Lucky Cement drops court challenge

01 Feb 2016

Business Report, 01 February 2016
By Roy Cokayne

Johannesburg - Pakistan cement producer Lucky Cement has decided against reviving its South African court challenge to the imposition by the International Trade Administration Commission (Itac) of anti-dumping duties on Portland cement imports from Pakistan.

The company said it had instead decided to put its faith in the Pakistan government’s approach to the World Trade Organisation (WTO) to challenge and revoke the anti-dumping duties.

Muhammad Faisal, the financial director of Lucky Cement, confirmed to Business Report last week that “as of now” the company would not proceed with a High Court application to set aside the definitive anti-dumping duties imposed by Itac.

“Pakistan has gone to the WTO (to rule) against the anti-dumping duties imposed by South Africa against exports from Pakistan.

“We believe that this matter will be better handled by the government of Pakistan and there is no need to go into litigation separately as a company at this juncture,” he said.

Lucky Cement last year applied to the Gauteng North High Court for an order to set aside and declare invalid the imposition of provisional anti-dumping duties of between 14.3 percent and 77.2 percent on Portland cement originating in or imported from Pakistan.

The application did not proceed because the provisional anti-dumping duties had a shelf life of six months and had expired before the application was heard.

But Itac made a final determination in December on the anti-dumping duties and imposed duties ranging between 14.29 percent and 77.15 percent following an investigation in response to complaints submitted by a number of local cement producers, including PPC, Lafarge, NPC Cimpor and AfriSam.

Itac’s final determination was that dumping of Portland cement originating in or imported from Pakistan was taking place, the South African Customs Union (Sacu) industry was experiencing material injury and a threat of material injury and the injury suffered by the Sacu industry was causally linked to the dumping of Portland cement originating or imported from Pakistan.

It resulted in Itac recommending to Trade and Industry Minister Rob Davies the imposition of anti-dumping duties of 14.29 percent on Lucky Cement, 77.15 percent on Bestway Cement, 68.87 percent on DG Khan Cement, 63.53 percent on Attock Pakistan Cement and 62.69 percent on all other exports excluding these four companies.

Donald Mackay, a director of XA International Trade Advisers and consultants to Lucky Cement, said in December the decision by Itac to make a final determination was “bizarre” because the final determination report did not include all the comments received.

Mackay said the total savings to South African consumers due to the Competition Commission’s intervention that resulted in the break-up of the cement cartel was estimated at between R4.5 billion and R5.8bn and Lucky Cement’s argument had consistently been that the injury caused to the Sacu cement industry was because of the end of the cartel.

However, Mackay said the Competition Commission was not even mentioned in Itac’s final determination report, which had also used the discretion granted in the regulations to extend the period to determine the injury from three to four years.

“We’re not debating Itac discretion but if it used it, to tell us the reason. It looks like the period was extended to exaggerate the injury,” he said.