Corning Incorporated announced that on Wednesday it received a preliminary determination from the Ministry of Commerce (MOC) asserting that Corning has dumped certain single-mode optical fiber products exported from the United States into China and caused material injury to the Chinese domestic producers.
Corning is extremely disappointed in the preliminary determination and said it will work with the MOC to reach a final determination. Corning was one of several optical fiber producers cited in the MOC's action. This preliminary determination will not impact Corning's fiber products produced by Shanghai Fiber Optics Company, Ltd., a majority-owned subsidiary of Corning Incorporated, based in Shanghai.
"Corning believes that it has not dumped optical fiber into China and that the company has not caused injury to the Chinese domestic producers," Robert B. Brown, senior vice president and general manager, Corning Optical Fiber, said. "We are extremely disappointed with this preliminary determination, and we will continue to cooperate with the MOC through the final determination to prove our position," he said.
The MOC initiated the anti-dumping investigation on July 1, 2003 against certain standard single-mode optical fiber products originating from the United States, Japan and Korea, alleging that foreign products were being imported and sold at lower prices than the market conditions justified, and that Chinese domestic producers were injured as a result.
This investigation was based on a complaint filed by two Chinese fiber manufacturers. Following the preliminary determination, representatives from the MOC will travel to the United States to meet with Corning officials to verify the information provided by Corning in its defense. The MOC will then provide a final determination, which Corning expects to receive by the end of this year. If the final determination is adverse, Corning may be able to appeal within the MOC or the Chinese legal system.
On the basis of this preliminary determination, Chinese importers of certain Corning single-mode optical fiber products will be required to make cash deposits of 16% of the purchase price to Chinese customs authorities. Corning is not able to estimate the impact of this preliminary determination on its fiber export business to China, but if the ruling holds it could have a significant negative impact on the company's ability to export fiber into China. The company's fiber export revenues to China currently are approximately 6& of its optical fiber and cable revenues. Corning said that the impact of any potential loss of fiber export volume to China on the company's expected earnings per share should be less than $0.01 in the second half of 2004.