The Indonesian government is looking into the alleged dumping into the domestic market of polyester films from China, India and Thailand.
The probe, officially launched on July 25, will last for up to 18 months as stipulated by World Trade Organisation (WTO) rules.
The investigation was launched following complaints by two local firms — PT Argha Karya Prima Industry and PT Kolon Ina — which produce the materials under assessment, according to Indonesian Anti-Dumping Committee (KADI) chairwoman Ernawati.
The subject of the probe, biaxially oriented polyethylene terephthalate (BOPET), is a polyester film used in flexible packages, electrical insulation and other industrial applications.
“After analysing and examining the request, KADI found strong early indications of dumping by China, India and Thailand that caused losses to local businesses that manufacture similar products,” Ernawati said Tuesday in a statement.
An anti-dumping investigation is a mechanism provided by the world trade governing body to seek evidence of dumping, an unfair trade practice in which manufacturers sell their products overseas at prices lower than in their home markets or below their production costs.
It usually ends with the imposition of an anti-dumping duty, a punitive duty added to regular import duty, to counter material injury on the local industry caused by imported goods. When necessary, an anti-dumping authority can also charge temporary anti-dumping duty to curb flows of the dumped products while a probe is ongoing.
KADI has found that imports of polyester films from China, India and Thailand rose 31.4 per cent in 2013 to 25,929 tonnes from a year earlier. That compared to a 17.66 per cent increase of overall imports to 33,265 tonnes in a similar period.
Accumulative imports from the three countries stood at 78 per cent last year, with China dominating the figure with 47 per cent, followed by Thailand (23 per cent) and India (7 per cent).
The investigation into BOPET is the second case in the trade of plastic packaging material in the past two years. Earlier, KADI probed alleged dumping by overseas producers of polyethylene terephthalate (PET), a plastic packaging material. This was in response to petitions by several plastic makers, including PT Indo-Rama Synthetics, PT Indorama Ventures Indonesia and PT Polypet Karyapersada.
However, the probe has met strong resistance from local food and beverage producers, who fear it would end up with the imposition of anti-dumping duties, which would push up their production costs by way of packaging.
Indonesia Olefin and Plastic Industry Association (INAplas) secretary-general Fajar Budiono welcomed the investigation, hoping that KADI could prove the dumping allegation.
“Once it is proven and necessary measures are taken to overcome the alleged unfair trade practice, they will help boost the utilisation of the domestic industry producing polyester films as domestic demand for the product is high,” he said.
The utilisation rate currently is below 60 per cent and could be significantly increased to about 85 per cent, according to Fajar.