KARACHI: Cement makers are eyeing a large potential bonanza that might be about to open up before them. Anti-dumping duties imposed by South Africa on Pakistani cement are set to expire on Dec 17, 2020. The duties, which range from 14-77 per cent, were imposed in 2015.

The International Trade Administration Commission (ITAC) of South Africa has issued a notice announcing the start of a sunset review on the anti-dumping duties as their five year terms is set to expire. Questionnaires will be sent to all concerned stakeholders, and responses are expected to be filed within 30 days of receipt of letter.

The ITAC called on all interested parties in South Africa back in May 2019 to file an application if they felt “the expiry of the anti-dumping duties against imports of Portland cement originating in or imported from the Islamic Republic of Pakistan would likely lead to the continuation or recurrence of dumping and injury”.

Six cement producers in South Africa responded in August 2020 urging a continuation of the anti-dumping duties.

“The applicant alleges that the expiry of the duties would likely lead to continuation or recurrence of dumping and material injury,” the notice issued by the ITAC says. “The Applicant submitted sufficient evidence and established a prima facie case to enable the Commission to arrive at a reasonable conclusion that a sunset review investigation of the anti-dumping duties on Portland cement originating in or imported from the Islamic Republic of Pakistan, should be initiated.”

The South African cement producers make their argument on a “comparison between the normal values and the export prices”, according to the ITAC notice. “In calculating the normal value for Pakistan, the applicant submitted information from the Pakistan Bureau of Statistics, which publishes weekly Sensitive Price Indicator reports covering a limited list of commodities, including cement. The SPI reports record retail prices, stated in Pak rupees, for eight different cities in Pakistan, and record a weekly national average. In calculating the export price for Pakistan, the official South African Revenue Service (SARS) statistics for the period Jan 1 to Dec 31, 2019 were used. The dumping margin was determined to be 43.49pc. On this basis, the Commission found that there was prima facie proof of the likelihood of the continuation or recurrence of dumping.”

“The applicant alleges and submitted sufficient evidence to show that it would experience an increase in imports, decline in sales, price undercutting and suppression, decline in profit, output, productivity, market share, capacity utilisation, inventories, and growth, if the duties expire,” the notice says.

The rate of duty imposed on Lucky Cement Ltd was 14.29pc followed by 77.15pc on Bestway Cement Limited, 68.87pc on DG Khan Cement Ltd, 63.53pc on Attock Cement Ltd and 62.69pc on all other cement exporters excluding above manufacturers.

Pakistan had approached the World Trade Organisation (WTO) challenging the South African anti-dumping duties, but to no avail.

The share of cement exports to South Africa was 20-30pc in 2015, according to industry estimates, when total exports were six to eight million tonnes.

Sources said only Lucky Cement was exporting cement to South Africa in limited quantities as the incidence of anti-dumping duty was 14.29pc.

Talking to Dawn, a cement maker, who asked not to be named, said the cement industry is reviewing the situation and may finalise a strategy next week to fight the case.

“We are counting on the government to resolve this issue as the anti-dumping duty was imposed only in Pakistan,” he said, adding a diplomatic push is needed as Pakistan imports coal from South Africa in large quantities to run cement and power plants.

Published in Dawn, December 13th, 2020