The Hindu Business Line : Capexil flays move to levy anti-dumping duty on EPDM rubber

CAPEXIL (formerly Chemicals and Allied Products Export Promotion Council), the designated nodal export agency for rubber manufactured products, has criticised the on-going efforts to seek anti-dumping duty on imports of EPDM (Ethylene-Propylene) rubbers stating that it would severely hamper the raw material availability for the domestic rubber goods sector, and thereby dent the nation's export competitiveness.

It is pointed out that the current capacity of the single producer of EPDM rubbers in the country was only 10,000 mt against the industry's total demand of 22,000 mt per annum.

And, anti-dumping duty on acryl nitrile rubber (ANR) from EU and Brazil has already been imposed, and is continuing against imports from the Far East.

In a recent communication to Mr E.V.K.S. Elangovan, Union Minister of State for Commerce & Industry, the council has suggested that at least some 12,000 mt of ANR should be permitted for import without duty, and the balance quantities could be subjected to the duty.

Clarifying that duty is being sought to be imposed on EPDM rubber imports from EU, US and Brazil, Mr M.F. Vohra, Chairman of Capexil's Rubber Products panel, and Managing Partner, Zenith Rubber and Plastic Works, told Business Line here recently that anti-dumping duty on EPDM has already been levied on imports from South Korea and Japan.

He said the sole producer of this item in India was Unimers (I) Ltd, a BIFR company, producing between 3,000-5000 mt per annum, arguably the smallest plant operating in the world.

It is pointed out that a minimum viable size for an EPDM plant has to be 40,000 mt per annum.

Mr Vohra said the total domestic requirement of EPDM rubber was 15,000 mt per annum, whereas Unimers has been producing less than one-third of the Indian demand, and that too only of a few grades and not the entire range.

Internationally, he pointed out, prices of EPDM have gone up from $1300 per tonne in late 2003 to $2600 per tonne at present.

The large price increase is said to be the fallout of closure of two major plants worldwide, producing 1,20,000 tonnes, leading to a huge shortage of this material.

Additionally, Mr Vohra explained, the quality of the domestically available material has been questioned a number of times, and the consumers have not been quite happy with the supply position either.

Should we be forced to pay duty on material that the local unit is not able to produce and supply because of smaller capacity?

He said it was a similar story in the case of ANR, in that there is only one domestic producer of this item albeit with substantially higher capacity and wider range, but still not producing enough to meet the industry demand fully.

He cautioned that if key raw materials become more expensive, and finished rubber products enjoy preferential duties under RTAs/FTAs, it would deal a deathblow to Indian industry, in general, and the domestic rubber goods sector, in particular.

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