Imports of steel wire will threaten Fletcher Building's business, says the MED.
Imports of steel wire will threaten Fletcher Building's business, says the MED.
Pacific Wire, a unit of the country's largest listed company Fletcher Building, could come under threat if the government removes its anti-dumping duty on galvanised wire, according to the Ministry of Economic Development.
A report published today warns New Zealand's sole producer of galvanised wire - which isused in agriculture and horticulture industries, mainly for fencing and downstream manufacturing - faces material injury if anti-dumping duties on Malaysian imports are removed.
"If the current anti-dumping duties are removed there is a likelihood of a recurrence of dumping and this would likely cause material injury to the New Zealand industry," the report said.
The report also recommends the tax be changed to an ad valorem duty of 15 per cent, rather than the present reference price method.
"The current reference price duty is an extreme example of how quickly prices can become out of date in relation to costs, in a highly volatile period of trading" where duties couldn't reflect rapid price changes in 2008, the report said.
The anti-dumping duty was first initiated in 2004 after an investigation found dumping had hurt the domestic industry, and higher rates were implemented in 2005 after a second review.
RCI Wire was excluded from the tax after the ministry found it hadn't been dumping wire on the New Zealand market.
Pacific Wire is part of Fletcher Building's Pacific Steel Group, which boosted its operating profit 46 per cent to $147 million in the 12 months through June last year.
Fletcher's shares fell 0.8 per cent to $8.40 in trading on the NZX today. South Africa is the other country with an anti-dumping duty on its galvanised wire products, though the majority of imports come from Australia and China.
