Pakistan firm fights SA duty

01 September 2015

The International Trade Administration Commission (Itac), which investigates and sets tariffs on imported products, is facing legal action by a Pakistani cement firm.

South Africa’s four largest cement companies have been named as respondents.
The Karachi-based firm has filed papers in the High Court in Pretoria contesting the 14.29% provisional antidumping duty imposed in May on its cement exports to the Southern African Customs Union (Sacu) following complaints by local producers.

Itac plans to oppose Lucky Cement’s application for the court to set aside its decision.
The duties imposed on other Pakistani cement importers were much higher ranging from 62% to 77.15%. Itac found that the continued increase in Pakistani cement imports — by 664% between 2010 and 2013 — threatened the Sacu industry with “material injury”.

Sales volumes and output, as well as profits and cash flow, were on the decline; while the Pakistani industry increased production capacity and exports to its traditional markets were declining.

In addition to Itac, the respondents are SARS commissioner Tom Moyane, and local cement producers Afrisam, Lafarge Industries, NPC-Cimpor and PPC.

Lucky Cement CFO Muhammad Faisal argues that Itac failed to consider the losses suffered by producers from a Competition Commission ruling on a cement cartel.

The commission did, in fact, consider this but concluded that it did not “sufficiently detract” from the dumping harm.

The Competition Commission imposed a fine of R124m on Afrisam and R149m on Lafarge in 2011 and 2012 respectively after finding the existence of a cement cartel. It estimated its intervention would save consumers R4.5bn-R5.8bn for the period 2010-13.

“It was illogical and irrational for Itac to attribute 100% of the injury to the Sacu cement industry to Pakistani exports.”

The total value of Pakistani cement imports from 2010-13 was R1.24bn.

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