Trade Commission Votes to Proceed with Investigation of Coated Paper Imports
WASHINGTON, DC—Nov. 6, 2009—-Appleton Coated LLC, NewPage Corp., and Sappi Fine Paper North America - together with the United Steelworkers (USW) -- applauded the U.S. International Trade Commission (ITC) for its preliminary determination and unanimous vote today to proceed with a full investigation of coated paper imports from China and Indonesia.
The companies and the USW filed unfair trade cases on Sept. 23 with the U.S. Department of Commerce and the ITC alleging that certain coated paper from China and Indonesia had been dumped and subsidized resulting in injury to the domestic industry and its employees. The paper products covered by the petitions include coated paper used in high-quality writing, printing, and other graphic applications using sheet-fed presses with a GE brightness rating of 80 or higher up and weighing to 340 grams per square meter.
"Today's vote is an important step in our quest to restore a level playing field," said Mark Gardner, president and chief executive officer of Sappi Fine Paper North America. "Fair competition requires all companies, both domestic and international, to abide by the trade laws and to make investments in sustainable practices."
The ITC's action follows the Oct. 13 decision by the Commerce Department to open its investigation on the filings.
The petitions filed by the companies and the USW estimate that total imports of covered coated paper skyrocketed by nearly 40 percent during the first six months of 2009 compared with a similar period of time in 2008. During the same period, shipments of paper covered by the domestic manufacturers' petitions are estimated to have declined by approximately 38 percent. China and Indonesia together almost doubled their share of the U.S. market over the same period and now are believed to account for nearly 30 percent of the U.S. market.
"We're prepared to compete with anyone on fair terms. But the dumping and subsidy practices of China and Indonesia undermine our ability to produce and jeopardize our employees and the communities in which they live," stated Rick Willett, president and chief executive officer of NewPage Corporation. "The advantages domestic producers enjoy from abundant, well-managed forest resources, energy and raw materials, as well as lower transportation and logistics costs aren't enough to compete against the unfair trade practices of some of our Indonesian and Chinese competitors. They just aren't competing fairly."
John Cappy, president and chief executive officer of Appleton Coated LLC, said, "the ITC's vote today indicates that there is sufficient evidence to support the allegations that the Chinese and Indonesian dumped and subsidized products are injuring, or threatening to injure, the domestic industry and that the case should go forward to the Department of Commerce. It's an important step forward to helping to restore a competitive market in these products. That's all we're seeking, and it's what our employees deserve. The domestic paper industry cannot afford to continue to lose more market share, more profits and more jobs to unfair competition."
Leo W. Gerard, USW international president, cited as evidence of injury, a coated paper mill closure in Michigan earlier this year, on top of previous job losses at idled, or closed plants and paper machines in Maine, Wisconsin and other states. "We cannot stand by and let imports unfairly take away our good jobs and shutdown factories," he declared. "Trade laws between nations must be enforced with government fact finding and the power to defend jobs and industries with strong tariff penalties for import violations."
Since the trade cases were filed, 22 members of Congress from eight paper manufacturing states have sent letters to the ITC and, or the Commerce Department, raising their voices in support of the domestic coated paper industry and its workforce.
The petitions allege, among other things, that various subsidies are being provided to Chinese paper producers, including low interest loans, tax subsidies, input subsidies, land use programs, grants and export tax subsidies. Similarly, the petitions allege that Indonesian paper companies are benefiting from timber provided from government-owned land at below-market prices, a ban on log exports, government loans, debt forgiveness, and tax incentives for certain encouraged businesses.
The next steps following today's affirmative vote by the ITC comes in December when the Commerce Department is expected to issue preliminary determinations in the countervailing duty case, and in March 2010 with respect to the antidumping duty case. These trade cases are expected to take about a year to complete.
The domestic industry has experienced substantial capacity reductions and under-utilization resulting in the loss of thousands of jobs. The petitions show that unfairly traded imports from China and Indonesia are a significant contributor to that underutilization of capacity and resultant job loss.
The three companies employ about 6,000 production workers represented by the USW at 20 paper mills operating in seven states.
About Appleton Coated
Appleton Coated, headquartered in Kimberly, Wisconsin, provides focused market leadership in premium coated and specialty paper products. The Appleton Coated product portfolio includes a range of commercial printing and book publishing papers marketed under the Utopia brand as well as specialty and private label products. Known for their performance, aesthetics, and environmental attributes, Appleton Coated manufactures their products in a state-of-the-art facility in Combined Locks, Wisconsin, hosting the newest paper machine in North America. For more information please visit our website at www.appletoncoated.com/.
About NewPage Corp.
Headquartered in Miamisburg, Ohio, NewPage Corporation is the largest coated paper manufacturer in North America, based on production capacity, with $4.4 billion in net sales for the year ended December 31, 2008. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. These papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising.
NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a total annual production capacity of approximately 4.4 million tons of paper, including approximately 3.2 million tons of coated paper, approximately 1.0 million tons of uncoated paper and approximately 200,000 tons of specialty paper. For more information: www.NewPageCorp.com/.
About Sappi Fine Paper North America
Sappi Fine Paper North America (SFPNA) is a leading North American producer of coated fine paper used in premium magazines, catalogues, books and high-end print advertising. Headquartered in Boston, Massachusetts, Sappi Fine Paper North America is known for innovation and quality. Its brand names, including McCoy, Opus, Somerset and Flo, are some of the industry's most widely recognized and specified. SFPNA is a division of Sappi Limited (NYSE, JSE), a global company headquartered in Johannesburg, South Africa, with manufacturing operations on four continents in 10 countries, sales offices in 50 countries, and customers in over 100 countries around the world. Learn more about Sappi Fine Paper North America at: www.sappi.com/na/. For the media kit and past press releases, visit the "About Us" section of the Web site.
About the United Steelworkers
The United Steelworkers (USW) is a North American union headquartered in Pittsburgh that negotiates labor agreements representing 850,000 active workers employed in metals, mining, pulp, paper, timber, rubber, chemicals, glass, auto supply, energy producing industries, plus the service and professional sectors to include healthcare, municipalities and pharmaceuticals. For more information: www.usw.org/.
