GB 2016 IN
Certain Gypsum Board
Statement of Reasons

[14] The complainant, CertainTeed Gypsum Canada Inc., operates six gypsum board manufacturing facilities located throughout Canada and is the only producer of gypsum board located in Western Canada, with three manufacturing facilities located in Vancouver, British Columbia, Calgary, Alberta and Winnipeg, Manitoba. As such, the complainant accounts for all domestic production of like goods in Western Canada, as defined in subsection 2(1) of SIMA.

[15] The name and address of the complainant’s head office is as follows:

[16] At the initiation of the investigation, the CBSA identified 36 potential importers of the subject goods based on both information provided by the complainant and CBSA import entry documentation.

[17] The CBSA sent an importer Request for Information (RFI) to all potential importers of the goods. The CBSA received five responses to the importer RFI.

[18] Supplemental RFIs (SRFI) were sent to three of the importers to gather additional information and seek clarification regarding their original RFI responses.

[19] The CBSA received responses to the SRFIs from the three importers.

[20] At the initiation of the investigation, the CBSA identified 25 potential exporters of the subject goods from information provided by the complainant and CBSA import entry documentation. The CBSA sent exporter RFIs to each of the potential exporters in the US.

[21] The CBSA received three substantially complete responses to the exporter RFI from exporters in the US.

[22] SRFIs were sent to these three exporters to gather additional information and seek clarification regarding their original RFI responses. The CBSA received SRFI responses from the three exporters.

[23] For the purpose of this investigation, subject goods are defined as:

[24] For greater certainty, the gypsum board considered to be subject goods includes but is not limited to:

1. Abuse-resistant gypsum board offering greater resistance to surface indentation, abrasion and penetration than standard gypsum board.
2. Eased edge gypsum board, which has a tapered and slightly rounded or beveled factory edge. It may be used as an aid in custom finishing of joints.
3. Gypsum base for veneer plaster serves as a base for thin coats of hard, high strength gypsum veneer plaster.
4. Impact-resistant gypsum board offer greater resistance to the impact of solid objects from high traffic and vandalism than standard gypsum board.
5. Mold-resistant gypsum board or Mold and moisture resistant gypsum board has a mold/moisture resistant gypsum core and paper facing that incorporates various methods of preventing the growth of mold and mildew on the board’s surface.
6. Regular gypsum board (gypsum wallboard) is used as a surface layer on walls and ceilings.
7. Sag-resistant gypsum board is a ceiling board that offers greater resistance to sagging than regular gypsum products used for ceilings where framing is typically spaced 24 inches.
8. Type C or Proprietary Type-X gypsum board is available in 1/2 inch and 5/8 inch thicknesses and is required in some fire rated assemblies. Additional additives give this product improved fire resistive properties.
9. Type X gypsum board is available in 1/2 inch and 5/8 inch thicknesses and has an improved fire resistance made possible through the use of special core additives. Type X gypsum board is used in most fire rated assemblies.

[25] Gypsum board has long been used as a building material because of its fire-resistant properties. It provides a durable, economical, non-combustible and easily decorated surfacing material for construction use. Gypsum board is the most widely used material for ceilings and interior walls for residential, commercial, and institutional buildings in developed countries. Paper-covered gypsum board is well suited to the application for which it was designed, that is interior non-load bearing construction.

[26] The process of gypsum board production does not typically vary substantially between producers. To produce gypsum board (also known as “drywall”), the gypsum rock is subjected to a calcination process in which the rock is crushed and heated to approximately 150°C, drying out roughly 75% of the chemically combined water. Typically, roughly 45 kilograms of gypsum rock contains approximately 8.5 kilograms of water. The resultant calcined gypsum powder (commonly referred to as “plaster of Paris”) is used to produce the core of the board. The core is formed by a slurry of calcined gypsum or “stucco”, water, foam, pulp, starch and optional chemical components to enhance water and/or fire resistance. At this stage, the slurry is forced between two unwinding rolls of absorbent paper resulting in a continuous “sandwich” of wet board resting on a belt line.

[27] As the board moves down the belt line, the calcined gypsum rehydrates to its original crystalline structure while the paper sheets become firmly bonded to the rehydrated core. After moving down the line for approximately 4 to 5 minutes, the continuous “sandwich” is cut to length and moved through dryers to remove excess moisture. The cut boards are moved to an off-loading area where they are bundled, stacked and put into storage or shipped directly to customers.

[28] The subject goods are normally classified under the following Harmonized System (HS) classification number:

• 6809.11.00.10

[29] The listing of the HS classification number is for convenience of reference only. Refer to the product definition for authoritative details regarding the subject goods.

[46] Normal values are generally determined based on the domestic selling prices of like goods in the country of export, in accordance with section 15 of SIMA, or on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, plus a reasonable amount for profits, in accordance with paragraph 19(b) of SIMA.

[47] Where, in the opinion of the CBSA, sufficient information has not been furnished or is not available, normal values are determined pursuant to a ministerial specification in accordance with subsection 29(1) of SIMA.

[48] Where sufficient information was provided by the responding exporters, normal values were determined pursuant to section 15 or paragraph 19(b) of SIMA. Where sufficient information was not provided by the responding exporters for certain products, normal values were determined pursuant to subsection 29(1) of SIMA.

[49] For those exporters that did not respond to the exporter RFI, the normal values of the goods were determined pursuant to subsection 29(1) of SIMA.

[50] The export price of the goods sold to the importers in Canada is generally based on the lesser of the adjusted exporter’s selling price or the adjusted importer’s purchase price. These prices are adjusted, where necessary, by deducting the costs, charges, expenses, duties and taxes resulting from the exportation of the goods as provided for in subparagraphs 24(a)(i) to 24(a)(iii) of SIMA.

[51] Where there are sales between associated persons or a compensatory arrangement exists, the export price may be determined based on the importer’s resale price of the imported goods in Canada to non-associated purchasers, less deductions for all costs incurred in preparing, shipping and exporting the goods to Canada that are additional to those incurred on the sales of like goods for use in the country of export, all costs that are incurred in reselling the goods (including duties and taxes) or associated with the assembly of the goods in Canada and an amount representative of the average industry profit in Canada, pursuant to paragraphs 25(1)(c) and 25(1)(d) of SIMA. In any cases not provided for under paragraphs 25(1)(c) and 25(1)(d) of SIMA, the export price is determined in such a manner as the Minister specifies, pursuant to paragraph 25(1)(e).

[52] Where, in the opinion of the CBSA, sufficient information has not been furnished or is not available, export prices are determined pursuant to a ministerial specification under subsection 29(1) of SIMA.

[53] The CBSA determined a margin of dumping for each of the exporters by comparing the total normal value with the total export price of the goods. When the total export price was less than the total normal value, the difference was the margin of dumping for that specific exporter.

[54] The determination of the volume of dumped goods was calculated by taking into consideration each exporter’s net aggregate dumping results. If it was determined that an exporter was dumping on an overall or net basis, then the total quantity of exports attributable to that exporter (i.e. 100%) was considered to have been dumped. Similarly, if an exporter’s net aggregate dumping results were zero, then the total quantity of exports considered to have been dumped by that exporter was zero.

[55] In determining the margin of dumping for the country, the margin of dumping found in respect of each exporter was weighted according to each exporter’s volume of subject goods released into Western Canada during the POI.

[56] Details relating to the margin of dumping for each of the exporters are presented in a summary table in Appendix 2, while the margin of dumping for the US can be found in a summary table at the end of this section.

[57] CertainTeed Gypsum and CertainTeed US is a manufacturer and exporter of subject goods. The company is a subsidiary of CertainTeed Gypsum and Ceiling USA, Inc. During the POI, the subject goods were shipped from the company’s facility in Carrollton, Kentucky. All of CertainTeed US’s exports to Canada were sold to a related importer, CertainTeed Canada.

[58] CertainTeed US and CertainTeed Canada provided sufficient information in response to the CBSA’s RFIs. SRFIs were sent to CertainTeed US and CertainTeed Canada to gather additional information and seek clarification regarding their original RFI responses. The responses were reviewed in detail and the information provided by the exporter and importer was verified through a desk audit.

[59] CertainTeed US had domestic sales of like goods during the POI. As there were sufficient profitable sales of like goods, normal values were calculated in accordance with section 15 of SIMA, using the domestic prices of gypsum board in the US market.

[60] Due to the relationship between CertainTeed US and CertainTeed Canada, a reliability test was performed to determine whether the section 24 export prices were reliable as envisaged by SIMA. This test was conducted by comparing the weighted average of the export prices determined under section 24 of SIMA, based on the lesser of the exporter’s selling prices and the importer’s purchase prices, with the weighted average of the export prices determined under paragraph 25(1)(e) of SIMA. The export prices were determined in such a manner as the Minister specifies, pursuant to paragraph 25(1)(e), since they could not be determined as provided for under paragraphs 25(1)(c) and 25(1)(d) of SIMA for CertainTeed Canada.

[61] The export prices determined under paragraph 25(1)(e) were based on the importer’s resale prices of the imported goods to unrelated purchasers in Western Canada less deductions for all costs incurred in preparing, shipping and exporting the goods to Western Canada that were additional to those incurred on sales of like goods for use in the country of export, all costs included in the resale prices that were incurred in reselling the goods in Western Canada (including duties and taxes) and an amount representative of the average industry profit in Western Canada. The amount for profit used for the section 25 export price calculations was based on sales of goods of the same general category in Western Canada in accordance with paragraph 22(b) of the Special Import Measures Regulations (SIMR), based on the information relating to vendors that operated at a profit during the POI in Canada. The CBSA considered other paper-faced gypsum board to be goods of the same general category.

[62] The analysis revealed that the export prices calculated in accordance with section 24 of SIMA were unreliable. Therefore, export prices for the purposes of the final determination were calculated in accordance with a ministerial specification pursuant to paragraph 25(1)(e) of SIMA employing the methodology described above.

[63] For the final determination, the total normal value compared with the total export price results in a margin of dumping of 211.0% for CertainTeed US, expressed as a percentage of export price.

[64] GP USA is a manufacturer and exporter of subject goods and its head office is located in Atlanta, Georgia. All of GP USA’s exports to Canada were sold to a related importer, GP Canada.

[65] GP USA and GP Canada provided sufficient information in response to the CBSA’s RFIs. SRFIs were sent to GP USA and GP Canada to gather additional information and seek clarification regarding their original RFI responses. Officers of the CBSA met with representatives of GP USA and GP Canada at their offices in the United States, to verify information provided by both GP USA and GP Canada.

[66] GP USA had domestic sales of like goods during the POI. Where there were sufficient profitable sales of like goods, normal values were calculated in accordance with section 15 of SIMA, using the domestic prices of gypsum board in the US market. Where there were insufficient profitable domestic sales of like goods or where there were no domestic sales of like goods, normal values were calculated in accordance with paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, an amount for administrative, selling and all other costs, and a reasonable amount for profits pursuant to subparagraphs 11(1)(b)(ii) and 11(1)(c)(i) of the SIMR.

[67] A very small amount of subject goods exported by GP USA could not have a normal value calculated under section 15 or paragraph 19(b) because the costing and domestic sales information for those goods was not provided by the exporter. As a result, the normal value for those subject goods was determined using the ministerial specification in accordance with subsection 29(1) of SIMA based on the methodology described in the section below entitled “All Other Exporters”.

[68] Due to the relationship between GP USA and GP Canada, a reliability test was performed to determine whether the section 24 export prices were reliable as envisaged by SIMA. This test was conducted by comparing the export prices determined under section 24 of SIMA, based on the lesser of the exporter’s selling prices and the importer’s purchase prices, with the export prices determined under section 25 of SIMA.

[69] For a portion of the sales, the section 24 export prices were compared to the export prices determined under paragraph 25(1)(c) based on the importer’s resale prices of the imported goods to unrelated purchasers in Western Canada less deductions for all costs incurred in preparing, shipping and exporting the goods to Western Canada that were additional to those incurred on sales of like goods for use in the country of export, all costs included in the resale prices that were incurred in reselling the goods in Western Canada (including duties and taxes) and an amount representative of the average industry profit in Western Canada.

[70] For the remaining sales, the monthly weighted averages of the section 24 export prices were compared to the monthly weighted averages of the export prices determined under paragraph 25(1)(e). The export prices were determined in such a manner as the Minister specifies, pursuant to paragraph 25(1)(e), since they could not be determined as provided for under paragraphs 25(1)(c) and 25(1)(d) of SIMA for GP US. The export prices determined under paragraph 25(1)(e) were based on the importer’s resale prices of the imported goods to unrelated purchasers in Western Canada less deductions for all costs incurred in preparing, shipping and exporting the goods to Western Canada that were additional to those incurred on sales of like goods for use in the country of export, all costs included in the resale prices that were incurred in reselling the goods in Western Canada (including duties and taxes) and an amount representative of the average industry profit in Western Canada.

[71] The amount for profit used for the section 25 export price calculations was based on sales of goods of the same general category in Western Canada in accordance with paragraph 22(b) of the SIMR, based on the information relating to vendors that operated at a profit during the POI in Canada. The CBSA considered other paper-faced gypsum board to be goods of the same general category.

[72] The test revealed that the export prices determined in accordance with section 24 of SIMA were unreliable. Therefore, export prices for sales to GP Canada were determined in accordance with paragraph 25(1)(c) or a ministerial specification pursuant to paragraph 25(1)(e) of SIMA employing the methodology described above, as appropriate.

[73] For the final determination, the total normal value compared with the total export price results in a margin of dumping of 94.6% for GP USA, expressed as a percentage of export price.

[74] USG is a manufacturer and exporter of subject goods and its head office is located in Chicago, Illinois, US. All of USG’s exports to Canada were sold to a related importer in Western Canada, CGC. CGC and USG are both wholly owned subsidiaries of USG Corporation.

[75] Both USG and CGC provided sufficient information in response to the CBSA’s RFIs. SRFIs were sent to USG and CGC to gather additional information and seek clarification regarding their original RFI responses. Officers of the CBSA met with representatives of USG and CGC at their offices in Chicago, Illinois and Mississauga, Ontario and one of their production facilities in the US, to verify information provided by the two companies.

[76] USG had domestic sales of like goods during the POI. Where there were sufficient profitable sales of like goods, normal values were calculated in accordance with section 15 of SIMA, using the domestic prices of gypsum board in the US market. Where there were insufficient profitable domestic sales of like goods or where there were no domestic sales of like goods, normal values were calculated in accordance with paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, an amount for administrative, selling and all other costs, and a reasonable amount for profits pursuant to subparagraphs 11(1)(b)(ii) and 11(1)(c)(i) of the SIMR.

[77] A very small amount of subject goods exported by USG could not have a normal value calculated under section 15 or paragraph 19(b) because the costing and domestic sales information for those goods was not provided by the exporter. As a result, the normal value for those subject goods was determined using the ministerial specification in accordance with subsection 29(1) based on the methodology described in the section below entitled “All Other Exporters”.

[78] Due to the relationship between USG and CGC, a reliability test was performed to determine whether the section 24 export prices were reliable as envisaged by SIMA. This test was conducted by comparing the monthly weighted averages of the export prices calculated under section 24 of SIMA for each product exported to Western Canada with the monthly weighted averages of the export prices for each product resold in Western Canada, which were calculated in accordance with paragraph 25(1)(e) of SIMA. The export prices were determined in such a manner as the Minister specifies, pursuant to paragraph 25(1)(e), since they could not be determined as provided for under paragraphs 25(1)(c) and 25(1)(d) of SIMA for USG.

[79] The export prices determined under paragraph 25(1)(e) were based on the importer’s resale prices of the imported goods to unrelated purchasers in Western Canada less deductions for all costs incurred in preparing, shipping and exporting the goods to Western Canada that were additional to those incurred on sales of like goods for use in the country of export, all costs included in the resale prices that were incurred in reselling the goods in Western Canada (including duties and taxes) and an amount representative of the average industry profit in Western Canada.

[80] The amount for profit used for the section 25 calculations was based on sales of goods of the same general category in Western Canada in accordance with paragraph 22(b) of the SIMR, based on the information relating to vendors that operated at a profit during the POI in Canada. The CBSA considered other paper-faced gypsum board to be goods of the same general category.

[81] The test revealed that the export prices determined in accordance with section 24 of SIMA were unreliable. Therefore, export prices for sales made by USG to CGC were determined in accordance with a ministerial specification under paragraph 25(1)(e) of SIMA employing the methodology described above.

[82] For the final determination, the total normal value compared with the total export price results in a margin of dumping of 201.0% for USG, expressed as a percentage of export price.

[83] At the initiation of the investigation, all known and potential exporters were sent an exporter RFI in order to solicit information required for purposes of determining normal values and export prices of subject goods in accordance with the provisions of SIMA. As such, all exporters were given the opportunity to participate in the investigation. In the RFI, the exporters were notified that failure to submit all required information and documentation, including non confidential versions, or failure to permit verification of any information, may result in the normal values of the subject goods exported by their company being based on the facts available. It was further stated that such a decision would be less favourable to their company than if complete and verifiable information were made available.

[84] Where, in the opinion of the CBSA, sufficient information regarding the subject goods was not provided, normal values and export prices were determined under a ministerial specification pursuant to subsection 29(1) of SIMA on the basis of facts available. In establishing the methodology for determining normal values and export prices under the ministerial specification, the CBSA examined all information on the record, including information from the complaint, information provided by exporters, publicly available information and customs documentation.

[85] The CBSA considered that the normal values and export prices determined for the exporters where sufficient information was provided, rather than the information provided in the complaint, was the best information on which to base the methodology for determining normal values under the ministerial specification since it reflects exporters’ trading practices during the POI. The CBSA examined the difference between the normal value and export price of each individual transaction for the exporters where sufficient information was provided in order to obtain an appropriate amount for the normal value methodology. The transactions were also examined to ensure that anomalies were not considered; such anomalies can include low volume shipments, very low value sales, effects of seasonality or other business or environmental factors.

[86] In its analysis, the CBSA identified and excluded from consideration multiple anomalies where the normal value exceeded the export price by an amount higher than what was used for the ministerial specification. The amounts were considered anomalous as the transactions were for low volumes.

[87] The CBSA considers the highest amount by which the normal value exceeded the export price (excluding anomalies) found on an individual transaction (expressed as a percentage of the export price), as an appropriate basis for determining normal values for all other exporters. This method of determining normal values is based on information on the record and limits the advantage that an exporter may gain from not providing necessary information requested in a dumping investigation as compared to an exporter that did provide the necessary information.

[88] Therefore, the normal values for all other exporters were determined under a ministerial specification pursuant to subsection 29(1) of SIMA, based on the export price as determined under section 24, 25 or 29 of SIMA, plus an amount equal to 324.1% of that export price.

[89] The CBSA considered that the information submitted on the CBSA customs entry documentation was the best information on which to determine the export price of the goods as it reflects actual import data. This information is more comprehensive than what was available in the complaint.

[90] Based on the above methodologies, the subject goods exported to Canada by all other exporters were found to be dumped by a margin of dumping of 324.1%, expressed as a percentage of the export price.