SA HAS slapped provisional antidumping penalties of 62% and 96% respectively on stainless steel kitchen sink imports from China and Malaysia.

The provisional payment was gazetted by the International Trade Administration Commission (Itac) earlier this month, and is the latest in the saga involving unlisted local kitchen sink manufacturer Franke Kitchen Systems’ battle against cheap imports.

Franke wants trade measures against cheap and subsidised imports, which it said had severely undercut the price of kitchen sinks in the local market and cost it market share.

Itac found in a preliminary determination that the local industry was suffering material harm as a result of dumping. It also determined a residual subsidy margin of 35% for Malaysian manufacturers that did not participate in the investigation.

While the dumping duties for the two countries are relatively high, lower levels of duties have been imposed on two individual Chinese companies and one Malaysian company that had participated in an investigation conducted by Itac in those countries at the end of last year. The companies are presumed to be the predominant exporters of the kitchen sinks into the southern African market.

This is only the third time that provisional dumping duties have been awarded to a local manufacturer against imports from China, since SA granted that country market economy status two years ago and agreed to enhance debate with China on dumping investigations.

Previously, provisional duties had been awarded in complaints against the dumping of polyvinyl chloride and welded steel chain.

The provisional antidumping payment will give Franke temporary respite.

Itac chief commissioner Siyabulela Tsengiwe said on Friday that the commission still needed to make a final determination on the matter.

However, the South African Revenue Service has been asked to institute the provisional duties.

Kitchen sinks are already subject to an import duty of 20%, which means imports would now attract duties of up to 116%.

Importers of kitchen sinks have argued that Franke previously had a de facto monopoly in the local market, and that a successful application would reinstate Franke’s monopoly.

The secretary of the European Brassware and Sanitaryware Manufacturers and Importers Association, Wouter Swanepoel, told Business Day that items such as heavy-duty stainless steel kitchen sinks for hotels and restaurants, and even hand basins for the change rooms of the 2010 Soccer World Cup stadiums, were categorised under the same tariff heading as domestic kitchen sinks.

This meant imported product would be penalised by additional duties even where Franke did not manufacture these products locally.

Franke first brought an antidumping application in June last year, saying dumped products were threatening 500 jobs in the industry.

According to Franke, Chinese and Malaysian products were undercutting the price of local products by 24% and 39% respectively, leading to price suppression, which meant the company could not recover manufacturing cost. Local manufacturers’ output decreased as a result, and they sacrificed considerable market share.

Franke could not be reached for comment at the weekend.

MATHABO LE ROUX
lerouxm@bdfm.co.za

Trade and Industry Editor

Posted to the web on: 28 April 2009

Source: www.businessday.co.za