Polypropylene anti-dumping duties Neutral to Oriental Weavers; CI Capital

Arab Finance: CI Capital, stated, in a recent report, that imposing anti-dumping duties of at least LE 1,605/ton on imported polypropylene is Neutral for Oriental Weavers Carpets (ORWE).

Ingy El-Diwany, analyst at CI Capital stated that, Oriental Weavers imports 60% of its needs of polypropylene which constitute 40% of its costs of goods sold.

Given that companies operating in private free zone areas are exempted from these duties and most of OW's fibers factories are operating in private free zone areas, OW will not pay the antidumping duties.

There is only one fiber plant (King Tout) expected to be inaugurated late 2012 that is located in non-free zone area. By the time the factory starts its commercial operations, duties will have been lifted (after 200 days).

Thus, we do not see any effect of these protective measures on OW’s performance in 2012 as OW will not be subject to anti-dumping duties on imported polypropylene.

It is worth noting that, Ministry of Trade & Industry decided to impose anti-dumping duties of at least EGP1,605/ton on imports of Polypropylene>Polypropylene (equivalent to 15% of its prices) starting June 5, 2012 for 200 days.