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Final Determination - Concrete Panels

OTTAWA, May 27, 1997

4258-101

AD/1155

STATEMENT OF REASONS

FINAL DETERMINATION OF DUMPING OF CERTAIN CONCRETE PANELS, REINFORCED WITH FIBERGLASS MESH, ORIGINATING IN OR EXPORTED FROM THE UNITED STATES OF AMERICA

DECISION

Pursuant to paragraph 41(1)(a) of the Special Import Measures Act, the Deputy Minister of National Revenue has, on this date, made a final determination of dumping respecting concrete panels, reinforced with fiberglass mesh, originating in or exported from the United States of America and produced by or on behalf of Custom Building Products, its successors and assigns, for use or consumption in the province of British Columbia or Alberta.

This Statement of Reasons is also available in French.

Cet énoncé des motifs est également disponible en français.

STATEMENT OF REASONS

SUMMARY

On November 29, 1996, the Deputy Minister of National Revenue initiated an investigation respecting the alleged injurious dumping of certain concrete panels, reinforced with fiberglass mesh, from the United States of America and produced by Custom Building Products, for use or consumption in British Columbia or Alberta. The investigation was initiated in response to a complaint filed by Bed-Roc Industries Limited of Surrey, British Columbia.

As a result of the investigation, the Deputy Minister is satisfied that the subject goods have been dumped, that the margin of dumping is not insignificant and that the volume of dumped goods is not negligible. Accordingly, the Deputy Minister has made a final determination of dumping in accordance with paragraph 41(1)(a) of the Special Import Measures Act (SIMA).

INTERESTED PARTIES

Complainant

Bed-Roc Industries Limited,

102-9555-194A Street,

Surrey, British Columbia.

V4N 4G4

Exporter

Custom Building Products,

13001 Seal Beach Boulevard,

Seal Beach, California 90740,

United States of America.

Importer

The only importer of concrete panels produced by Custom Building Products in the regional market of British Columbia and Alberta during the period of investigation was:

Custom Building Products of Canada Ltd.,

12638 - 82nd Avenue,

Surrey, British Columbia.

V3W 3G1

PRODUCT INFORMATION

Definition

For purposes of this investigation, subject goods are defined as:

Concrete panels, reinforced with fiberglass mesh, originating in or exported from the United States of America and produced by or on behalf of Custom Building Products, its successors and assigns, for use or consumption in the province of British Columbia or Alberta.

Product Information

There are other producers of concrete panels, reinforced with fiberglass mesh, in the United States that export to British Columbia and Alberta, but it is only concrete panels produced by Custom Building Products that are subject to the investigation. Concrete panels produced by this company alone were identified in the complaint as causing injury, and they represent a large portion of the regional market.

The subject goods produced by Custom Building Products are described as an aggregated portland cement based board, reinforced with a fiberglass mesh embedded in both surfaces. The imported goods are sold under the trade names The Original WonderBoard, Multi+WonderBoard, and Floor+WonderBoard. The three types of WonderBoard, hereafter referred to simply as WonderBoard, are available in a variety of sizes.

The concrete panels, commonly referred to as tile backer board, are used mainly in the construction industry as a backing board for ceramic tile installations around showers, tubs and other wet areas and as an underlayment for ceramic tile, slate and marble floors and countertops. Such goods are also used for exterior sheathing and for wall shields and floor protectors around fireplaces, wood stoves and heaters.

The subject goods are properly classified under the Harmonized System classification number 6810.19.00.00.

CANADIAN INDUSTRY

There are two companies in Canada producing concrete panels reinforced with fiberglass mesh. These are Bed-Roc Industries (Bed-Roc), located in Surrey, British Columbia, and Unifix Inc., located in Bromont, Quebec.

Bed-Roc is a small manufacturer which started producing concrete panels in 1988. Its concrete panels are named Super Panel and Bed-Roc markets the product exclusively in British Columbia and Alberta. Bed-Roc sells Super Panel primarily to building supply retailers which, in turn, sell to contractors and the general public.

Unifix has been producing concrete panels since 1984. It sells concrete panels under various trade names including Unipan. Unifix also produces this product for Westroc Industries of Mississauga, Ontario, which sells it under the trade name Panaroc. Concrete panels produced by Unifix are not sold in the provinces of British Columbia and Alberta, and Unifix did not participate in the dumping complaint filed by Bed-Roc.

CANADIAN MARKET

The size of the Canadian market for concrete panels reinforced with fiberglass mesh was estimated by adding Canadian production to the volume of imports from the United States. The Department obtained information on Canadian production from Bed-Roc and Unifix Inc. The imports into Canada included subject goods produced by Custom Building Products and goods made by other producers in the United States who are not subject to the investigation.

The total apparent Canadian market for concrete panels reinforced with fiberglass mesh was approximately $5,247,000 in the first nine months of 1996.

DETERMINATION OF REGIONAL MARKET

Although dumping investigations normally cover allegedly dumped goods imported across Canada that harm Canadian production as a whole, in certain circumstances a part of the country can be considered a separate regional market and the investigation may be limited to imports into that regional market.

The goods subject to this investigation are those imported into a regional market composed of the provinces of British Columbia and Alberta. In order to identify a regional market in Canada, SIMA specifies that two criteria must exist.

The first criterion is that the producers in the region must sell all or almost all of their production of the product in the regional market. Bed-Roc is the only producer of these concrete panels in the region and the Department confirmed that it sells all of its production within the regional market. Hence, the Department is satisfied that the first criterion for a regional market is met.

The second criterion is that the demand for the product in the regional market should not, to any substantial degree, be supplied by producers located elsewhere in Canada. The Department obtained information from Unifix Inc. and Westroc Industries, and confirmed that like goods produced by Unifix Inc. are not sold in British Columbia and Alberta. Consequently, the Department is satisfied that this second condition is met.

As a result, the evidence suggests that the provinces of British Columbia and Alberta constitute a regional market for concrete panels reinforced with fiberglass mesh, and that Bed-Roc may be considered a separate domestic industry in accordance with subsection 2(1.1) of SIMA.

Of the total apparent Canadian market for concrete panels reinforced with fiberglass mesh, the regional market of British Columbia and Alberta was estimated to account for approximately $512,000 in the first nine months of 1996.

RESULTS OF THE INVESTIGATION

The exporter, Custom Building Products, sells through its subsidiary, Custom Building Products of Canada Ltd., which distributes WonderBoard through ceramic tile, drywall and building supply distributors in Canada.

The investigation concerned shipments in the period of investigation (POI) from January 1, 1996, to September 30, 1996. Although the complaint was specific to concrete panels produced by Custom Building Products for use or consumption in British Columbia or Alberta, the Department also reviewed exports from Custom Building Products into the rest of Canada. This was necessary to determine whether there was a concentration of dumped imports in the regional market of British Columbia and Alberta.

At the time of the initiation of the investigation, the Department identified two companies in British Columbia and Alberta as importers of the subject goods. Subsequent information revealed that one of these companies was actually the consignee, not the purchaser or importer as identified on customs documents. Consequently, the Department is satisfied that there was only one importer of the subject goods during the POI, Custom Building Products of Canada Ltd.

The exporter, Custom Building Products, shipped goods from two plants in the United States during the POI. All exports to British Columbia and Alberta originated from the plant located in Bakersfield, California. All exports into the rest of Canada originated from the plant located in Bridgeport, New Jersey. The Department requested information respecting both plants.

Submissions were received from the corporate office regarding imports into British Columbia and Alberta. No information was received from the plant in Bridgeport, New Jersey. Verification meetings were held with company officials from Custom Building Products in Seal Beach, California. Information was also provided by the importer, Custom Building Products of Canada.

Normal Value and Adjustments

Normal values were determined for each type of WonderBoard exported to Canada during the POI, in accordance with section 15 or 19 of SIMA and the relevant provisions of the Special Import Measures Regulations. The normal value was determined using domestic market sales under section 15 of SIMA for all but one type of WonderBoard.

Section 15:

Normal values were determined using profitable sales of like goods in the United States that were sold to more than one unrelated customer. As there was only one customer in the domestic market who operated at the same trade level as the importer in Canada, a national distributor, sales to purchasers at the nearest and subsequent level of trade were used. This level of trade was determined to be the flooring and tile distributors.

The Department selected customers at this trade level who purchased in quantities comparable to the importer. Sales to these customers during the POI were adjusted in accordance with the regulations as follows.

Regulation 7: Delivery Costs

Where the selling price of like goods included delivery charges incurred in transporting the goods from the producer's factory or warehouse to the domestic customer, an adjustment was made to reduce the selling price by the cost of freight. This adjustment was based on the average cost of freight incurred during the period of investigation.

Regulation 9: Trade Level Adjustment

As normal values were based on sales to purchasers at a trade level subsequent to that of the importer, a trade level adjustment was made. The selling prices were reduced by an amount to reflect the selling expenses incurred on activities that the exporter performed on sales in the United States but did not perform on sales to the importer in Canada.

Section 19:

For one type of subject goods, normal value could not be determined under section 15. The normal value for this type was determined under section 19 of SIMA, using the aggregate of the cost of production of the goods, a reasonable amount for selling, administrative and all other costs, and a reasonable amount for profits.

In calculating an amount for profit under regulation 11, the Department used sales of goods of the same general category produced by the exporter at the Bakersfield, California, plant. Before determining the amount of profit on such sales, the net selling price of the goods, exclusive of freight costs, was reduced to reflect the trade level adjustment provided for under regulation 9.

Export Price

As Custom Building Products of Canada is a wholly-owned subsidiary of the exporter, the Department conducted a reliability test on the declared selling prices prior to the preliminary determination. A comparison of the export prices calculated under section 24 and paragraph 25(1)(c) of SIMA revealed that the declared selling prices were acceptable for purposes of determining export prices. Consequently, export prices were determined under section 24 of SIMA.

Margins of Dumping

During the POI, 100 per cent of the subject goods imported into the regional market of British Columbia and Alberta were found to be dumped. The margins of dumping ranged from 26.8 per cent to 53.8 per cent, with a weighted average margin of dumping of 35.72 per cent, when expressed as a percentage of the normal value.

Concentration of Dumped Imports

When a dumping investigation involves a regional market, the Canadian International Trade Tribunal must determine whether there was a concentration of dumped imports into the regional market. As a result, the Department must provide the Tribunal with information on the volume and margin of dumping of imports into the rest of Canada, as well as into the regional market. Exports by Custom Building Products to the rest of Canada were shipped from the plant in Bridgeport, New Jersey, but in the absence of information on production in that plant, the normal values determined for the plant in Bakersfield, California, were used to calculate the margin of dumping of imports into the rest of Canada. It was determined that imports from Custom Building Products into the rest of Canada were dumped by a margin similar to the imports into the regional market. However, the volume of dumped imports in proportion to the size of the market was significantly less into the rest of Canada than into the regional market of British Columbia and Alberta. This information has been conveyed to the Tribunal.

DECISION

The investigation revealed that the margins of dumping on the subject goods are not insignificant and that the actual volume of dumped goods is not negligible. Accordingly, on this date, pursuant to paragraph 41(1)(a) of SIMA, a final determination of dumping was made with respect to concrete panels, reinforced with fiberglass mesh, originating in or exported from the United States of America and produced by or on behalf of Custom Building Products, its successors and assigns, for use or consumption in the province of British Columbia or Alberta.

FUTURE ACTION

The Canadian International Trade Tribunal's inquiry concerning the question of injury to the producer in the regional market in Canada is continuing and an order or finding will be made by June 27, 1997.

Subject goods imported during the provisional period will continue to be assessed provisional duty as determined at the time of the preliminary determination. This provisional period began on the date of the preliminary determination, February 27, 1997, and will end on the day the Tribunal issues its finding.

If the Tribunal finds that the dumped goods have not caused injury and do not threaten to cause injury, all proceedings relating to this investigation will be terminated. In such a case, all provisional duty paid or security posted by importers will be returned and future importations will not be subject to anti-dumping duty.

If the Tribunal finds that the dumped goods have caused injury, the Department will finalize the anti-dumping duty payable on subject goods released from customs' possession during the provisional period. If the provisional duties paid are in excess of those finally determined during a reinvestigation, the excess duties paid will be refunded. Importations released from customs' possession after the date of the Tribunal's finding will be subject to anti-dumping duty equal to the margin of dumping. If anti-dumping duty is payable, such duty is hereby demanded under section 11 of SIMA.

If the Tribunal finds that the dumped goods threaten to cause injury, all provisional duty paid or security posted by importers will be returned. However, importations released from customs' possession after the date of the Tribunal's finding will be subject to

anti-dumping duty equal to the margin of dumping. If anti-dumping duty is payable, such duty is hereby demanded under section 11 of SIMA.

The margin of dumping, in relation to any goods, is the amount by which the normal value exceeds the export price. Specific normal values for the subject goods have been provided to the exporter. These values will come into effect the day after the Tribunal's finding.

PUBLICATION

Notice of this final determination is being published in the Canada Gazette, pursuant to paragraph 41(3)(a) of SIMA.

INFORMATION

This Statement of Reasons has been provided to persons directly interested in these proceedings. A free copy may be obtained by contacting the departmental officers named below. For further information, please contact one of the following Revenue Canada officers by phone at,

• Jan Smith (613) 954-7409
• Elizabeth White (613) 954-7180

or by telefax at (613) 954-2510, or in writing at the following address:

Department of National Revenue,

Anti-dumping and Countervailing Directorate,

191 Laurier Avenue West,

Ottawa, Ontario.

K1A 0L5

R.A. Séguin
Acting Director General
Anti-dumping and Countervailing Directorate