2. Introduction
2.1 Proceedings
17. On 26 August 2005 the Chief Executive of the Ministry of Economic Development (Ministry) received a properly documented application from Winstone Wallboards Limited (Winstone) for a review of anti-dumping duties that currently apply to imports of plasterboard from the Kingdom of Thailand (Thailand).
18. The anti-dumping duties that currently apply to plasterboard imports are the result of two separate cases. The first covers plasterboard from Thailand ranging from 8.75 millimetres (mm) to 10.25 mm in thickness. This description results from a number of investigations conducted since 1989 and the duty was reassessed on 19 November 2000. The second is plasterboard from Thailand (Other Sizes) that expanded the range of thickness of plasterboard subject to duties to 6 mm to 12 mm, which was imposed on 27 September 2000. Both of these duties were reassessed together and new rates were imposed on 4 December 2002. The duties would have expired on 27 September 2005 and 19 November 2005, unless a review had been initiated prior to then. The goods on which duties currently apply are described below:
19. The Investigating Team proposes to clarify the current goods description as below. It is considered that this will not have any effect on the goods covered by the description and is merely for the purpose of improving the language of the description:
20. Unless otherwise stated any references to plasterboard, or standard plasterboard, throughout this report are references to plasterboard of the type described above.
21. On 26 September 2005, the Chief Executive of the Ministry initiated a review of the duties currently in place against imports of plasterboard from Thailand, being satisfied, in accordance with sub-section 14(8) of the Dumping and Countervailing Duties Act 1988, and its subsequent amendments, (Act) and Article 11.3 of the World Trade Organisation Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Agreement) that Winstone, as the domestic industry, had submitted positive evidence justifying the need for a review within a reasonable period of time prior to the impending expiry of the duties.
22. Paragraph 3 of Article 11 of the Agreement sets out the matters to be addressed in a "sunset review", that is, when the anti-dumping duties are set to expire after five years has passed either since their initial implementation, or the last substantive review:
…Any definitive anti-dumping duty shall be terminated on a date not later than five years from its imposition (or from the date of the most recent review under paragraph 2 if that review has covered both dumping and injury, or under this paragraph), unless the authorities determine, in a review initiated before that date…upon a duly substantiated request made by …the domestic industry within a reasonable period of time prior to that date, that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury [footnote omitted]. The duty may remain in force pending the outcome of such a review."
2.2 Review Details and Exchange Rates
23. The period of review is the year ended 31 August 2005. In tables, column totals may differ from individual figures because of rounding. Unless otherwise stated all annual figures are given for the year ended 30 June.
24. Sub-paragraph 4.1 of Article 2 of the Agreement states:
When the comparison under paragraph 4 requires a conversion of currencies such conversion should be made using the rate of exchange on the date of sale8, provided that when a sale of foreign currency on forward markets is directly linked to the export sale involved, the rate of exchange in the forward sale shall be used. Fluctuations in exchange rates shall be ignored and in an investigation the authorities shall allow exporters at least 60 days to have adjusted their export prices to reflect sustained movements in exchange rates during the period of investigation.8
Normally, the date of sale would be the date of contract, purchase order, order confirmation, or invoice, whichever establishes the material terms of sale.
25. [Text deleted due to confidentiality] in the review [text deleted due to confidentiality] in New Zealand Dollars (NZD) and transactions on the Thai domestic market were in Baht (THB). Any currency conversions that were required, have been converted at a specified forward rate, if this was available to the Investigating Team, or alternatively converted at the date of sale using the inter-bank spot rate as displayed on FXConverter .
2.3 Disclosure of Information
26. The Ministry makes available all non-confidential information to any interested party through its public file system. Paragraph 7 of Article 6 of the Agreement states:
In order to verify information provided or to obtain further details, the authorities may carry out investigations in the territory of other Members as required, provided they obtain the agreement of the firms concerned and notify the representatives of the government of the Member in question, and unless that Member objects to the investigation. The procedures described in Annex I shall apply to investigations carried out in the territory of other Members. Subject to the requirement to protect confidential information, the authorities shall make the results of any such investigations available, or shall provide disclosure thereof pursuant to paragraph 9, to the firms to which they pertain and may make such results available to the applicants.
27. The Investigating Team carried out visits with representatives from the following companies in order to verify information or to obtain further details: Winstone, SCT Co. Ltd., (SCT), The Siam Gypsum Industry (Saraburi) Co., Ltd. (SGI), BPB Thai Gypsum Plc. (BPB) and Elephant Plasterboard New Zealand Limited (Elephant) in the course of this review. Copies of the reports prepared following these visits were provided to the relevant parties for comment and non-confidential versions placed on the public file.
28. The only interested party that the Investigating Team did not meet with was Building Materials (NZ) Limited (BML).
29. Paragraph 8 of Article 6 of the Agreement states:
In cases in which any interested party refuses access to, or otherwise does not provide, necessary information within a reasonable period or significantly impedes the investigation, preliminary and final determinations, affirmative or negative, may be made on the basis of the facts available. The provisions of Annex II shall be observed in the application of this paragraph.
30. Information was requested, but not received, or not received in a timely fashion, or to the extent required, from BPB, BML, Elephant and, to a lesser extent, from SGI and SCT. Winstone also provided only limited detail on certain matters but also provided substantive information in other areas.
31. As the Investigating Team has not received full information from all parties some of the findings in this report are based on the best information available to the Investigating Team. The relevant information relied on is detailed in each section of the report.
32. The Interim Report for this review was released in summary to interested parties on 23 February 2006 and later in full on 27 February 2006. Parties were given until 10 March 2006 to comment upon the report. Submissions were received from BPB, Elephant and Winstone. All submissions received in relation to the Interim Report have been taken into account and included in the analysis leading to the recommendations in this report. Specific submissions are discussed in the relevant sections below. No submissions on the Interim Report were made by BML or SGI/SCT.
2.4 Background
33. Anti-dumping duties relating to the importation of plasterboard from Thailand were first imposed in December 1989 and have been the subject of thirteen separate anti-dumping investigative actions since, including reviews and reassessments of the applicable duties.
34. The number of investigative actions taken in respect of the plasterboard duties is relatively high and have canvassed the coverage of goods subject to the duties, the basis for collecting duties, changed import arrangements, and matters arising in the settlement of judicial review proceedings. Significant events are summarised below.
35. The Minister of Commerce first imposed anti-dumping duties on plasterboard (9 or 9.5 mm) from Thailand in December 1989 in the form of a specific amount of duty per square metre.
36. Following a reassessment, the mechanism for collecting the anti-dumping duty was changed to a non-injurious free on board (NIFOB) mechanism in April 1991.
37. A review was undertaken in 1995 that concluded the dumped imports threatened "further material injury additional to that found in the original investigation". The duties were again reassessed in February 1996, at which time the NIFOB was increased.
38. In March 1996 the NIFOB was extended to cover various lengths of 9 or 9.5 mm plasterboard. In July the same year the NIFOB was also extended to apply to 10 mm plasterboard and an interim reassessment took account of a reduction in the applicable tariff rate (as set out in the Working Tariff of New Zealand) and the NIFOB was increased.
39. A further reassessment in January 1997 took account of changes in the values of the elements of the NIFOB and it was increased again.
40. An application for judicial review of the February 1996 review and reassessment was made by Winstone in August 1997, which was settled out of court and was followed by another reassessment. The reassessment resulted in anti-dumping duties being imposed via a reference price mechanism, allowing the dumping margin (and corresponding duty payable) to be calculated for each shipment. Winstone challenged the Ministry's conclusions in the reassessment based on its interpretation of the Act. The Crown Law Office confirmed the Ministry's interpretation of the Act in December 1998.
41. In September 1999, the duties were reassessed and it was apparent that dumping margins had increased significantly, but it was considered that the level of injury could only be reconsidered as part of a review. Accordingly, a review was initiated in September 1999 and completed in March 2000. The review concluded that the continued imposition of anti-dumping duties was necessary to prevent a recurrence of injury to the New Zealand industry and a reassessment was initiated in April 2000, following an application by Winstone regarding increased normal values in Thailand.
42. The Ministry also initiated on 5 April 2000 an investigation into the alleged dumping of standard plasterboard outside the (then) current subject goods description and in September 2000, the goods subject to duty were extended accordingly upon the basis of a threat of material injury to "standard plasterboard with dimensions of a nominal thickness from, but not including 6 mm, and up to, but not including 12 mm, of any width or length".
43. The two differing duties were reassessed together and new rates were effective from 4 December 2002.
Grounds for the Application
44. As stated above, the application for this review was based on the imminent expiry of the anti-dumping duties. Winstone does not claim that it has been suffering any material injury due to the importation of plasterboard from Thailand over the period of review and stated that the anti-dumping duties have been effective to this end.
2.5 Interested Parties
New Zealand Industry
45. The application was submitted by Winstone, which is a wholly owned subsidiary of Fletcher Building Limited (FBL). Throughout the history of the anti-dumping duties on plasterboard from Thailand, Winstone has been the sole manufacturer of plasterboard in New Zealand.
46. The Investigating Team has not discovered, nor been presented with, any information during the course of this review that suggests Winstone is no longer the sole New Zealand producer of plasterboard.
Manufacturers and Exporters
47. Two companies were identified as being manufacturers of the subject goods exported to New Zealand. Those companies are SGI and BPB. BPB exports directly to New Zealand and SGI exports to New Zealand via its related company, SCT.
48. SGI is part of the Siam Cement Public Co. Ltd (Siam Cement) group of companies, and manufactures plasterboard for both the Thai domestic market and for export under the "Elephant" brand. SGI is now 71 percent owned by Lafarge Boral Gypsum Asia (Lafarge). It has headquarters in Bangkok and production facilities in Saraburi.
49. SCT is the export arm of the Siam Cement group of companies and handles the group's international trading and marketing for a wide range of products, including plasterboard. SCT does not conduct any sales in the Thai domestic market.
50. SGI and SCT provided some information and co-operated with the Investigating Team in relation to the review. For the remainder of this report, where relevant, both companies are, at their request, referred to as SGI/SCT.
51. BPB manufactures for the Thai domestic market and exports plasterboard to a number of countries. BPB has been part of the BPB global group since December 1999. Its headquarters are in Bangkok and it has production facilities elsewhere in Thailand. BPB plasterboard is marketed under the "BPB" brand.
52. BPB has provided very limited information to the Investigating Team in relation to this review.
53. The New Zealand Customs Service (Customs) data also showed a third exporter over the period of review, [text deleted due to confidentiality]. There was a single shipment by this exporter. No contact with the exporter was made. Exports by this company are discussed further at paragraph 57.
Importers
54. Since the initial imposition of duties in 1989 to the present review, there have primarily been two or three individuals that have owned and operated various legal entities involved in the importation of plasterboard from Thailand and its consequent sale in the New Zealand market. Currently there are two companies importing plasterboard on an ongoing basis from Thailand, one from each Thai manufacturer.
55. The first is Elephant that involves the continuation of business previously conducted by Sigma Agencies Limited and Rikki Merchants Limited. Elephant purchases plasterboard from SGI/SCT.
56. The second company importing plasterboard from Thailand is BML. BML involves the continuation of business previously conducted as CTS Quality Building Products Limited. BML imports plasterboard from BPB.
57. The Customs data also showed a third importer over the period of review, [text deleted due to confidentiality]. The Customs data showed only one importation by [text deleted due to confidentiality] over the period of review for an amount of xxxx square metres, being a very small amount, only slightly above 0 percent of the total imports from Thailand over the period of review. Due to the size of the importation, that only a single shipment has been imported and the information supplied by the importer, namely that it was a one off shipment and no ongoing importations would be made; the Investigating Team has not included this importer or the corresponding exporter in the review.
Elephant
58. The business structure of the entities that preceded Elephant have previously been the subject of much debate in previous reviews and reassessments. The business structure of Elephant has not been a topic of any significance in the present review. Elephant is the sole distributor of SGI/SCT manufactured plasterboard in New Zealand. Elephant currently sells plasterboard to distributors and to end-users and ([text deleted due to confidentiality]) attempts to process all its sales through distributors, including delivered to site sales.
59. During the period of review Elephant purchased directly from, and were invoiced directly by, SGI/SCT in xxxx.
60. Limited information and co-operation has been provided by Elephant in respect of this review.
BML
61. BML has provided limited information, by means of a partial questionnaire response, to the Investigating Team and beyond this has not co-operated in respect of this review.
62. BML stated that it sells plasterboard ex-wharf to stockists, ex-store to distributors and thirdly in house lots (processed through its stockist) that are delivered directly to site.
2.6 Imported Goods
63. The goods which are the subject of this review are described in paragraph 19. Customs has previously advised that plasterboard imported from Thailand enters New Zealand under tariff item and statistical key 6809.11.00.10D, as shown below.
68.09 Articles of plaster or of compositions based on plaster: - boards, sheets, panels, tiles and similar articles, not ornamented:68.09.11.00 10 d - faced or reinforced with paper or paperboard only
64. The subject goods fall under the same tariff item as all other standard and performance plasterboards imported into New Zealand. Imported plasterboard from Thailand is eligible to enter New Zealand at the preferential `less developed countries' tariff rate of 5 percent (the Normal tariff rate for imports from non-preferential sources is 6.5 percent).
65. Under the New Zealand Thailand Closer Economic Partnership Agreement the 5 percent preferential rate will remain in place at that level until 2 January 2010, when it will reduce to zero.
66. The plasterboard exported from Thailand is sent directly to New Zealand and does not pass through any third countries.
Superspand
67. Since the last review by the Ministry, SGI/SCT has begun exporting [text deleted due to confidentiality] quantities of a certain type of plasterboard, Superspand, to New Zealand, which appears to fall within the description of the goods under review.
68. The Investigating Team considered at the time it prepared SGI/SCT's verification report, that the information supplied to it to date did not provide any basis on which to distinguish and exclude Superspand from the goods under review. The Investigating Team directly asked SGI/SCT and Elephant to comment on this.
69. SGI/SCT commented on the issue and Elephant declined to provide any written submission on this issue, but stated verbally that the evidence already in front of the Investigating Team supports the position that Superspand is not standard plasterboard.
70. In SGI/SCT's response to the Ministry's questionnaire it did not include Superspand in the amounts for goods subject to duties exported over the period of review.
71. xxxx of the xxxx lines of Superspand product were dumped over the period of review.
72. In response to the Interim Report, Winstone stated that "like SGI" it considers Superspand is a performance plasterboard and therefore not a good subject to the anti-dumping duty. Details of Winstone's submission are addressed in the relevant sections below.
Physical Characteristics
73. Superspand has a thickness of 10 mm, width of 1200 mm and is available in a range of lengths; 2.4 metres (m), 2.7 m, 3.0 m, 3.6m, 4.2 m, 4.8 m and 6.0 m. Standard plasterboard is also available from Elephant in these same sizes, but is also available in an additional two lengths of 3.3m and 3.9m.
74. SGI/SCT stated that the formulation for Superspand was [text deleted due to confidentiality] to that used for standard plasterboard but did not provide any documentation to support this. SGI/SCT also added that it did not consider [text deleted due to confidentiality] formulations enough to distinguish two types of plasterboard, with [text deleted due to confidentiality] of its formulations for all types of plasterboard [text deleted due to confidentiality].
75. SGI/SCT commented that an outcome of the [text deleted due to confidentiality] is that Superspand is [text deleted due to confidentiality] than standard board, but again no evidence was submitted on this, or any attempt made at quantifying this.
76. Winstone stated that Superspand is a fire and sound rated board and contains fibreglass in order to attain fire-rated properties. The Investigating Team does not have any information regarding the existence or levels of fibreglass in the imported standard plasterboard to assess this statement against.
77. Elephant corrected the Investigating Team's statement in the Interim Report that Superspand has reddish paper, stating that it has white paper, as does its standard board. The Investigating Team has not sighted either the standard or Superspand boards in sufficient detail and has accepted Elephant's statement on this.
78. The Investigating Team notes that Superspand is xxxx kilograms (kg) per square metre, or xxxx percent heavier than Elephant's standard plasterboard. According to Elephant's price list 10 mm Superspand weighs xxxx kg per square metre compared with xxxx kg for the same thickness of standard board. Elephant's 10 mm Fireboard performance plasterboard also weighs xxxx kg per square metre. Superspand is also xxxx] percent heavier than Winstone's 10 mm standard plasterboard at xxxx kg per square metre.
79. The Investigating Team considers that, based on the evidence currently before it and in the absence of any further explanation, there are physical differences between Elephant's Superspand and standard plasterboards but that these alone are not sufficient to distinguish Superspand from the subject goods description.
Function/Usage
80. Elephant's advertising brochure states that the Superspand product "is designed for use in ceilings". The Investigating Team notes that traditionally 10 mm standard plasterboard has been (and continues to be) used in ceilings. Recently there has been a trend towards using thicker 13 mm standard plasterboard in ceilings, but this is still a standard board, although not of the type subject to anti-dumping duties, rather than a high performance fire or water rated performance board. However, the Elephant brochure also states that the Superspand product "can also be used in fire & sound rated systems".
81. Winstone stated in response to the Interim Report that Superspand is recommended for use in ceilings with 600 mm centres, being the space between the ceiling batons, rather than 450 mm centres Elephant recommends when utilising its 10 mm standard plasterboard.
82. Winstone said that Elephant's published fire and noise control systems incorporate 10 mm Superspand. Winstone gave the example "system specification EBT(L)A60 is a double timber frame wall with two layers of Superspand fixed to each frame. With cavity insulation this system offers 60/60/60 FRR and 62 STC." Winstone stated that Elephant has "…a number of other systems which claim to possess higher performance rating characteristics that incorporate Superspand."
83. Winstone also commented that Elephant's Superboard, the name under which the Superspand product is presented in the New Zealand market, competes directly with its 10 mm Ultraline product, which Winstone classifies as a performance board.
84. Winstone's website states that its GIB Ultraline® product has a "special white surface paper [with] a finer, smoother texture, and a special mix of plaster and fibreglass reinforcing in its core. These features make it more solid and rigid than 10 mm GIB® standard plasterboard and result in an enhanced finish quality".
85. The Investigating Team notes that Elephant's FireBlock fire rated performance plasterboard is described in the Elephant brochure material as having "greater resistance to fire formulated by adding non-combustible fibre to the gypsum and encased with pink glutinous compressed paper to enhance its strength. Manufactured to provide fire resistance rating from ½-4 hours". This description seems to place Elephant's FireBlock in direct competition with GIB Ultraline® product and there is no corresponding distinction, as to composition or function, for the Superspand product in Elephant's marketing material.
86. From the information available to the Investigating Team it appears that Superspand is not sold in the Thai market and that SGI/SCT only sells 12 mm and 15 mm Firebloc plasterboard in Thailand, as opposed to 9 mm for its HeatBloc and MoistBloc products. Elephant also imports 10 mm and 13 mm Fireboard into New Zealand.
87. The Investigating Team is aware that technical or performance plasterboards can be used in place of standard board in any instance. The circumstances in which Superspand is used also needs to be considered in the context of the increasing use of performance plasterboard in the New Zealand market and the extent to which this may be replacing standard plasterboard.
88. The Investigating Team considers that there appears to be substantive differences in the function and usage of standard plasterboard and the Superspand board.
Pricing Structures
89. Exports of Superspand from SGI/SCT to Elephant at NZD xxxx per square metre are priced xxxx percent [text deleted due to confidentiality] than the corresponding exports of standard plasterboard at NZD xxxx per square metre.
90. In the New Zealand market Elephant's list price for delivered to site sales within the Auckland sales zone is NZD xxxx per square metre for 10 mm standard plasterboard. This is compared to NZD xxxx per square metre for 10 mm Superspand for the same type of sale, being xxxx percent [text deleted due to confidentiality]. The price for Elephant's Fireboard is [text deleted due to confidentiality] its price for Superspand.
91. The purchase prices of Superspand and standard plasterboard are [text deleted due to confidentiality] and the difference between the selling prices is [text deleted due to confidentiality] indicates that Superspand and standard plasterboard are not priced to the New Zealand market as being alternate boards.
92. Winstone stated that as Superspand is not sold in the Thai market, which is comprised predominantly of standard plasterboard, it believes that the inclusion of Superspand with its higher price in the goods subject to review would understate the level of dumping calculated by the Investigating Team.
Marketing
93. SGI/SCT stated that the fact that Superspand was not standard plasterboard and therefore not subject to the anti-dumping duties, is supported by Elephant's marketing of Superspand as a performance board in New Zealand.
94. Elephant's product brochure advertises Superspand as "Super board" and part of its performance/technical board range. The brochure states that Superspand is "a high performance board designed for use in ceilings and that it can also be used in fire and sound rated systems.
Conclusion on Superspand
95. While Superspand and standard plasterboard are available in the same thickness and identical range of sizes (lengths and width) and can be used in similar circumstances there are also some key differences that mean the two types of plasterboard are distinguishable.
96. These differences include; the use of Superspand in ceiling systems with 600 mm centres (as opposed to 450 mm for standard plasterboard), it is marketed by Elephant as a higher performance product; Winstone considers that Superspand competes directly with Ultraline one of its performance plasterboards, the price in the New Zealand market is [text deleted due to confidentiality] than that of standard plasterboard, it has a xxxx composition to the standard plasterboard and significantly SGI, Elephant and Winstone all consider that it is not a like good to standard plasterboard.
97. The Investigating Team has given considerable weight to the fact that Winstone, as the domestic industry, does not consider Superspand is covered by the description of goods subject to the duty and that Winstone's standard plasterboard is not a like good to the Superspand product.
98. The Investigating Team considers, on the information now before it, that Superspand is not covered by the subject goods description and therefore has been excluded from the review. The calculations relating to dumping margins and imports of subject goods now differ from those reported in the Interim Report, as they exclude imports of Superspand.
2.7 New Zealand Industry
Like Goods
99. In order to establish the existence and extent of the New Zealand industry for the purposes of assessing like goods, section 3 of the Act stipulates that it is necessary to determine whether there are New Zealand producers of goods which are like the subject goods in all respects, and if not, whether there are producers of other goods which have characteristics closely resembling the subject goods. The subject goods are described in paragraph 19.
100. The standard plasterboard imported into New Zealand, which falls within the definition of the board subject to duty, closely resembles 10 mm standard plasterboard produced by Winstone. Winstone markets these like goods as its GIB®reg; 10 mm standard plasterboard and 10 mm GIB Wideline® plasterboard available in several lengths and widths.
101. GIB Wideline® was not manufactured by Winstone at the time the anti-dumping duties against imports from Thailand were first introduced. The development of the New Zealand market has, over time, seen changes in building techniques and corresponding demand. One of these changes has been the expansion of the dimensions of plasterboard used in the New Zealand market. This has occurred in response to greater levels of horizontal installation of plasterboard, as opposed to traditional vertical installation and changing stud heights. Importers have also responded to these changes by importing plasterboard in a wider range of lengths and widths. GIB Wideline® is [text deleted due to confidentiality]as standard plasterboard, with its [text deleted due to confidentiality] being that it is wider at 1350 mm than the other standard plasterboard at 1200 mm.
102. Changes in manufacturing dimensions, within the nominal thicknesses of 6 mm and 12 mm, do not change the essential character of the goods and any dimensions of board within this range would be considered standard plasterboard. Therefore on the basis of the information available, the Investigating Team considers that standard plasterboard produced by Winstone are goods that closely resemble the subject goods and therefore like goods.
Conclusion
103. Winstone is the New Zealand industry producing like goods. Winstone has constituted the New Zealand industry manufacturing standard plasterboard, and its applications have been supported to the standard defined by sub-section 10(3) of the Act, in all previous investigative actions undertaken.
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