Brazil's tyre probe worries SA company

Manufacturers of truck and bus tyres are the latest target of a Brazilian anti-dumping investigation against SA, following an application by the Brazilian body representing tyre manufacturers, ANIP.

Apollo Tyres said last week it was aware of the action and was seriously concerned about the effect the investigation would have on its business. Chief executive Riaz Haffejee said the company was talking with the relevant stakeholders to gain greater clarity about the issues relating to the probe.

The South African company only recently heard of the proposed action against it and manufacturers in Russia, Thailand, South Korea, Taiwan and Japan. Claims levelled against South African manufacturers include that they are dumping at a rate of 52% with the normal value of the tyres being US$6,421 a ton compared with the export price of US$4,225 a ton.

Haffejee said Apollo exported a substantial number of tyres across all categories to Brazil. He would not comment on the claim that SA was dumping tyres in that market.

"It would be premature to comment on this figure as yet," Haffejee said.

The company would submit a more comprehensive statement once it had a better understanding of how the duty was calculated.

Tyre exports small

George Geringer, senior manager at PwC tax services, said total exports from South African manufacturers of truck and bus tyres were not material, since it seemed that among the large manufacturers it was only Apollo that exported products to Brazil.

The Brazilian development, industry and foreign trade ministry began an anti-dumping investigation on 10 June and gave importers 40 days to respond to the probe.

Etienne Human, chief executive of the South African Tyre Manufacturers' Conference, said last week the conference's members were in the process of obtaining technical advice on how to deal with the Brazil anti-dumping application. It was not uncommon for a country to start an investigation against another country that was investigating it. SA and Brazil have been at loggerheads over the importation of low-priced Brazilian chickens.

Human said in many cases it was irrelevant what happened to the investigation, which was part of a political game. The European Union and the US used to play that game, but they have turned their attention to India and China.

Geringer said there were also many instances where actions by one country's manufacturers or producers caused material harm and the investigations did reflect that.

In the Brazilian tyre anti-dumping initiation document it is stated that there was lack of pricing data for the products under investigation. Therefore, the normal value for all investigated countries was constructed based on "estimates of production costs, operational expenses and profit margins".

Source: Business Day via I-Net Bridge