ELECTRICAL products group Delta Electrical Industries, which was yesterday slapped with a five-year duty by the European Union (EU), said its customers would be liable for the duty.

A Delta representative who did not want to be named said the payment of the duty would not affect the company.

"We will be supplying the product and the only difference is that the customer will be paying the duty. We will maintain our prices and we are entitled to reduce costs," he said.

The EU imposed a five-year duty on a unit of Delta Electrical Industries that makes a material for consumer batteries, risking price increases to shield a producer in Greece from cheaper imports.

The 17,1% levy on electrolytic manganese dioxide (EMD) punishes Delta EMD for selling the product in the EU below cost, a practice known as dumping. The anti-dumping duty, meant to protect Greece's Tosoh Hellas AIC, replaces a provisional 14,9% levy introduced six months ago.

The five-year trade protection aimed to "counteract the unfair competition" and "create a level playing field" so Tosoh Hellas can stay in the market, the EU said in Brussels yesterday. The duty may boost battery prices as much as € 0,02. 2c. euro cents (0.03), the bloc said.

Delta EMD, SA's only producer of electrolytic manganese dioxide, increased its share of the EU market to between 60% and 70% in the 12 months through September 2006, from 30%-40% in 2002, according to the EU.

Tosoh Hellas, a joint venture between Japan's Tosoh and Mitsubishi Corporations, suffered falling sales, market share and profitability as a result of dumping by Delta EMD , the EU said.

The Greek electrolytic manganese dioxide business, which accounts for more than half the bloc's output of the product, became unprofitable and would face the threat of a shutdown without trade protection, according to the bloc.

European battery makers, who have faced increases in prices of raw materials including zinc, nickel, copper and steel, could cope with the duty on electrolytic manganese dioxide, the EU said. The battery industry should be able to pass on costs to consumers, the bloc said.

1c euro cent and € 2c euro cents as a result of the trade protection, according to the bloc.

The EU rejected an offer by Delta EMD to sell electrolytic manganese dioxide in Europe at a minimum price in return for an exemption from the duty, saying a price floor would be less effective and could reduce competition by becoming a reference level on the market.

The 17,1% levy will take effect after being published in the EU Official Journal by March 18.

11 March 2008

Thabang Mokopanele

Johannesburg

Source: allafrica.com