THE DEFINITIVE TRUCKING SITE

May 2007

You have to feel a little sorry for the local tyre manufacturing industry, which in recent months has gone from agony to ecstasy and back again, all because the government can't quite make its mind up with regards to the impact of Chinese tyres on our local tyre producers. In 2005, after much lobbying by the South African Tyre Manufacturer's Conference (SATMC), the International Trade Commission of South Africa (ITAC) sent a team of investigators to The Peoples Republic of China to ascertain whether Chinese tyre producers were employing unfair pricing techniques to snap up market share in South Africa.

On the investigation returning to SA with evidence of dumping (selling products in foreign markets at prices cheaper than what the same products are sold at in their country of origin), ITAC ruled that the tyres were being dumped and that the SA tyre industry did suffer 'material damages'. The South African Revenue Service then imposed tarrifs on these imported tyres for a period of 26 weeks.

According to law firm Floor Inc spokesman Rian Geldenhuys, "Floor Inc acted for one of the Chinese tyre producers and as a consequence hereof the preliminary finding of the Commission is that the tyres from this Chinese producer were not dumped. As a matter of fact, the dumping margins were found to be negative. Put differently, this particular exporter could even export at lower prices than they currently did. Our client is therefore not affected by the proposed provisional payment and may continue to export tyres to South Africa as it currently does. We still await the Commission's final determination."

The government Gazette dated 5 April 2007 states that a withdrawal of these duties will come into effect as of 27 April 2007, leaving the local tyre companies somewhat exasperated. Says Romano Daniels, spokesperson for Bridgestone South Africa: "Bridgestone is very disappointed with Government's decision to terminate the investigation into the alleged dumping of tyres imported from China. This is a major setback for the South African Tyre Manufacturing industry. 
 

Bridgestone South Africa’s Romano Daniels... need for free and fair competition.

"ITAC in their recommendation to the Minister of Trade and Industry concluded that the industry was suffering material injury in various aspects including price undercutting, decrease in sales volumes and capacity utilization and the decrease in production employment. They also found that dumping of unrealistically cheap imported tyres are indeed happening. 
 

Asian imports are undercutting the local tyre industry to such an extent that thousands of jobs have been lost over the last five years. Plans are afoot to reverse this downward spiral.

"It is therefore disappointing that their recommendation was to terminate the investigation because they could not proof a direct link between the dumping and the problems experienced by the new tyre industry. Although the industry is indeed affected by many different factors, Bridgestone South Africa is of the opinion that the provisional duties applied by SARS on certain Chinese imports since July last year had a major impact on stabilizing the market.

"Bridgestone South Africa is of the opinion that the decision to cancel the Anti-Dumping Duties will have a negative impact on the tyre industry in South Africa. The industry is already highly competitive and an unhealthy price war caused by unrealistically cheap import tyres could result in significant job losses in the manufacturing sector. 

"It is Bridgestone South Africa's sincere hope that Government would exercise favourable consideration to the industry's need to establish free and fair competition in which the industry can significantly contribute towards the country's economic growth and maintain job security in the industry.