Fortress Paper recently announced that China's Ministry of Commerce ("MOFCOM") has made a preliminary determination to impose an interim duty on the import of Canadian dissolving pulp into China.
The interim duty applied against Fortress Paper’s dissolving pulp imports will be calculated at 13% of the CIF price to China and will be payable in cash bonds in respect of prospective imports during the period between MOFCOM’s preliminary and final determination.
The interim duty applied against Fortress Paper’s imports is consistent with that applied against other Canadian dissolving pulp importers who responded to the investigation.
Fortress Paper is disappointed by MOFCOM's preliminary decision, and believes that the decision represents an unsupported assessment of injury to China's dissolving pulp market and the allegations of 'dumping' activities by Canadian producers. MOFCOM's interim duty will materially harm the business of Chinese viscose fibre producers, which is a significant domestic industry. As set forth in the report, "China's Antidumping Investigations Against Cellulose Pulp" by prominent Canadian economist Michael Stone, changes in the price for dissolving pulp have largely been driven by factors such as the price of cotton and a globally weak textile fibers market. Furthermore, cost of wood fibre is the largest single input cost in dissolving pulp production, which places Chinese producers at a disadvantage due to their need to import fibre and not as a result of any alleged dumping activities by foreign dissolving pulp producers. The duty imposed by MOFCOM will be ineffective in reducing wood fibre costs for Chinese producers, and may end up causing significant harm to China's viscose fibre producers.
Chadwick Wasilenkoff, Chief Executive Officer of Fortress Paper, commented: "This is a challenging time for Fortress Paper, but we have prepared for this eventuality and have implemented a strategy which should mitigate the short-term adverse effects of MOFCOM's preliminary determination." Mr. Wasilenkoff continued, "We wholly disagree with MOFCOM's conclusion that Canadian dissolving pulp producers are dumping exports in to China and have expressed this view to MOFCOM in the strongest manner. As a response, we are assessing our legal options and will be working with the Canadian government to have this determination reviewed by the WTO."
