Investigators from India’s ministry of commerce who conducted the recent anti-dumping (AD) inquiry into solar imports from China, Taiwan, the U.S. and Malaysia said Tainan-based Motech Industries had wrongly stated information about its subsidiaries.
The comprehensive report into the findings of the AD probe revealed the information supplied by the Taiwanese solar manufacturer so investigators could calculate a normal value for its goods, listed its U.S. unit AE Polysilicon Corp, USA, as its only subisidiary.
But investigators found Taiwan-based TSMC Solar, Chinese business Motech (Suzhou) Renewable Energy Co Ltd, the American Motech Americas LLC and Japanese business Itogumi Motech were all subsidiaries of the parent company.
Normal value is one of the two elements required for AD investigators to calculate a reasonable price for goods to be exported at and is based on a cost for the products in question crystalline and thin film cells and solar modules to be manufactured at using the most efficient domestic production methods and adjusted for selling and general and administrative costs with a 5% profit margin factored in.
The other value to be determined is the export price of the goods in question and when Motech’s Chinese unit Motech (Suzhou) Renewable Energy Co Ltd supplied information to investigators relating to the export price of its goods, the business claimed to be fully owned by Power Island only for investigators to discover it was a subsidiary of Motech Industries.
Motech’s reasoning dismissed
The parent company’s arguments that the ‘substantial volume’ of solar goods exported by Motech (Suzhou) Renewable Energy Co Ltd to India in 2011 and the first half of 2012 were Chinese in origin and had submitted information for the sampling of Chinese-made goods to investigators, were disregarded by ministry officials.
The only company investigated to successfully secure its own normal value and export price was U.S. thin film manufacturer First Solar.
Investigators accepted the company’s argument that ‘sales’ in the U.S. to its First Solar Electric Inc. business at ‘much below’ the book price of U.S. sales to non-affiliated companies should be excluded as the products in question were used to develop projects in-house rather than sold on.
First Solar would not explain German invoicing
But ministry officials did exclude First Solar sales to India invoiced through the company’s German unit First Solar GmbH, Mainz, because the thin film giant could provide no explanation for the reasoning behind that supply route.
Conversely, in terms of export price, investigators accepted the usual route for First Solar products was via orders secured by the Mainz business, and excluded the small proportion of sales invoiced through the U.S. unit.
First Solar’s Malaysian operations, however, failed to have their own normal value or export price set and offered an insight into the tortuous nature of multinational supply chains.
Goods manufactured by First Solar Malaysia were sold on to Indian customers by the Mainz business unit in part but also sold on via a further four unnamed German companies as well as businesses in the UAE, U.S., Spain and Holland. The lack of information from the third-parties involved, said the final AD report, meant ‘the existence of any compensatory arrangements between such parties could not be ruled out.’
The lack of information on a complete supply chain put paid to First Solar Malaysia’s normal value figure as well as that for Q-Cells Malaysia and the export price figures for Wuxi Suntech, JA Solar‘s four related companies and Sunergy‘s three related units.
Chinese manufacturer Canadian Solar successfully supplied information to have its own export price calculated.
The Indian investigation recommended the imposition of a range of AD duties be applied to the goods exported by the companies investigated to India and the solar industry is waiting to see whether the new government led by Narendra Modi, will follow the advice.