Posted on February 26, 2013 by kcma

On October 18, 2012, KCMA Executive Vice President Dick Titus appeared at a hearing held by the U.S. International Trade Commission to oppose an anti-dumping and countervailing duty petition on hardwood plywood imported from China. Reasons for the opposition included: (1) the petition included products not produced by domestic suppliers; (2) the petition would create serious materials shortages and significant price increases; (3) the petition significantly advantaged importers of cabinets from China (not covered); and (4) it would impact all cabinet manufacturers, not just those using imported hardwood plywood. Following are Mr.Titus’ remarks.

Good morning and thank you to the commission staff for providing me with an opportunity to present the views of the Kitchen Cabinet Manufacturers Association (KCMA) regarding the anti-dumping and countervailing duty petition filed on hardwood plywood (hwpw) from China.

The KCMA is the national trade association founded in 1955 to represent companies who manufacture kitchen, bath and other residential cabinets and their suppliers. Currently, KCMA has 309 members who account for 75%-80% of the U.S. cabinet market. All major manufacturers are KCMA members. Sixty percent of KCMA members report sales under million. Total sales in the industry are approximately billion. There are over 5,000 cabinet makers in the U.S.; most employ 20 or fewer people. The past five years have produced the worst economy in the history of the industry and companies are struggling. The cabinet industry is a major consumer of hardwood plywood in the U.S. Our members purchase hardwood plywood from domestic and foreign sources, including China, and other countries.

As a general matter, domestic and Chinese hardwood plywood are purchased to use in different applications when making cabinets. Domestic and Chinese hardwood plywood often have different physical characteristics. Most KCMA companies who use imported hwpw use fifty percent or less Chinese plywood in their cabinets. Most companies consider the two sources as complementary to each other.

We understand that your agency will be making a legal determination as to whether the hardwood plywood industry is being unfairly injured by Chinese imports. Based on recent experience, a reduction in hwpw sales of 50%-60% over the past four years due to the U.S. economic downturn with no relation to Chinese imports would not be surprising. We hope that you will take into consideration all aspects of the economies in play. If our members are cut-off from access to a large supply of essential raw materials, which is likely to happen if the request for a 300% increase in tariffs were granted, there will be shortages that will negatively impact our members. Also, there is significant concern that the granting of the petition would (a) result in higher prices for hardwood plywood imported from China; and (b) encourage domestic suppliers to raise their prices because of reduced competition. U.S. cabinet manufacturers would have their competitiveness negatively impacted whether or not they use imported hardwood plywood as a result. This would produce severe consequences across the entire distribution chain and, ultimately, impact the end consumer. Imported finished cabinets from China are not within the scope of this petition and would get a huge advantage over U.S.-made products.

Finally, there is serious concern that if the tariff as requested is granted, there would be serious disruption of supply/distribution channels established over the last twenty years with a strong likelihood of product shortages and other disruption because the domestic industry is incapable of filling the demand for the multiplicity of products potentially affected. This could have a devastating impact on U.S. cabinet manufacturers and the jobs they provide.
The International Trade Commission is expected to issue its countervailing duty finding on February 26.

Posted in Uncategorized | Tagged anti-dumping