Don?t blame PTA industry
Apropos of the article ?User industries oppose RIL plea for PTA dumping duty,? (FE, March 7), we regret to inform that the said article is based on incomplete and distorted information on the PTA industry. The PTA industry has been incurring huge losses in the recent past and hence all PTA producers are restoring to dumping by exporting their product below their cost of production. We would like to mention here that all PTA makers in Asia are losing huge money for the last two years. We, MCC PTA India Corp, Pvt Ltd (MCPI). Our losses were so huge that we became a sick company on March 31, 2013. Please note:
1. PTA makers are bound to operate their plant at full rate even though they are making losses. Reducing throughput is not the solution as this increases the cost of production. So running the plant at 100% is a compulsion rather than a choice.
2. The ADD is a quasi judicial process and injury is calculated based on the price of the imported cargo. The volume injury is not a point of concern. Moreover we would like to add here that when China was short of 6 million metric ton of PTA, they imposed ADD on many countries, including Korea and Thailand. So, supply-demand balance does not determine the rationale behind imposition of ADD. The price of the imported product is the matter of concern, which we believe that the designated authority is checking in detail.
3. As a producer the chief concern is the extremely high price of main raw material, paraxylene. In fact pricing of naptha has no direct bearing on its price. Hence, any reference to the same will likely confuse the issue.
4. It may kindly be appreciated that for the growth and well being of the polyester industry it is necessary to have stable supplies of PTA in the domestic market. Dependence on imports may expose the domestic polyester industry to the volatility of international market. In any case for export of polyester products, ADD on PTA would not be applicable. PTA can be purchased without any duty, including ADD, for the re-export portion.
5. In the backdrop of the severe hardship being faced by the PTA industry, application of ADD has been filed in line with the rights assured by WTO to protect the domestic industries from dumped imports. The plea is based as the incontrovertible data pertaining to PTA industry alone. Any attempt to gloss over the losses of the PTA industry by referring to other products in the petrochemical chain would tantamount to belittling the distress of the PTA producers.
6. Last, but not the least, we would like to state that the demand-supply balance of PTA in Asia changed dramatically in the last couple of years, China, which was severely short of PTA, was importing big quantities from Korea, Thailand and Taiwan. But after the huge PTA capacity additions in China, the PTA capacities in these countries was in excess. Hence, they started dumping PTA into India. Moreover China?s position changed from net importer to net exporter. So, it has also started increasing its PTA exports to Indian market recently.
During the investigation, we believe, all issues related to integrated producers must have been addressed by the designated authority.
Amitava Banerjee
General Manager, Marketing & Raw Materials, MCC PTA India Corp, Pvt. Ltd