Anti-dumping case in the EU hits, Foshan Ceramics has been “take the lead”

On March 17, 2011, the European Union made a preliminary ruling on anti-dumping investigations on tiles produced in China. Three Chinese ceramics companies received case processing. The tax rates were 35.5%, 36.6%, and 26.2%, respectively, but the cooperation was not drawn. The tax rate of 112 companies is 32.3%. Other ceramic companies have a nationwide tax rate of 73%. According to the procedures, temporary tariffs will be implemented for half a year from March 17 to September 16. On September 17, the final decision will be made as to whether to levy a five-year formal anti-dumping tax. Judging from the current situation, the final ruling in September hopes that the Chinese ceramic tile exports to the EU market will face a huge crisis.

The anti-dumping, the subjective factor is that the average price per square metre of ceramic bricks exported from China to the EU has been lower than the ex-factory price of EU tile manufacturers for a long time. As far as Foshan is concerned, the FOB prices of ceramic tiles from Foshan ceramics companies are generally between US$5 and US$6, and the CIF price is only about 60% of the EU manufacturers’ ex-factory prices. Anti-dumping can be said to be the result of long-term accumulation of this factor. The main reason for this anti-dumping is the financial crisis in 2008. The anti-dumping was filed by the European Union of Ceramic Tile Producers in May last year to the European Commission.

The ceramic tile production enterprises in the European Union fell into a downturn since the economic crisis of 2008 and continued to close down. In particular, Spain and Italy, the major producers of ceramic tiles, have been greatly affected. In the economic downturn, trade protectionism will rise. The EU’s move is clearly aimed at protecting the interests of local companies and transferring them to the economic crisis. Chinese ceramic companies have become the scapegoat for the EU tile industry downturn.

This anti-dumping has a great impact on Foshan ceramic tile manufacturers. At present, many trading companies in Foshan and some small and medium-sized enterprises export ceramic tiles to the EU. These companies and trading companies have to bear a tax rate of 73%, basically cutting off the possibility of exporting to the EU. These will be eliminated by the EU market. Some large-scale enterprises, especially some companies whose product quality is comparable to or even superior to that of local enterprises in the European Union, are mainly affected by the volume of exports and landed prices, and have a great impact on their competitiveness in the EU market. As far as the export to the EU itself is concerned, the Foshan ceramics industry can be described as a slammer.

However, according to the author, the anti-dumping effect on the development of the entire Foshan ceramics industry is limited and the situation is still controllable. The total export volume of Foshan ceramic tiles increased from 1.5 billion U.S. dollars in 2007 to nearly 2 billion U.S. dollars in 10 years, of which ceramic tiles exported to the EU account for about 10% to 15%. According to the data provided by the industry association, 80% of ceramic tiles produced in Foshan are sold domestically, and exports only account for 20% of the total output. That means tiles exported to the EU account for only about 2% to 3% of the total output of Foshan tiles. Therefore, the overall impact on the ceramics industry in Foshan is extremely high but the situation is controllable. The fear of anti-dumping this time lies in the series of chain reactions triggered. Once these reactions respond to mistakes, they will bring a huge crisis to the healthy development of Foshan Ceramics.

First, in recent years, Foshan ceramics is in a critical period of industrial transfer and industrial upgrading. After the transfer of ceramics enterprises, it is particularly painful for them to meet the needs of water and soil. How to develop new products that are energy-saving and environmental friendly and suitable for market needs is an urgent issue for enterprises. In fact, in my opinion, innovation is linked to market needs. It is understandable for companies to pursue profits. The current situation is that some Asian and African markets do not need high-priced new products at all. If they are only sold in these markets, innovation is actually a thankless task. The EU market needs high quality and high quality products, so some large-scale Foshan ceramic companies have been targeting the EU market for innovation in recent years. After the new products come out, they will first need to test the EU market. Innovation also has a market, which is a driving force for innovation. Where Losing the EU market has hit everyone's enthusiasm for innovation.

Second, China's ceramic tile production has been in a state of excess, homogenization is serious, and the market segmentation is not obvious. Export is an important means to solve the excess capacity of the ceramic industry. The reduction of the EU market allows us to fight hard against other markets, and the situation has been even more serious since it has been detrimental to competing against others. The result of the price reduction is to hand over the surplus value we have obtained to foreign dealers. In turn, foreign production companies must also accuse us of dumping and set off a new round of anti-dumping investigations and punitive measures. Such a vicious cycle has caused the export environment of ceramics to become worse and worse.

Third, with the further implementation of real estate regulation, the ceramic industry may be attacked both inside and outside. Ceramic industry's "hot" of real estate has always been "reluctant to retreat." In recent years, the boom in real estate investment has made the ceramic industry, which is the upstream industrial chain of the real estate industry, undergo a period of rapid development of 7 years. However, the “virtual height” of real estate has always been a concern for ceramic distributors. Once the beginning of "squeeze foam" ceramic industry will be greatly affected. With the gradual implementation of the national real estate regulation and control policy, ceramic domestic sales began to decline significantly at the end of last year. If an affair anti-dumping case is accompanied by the real estate industry with “who is still alive”, it can be expected that the next year will be a year in which Foshan Ceramics will experience difficulties in internal and external affairs.