASHIJI, AQUALITE, KASUMI, OCEANIC and WANJA with thicknesses from 3mm to 6mm.

2. Market Participants

2.1 Domestic Producer

Republic-Asahi Glass Corporation (RAGC) was incorporated on 30 August 1988 as a joint venture company between Republic Glass Holdings Corporation (formerly Republic Glass Corporation) of the Philippines and Asahi Company, Ltd. of Japan.

It has an authorized capital investment of P2.40 billion, of which P 1.558 billion is subscribed. The company is the sole manufacturer of clear figured glass in the Philippines with existing annual plant capacity of 43,795 converted cases or 1,990.68 MT and an estimated actual capacity of 41,061 converted cases or 1,866.41 MT. It is a holder of ISO 9002 certificate for the production of float glass.

In Metro Manila and Luzon areas, there are (5) five authorized distributors of figured glass, namely: Chain Glass Enterprises; Glasteck, Inc.; Pacific Glass Corporation; Quinta Trading Co.Inc; and Valerie Products Mfg., Inc. Aside from the trading of clear figured glass, most of these distributors have existing facilities in the processing of glass e.g., bevelling, cutting, and polishing machines. The processed glass are then manufactured into furniture, windows, decorative purposes, etc.

2.2 Foreign Manufacturers/Exporters

Shanghai Ta-yuan Glass Co., Ltd. (STG) was established in December 1995 as a full foreign capital enterprise. It is located in a 66,000 sq. meter area at Nanxiang Economic Developing Area of Jiading District in Shanghai, the largest city in China. On 15 August 1997, the company started manufacturing figured glass with thicknesses of 2.5 mm to 10 mm in its 1^st production line. It invested US $10 million with an annual capacity of 25,000 MT. The technology and machinery came from Taiwan Hsinchu Glass Industrial Ltd., Co. On 26 August 1999, the 2^nd figured glass production line was commissioned to produce 50,000 MT annually. The investment amounted US $ 8 million. STG started exporting to the Philippines in September 1997. In October 1997, STG exported its figured glass to other countries i.e., USA, Japan, Korea, Europe, Australia, among others.

It exports MISTLITE, HISHICROSS and WANJA designs to the Philippines.

STG employs a total of 300 employees (270 plant and 30 office). It supplies 30% of the domestic market in China.

2.3 Importers

2.3.1 Malabon Mirror Factory & Aluminum Industries, Inc. (MMFAII)

MMFAII was established as a single proprietorship with a capital of P10, 000.00. At first the company provides only service to walk-in customers, until after such a time that because of its customer's demand, it also provided for materials coming from local and foreign market.

It has become pioneer in the automatic, polishing, bevelling and smoothing of glasses and mirrors.

In 1978 the company became a corporation when it expanded its business venture where it added to its line, manufacturing of jalousies and inclusion of accessories.

The company sources its glass from RAGC’s distributors Century Glass Corp. and imported glass from China.

2.3.2 Isla Industrial Sales

Isla Industrial Sales started its operation as a trading company in 1982 and renewed its business name in 1998 with a capital expenditure of P200, 000.00. Its principal line of business are the processing of local and imported glass and construction materials.

2.3.3 Philtech Glass

Philtech Glass is a Filipino owned company engaged in the processing of glass with office located at San Francisco Del Monte, Q.C.

An ocular inspection at the plant facilities of Philtech in Q.C. was conducted on 16 January 2001 as well as the verification of information.

3. Industry Support

RAGC is the sole local manufacturer of clear figured glass in the Philippines during the POI. As such, the applicant satisfies the requirement of domestic industry support.

4. Market Shares

Total Philippine market for clear figured glass contracted by 15% from 1997 to 1998. However, in 1999, there was a slight increase of 6%. RAGC supplied more than half of the total domestic clear figured glass requirements of glass processors as well as ancillary industries at 90.69% in 1997, 85.84% in 1998 and 77.86% in 1999.

RAGC’s local sales exhibited a declining trend from 1997 to 1999. From 1997 level, sales dropped by 19% in 1998 and further by 22% in 1999. Imports from PROC as a percentage of domestic market represents 4% in 1997, went down to 2% in 1998 but had significantly grown to 6% in 1999. On the other hand, imports from other countries were continuously on the uptrend registering a 6% share in 1997, 12% in 1998 and 16% in 1999.

Hence, all imports of subject article have eroded the market share of locally produced clear figured glass.

DETERMINATION OF LIKE PRODUCT

Article 2.6 of the Agreement, defines the term "like product" as:

"A product which is identical, i.e., alike in all respect to the product under consideration, or in the absence of such a product, another product which, although not alike in all respects, has characteristics closely resembling those of the product under consideration/"

Issues Raised

1.1 RAGC

The locally produced clear figured glass and the protested article imported from the PROC are made from the same basic raw materials and used the same production process, these are used in the same area of applications.

1.2 STG

STG alleged that the imported clear figured glass is different in quality and have different characteristics from the locally manufactured glass. This was echoed by importers Malabon and Isla. However, the allegation of difference in quality by the exporter and importers was not substantiated by any evidence which would result in a distinction that would make the domestic product different from the imported counterpart.

2. Characteristics

2.1 RAGC

Clear figured glass being manufactured by RAGC has a translucent surface at different designs wherein one surface permits light to pass through it in diffused manner so that the objects are not clearly visible.

It is available in different sizes and patterns such as Luningning (International name Mislite), Hasmin International name Nashiji), Sampaguita (International name Flora), Checkerlite, Karatachi, and Moran.

Table 1: SIZES AND DESIGNS OF LOCALLY PRODUCED CLEAR FIGURED GLASS

                 
Cast glass and rolled glass, in sheet or profiles, whether or not having an absorbent, reflecting or non-reflecting layer, but not otherwise worked.