Leading steel pipe manufacturer Welspun Corp today said it will not be impacted by the US move to slap countervailing duty of 286% on certain steel pipes from India.
The proposal to impose duty was announced yesterday by the US Commerce Department, which made its preliminary findings public on imports of non-API circular welded standard pipes of 16 inches and below diametre from India and other countries like Vietnam, Oman and UAE.
Following the news, shares of the company were down by 3.02% at Rs 134.70 apiece on the Bombay Stock Exchange (BSE) in afternoon trade.
In 2011, Indian manufacturers exported 65,000 tonnes of such pipes, amounting to $64.57 million, it said, adding that the proposal is subject to final determinations in August.
In a statement, Welspun said, "It may be noted that the company is not exporting any product under these category to US and thus shall have no impact on its Indian operations."
It added that the proposed move will help Welspun in the coming days as it is setting an ERW pipe plant of 1,75,000 tonne and coating unit in Arkansas state of the US at an investment of $65 million.
"This plant is targeted for commissioning by March, 2013 and likely to ramp up to optimal utilisation in FY'14. This measure by US to protect domestic industry will help Welspun in coming days and shall have a positive impact," the BK Goenka-promoted firm said.
As per the findings of US Commerce Department on countervailing duty (CVD) investigations of imports of such pipes, "Indian and Vietnamese producers/exporters have received countervailable subsidies of 285.95%, and 0.04 to 8.06%, respectively."
According to it, "countervailable subsidies are financial assistance from foreign governments that benefit the production of goods from foreign companies and are limited to specific enterprises or industries, or are contingent either upon export performance or upon the use of domestic goods over imported goods."
