Industry pushes for rethink on anti-dumping measures against China’s exports of titanium dioxide

Paint manufacturers are pushing for a rethink of EU anti-dumping measures against Chinese exports of a key raw material, saying they will lead to factory closures and further erosion of the region’s industrial base.

The bloc’s paint producers fear that tariffs of up to 39.7 per cent on Chinese exports of titanium dioxide (TiO2) would bankrupt smaller producers and push bigger manufacturers to shift production outside the bloc.

The provisional duties imposed in July have yet to be confirmed by member states.

“This is a question of survival of these industries,” said Nicolas Dujardin, chief operating officer of Océinde, a family-owned French paint producer. “If all those investigations result in such high taxes in Europe, then there are going to be some bankruptcies.”

As a result of an anti-dumping investigation launched last year, the EU introduced provisional measures, including retroactive duties, that could be adjusted or confirmed next January.

The debate puts a spotlight on the dilemma the EU faces in protecting its industries from Chinese competition without stoking inflation and generating higher costs for its own producers.

Paula Salastie, the fourth-generation family owner of Finland’s Teknos, said the paint sector would face a prolonged downturn if consumers were hit by even higher prices, and that if Chinese supply were diverted elsewhere, raw material shortages would cause production outages.

“If we’re unable to sell as much as we were expecting, then we need to cut jobs. We are looking with a very keen eye,” she said.

The duties meant its next investments were likely to go outside the bloc, she added.

The European Commission declined to comment but noted that paint producers had until October 21 to submit their views ahead of a vote by member states.

Big paint producers have also criticised the duties. Pedro Serret Salvat, president of Europe, Middle East and Africa at PPG, the world’s second-largest paint company, said they would “have a negative impact on the competitiveness” of its EU manufacturers.

The duty was “disproportionate” and the retroactive application was “unacceptable”, he added.

Paint producers have said the tariffs would be acceptable if introduced gradually along with increased subsidies for local titanium dioxide production.

However, western TiO2 producers have been badly hit by Chinese competition.