Anti-dumping duty is always imposed to protect the domestic industry. But the recent Government decision to impose such duty on PTA (purified terephthalic acid) imports from China, South Korea, Thailand and European Union had a negative impact on the home-grown Dhunseri Petrochem & Tea, according to Chairman CK Dhanuka.
The ₹4,000-crore Dhunseri uses PTA for manufacturing 5 lakh tonnes of bottle-grade PET-resin annually, from two plants in Haldia in West Bengal. The company has also invested in a similar facility in Egypt. PET-resin is used for packaging drinking water, carbonated soft drinks, edible oil, and pharmaceuticals.
In a stock market notification on August 14, the company said one of its Haldia facilities was shut down due to unfavourable market conditions and “margin pressure”. The 2-lakh-tonne facility was fully catering to the export market. Dhanuka told BusinessLine that while his company’s revenues were already under pressure due to a global meltdown in polyester prices, the anti-dumping duty, imposed in July, and the resulting high cost of feedstock made its operations unviable.
The duty was imposed to protect the interests of domestic PTA manufacturers, including IndianOil (Panipat), Reliance (Jamnagarh) and Mitsubishi Chemical Corporation-controlled MCC PTA India (Haldia). But it did not go down well with downstream polyester units. Dhanuka says he is now forced to shell out $50-60 a tonne higher for sourcing PTA from the next door neighbour MCC.