REPUBLIC OF THE PHILIPPINES TARIFF COMMISSION FINAL REPORT (Investigation No. AD-2016-OC-FloatGlassCN) APPLICATION OF AGC FLAT GLASS PHILIPPINES, INC. FOR THE IMPOSITION OF DEFINITIVE ANTI-DUMPING MEASURE AGAINST IMPORTATIONS OF CLEAR FLOAT GLASS (2012 AHTN Subheading No. 7005.29.90) AND BRONZE FLOAT GLASS (2012 AHTN Subheading No. 7005.21.90) FROM THE PEOPLE’S REPUBLIC OF CHINA (PROC) PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 13 July 2017 01 Quezon City, Philipp 176 « PHC Trnkline (632) 925-2401 to 50 localPUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 1.1. THE ANTI-DUMPING APPLICATION On 17 May 2016, AGC Flat Glass Philippines, Inc. (AGPH), representing the domestic industry, filed an anti-dumping petition/application against the importation of clear and bronze float glass from the People's Republic of China (PROC) with the Department of Trade and Industry (DTI). On the same date, the DTI notified the Embassy of PROC in Manila that it has accepted a properly documented anti- dumping application against imports of clear and bronze float glass from PROC On 25 May 2016, the DTI initiated the preliminary anti-dumping investigation. The notice of initiation was published in Malaya Business Insight and Business Mirror on the same date. On the basis of the DTI-Bureau of Import Services’ affirmative findings of dumping and the existence of material injury to the Philippine float glass industry caused by the importation of dumped clear and bronze float glass from PROC, the DTI Secretary ordered the imposition of provisional anti-dumping duties in the form of cash bond, as follows: Table 1. Provisional Duties 7 Nominal Dumping Margin g Specific Exporter ane (USSIMT) % Export Price Clear Float Glass: Rider Glass Co., Ltd. 3 78,82 39.68 5 97.66 54.48 6 113.60 59.39 40 45.32 22.00 412 44.55, 21.11 Xinyi Group (Glass) Co., 3 49.87 21.91 Ltd) 5 120.47 77.00 6 142.23 87.44 10 84.40 50.55 | 412 83.67 48.66 | Other Exporters from the 3 78.82 39.68 PROG 5 120.47 77.00 6 142.23 87.44 10 84.40 50.55 =~ 12 83.67 48.66 Bronze Float Glass: Rider Glass Co., Ltd. 5 55.05 23.88 6 23.06 ari Xinyi Group (Glass) Co., 5 50.18 ~ 20,92 Ltd. 6 58.56 25.54 | Other Exporters from the 5 55.92 23.88 | PRoc 6 58.56 25.54 10 104.09 53.96 ‘Source: DTI Order dated 07 November 2016 ao Page 2 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties The duration of the provisional anti-dumping duty is for four (4) months from the date of the Customs Memorandum Circular (CMC) issued by the Bureau of Customs (BOC) or fifteen (15) days after the publication of the DTI’'s Order in two (2) newspapers of general circulation, whichever comes first. DTI's Order dated 07 November 2016 was published on 17 November 2016 in Malaya Business Insight and Business Mirror while BOC's CMC No. 161-2016 was issued on 22 November 2016 On 15 November 2016, the DT! Secretary forwarded the preliminary affirmative findings, together with the records of the case, to the Tariff Commission (Commission) for formal investigation. A Page 3 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties [ 2. THE FORMAL INVESTIGATION | Section 3 (h) of Republic Act (RA) No. 8752 (Anti-Dumping Act of 1999) provides the legal basis for the Commission to conduct a formal investigation. It states that: “In the formal investigation, the Commission shall essentially determine the following 1. If the article in question is being imported into, or sold in the Philippines at a price less than its normal value; and the difference, if any, between the export price and the normal value of the article. 2. The presence and extent of material injury or the threat thereof to the domestic industry, or the material retardation of the establishment of a domestic industry; 3. The existence of a causal relationship between the allegedly dumped product, commodity or article and the material injury or threat of material injury to the affected domestic injury, or material retardation of the establishment of a domestic industry; 4. The anti-dumping duty to be imposed; and 5. The duration of the imposition of the anti-dumping duty.” Under the law, the Commission has one hundred twenty (120) days from receipt of endorsement of the case to complete its investigation and submit its report of findings to the DTI Secretary. The investigation commenced on 15 November 2016 2.1. PRODUCT AND COUNTRY COVERAGE The investigation covers the importation of clear and bronze float glass from PROC, the importation or sale of which is claimed to be dumped and causing material injury or threat of material injury to the industry producing like products in the Philippines. 2.2. PERIOD OF INVESTIGATION The Commission's period of investigation (PO!) for dumping determination is the twelve-month period from 01 January to 31 December 2015. With respect to material injury determination, the POI is the four-year period from 2013 to 2016. ea Page 4 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 2.3 NOTIFICATIONS 2.3.1. Commencement of Formal Investigation and Preliminary Conference The Notice of Formal Investigation and Preliminary Conference was published on 18 November 2016 in The Manila Times and Manila Standard and was posted on the Commission's website at _http://Awww.tariffcommission.gov.ph. Individual notifications were sent to all identified interested parties 2.3.2. Public Hearing The Notice of Public Hearing was published on 25 March 2017 in The Manila Times and Manila Standard and was posted on the Commission's website. Individual notifications were sent to all identified interested parties. In said Notice, counsels, affiants, deponents, witnesses, and other interested parties to the case were directed to attend the first day of the public hearing Moreover, parties were directed to submit to the Commission, at least five (5) days before the hearing, a list of issues, other than the elements of product comparability and price difference, that they want to explore. A party which does not submit said list is deemed to have no controversial/contestable matter to raise and will be given less priority in the order of parties who will ask clarificatory questions during the hearing. Parties were likewise required to submit affidavits of their witnesses three (3) days prior to the public hearing, 2.4 PRELIMINARY CONFERENCE On 22 November 2016, a preliminary conference was held to explore the possibility of amicable settlement/price undertaking, and to apprise the parties on the procedure of investigation and other related matters necessary for the timely disposition of the case. In attendance were representatives and/or counsels for AGPH, Franke Foodservice System Philippines, Inc., Philippine Glass Processing Specialist, Permasteelisa Philippines Inc., and the DTI-BIS. The Commission issued an Order indicating the agreements reached during the conference. All parties who attended the Conference were furnished a copy of the Order. Said Order was also posted on the Commission's website. 2.5 ON-SITE INVESTIGATION The Commission conducted on-site investigation to validate the veracity of parties’ submissions and to obtain other relevant information. Prior to the scheduled visit, companies were informed about the nature of the information to be verified and the pertinent data/documents that may be required during the on-site investigation OF Page 5 of 58PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties Having obtained the parties’ agreement to the conduct of an on-site investigation by the Commission, ocular inspection and data verification were undertaken on the following dates: Table 2. Ocular Inspection/Data Verification ‘Company Dates Domestic Industry-Applicant; = AGPH 2, 9 and 20 December 2016 Foreign Exporters: | Xinyi Glass (Yingkou) Company Lid. 13-14 February 2017 Znongbo Technology Company Ltd. 16 February 2017 Rider Glass Company Ltd. 17 February 2017 Philippine Importers: Asia Temp Glass Corporation 28 February 2017 Asya Glass Philippines 2.6 STAFF REPORT On 31 March 2017, the Commission issued a Staff Report containing its initial findings on the elements of product comparability and price difference/dumping. All identified interested parties were provided a copy of said Report, and were given five (5) days from receipt thereof to submit comments. 2.7 PUBLIC HEARING The public hearings were scheduled from 03 to 07 April 2017. In attendance were representatives and/or counsel for AGPH, Comglasco Aguila Glass Corporation (Comglasco), Asia Glass Group, Federation of Filipino-Chinese Chambers of Commerce and Industry, Inc. (FFCCCII), and DTI-BIS. There being no other issues to discuss nor witnesses to present, the hearing was terminated on 03 April 2017 2.8 DISCLOSURE OF ESSENTIAL FACTS On 14 and 27 June 2017, the Commission provided all identified interested parties copies of the Essential Facts which form the basis for its decision, Parties were given five (5) days from the date of receipt of the report to comment and submit their supporting documents and computations. 2.9 FINAL REPORT The Commission submits its report of findings and decision to the DTI Secretary. All identified interested parties are furnished a copy of the public version of the report. The report is also posted on the Commission's website. Bete ean Page 6 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 2.10 SCOPE OF THE INVESTIGATION For purposes of final determination, the Commission limited its investigation in accordance with the provisions of Section 11 (m) of the Implementing Rules and Regulations (IRRs) of RA No. 8752' which states: “if possible, an individual margin of dumping shall be determined for each known foreign exporter or producer of the dumped product. In cases where the number of importers, foreign exporters or producers, or the type of the dumped products involved is so large as to make such determination impracticable, the Secretary and the Commission may limit their examination either to: i) a reasonable number of interested parties or products by using statistically valid sampling techniques on the basis of information available to them at the time of the selection; or ii) the largest percentage of volume of exports from the country in question which can be reasonably investigated. x x x" Further, parties who failed to submit position papers or answers to questionnaires within the reasonable period are governed by the provisions of Section 10 (h) of the IRRs of RA 8752? which reads: “In cases any or all of the parties on record fail to submit their answers to position papers or to questionnaires within the reasonable period, the ‘Commission shall base its findings on the best information available.” In its appreciation of evidences submitted, the Commission exercised due diligence in the determination of the elements of product comparability, price difference, material injury and threat thereof, and causal linkage. 1 Consistent with Aticle 6.10 of the WTO Anti-Dumping Agreement (ADA) 2 Cons th Article 6.8 of ADA, Page 7 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 3, PARTICIPANTS’ SUBMISSIONS In the course of its investigation, the Commission received submissions including position papers, memoranda, comments and issues, from various parties Non-confidential submissions were made available in the Commission's public file. Below is a summary of said submissions: 3.1 THE DOMESTIC INDUSTRY'S CASE AGPH? is the sole local manufacturer of clear and bronze float glass. The company, through counsel, submitted the following: © List of issues received on 02 December 2016 as follows: ¥ Whether or not Chinese export companies are exporting clear float glass and bronze float glass at an export price lower than their home consumption value ¥ Whether or not imports of clear float glass and bronze float glass from PROC is causing material injury to the Philippine float glass industry. + Position paper received on 09 December 2016 containing the following elements Normal Value ¥ Chinese companies export clear and bronze float glass at prices lower than they normally charge in their own home market. As determined by the Embassy of the Philippines-Philippine Trade and Investment Center in Shanghai, the average wholesale selling price of clear float glass in PROC in 2015 ranged from USD 305/MT (6 mm) to USD 251/MT (10 mm) while that for bronze float glass ranged from USD 297/MT (10 mm) to USD 288/MT (6 mm). Based on import entry declarations from the BOC, export prices of clear float glass ranged from USD 189/MT (3 mm) to USD 3/MT (6 mm) while those for bronze float glass ranged from USD 217/MT (5 mm) to USD 9/MT (6 mm) in the same year v The comparable price difference between the normal home selling price and export price to the Philippines shows the normal selling price higher than the export price for both clear and bronze float glass from PROC. Causal Link and | ¥ Increased volume of clear and bronze float glass imported from PROC causes injury to Philippine manufacturers of float glass. In 2015, imports of clear float glass and bronze float glass from PROC increased by 90% and 210%, respectively, compared to their 2014 levels. 3 The company was incorporated in 1888 and started commercial operations in 1981 under the name Republic Asahi Glass Corporation (RAGC), In 2001, RAGC became a wholly owned subsidiary of Asahi Glass Company Ltd. of Japan (AGC). In 2007, in line with AGC's Global Brand Unification Program, the company adopted ts current name AGC Flat Glass Philippines, Ine. (AGPH). Page 8 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties ¥ The share of imports of clear and bronze float glass from PROC in the Philippine market increased significantly from 3% in 2012 to 37% in 2015 compared to imports from other sources. v The increase in import volume and value of subject articles sourced from PROC resulted in: lower production; reduced sales; lower capacity utilization; and a decrease in the number of employees and their productivity. v The low landed cost of imported clear and bronze float glass prevented the Philippine industry from increasing its prices. v The Philippine industry is forced to adopt a policy of import parity pricing to gain more market share. This policy meant that the industry could not increase its selling price despite its high cost of production v The decrease in sales volume, prices, market share and its inability to raise prices because of the low price of imported clear and bronze float glass has resulted to a negative impact on the financial condition of the industry. Net losses were incurred from 2012 to 2015. Threat of Further Injury ¥ Present circumstances indicate that there is a threat of further injury from low- priced imports of clear and bronze float glass from PROC, i.e., the level of Philippine tariffs for float glass which unduly placed the local industry at a disadvantageous position; the increase in glass production capacity in PROC resulting to enormous excess capacity; and the imposition of anti-dumping duties by Australia, South Africa and Korea against Chinese float glass thus making the Philippines a viable market for dumped glass products. Formal Offer of Exhibits, i.e., AGPH witnesses’ affidavits-testimony for the public hearing, received on 27 March 2017 in compliance with the Commission's Order dated 23 November 2016 Amended position paper received on 18 April 2017 in compliance with the Commission's directive to AGPH during the public hearing to update its submission and include 2016 data for material injury determination On 21 June 2017, AGPH submitted its comments to the computation of normal value and dumping margin for Xinyi Group Glass’ clear float glass (Tables 6 and 7 of the Essential Facts) on the following grounds: ¥ The Essential Facts set aside the findings by the Commercial Attaché on the normal value of clear float glass by Xinyi without justification. v The normal value reported and certified to by the Commercial Attaché on clear float glass by Xinyi should be respected and followed v Fair play and due process would mean that the Commission should at least ventilate the issue by giving petitioner a chance to understand and dispute the basis and reason why the Commission chose to set aside the findings of the Commercial Attaché. Page 9 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 3.2 THE OPPOSING PARTIES’ CASE 3.2.1. Comglasco Aguila Glass Corporation Established in 1946, Comglasco is engaged in the marketing and distribution of automotive, advertising, and architectural products. Among the products that Comglasco markets and distributes are clear float glass and bronze float glass. The company, through counsel, submitted the following * Entry of appearance as oppositor or protestee to the case, with the request that counsel be furnished a copy of the notices, pleadings, memoranda, orders, and decisions that will be filed/issued, received on 25 January 2017 * List of issues for the hearing received on 31 March 2017 as follows: v Whether or not clear float glass and bronze float glass from PROC cause material injury to the domestic industry, threat of material injury or material retardation of the establishment of a domestic industry on clear and bronze float glass ¥ Whether or not there is a causal link between the injury being suffered by the domestic industry and the dumped imports ¥ Whether or not the injury suffered is directly attributable to the alleged dumping v Whether or not AGPH is representative of the clear and bronze float glass manufacturers in the Philippines v Whether or not AGPH and/or the entire domestic float glass industry can meet the demands or needs of the entire market, ¥ Whether or not the imposition of anti-dumping measure will merely lead to a monopoly of AGPH in clear and bronze float glass in the country v Whether or not the products of AGPH have the same quality and durability as the imported products ¥ Whether or not the imposition of anti-dumping measure will only lead to closure and/or downsizing of the business of importers ¥ Whether or not the import prices of clear and bronze float glass are really below the prices of said products in PROC * Manifestation received on 07 April 2017 requesting that counsel be given access to data marked “confidential” in the affidavits (including attachments) of AGPH's witnesses * Ex-Parte manifestation received on 21 April 2017 on the following ¥ Memorandum dated 19 April 2017 and its Annexes, copy furnished AGPH’s ¥ Comment dais 30 April 2017, copy furnished AGPH's counsel * Memorandum received on 21 April 2017 stating that ¥ The application for imposition of anti-dumping duties against imports of clear and bronze float glass from PROC has no legal and factual basis. Page 10 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties * the manner in which the investigation has been conducted is in violation of the right of due process of Comglasco = the manner of verification of the information was not made clear in the Staff Report and to all parties. * AGPH failed to establish all the requisites for the imposition of anti-dumping duties against imports of subject articles from PROC. * AGPH is engaged in the manufacture and sale of various glass products and not just the subject products + AGPH's inventory in 2015 was reduced from its 2014 level indicating that the volume of sales of subject product has increased. * cash and cash equivalent are higher than loss from operations in 2015. * despite import parity pricing, AGPH's sales and market share still declined. The problem could be more on marketing and sales strategy rather than pricing * losses from 2012 to 2015 suffered by AGPH were not solely due to importation of clear and bronze float glass from PROC but can be attributed to many factors such as: increase in selling and general administrative cost due to low sales volume; high fixed costs; salary increment and increase in contract labor cost; and rise in delivery end storage costs due to increase in freight and hauling cost. * reduction in the sales of AGPH was due to decline of sales to its affiliatesirelated parties and not to the importation of clear and bronze float glass. ¥ There is no legal and factual basis that AGPH has suffered material injury or threat of injury due to the importation of clear and bronze float glass from PROC ¥ Comglasco prayed that the anti-dumping protest be denied/dismissed for lack of merit Comment on AGPH’s amended position paper received on 19 May 2017 containing the following v AGPH’s amended position paper should be expunged from the records of the case on the following grounds: = submission of the amended position paper was already very late; * AGPH did not indicate which parts of its previous position paper are subject of the amendments; * the amended position paper failed to establish all the requisites for the imposition of anti-dumping duties against the importation of clear and bronze float glass from PROC; and + the amended position paper blocked important data, which is again a violation of the rights of Comglasco and the public to know the information and/or the alleged facts behind the present case. v Re-pleading of its arguments as stated in its Memorandum dated 19 April 2017 os Page 11 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties * On 21 April 2017, Comglasco submitted the following comments on the Staff Report ¥ AGPH did not include Comglasco as an interested party in the instant case. The latter was not notified about the protest hence it was unable to attend the Preliminary Conference held on 22 November 2016, v There is a difference in the number of identified Chinese manufacturers/exporters of clear and bronze float glass in 2015 as indicated in Chapters 3 and 5 of the report. v The report does not mention the following: = whether the data from Rider Glass, Xinyi Yingkou and Zhongbo Glass (referred to as “Participating Exporters") were statistically valid. It appears that the information from said exporters are incomplete sampling for the subject products imported from PROC since they are not part of the top five (5) manufacturers/exporters to the Philippines. * whether the description of the imported subject product is representative of all subject products from PROC since the description was only based on data provided by Rider Glass. Thus, the conclusion that the subject products imported from PROC are like products to the locally produced clear and bronze float glass is without basis. = the percentage represented by Rider Glass and Xinyi Group Glass where the best information available was obtained * that the information provided by AGPH was verified and/or confirmed based on a valid and reliable source v AGPH claimed that it has a thousand dealers, wholesalers and distributors. A quick visit to the AGPH website would show that AGPH only has six (6) sales offices and in limited locations in the Philippines. ¥ Determination of normal value using the domestic selling prices submitted by Xinyi Glass Yingkou as basis for comparison with the export prices of clear and bronze float glass of the five (5) other top exporters has no logical/factual and legal basis. The report did not explain why such method was used, i.e., why Xinyi Glass Yingkou was selected. ¥ Determination of de minimis margin of dumping is unreliable since it was based on the specific exporter's calculated dumping margin results Y Since the basis of the report are information which have been marked “Confidential’, Comglasco cannot determine whether the results from said confidential information are correct and/or reliable. Despite its request, Comglasco was denied access to information marked as “Confidential” (e.g, export prices, domestic selling prices as basis of normal value, and specific exporter's dumping margin calculations). These information do not fall under the category of confidential information under the Implementing Rules and Regulations of RA 8752. v Comglasco prayed that herein comments be noted by the Commission and the protest of AGPH against importation of clear and bronze float glass from China be denied/dismissed for lack of merit. 7 Page 12 of 59PUBLIC VERSION FOR: Importers, Exporters and Other interested Parties * On 28 June 2017, Comglasco submitted the following comments on the Essential Facts: ¥ On the determination of like product, Comglasco does not interpose any objection as to the description of clear and bronze float glass and their processes of production ¥ On the determination of dumping, and material injury or threat thereof to the domestic industry, Comglasco cannot verify the truthfulness of the information contained in the essential facts. The information was incomplete and insufficient so Comglasco was unable to make an intelligent assessment of the facts therein. Comglasco reiterates its continuing request to be given access to information which were left blank ¥ Comglasco reiterates its objection to the use of Xinyi Group Glass and Rider Glass as representative of exporters from PROC. As previously mentioned in its comment to the Staff Report, there was no indication as to the percentage of total PROC exports represented by said exporters. 3.2.2. Glasstemp Industries Corporation Glasstemp Industries Corporation (GIC), a subsidiary of San Francisco Mirror Group of Companies since 1952, is the first glass company to ever produce the largest flat tempered glass (2440mm [W] x 6200mm [H]) in the Philippines, Over the years, it has aimed to meet the market's diverse and demanding structural and industrial challenges.> On 05 December 2016, GIC submitted its position opposing all actions that are self-serving and detrimental to the advancement of the Philippine glass industry. The following reasons were cited: * There is a tariff distortion wherein imported finished glass products are duty-free while the local flat glass processing industry pays import duty for imported float glass raw materials. * With all the support they are getting from government, AGPH did not even make improvements to meet the increasing and diverse demand of the local glass industry. The company shut down their processed glass factory, retrenched workers, and diverted investments to solar panels for export 10 serve the international market In its letter to the Commission dated 20 February 2017, GIC requested the exclusion of ultra-clear float glass from the imposition of dumping duties since it is different from clear float glass and is not produced locally. The Commission, in its letter dated 09 March 2017, requested the company to submit pertinent information and/or documents to prove its claim. GIC failed to provide any submission on the matter. www sanfrancigpomirrar.com/group-of. /glasetemp-industriee corporation-about/ Page 13 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 3.2.3. Permasteelisa Philippines, Inc. The company, in its letter of 25 November 2016, requested the Commission for exclusion from the proceedings on the instant case as it does not import clear and bronze float glass. 3.2.4 San Francisco Mirror Group of Companies San Francisco Mirror Corporation (SFMC) was established in 1952 as a manufacturer and importer, supplier and processor of high quality glass products Through the years, SFMC has maintained sets of highly technical equipment that allowed the company to fabricate almost any type of glass with different designs and specifications.® Forwarded by the DTI-BIS to the Commission on 06 January 2017, SFMC expressed in its position paper its apprehension over the imposition of anti-dumping duty on clear and bronze float glass which would have an adverse effect on all industry glass processors, importers and wholesalers. The anti-dumping duty on said products radically raised the cost of doing business which the glass industry cannot afford in this time of financial crisis. The industry cannot afford to allow its customers to bear the importation costs plus the additional anti-dumping duty. 3.2.5 WorldHotel Makati, Inc. Forwarded by the DTLBIS to the Commission on 19 January 2017, the company manifested that it is not @ party to the investigation as it has not imported clear and bronze float glass from PROC. 3.26 Xinyi Group Glass Company Ltd On 18 May 2017, Xinyi Group Glass Company Ltd. (Xinyi Group Glass), through counsel, provided its comments on the Staff Report. It submitted its computation of dumping margin for bronze float glass considering the following domestic sales to related parties/affiliates were included in the determination of normal value; ji) cost adjustments were not deducted from the gross domestic selling price to arrive at ex-factory level; and iii) other cost adjustments were not deducted from the export price to arrive at the producer's ex-factory price. Xinyi Group Glass did not contest the Commission's calculation of dumping margin for clear float glass. 3.2.7. Rider Glass Company Ltd On 19 June 2017, Rider Glass Company Ltd. (Rider Glass), through counsel, submitted its comments to the Essential Facts. It provided its computation of dumping margin for clear and bronze float glass: trader's profit, packing cost and credit interest were not considered in arriving at the producer's ex-factory export price; only overseas transport and insurance, 17% VAT, and handling and inland transportation costs pegged at US$7.50/MT each were deducted. Rider Glass did not © hnttovimww sanfanciscomitror.com/eompany profile! Page 14 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties contest the normal value determined by the Commission for clear and bronze float glass. 3.3. DOCUMENTS RECEIVED FROM DTI Only three (3) companies replied to the DTI Exporter's Questionnaire, namely: Rider Glass Company Ltd, (Rider Glass), Xinyi Glass Yingkou Company Ltd. (Xinyi Glass Yingkou) and Zhongbo Technology Company Ltd. (Zhongbo Technology) They were represented by counsel based in PROC. Their accomplished Questionnaires were forwarded to the Commission as part of the records of the case. Asya Glass Philippines, Inc. and Asia Temp Glass Corporation responded to the DTI Importer's Questionnaire while SFMC and GIC submitted position papers, which DTI-BIS later forwarded to the Commission as part of the records of the case. ox Page 15 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties | 4. THE DOMESTIC INDUSTRY AND MARKET Section 3 (b) of RA 8752” provides for the following, to wit “The application shall be considered to have been made “by or on behalf of the domestic industry” if it is supported by those domestic producers whose collective output constitutes more than fifty percent (50%) of the total production of the like product produced by that portion of the domestic industry expressing either support for or opposition to the application. In cases involving an exceptionally large number of producers, the degree of support and opposition may be determined by using statistically valid sampling technique or by consulting their representative organization. However, no investigation shail be initiated when domestic producers expressly supporting the application account for less than twenty-five percent (25%) of total production of the like product produced by the domestic industry.” Section 2 (i) of the IRRs of RA 8752° defines domestic industry as: “domestic producers as a whole of the like product or to those of such producers whose collective output of the product constitutes a major proportion of the total domestic production of that product, except that when producers are related to the importers or foreign exporters or are themselves importers of the allegedly dumped product, the term ‘domestic industry" may be interpreted as referring to the rest of the producers.” The application was filed by AGPH. The company is the only manufacturer of clear and bronze float glass in the Philippines and thus represents the domestic industry. As such, the applicant satisfied the domestic industry requirement. 4.1 MARKET PARTICIPANTS 4.1.1. Domestic Producer(s) AGPH is a pioneer in the flat glass industry in the Philippines. It used to manufacture and distribute figured glass and glass mirrors but ceased production in 2007 and 2008, respectively. In 2014, the company manufactured and exported solar glass panel but transferred the business later to its sister company AGC Industrial Solar Glass Philippines, which shut down its operation in December 2016. From 2014 to the present, AGPH has not manufactured and/or sold any other products except float glass, clear and bronze. 7 Consistent with Article 5.4 of ADA 8 Consietent iol 4.4 of ADA Page 16 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 4.1.2. Foreign Producers/Exporters Based on BOC - Electronic Import Entry Declarations (EIED), there were a total of 28 and 16 identified Chinese manufaciurers/exporters to the Philippines of clear and bronze float glass, respectively, in 2015. The top ten (10) manufacturers/exporters ranked by 2015 volume of exports are listed below. Table 3. Top PROC Exporters of Float Glass: 2015 ‘% Share of Total Rank Name of Exporter PROC Exports to [ie the Philippines Clear Float Glass: 1* | Xinyi Group Glass Company Lt. 44.19 __ 2" | Tengzhou Jinjing Glass Company Ltd 42.01 3 Rider Glass Company Lid. 8.28 4" | Future Glass Co. Ltd. 6.21 5 | Shandong Jinjing Science & Technology Stock Co., Ltd. 4.95 | 6® | Shandong Jinjing Energy Efficient Glass Company Ltd. 482 7 | Jing Yu Intemational Trading Co. Ltd. 438 ‘| Shenzhen Huadingxing Import and Export Company Ltd. 3.08 "| Hongkong Mercury Intemational Company Ltd 236 10" | Qinhuangdao Yaonua Glass industrial Zone. 1.98 [_ Total 92.26 Bronze Float Glass: a= ‘Shandong Jinjing Science & Technology Stock Co., Ltd. 47.40 2" | Xinyi Group Glass Company Ltd. 35.51 F onl ‘Shenzhen Yihaodi import and Export 283 ae Hongkong Mercury International Company Ltd. 2.36. ‘5 | Shenzhen Changrui Import & Export Trade Co., Ltd, 2.36 6" | Qingdao Globalstar Glass Co. Lid. 1.73 F aid ‘Shenzhen Juntongda Import and Export Company Lid. 1.62 8% | Rider Glass Company Ltd. 1.40 ‘9 | Xiamen Hanza Import and Export Company Ltd. 0.95 10" | Reed Intemational Trade Company Ltd 0.85 Total 97.01 Compared to other countries, the Philippines has become an attractive destination of Chinese float glass, as shown by an upsurge of 2,106% in Chinese exports of clear float glass and 8,923% for bronze float glass to the Philippines during the period (Table 4). Moreover, an average of 26% (for clear) and 24% (for bronze) of total annual Chinese exports were sold to the Philippines during said period ) Page 17 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties Table 4. China’s Exports of Clear and Bronze Float Glass (In MT): 2013-2016 Product / Country of 2013 2014 2015 2016 Total Destination Clear Float Glass: [ Chile 41,699 39,767 48,978 44,905 [__175,349 India 28,331 25,632 43,719 48,944 | 146,626 Korea, Republic of 62,490 | 156,885, 191,434 133,212 | 544,021 Pens 82,279 91,388 87,080 66,871 | 327,628 Philippines 2,280 20,650 36,630 50,290 | 109,850 Others 657,181 741,402 735,032 833,580 | 2,967,195 Total | __874,260| 4,075,724 | 1,142,883 | 1,177,802 | 4,270,669 Bronze Float Glass: | Colombia 8,048 9.557 9,435 9.448 36,488 Ecuador 8,798 8,365 9,573 7,661 34,397 Korea, Republic of 26,893 22,460 8,998 53,887 | 112,238 Peru 35,589 32,975 44,565 44,247 | 157,376 Philippines: 130 6,660 |____ 26,700 11,820 45,310 Others 780,479 | __150,994 145,410, 762,042 | 638,925 | Total 259,937 | 231,011 244,681 289,105 | 1,024,734 ‘Source: TradeMap 4.1.3. Importers As indicated in the BOC-EIED, there were 21 and 12 known Philippine importers of clear and bronze float glass, respectively, in 2015. The top 10 importers ranked by 2015 volume of imports are listed below: Table 5. Top Philippine Importers of Float Glass: 2015 ‘% Share of Total Rank Name of Importer Philippine Imports from PROC Clear Float Glass: 1 | Philippine Glass Processing Specialist, Inc. 37.36 2" | Chain Glass Enterprises inc. 26.62 3° | Cebu MMF Glass & Aluminum Supply 10.30 a Century Giass Center inc. TIT. al Vertex Aluminum Facade Corporation 5.56 Ld Glasstemp Industries Corporation 2.81 ~_7* | San Francisco Mirror Corporation 2.36 3% | Glasmatic Industrial inc. 1.17 9" | Vetro Safety Inc. 7 0.87 10" | Asia Glass Palace Inc. 0.82 Total 95.64 Bronze Float Glass: 1° | Philippine Glass Processing Specialist, Inc. e724 24 | Chain Glass Enterprises Inc. 36.73 3 | Cebu MMF Glass & Aluminum Supply 5.42 a Century Glass Center Inc. 2.36 5° | Nitoo Enterprises Inc. 2.36 6" | La Crosse International Trading = 2.35 Page 18 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties % Share of Total Rank Name of Importer Philippine Imports from PROC ‘7 | Vertex Aluminum Facade Corporation 4.57 8" | Greenbucks Enterprises 1.34 9 | Emory Inc. 0.09 10" | Kima Glass Supply Company, Inc. 0.09 Total 99.52 4.2 THE PHILIPPINE MARKET During the POI, the domestic market for clear and bronze float glass was supplied mainly by AGPH, but augmented by imports, with the biggest volumes coming from PROC. Table 6. The Philippine Float Glass Market in Metric Tons (MT): 2013-2016 Particulars 2013 2014 2015 2016 Clear Float Glass: Domestic Industry Sales 7 Total Imports ® Imports from PROC Confidential Imports from Other Sources Total Philippine Market % Share in Philippine Market. Domestic Industry 95.66 67.24 61.78 58.15 Total Imports 434 32.76 38.22 41.85 Imports from PROC 2.94 18.77 31.95 40.26 Imports from Other Sources 1.40 13.99 6.27 1.59 Bronze Float Glass: Domestic Industry Sales 7 Total Imports * Imports from PROC. Confidential Imports from Other Sources Total Philippine Market % Share in Philippine Merket: Domestic Industry 99.04 86.99 52.22 71.42 Total imports 0.96 43.01 4778 28.88 Imports from PROC 0.45 12.68 47.78 23.80 Imports from Other Sources ost | 033 0 5.08 Sources: Y AGPH; expressed in converted cases (cc) translated to MT. Based an the information provided by AGPH, 1 MT in weight is equal to 22 cos. ¥ BOC-EIED; includes AGPH's imports of specific float glass, that afe not economical to produce, and thus imported from its affiliates in Indonesia and Thailand to complet its product portfolio in the domestic market. get La Page 19 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties Demand for clear float glass grew steadily from 2013 to 2016. In 2014, the market expanded by 42% (highest over the period) and imports from PROC, which grew by more than eight (8) times, captured most of this increase in demand. The market for bronze float glass has also grown, rising from less than 30,000 MT in 2013 to nearly 56,000 MT in 2015. In 2016, the market contracted to around 50,000 MT. Consumption of float glass is driven by building construction activities. Page 20 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 5. DETERMINATION OF LIKE PRODUCT Section 3 (s), paragraph 6 of RA 8752"? defines like product as “a product which is identical or alike in all respects to the product under consideration, or, in the absence of such a product, another product which, although not alike in all respects, has characteristics closely resembling those of the product under consideration.” 5.1 PRODUCTS UNDER CONSIDERATION The products that are subject of the Commission's investigation cover clear and bronze float glass, originating or imported from PROC. The products under consideration, as identified in the application for anti- dumping petition, are: (i) clear float glass falling under the 2012 ASEAN Harmonized Tariff Nomenclature (AHTN) Subheading No. 7005.29.90 and (ii) bronze float glass falling under AHTN Subheading No, 7005.21.90. Float glass is a sheet of glass made by floating molten glass on a bed of molten metal, typically tin, hence the name float glass. In this process, the underside of the glass conforms to the smooth surface of the molten tin surface, and the top surface flows out to a smooth surface, thus giving sheet uniform thickness and very flat surfaces. Float glass is a hard, brittle and transparent substance, made by melting together feldspar, dolomite, silica sand, salt cake and other materials. Clear float glass is a distortion-free, transparent glass with precise surface flatness which provides excellent through-vision images. It comes in standard thicknesses ranging from 2 mm to 19 mm and standard sizes ranging from 1,219 mm x 914 mm to 10.160 mm x 3,048 mm. Bronze float glass, on the other hand, is a distortion-free glass, with a light to darker shade of brown, with precise surface flatness. It comes in standard thicknesses ranging from 3 mm to 12 mm and standard sizes ranging from 2,440 mm x 1,830 mm to 3,050 mm x 2,134 mm. 5.2 FACTORS CONSIDERED IN DETERMINING LIKE PRODUCT 5.2.1 Tariff Classification The domestically produced clear and bronze float glass and the protested imported Chinese clear and bronze float glass are both classified under 2012 AHTN Subheading Nos. 7005.29.90 and 7005.21.90, respectively, as shown below: of Page 21 of 59 2 Consistent with Article 2.6 of ADA,PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties Table 7. MEN Tariffs on Float Glass: 2012-2020 MEN Rate of Duty eae Description (% ad valorem) : 2012-43 | 2014-16 | 2017-20 70.05 Float glass and surface ground or polished glass, in sheets, whether or not having an absorbent, reflecting or non-reflecting layer, but not othenwise worked. = Other non-wired glass: 7005.21 | - - Coloured throughout the mass (body tinted), opacified, flashed or merely surface ground: 7005.21.80 Other 15 70 70 7005.28 Other: E T 7005.29.90 Other 15 | 10 10 Based on BOC-EIED, clear and bronze float glass imported from PROC are classified under 2012 AHTN Subheading Nos. 7005.29.90 and 7005.21.90 respectively. Products falling under subheading 7005.29.90 include, but are not limited to, clear float glass and ultra-clear float glass while products falling under subheading 7005.21.90 include, but are not limited to, colored/tinted float glass (e.g., blue, grey, and green). 5.2.2 Raw Materials Based on AGPH submissions, ocular inspection, and documents filed by PROC. exporters, raw materials used in the manufacture of clear float glass are common in both the domestic and international glass industry. These include silica sand, soda ash, salt cake (sodium sulphate), blue dust (ferric oxide), coke (carbon), dolomite, feldspar, and cullet. Ultra-clear float glass makes use of the same raw materials but there may be differences in the material ratio. Tinted float glass uses the same base raw materials as that of clear float glass, excluding coke (carbon). To produce the brownish shade, or bronze tint, other raw materials are added such as cobalt oxide, sodium nitrate and sodium selenite. 5.2.3 Physical Characteristics Locally-Produced Float Glass Submissions by AGPH describe clear float glass as a distortion-free transparent glass, with precise surface flatness, and providing excellent through-vision images Ocular inspection of AGPH plant facilities confirms production of float glass by floating molten glass on top of a molten tin bath, forming a continuous ribbon which is pulled and cooled at controlled temperature to strengthen the quality of the glass Table 82 shows the standard nominal thicknesses and sizes of AGPH's clear float glass. Page 22 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties Table 8a. Dimensions of Locally-Produced Clear Float Glass ‘Standard Maximum Size fecal tobias aa me 2.0 1,220x 915 48x36 3.0 2,498 x 1,829 96x72 4.0 3,048 x 2,134 120 x84 50 3,048 x 2,134 120x84 60 | 3,048 x 2,438 120x96 8.0 3,048 x 2,438 120x 96 100 | 3,048 x 2,438 120x986 12.0 3,048 x 2,438 120 x96 15.0 | 3,048 x 2,438 120x96 19.0 | 10,160 x 3,050 400 x 120 Source: AGPH On the other hand, bronze float glass produced by AGPH is a colored, or tinted, but transparent glass with a distinct brownish shade. Depending on the tint and thickness, the glass absorbs a high percentage of solar radiation heat, thus reducing the quantity of heat flowing into a building, lessening the cooling load, and bringing about energy savings. The sizes and standard nominal thicknesses of AGPH's bronze float glass are shown in Table 8b. Table 8b. Dimensions of Locally-Produced Tinted Float Glass ‘Standard Maximum Size Tint Nominal Thickness vai (mm) Millimeters Inches Bronze 3.0 2,440 x 1,830 96 x72 5.0 3,050 x 2,134 120 x 84 60 3,050 x 2,134 120 x 96 8.0 3,050 x 2,134 120 x96 10.0 3,050 x 2,134 120 x 96 12.0 3,050 x 2,134 120 x 96 ‘Source: AGP Imported Float Glass Based on brochures and documents submitted by the PROC exporters/manufacturer, imported clear float glass is described as a distortion-free transparent glass with precise surface flatness, and providing excellent through- vision images. Brochures from the exporter include ultra-clear float glass which is described as low iron glass with high light transmittance and high transparency. As such, it is optically similar to clear float glass. PROC manufactures glass using the same float process, wherein glass is produced by floating molten glass on top of a molten tin bath, forming a continuous ribbon that is pulled and cooled at controlled temperatures to strengthen the quality of the glass. Table 9a shows clear float glass, Page 23 of 59 xPUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties as exported by Rider and Xinyi, conforming to international standard nominal thicknesses and sizes. Table 9a. Dimensions of Imported Clear Float Glass Standard Maximum size Gai Millimeters | Inches 20 | 4,624%2,134 60x64 30 | 2,440 x 3,660 96x 144 40 | 2,440x 3,660 96x 144 50 2,440 x 3,660 96 x 144 60 2,440 x 3,660 96 x 144 80 2,440 x 3,860 96x 144 10.0 2,440 x 3,660 96 x 144 12.0 2,440 x 3,660 96x 144 160 2,440 x 3,660 96 x 144 19.0 2,440 x 3,660 96x 144 26.0 2,440 x 3,660 96x 144 ‘Sources! Rider Glass & Xinyi Glass Vingkou Imported bronze float glass is a colored, or tinted, but transparent glass with a distinct brownish shade, which reduces solar transmittance. The standard nominal sizes and thicknesses of subject article, conforming to international standards, are in Table 9b. Table 9b. Dimensions of Imported Bronze Float Glass ‘Standard Maximum Size Tint Nominal Thickness a (mm) Millimeters Inches [ Bronze 3-12 3,660 x 2,250 144 x88 Sources: Rider Glass & Xinyi Glass Yingkou Locally produced and imported clear and bronze float glass conform to both domestic and international standards, i.e., Philippine National Standards, SIRIM (Malaysian Standards), JIS (Japanese Industrial Standards), AS (American Standards), ECE (European Standards), and Asahimas Float Glass Standards." "2 TC Report on the Application of Safeguard Measures Against Importation of Float Giass (SG Investigation No. 02-2003), March 2004 Page 24 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 5.2.4 Manufacturing Process The term “float” glass was derived from the production methad invented by Sir Alastair Pilkington in the 1950s, the “float glass process”. Said process has been adopted as the universal method for the manufacture of high quality flat glass. In the float process, a continuous ribbon of glass moves out of the melting furnace and then floats across the surface of an enclosed bath of molten tin. The semi-molten ribbon is held in a chemically controlled atmosphere at a high temperature for a specific time for the irregularities to flow out and for the surfaces to be flat and parallel. Since the surface of the molten tin is dead flat, the glass also becomes flat. The ribbon is then cooled down while still advancing across the molten tin until the surfaces are hard enough to be taken out of the bath without the rollers marking the bottom surface, so a ribbon is procuced with a uniform thickness and bright polished surfaces without the need for further processing The float process differs from the old way of making glass known as the “drawn sheet’ method. In the drawn sheet process, sheets are literally drawn out of a vat of molten glass. The result is an inferior glass that is optically impure Figure 1. Simplified Flow Diagram of Clear_and Bronze Float__Glass Float Glass Process Continuous Cooling Tibbon of lehr glass Cross Float cutters Melting Path furnace Large plate lift- Small plate lift- off devices off devices Raw material feed Locally Produced Float Glass Float glass is manufactured through a continuous process. AGPH's float plant operates 24 hours a day, 365 days a year. To ensure that quality standards are met, raw materials are sampled and weighed before loading into the bath silos. Finished products are checked on-line with the aid of computers and, depending on the thickness of the glass, random sampling is conducted every hour or two. Page 25 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties The float glass production process consists of the following steps i. Batch preparation! Raw material feed - The raw materials, mixed with cullet, are conveyed to the silo tanks, ready for feeding into the furnace. ii. Melting and refining - At a temperature of 500°C to 1600°C, using bunker fuel oil, the raw materials are fused into molten glass ili, Glass forming/ Float bath - At a temperature ranging from 110°C to 1150°C, the molten glass is formed over a molten tin bath, producing a distortion-free and fire- polished continuous ribbon of glass with thicknesses ranging from 2.0 mm to 19.0 mm. iv. Annealing - The float glass is passed through the Lehr chamber to remove undesired strains and improve its strength. v. Cutting and packaging - Float glass are cut and packed, ready for delivery to the warehouse. Imported Float Glass Imported float glass is manufactured using the same production process, the “float process’. Similar to that of locally produced float glass, production involves: batching, melting, forming, annealing, and packaging. 5.2.5 Uses Clear (including ultra-clear) and bronze float glass, in general, are used in various applications. These include, but are not limited to, windows, doors, interior room partitions, decorative purposes, furniture, and automotive. As an intermediate product, float glass undergoes further processes to produce, among others, mirrors, safety glass, tempered glass, laminated glass and ballistics glass. 5.2.6 Distribution Channels AGPH supplies clear and bronze float glass to home/building/structure owners (end-users) nationwide through a regional distribution channel. There are a total of 192 dealers nationwide to which AGPH has direct access. These “big players’, in tum, serve AGPH's downstream customers. Chinese producers export clear and bronze float glass to the Philippines directly or via foreign trader-exporters. a ie Page 26 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 5.3 FINDINGS Domestically produced and imported float glass, clear (including ultra-clear) and bronze, fall under the same AHTN subheadings, undergo the same manufacturing process, use the same raw materials, possess the same physical characteristics, and generally have the same uses and applications. In view of the foregoing, the Commission finds that, in accordance with Section 3 (s), paragraph 6 of RA 8752, domestically-produced clear and bronze float glass and imported clear and bronze float glass from PROC are like products for purposes of this investigation. Cae Page 27 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties r ES 6. DETERMINATION OF DUMPING Section 3 (h) of RA 8752 provides: “In the formal investigation, the Commission shall essentially determine the following: 1. If the article in question is being imported into, or sold in the Philippines at a price less than its normal value; and the difference, if any, between the export price and the normal value of the article. 2 xxx’ Sections 11(a) and (b) of the IRRs of RA 8752 set the terms for comparing normal value" and export price'®, to wit “(a) The Commission shall determine the existence of dumping by making a fair comparison between the export price and the normal value of the allegedly dumped product, covering all transactions for the allegedly dumped product during the period of investigation (POI). x x x (b) The comparison shall be made at the same level of trade, normally at the ex- factory level, and in respect of sales made at the same time or as near as possible at the date of exportation. Due allowances shall be made in each case for differences which affect price comparability including differences in conditions and terms of sale, taxation, levels of trade, quantities, physical characteristics and any other differences which are also demonstrated to affect price comparability.” 6.1 PARTICIPATING EXPORTERS Out of the 28 and 16 identified Chinese manufacturers/exporters of clear and bronze float glass, respectively, to the Philippines in 2015, only Rider Glass Company Ltd. (Rider Glass), Xinyi Glass Yingkou Company Ltd. (Xinyi Glass Yingkou) and Zhongbo Technology Company Ltd. (Zhongbo Technology) fully cooperated in the investigation. Rider Glass is a trader-exporter while Xinyi Glass Yingkou and Zhongbo Technology are producers of clear and bronze float glass in PROC. During the POI, Xinyi Glass Yingkou and Zhongbo Technology exported clear and bronze float glass to the Philippines via their trader-exporters Xinyi Group + As defined in Section 3 (s) of RA 8752, ie, a comparable price at the date of sale of the like product, commodity or afticle in the ordinary course of trade when destined for consumption in the country of export of origin As defined in Section 3 (s) of RA 8752, ie., (1) the ex-factory price at the point of sale for export; or (2) the FOB price at the point of shipment. In cases where (1) or (2) cannot be used, then the export price may be constructed based on such reasonable basis as the Secretary or the Commission may determine Baill 7 Page 28 of 59 CON AX 6PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties Glass Company Ltd. (Xinyi Group Glass) and Rider Glass, respectively. Both producers knew at the time of sale that the subject product was destined for export to the Philippines. Based on their submissions as validated and verified during the on-site investigation conducted by the Commission, individual dumping margins were computed for Rider Glass and Xinyi Group Glass. These companies’ combined exports to the Philippines of clear and bronze float glass totaled 29,902 MT or 47% of total Philippine imports of subject articles from PROC in 2015. 6.1.1 Xinyi Group Glass Xinyi Group Glass was the 1* and 2" top exporter of Chinese clear and bronze float glass to the Philippines in 2015, respectively. The company’s clear and bronze float glass exports to the Philippines, which accounted for 40% and 39%, respectively, of total Philippine imports of subject goods from PROC in 2015, were all sourced from its parent company, Xinyi Glass Yingkou. On the aggregate, the ‘company supplied 40% of imports by the Philippines of float glass (whether clear or bronze) from China in 2015. Export Price All export sales were made to unaffiliated/independent Philippine importers and the export prices invoiced on the date of sale were at arm’s length. Thus, export prices were calculated directly from the actual gross prices reported by the exporter. ‘These prices, expressed in CIF values, were adjusted to FOB values by deducting all post-exportation charges incurred by the exporter (i.e., ocean freight and insurance), credit expense’, and trader’s profit!?. From FOB value, local expenses such as value-added tax (VAT) of 17%, inland freight, handling, and packing cost directly linked to each export sale were deducted to arrive at the producer's ex-factory export price. Local expenses of Xinyi Glass Yingkou, it being the only supplier of clear and bronze float glass to Xinyi Group Glass in 2015, were used as basis of cost adjustments to arrive at the producer's ex-factory export price. Table 10a shows the weighted average adjusted export prices for each thickness of clear and bronze float glass exported by Xinyi Group Glass in 2015. Xx + This is the imputes interest for the time that elapsed between the shipment and the date of receipt of payment ‘bout 30 days, at 4.35% per annum '® This is the imputed amount of profi/commission eared by Xinyi Group Giass as a middleman between the importer and manufacturer, equivalent to 10% of the export price. Xinyi Group Glass did not provide Information on mergin of profit (MOP), thus Rider Glass’ submission on MOP equivalent to 10% was used. fee Page 29 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties Table 10a. Weighted Average Adjusted Export Prices: Xinyi Group Glass Nominal Export | Gross Export | Weighted Average Product Thickness | Volume | Prices Adjusted Export Price (mm) (mT) | (usD/MT) (USDIMT) Clear Float 4 75 Glass 5 843 6 4,089 | Confidential Confidential 8 351 10 3,483 12 5.870 Total 14,711 Bronze Float 4 155 Glass 5 2,122 6 6,276 | Confidential Confidential 10 ‘904 12 872 Total 10,329 Normal Value The Commission first applied the ordinary course of trade (OCOT) test® to determine whether there are sales to related parties or sales made at prices below cost. Sales below cost that were in substantial quantities" were excluded in the calculation of the normal value. The remaining volume of domestic sales (net of the volume of sales below cost) was then subjected to the sufficiency/viability® test to determine whether domestic sales of subject product constitute a sufficient basis for normal value calculation The Commission adopted as basis of normal value the domestic selling price for the specific thickness of clear and bronze float glass sold in China as submitted by Xinyi Glass Yingkou. Prices were adjusted to ex-factory level by deducting value added tax of 17% and inland costs directly linked to each domestic sale. oF 2 Consistent with Article 2.2.1 of ADA 2" Footnote 5 to Article 2.2.1 of ADA, 22 Footnete 2 to Article 2.2 of ADA, ao Page 30 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties Table 10b. Weighted Average Adjusted Normal Value: yi Group Glass Nominal Gross Domestic Weighted Average Product Thickness Selling Prices | Adjusted Normal Value (mm) (USDIMT) (USDIMT) Clear Float Glass 4 5 6 Confidential Confidential 8 10 12 Bronze Float Glass 4 5 Confidential Confidential 6 10 With regard to 12 mm bronze float glass with low domestic sales volume, ie., below the required 5% sufficiency threshold, a constructed normal value was calculated pursuant to Section 11 (c) of the IRRs of RA 8752% that states: “If the normal value of an article cannot be determined because of the following conditions in the domestic market of the country of export or origin: 1. xxx; or 2.Xxx; or 3. volume of domestic sales is less than 5% of export sales to the Philippines. x KX then, the Secretary or Commission, may determine that the normal value shall be either: @) xxx;or (ii) the constructed value or the cost of production in the country of origin plus a reasonable amount for administrative, selling and general costs and for profits.” In the calculation of the constructed normal value, the basic rules provided in Articles 2.2.1.1 and 2.2.2 of ADA were also applied Table 10c shows the constructed normal value for 12 mm bronze float glass of Xinyi Group Glass. 2 Consistent with Article 22 of ADA 3* The cost of protiuction shall normally be calculated on the basis of records kept by the exporter or producer under eonsideraton, provided that such records are in accardance withthe generally accepted accounting prineipias ofthe exporting country, and reasonably reflect the costs associated withthe production and sale of the product under consideration The amounts for administrative, selling and general costs, and for profits shall be based on actual date pertaining to production and sales in the ordinary course of trade of the like product by the exporter or producer under investigation 25 Page 31 of 59 xPUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties Table 10c. Constructed Normal Value: Xinyi Group Glass Constructed Normal Value Product (USDMT) Bronze float glass (12 mm only) Confidential Margin of Dumping In computing the margin of dumping, the Commission adopted Method 1 as provided for under Section 11 (|) of the IRRs of RA 8752°®, to wit “In accordance with the provisions governing fair comparison, the existence of a dumping margin during the period of investigation shall be established by the comparison of: 1. @ weighted average normal value with a weighted average of all comparable export transactions; or 2xxx.” Except for 5 mm clear float glass at 0.56%, a negative dumping margin was computed for clear float glass. For bronze float glass, the calculated dumping margin ranged from 0.93% to 33.49%. Table 10d. Dumping Margin: Xinyi Group Glass Weighted | Weighted ‘Dumping Margin Nominal Average Average Absolute Percentage Product Thickness | Normal Value | ExportPrice | Terms | of Export Price (mm) (usowT) | _(UspimT)_| (usD/MT) (%) @ T— ®) 1a) (e)=c-d | (=e/dx 100 Clear Fioat Glass a ] (20.00) (10.20) 5 4.00 0.56 6 Confidential | Confidential | (7.00) (3.91) 8 (8.00) (4.47) 10 (1.00) (0.58) 12 (4.00) (2.22) Bronze Float Glass 4 52,00 33.12 5 2.00 0.93 | 8 Confidential | Confidential | 17.00 a7 | | 10 71.00 3349 | | 12 0.00 | ooo | °® Consistent with Article 2.4.2 of ADA ee Page 32 of 69PUBLIC VERSION FOR: Importers, Exporters and Other Interested Partios 6.1.2 Rider Glass The company is the 3 top exporter of Chinese clear float glass to the Philippines, accounting for 12% of total Philippine imports from PROC in 2015. Its exports of bronze float glass accounted for only 2% though, The company purchased clear and bronze float glass from several Chinese producers, including Zhongbo Technology, and exported the same to other countries aside from the Philippines. In 2015, exports of Rider Glass to the Philippines were sourced from several Chinese producers, except for 10 mm bronze float glass which were purchased solely from Zhongbo Technology. Export Price All export sales were made to unaffiliated/independent Philippine importers and the export prices invoiced on the date of sale were at arm's length. Thus, export prices were calculated directly from the actual gross prices reported by the exporter ‘These prices, expressed in CIF values, were adjusted to FOB values by deducting all post-exportation charges incurred by the exporter (i.e., ocean freight and insurance), credit expense”, and trader's profit”, From FOB value, local expenses such as value-added tax (VAT) of 17%, inland freight and handling costs pegged at US$7.50/MT each, and packing cost directly linked to each export sale were deducted to arrive at the producer’s ex-factory export price. Table 11a shows the weighted average adjusted export prices for each thickness of clear and bronze float glass exported by Rider Glass in 2015. Table 11a. Weighted Average Adjusted Export Prices: Rider Glass Nominal Export | Gross Export | Weighted Average | Product | Thickness | Volume | Prices Adjusted Export Price (mm) (wt) | (usp) (USDIMT) Clear Float 2 26 Glass 3 520 5 2,470 6 '910| Confidential Confidential 40 234 12 182 15 52 49 26 [7 Total 4,420 Bronze Float 5 234 Glass 6 182 Confidential Confidential 10 26 Total 442 7 This is the imputed interest for the time that elapsed between the shipment and the date of receipt of Payment, about 20 days at 4.35% per annum This is the imputed amount of profiicommission earned by Rider Glass as a middieman between the importer and manufactures, equivalent to 10% of the export price, as submitted by Rider Glass. Figures provided by Rider Glass in its comment to the Essential Facts submitted on 19 June 2017 Page 33 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties Normal Value In the determination of normal value, the Commission first applied the OCOT test" to determine whether there are sales to related parties or sales made at prices below cost. Sales below cost that were in substantial quantities®? were excluded in the calculation of the normal value. The remaining volume of domestic sales (net of the volume of sales below cost) was then subjected to the sufficiency/viability® test to determine whether domestic sales of subject product constitute a sufficient basis for normal value calculation. The Commission adopted as basis of its normal value the domestic selling price of 10 mm bronze glass when sold in China as submitted by Zhongbo Technology Prices were adjusted to ex-factory level by deducting value added tax of 17% and inland costs directly linked to each domestic sale Table 11b. Weighted Average Adjusted Normal Value: Rider Glass | Nominal | Gross Domestic | Weighted Average Product | Thickness Selling Prices | Adjusted Normal Value (mm) (USD/MT) (USD/MT) Bronze Float Glass 40 Confidential Confidential For exports by Rider Glass of clear float glass (all thicknesses) and bronze float glass (except 10 mm) which the company sourced from unidentified Chinese producers and for which no information on domestic sales in China was provided, a constructed normal value was calculated using Xinyi Glass Yingkou's data as basis, the latter being the main Chinese supplier of clear and bronze float glass to the Philippines in 2015 and whose data has been verified by the Commission. Table 11c. Constructed Normal Value: Rider Glass Constructed Normal Value Product (USD/MT) Clear float glass (all thicknesses) Confidential Bronze float glass (except 10 mm) a Consistent with Article 2.2.1 of ADA, % Footnote 5 to Article 2.2.1 of ADA % Footnote 2 to Article 2.2 of ADA “The rules provided ip Articles 2.2.1.1 and 2.2.2 of ADA were applied Page 34 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties. Margin of Dumping The calculated dumping margin® for clear float glass and bronze float glass ranged from 2.12% to 35.92% and 24.86% to 35.12%, respectively. A negative dumping margin was computed for clear float glass with thicknesses of 15 mm and 19mm. Table 11d. Calculation of Dumping Margin: Rider Glass Weighted | Weighted ‘Dumping Margin Product Nominal Average Average | Absolute | Percentage Thickness | Normal Value | Export Price | Terms _| of Export Price (mm) | _(uspiwT) | (usD/MT)_| (usDMT) (%) a) ) | ©) @) (e)=c-d | ()=e/dx 100 Clear Float Glass 2 4.00 2.42 3 51.00 35.92 5 39.00 25.32 6 Confidential | Confidential | 26.00 15.57 10 35.00 2215 | 12 31.00 19.14 15 (60.00) (23.72) 19 (40.00) (17.17) Bronze Float Glass 5 58.00 34.32 6 Confidential Confidential 59.00 35.12 40 46.00 24.86 6.2 NON-PARTICIPATING EXPORTERS All other exporters did not respond to the DTI-BIS Questionnaire. Hence, the Commission, in the course of its investigation, sent a follow-up letter to eight (8) top manufacturers/exporters, namely Future Glass Company Ltd., Hongkong Mercury International Company Ltd., Jing Yu International Trading Company Ltd., Qingdao Chengye Glass Company, Ltd., Shandong Jinjing Science and Technology Stock Company Ltd., Shandong Jinjing Energy Efficient Glass Company Ltd., Shenzhen Huadingxing Import and Export Company, Ltd., Tengzhou Jinjing Glass Company Litd., reiterating the submission of information relevant to the investigation. Based on the import entry declarations from BOC forwarded by the DTLBIS to the Commission, the combined exports of clear and bronze float glass of the aforesaid exporters accounted for 36% and 57%, respectively, of the total Philippine imports from PROC in 2015. Their exports, combined with that of Rider Glass and Xinyi Group Glass, constituted 92% of total Philippine imports of clear and bronze float glass from PROC in 2015. ys 3 Consistent with Section 14 (I) ofthe IRR of RA 8762 and Article 2.4.2 of ADA Page 35 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties Section 11 (m) of the IRRs of RA 8752® states: “If possible, an individual margin of dumping shall be determined for each known exporter or producer of the dumped product. In cases where the number of importers, foreign exporters or producers, or the types of the dumped products involved is so large as to make such determination impracticable, the Secretary and the Commission may limit their examination either to: i) @ reasonable number of interested parties or products by using statistically valid sampling techniques on the basis of information available to them at the time of the selection; or ii) the largest percentage of volume of exports from the country in question which can be reasonably investigated. x x x” Despite sufficient time given to parties to submit the required data, no submission from any of the exporters was received by the Commission. Hence, dumping margin was determined by the application of the best information available to the Commission at the time of the investigation pursuant to Section 10 (h) of the IRRs of RA 8752” which reads: “In case any or all of the parties on record fail to submit their answers to position papers or to questionnaires within the prescribed period, the Commission shall base its findings on the best available information.” Export Price Export prices were estimated based on the exporters’ FOB prices indicated in the import entry declarations from BOC forwarded by the DTI-BIS. fe the Commission Table 12a shows the weighted average export prices for each thickness of clear and bronze float glass exported by all other Chinese exporters in 2015. Table 12a. Weighted Average Export Prices: Non-Participating Exporters Product / ] Nominal Thickness Weighted Average Export Prices | (mm) I (USD/MT) Clear Float Glass: | 3 | | 5 | 6 Confidential | | 10 12 Bronze Float Glass: 5 6 Confidential | 10 J % Consistent wth Article 6.10 of ADA % Consistent with Article 6.8 of ADA Page 36 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties Normal Value The Commission considered the domestic selling prices submitted by Xinyi Glass Yingkou as basis of normal value, its data having been verified and it being the main Chinese supplier of subject articles in 2015. Table 12b shows the weighted average normal value applicable to exports of clear and bronze float glass by all other Chinese exporters. Table 12b. Weighted Average Normal Value: Non-Participating Exporters Product (mm) Nominal Thickness Weighted Average Normal Value (USDIMT) Clear Float Glass: 3 5 6 10 12 Bronze Float Glass: Confidential 5 8 10 Confidential Margin of Dumping The calculated dumping margin® for clear and bronze float glass ranged from 37.33% to 47.18% and 85% to 100%, respectively Table 12c. Dumping Margin: Non-Parti jpating Exporters Weighted Weighted Dumping Margin 1 Name of the Nominal Average Average | Absolute | Percentage Exporters Thickness | Normal Value | Export Price | Terms | of Export Price (mm) quspimT) | (USD/MT)_| (USD/MT) (%) @) (b) (©) (a) (e)=c-d | ()=e/dx 100 Clear Float Giass 3 56.00 37.33 5 67.00 47.18 6 Confidential | Confidential | 57.00 39.04 10 65.00 44.83 12 62.00 43.06 Bronze Float Glass: 5 119.00 85.00 6 Confidential | Confidential | 123.00 | 86.62 40 167.00 | 100.00 3 Consistent with Section 11 (|) ofthe IRRs of RA 8752 and Article 2.4.2 of ADA a Pag x ge 37 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 6.3 DE MINIMIS MARGIN OF DUMPING Section 9 (a) of the IRRs of RA 8752” provides for the immediate termination of the investigation where the calculated margin of dumping is de minimis, to wit: “The Commission, as the case may be, shall motu proprio terminate the investigation at any stage of the proceedings if the provisionally estimated margin of dumping is less than two (2) per cent of the export price x x x.” Margins of dumping were de minimis for clear float glass (all thicknesses) and bronze float glass (5 mm, 12 mm) exported by Xinyi Group Glass and clear float glass (15 mm, 19 mm) exported by Rider Glass. For all other exports, the calculated dumping margins were above de minimis. © Consistent with Article 5.8 of ADA Page 38 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 7. DETERMINATION OF MATERIAL INJURY TO THE DOMESTIC INDUSTRY AS A RESULT OF DUMPING Section 3 (h) of RA 8752, 2"! paragraph, provides “In the formal investigation, the Commission shall essentially determine the following. te 10x mp 2. The presence and extent of material injury or the threat thereof to the domestic industry, or the material retardation of the establishment of a domestic industry; 3. The existence of a causal relationship between the allegedly dumped product, commodity or article and the material injury or threat of material injury to the affected domestic industry, or material retardation of the establishment of a domestic industry; 4. xxx" Section 12 of the IRRs of RA 8752*' sets out the parameters in the determination of material injury and threat thereof. In the determination of material injury, the Commission must consider the following factors. 4, Volume of dumped imports; 2. Effect of the dumped imports on prices in the domestic market for like product; 3. Consequent impact of the dumped imports on domestic producers of such product; and 4, Factors other than dumping, A + Consistent ae Page 39 of 59PUBLIC VERSION FOR: Importers, Exporters and Other Interested Parties 7.1 VOLUME OF DUMPED IMPORTS 7.1.1 Negligible Volume Section 9 of the IRRs of RA 8752* provides for the immediate termination of the investigation where the volume of dumped imports is found to be negligible, to wit: (a) The Secretary or the Commission, as the case may be, shall motu proprio terminate the investigation at any stage of the proceedings if the provisionally estimated margin of dumping is less than two (2) percent of the export price or the volume of the allegedly dumped products or injury is negligible, x x x (b) The volume of the allegedly dumped products from a particular country shall normally be regarded as negligible if it accounts for less than three percent (3%) of the total imports of said product in the Philippines unless countries which individually account for less than three percent (3%) of the total imports of the said product in the Philippines collectively account for more than seven percent (7%) of the total imports of that product." In 2015, dumped imports of clear and bronze float glass from PROC totaled 21,841 MT and 23,706 MT, respectively, with a combined volume of 45,547 MT. Since their shares to total Philippine imports exceeded the 3% negligibility threshold, the volume of dumped imports of clear and bronze float glass from PROC is not negligible. Table 13a. Volume of Dumped Imports (MT): 2015 Imports (MT) 7 Share of Dumped From PROC From Imports to the Product Rion: = Other Total Total Philippine Dumped | pumped | Total | Countries tapers Clear Float Glass 49.85 Bronze Float Glass 88.79 Total 64.60 Sources: 4 BOC-EIED and Exporters’ Submissions . Consistent with Article 5.8 of ADA A Page 40 of 59