Saudi Arabian Aluminum Importers Object to Duty

SA (Saudi Arabia) 's aluminium importers are angry over the timing of an application by primary aluminium producer Hulamin for a 10% duty on imports of semifabricated rolled aluminium products.

But they now have an opportunity to request an extension to last March 25, 2011's closing date for objections, says the International Trade Administration Commission of SA (Itac).

"We are open to requests for an extension by all interested parties that wish to lodge new or additional information once the deadline has been reached," Siyabulela Tsengiwe, Itac chief commissioner, said on March 25, 2011. He said such requests were standard procedure, and could also come from parties that had missed the initial deadline on March 25, 2011.

Last year, Hulamin applied for a 15% import duty on extruded products that it makes, such as aluminium piping and window frames. At the time, importers were advised by Itac to raise objections through their industry body, the Aluminium Federation SA (Afsa), and were given plenty of notice. The duty was subsequently raised to 5%.

This time, importers say they were given only days to respond when Afsa sent an e-mail to members on March 9, inviting them to a meeting on March 15 "to review the potential impact of an application to Itac for an import duty on aluminium sheet products".

The latter date was only days before Itac's deadline of March 25, 2011 . Hulamin is Afsa's largest contributing member.

"There was no formal notification up front with regard to objections to the application," Neville Breytenbach, MD of Aluminium & Chemical Resources, said on March 25, 2011. The company imports value-added rolled and extruded aluminium.

"Why should (that) not apply to rolled products? We signed a register. The meeting was minuted, everybody objected, except Hulamin," Mr Breytenbach said.

"The last thing we need now is for this opportunistic, blanket- type tariff to come in. Why should downstream manufacturers pay a premium on technology that is nonexistent in SA — we want to increase local content!"

Itac communications manager Thembinkosi Gamlashe said on March 25, 2011 the commission's investigation into Hulamin's application was still at the preliminary stage. He said a final decision was expected to be made on May 10 .

So far, Itac had received objections from five companies over Hulamin's application, Mr Gamlashe said.

Hulamin said in its reasoning for the application that the duty would increase competition in the sector. It said it was forced to be a net exporter, and that the strong rand had damaged its markets.

Hulamin CEO Richard Jacob said last week his company could not compete with subsidised imports from Asia, and that SA was the only country with a domestic aluminium rolled products industry that had no duty protection.

He said duties in the US, European Union, India, China and Brazil were at levels up to 16%, and in India there was duty protection of 35% against Chinese imports.

However, importers said the cost of Hulamin's rolled product in the domestic market was steep, while it sold the same product more cheaply to its export customers. They also said Hulamin imported product it did not make, such as composite panels for buildings, from China, that it re- branded as Hulabond.