6
EC expected to refuse ‘Market Economy
Treatment’ to Chinese factories
According to information from a to be that prices paid for steel by the European Commission – this
Chinese fastener association wire were not considered in line is expected at the end of May. It is
source, which has had access to with international market values. also not known at this stage what
a European Commission report, The Commission investigators are investigators proposals will be in
‘Market Economy Treatment’ understood to have found that the relation to foreign owned factories
will almost certainly be refused cost of steel wire in China was in China – specifically Taiwanese
to nine Chinese exporting significantly below the average and European factories understood
factories. price charged in other markets, to have applied for MET.
In total 125 Chinese companies such as the EU and India. The The strong probability that MET
applied for MET and the eventual report noted a number of applications will be rejected
EC ruling is likely to apply similarly previously published studies would indicate that the
to all of them since the nine were arguing that steel production in Commission investigators will
selected under a sampling China is heavily influenced by the assess dumping margins by
process. state. comparison to another market
As with all EC antidumping Investigators are also economy. Distributor associations
processes the investigation is understood to have concluded that have argued strongly against the
tightly prescribed, in this case with four companies presented false or use of India for this purpose since
five defined criteria to be met. misleading information, it resulted in extremely high
These include business decisions invalidating their claim for MET. For dumping margins alleged in the
being responsive to the market two other companies state original complaint document
and not subject to significant state interference could not be ruled submitted to the Commission.
interference; costs reflecting out. One, the PMC Group is Rejection of MET for Chinese
market values; a clear set of indirectly 47% state owned. factories would also suggest a
independently audited accounts; Another company was viewed as higher probability that provisional
no distortions carried over from a being controlled by a trade union tariffs, if and when applied,
previous non-market economy rather than shareholders. One would be consistent across
system; foreign exchange other company is understood to Chinese exporters rather than
converted at market rates; and the have failed to meet the differentiated by company.
company being subject to accounting criterion and two to The deadline for the European
bankruptcy and property laws that have shown indications of some Commission to announce a
guarantee stability and legal form of distortion in the decision on provisional tariffs is
certainty. privatisation process. expected to be 8th August 2008,
The overriding reason for No decision in respect to MET nine months from the initiation of
proposed rejection is understood has yet been formally published the investigation.
Alcoa bolsters its aerospace
portfolio
Alcoa Inc. has announced that it has acquired Republic Fastener Manufacturing Corporation
and Van Petty Manufacturing from the Wood Family Trust.
The two aerospace fastener manufacturing businesses are located in Newbury Park, California,
and employ a combined 240 people.
Since it was founded in 1968, Republic has maintained its focus on the “super standard” end of
the aerospace fastener locknut product line. Along with its "Boots Aircraft Division” acquired from
Cherry Fasteners in 1989, Republic offers a wide variety of sheet metal and wrenchable aerospace
fasteners. Van Petty has been producing high performance precision aerospace fasteners used
primarily by engine & equipment manufacturers since 1943. Its products include a variety of
specialised aerospace fasteners. The two businesses had combined 2007 revenues of US$51 million.
“This represents a significant step for Alcoa Fastening Systems (AFS) in our strategy to accelerate
the growth of our business, both organically and through select acquisitions, where we believe our
know-how and commitment will better serve our customers and our shareowners," said Olivier
Jarrault, president of AFS. "As a result of this acquisition, we are adding much needed aerospace
fastener capacity, and will have greater presence in new targeted markets where we see increasing
demand for our products and services.”
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