In view of the apparent large number of exporting producers in the PRC, sampling was envisaged in the Notice of Initiation.

To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all known exporting producers in the PRC to provide the information specified in the Notice of Initiation. In addition, the Commission requested the Mission of the People's Republic of China to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

Since only two companies in the PRC came forward, sampling was not necessary.

In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. In accordance with Article 17(1) of the basic Regulation, the Commission selected the sample on the basis of the largest representative volume of production, taking also into account the sales volume and geographical spread. The sample consisted of five Union producers. The sampled Union producers accounted for around 74 % of the total Union production during the RIP. The Commission invited interested parties to comment on the provisional sample. No comments were received within the deadline and the provisional sample was thus confirmed. The sample is considered representative for the Union industry.

To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all unrelated importers to provide the information specified in the Notice of Initiation.

Around 35 known potential importers/users were contacted at initiation stage and were invited to explain their activity and to fill in the sampling form for unrelated importers attached to the Notice of Initiation, if applicable.

Thirteen importers submitted the sampling form. All of them indicated that they did not import okoumé plywood from China. On this basis, sampling was not considered warranted.

Four exporting producers were granted market economy treatment (MET) in the original investigation. According to Article 2(7)(a) of the basic Regulation, normal value for the remaining exporting producers shall be determined on the basis of the price or constructed value in a market economy third country. For this purpose, a market economy third country had to be selected (‘the analogue country’).

Turkey was selected as an analogue country in the original investigation and in the previous review. In the Notice of Initiation of the present review, the Commission proposed to use Turkey as an analogue country.

The Commission sought information concerning producers of okoumé plywood in other potential analogue countries and contacted known producers of okoumé plywood in Gabon, Morocco and Switzerland and invited them to provide the necessary information.

Two producers in Gabon and one producer in Morocco came forward and provided the information requested. None of the Turkish producers cooperated.

Gabon was not considered a suitable analogue country since local okoumé plywood producers had a clear comparative advantage by benefiting from significantly lower raw material input costs

Okoumé is a tropical wood which grows predominantly in Gabon and to a lesser extent in Equatorial Guinea and in Cameroon.

Morocco was considered to be a suitable analogue country because, despite its high import duties, it had substantial imports of the like product which were competing with the domestically produced product.

Interested parties were invited to comment on this selection. No comments were received.

As mentioned above in recital (28), due to the non-cooperation of the Chinese producers, the export price was based on facts available, in accordance with Article 18 of the basic Regulation, i.e. on information in the expiry review request. Specifically, the export price for both main product types described in recital (22) was based on more than ten commercial offers to the Union market and to other third countries (namely Bosnia and Herzegovina, Switzerland, Turkey, Gulf States and Norway), made by email or available as public commercial offers on different Chinese websites during the RIP, as contained in the expiry review request. The prices contained in the commercial offers were ranging from 313 EUR/m³ to 540 EUR/m³ (CIF). To be noted that these price levels were in the same range as the price level of okoumé plywood of imports from China reported in Eurostat and 14(6) database after the RIP (third quarter of 2016). Although the quantities concerned were marginal, this price level confirms the representativity of the commercial offers as indication of possible exports prices of okoumé plywood from China.

The Commission compared the normal value and the export price thus established on an ex-works basis per product type described in recital (22). Where justified for the purpose of a fair comparison, the export price and normal value were adjusted for differences affecting prices and price comparability in accordance with Article 2(10) of the basic Regulation. Adjustments were made for transport costs (domestic and ocean freight) based on the facts available, in accordance with Article 18 of the basic Regulation, i.e. on information in the expiry review request.

The Commission compared the weighted average normal value to the weighted average export price per product type as established above in accordance with Article 2(11) and (12) of the basic Regulation.

In the absence of cooperation from the Chinese producers and any publicly available information, production in the PRC was established on the basis of estimates provided by the applicant in its request for the current expiry review, based on its best knowledge of the market.

The applicant estimated the production of okoumé plywood in China on the basis of the number of okoumé logs imported in China in 2014 which were used for the production of plywood. Based on this, the production of okoumé plywood was estimated to be between at least 290 000 m³ and 2,9 million m³ at most, depending on the product type produced, as described in recital (22), that is full okoumé or faced okoumé, respectively. This corresponded to a minimum of 1,5 times to a maximum of 15 times of the total Union consumption.

In the absence of cooperation from the Chinese producers of okoumé plywood or other available information on the Chinese okoumé plywood industry, the situation of the Chinese plywood industry as a whole (regardless the type of wood species used) was examined, as it was done in the previous review. In line with the previous investigations, it was confirmed that plywood is produced by the same companies, on the same equipment, whatever the wood species used. The previous review also established that okoumé plywood is more lucrative than other types of plywood. Therefore, in the absence of measures, it is likely that Chinese producers shift their production from other types of plywood towards the more lucrative okoumé plywood.

On this basis, significant production capacity potentially available in China is indicated by the production volumes of all types of plywood, which, based on FAO statistics, accounted for 113 million m³ during the RIP. Consequently, only a minor shift from other types of wood to okoumé is needed to substantially increase the production volumes of okoumé plywood, which could be used for exports.

Production increased slightly during the period considered from 143 729 m³ in 2012 to 147 767 m³ during the RIP, i.e. by 3 %. This increase reflected the slight improvement in the okoumé market in the Union as mentioned in the recital (62). Despite this slight increase, the production volume of the Union industry remained below the volumes found in the investigation period of the original investigation and during RIP of the previous review, i.e. below 267 591 m³. This reflected the drop in consumption on the market and the fact that production takes place mainly on the basis of orders.

The production capacity increased slightly, in line with the production volume, from around 179 561 m³ in 2012 to 184 738 m³ during the RIP, i.e. by 3 %. This capacity is however at a considerably lower level than in the previous review, i.e. 68 % lower than 577 205 m³ established during the RIP of the previous review. This was due to the closures of a number of Union producers of okoumé plywood, including the largest producer in the Union, Plysorol, and also to the reduction in production of those Union producers that are still in the business.

Since the adaptation of the production capacity to match the lower levels of consumption took place mainly before the period considered, the capacity utilisation rate has been stable and at a higher level compared to the rates established during the RIP in the previous review (41 %)

See recital (50) of Implementing Regulation (EU) No 82/2011.

Sales volume increased over the period considered from 124 033 m³ in 2012 to around 141 446 m³ during the RIP, i.e. by 14 %, which was more than the 4 % increase of consumption described in the recital (62). Therefore the increase in sales volumes, taking also into account the parallel decrease of imports from other third countries described in recital (66), contributed to an increase in market share of the Union industry from 68,2 % in 2012 to 74,9 % during the RIP. However, this market share level still falls short of the Union industry's 80,2 % market share during the RIP of the previous review.

While Union consumption increased by 4 % during the period considered, the sales volume of the Union industry increased to a higher degree, i.e. by 14 %, which translated into an increase of market share of 6,7 percentage points.

Employment of the Union industry overall decreased from 2012 to 2014 by 13 % and subsequently increased lightly (by 4 %) from 2014 to the RIP. Overall, during the period considered it decreased by 9 %. Due to companies closures and restructuring, the employment level in the period considered was only around half of the level established during the RIP of the previous review (983 persons).

As explained in the recital (76), the production volume increased by 3 % during the period considered. Consequently, the productivity measured as annual output (cubic metres) per person employed increased by 13 % during the period considered. This reflects the fact that production increased slightly, while the employment level decreased. This is an indication of the improved efficiency and results of the restructuration by the Union producers.

As mentioned in the recital (29), there were no imports of the product concerned from the PRC during the RIP. Therefore there no dumping could be established during this period in the Union market and the magnitude of the dumping margin could not be assessed. Consequently there was also no direct price pressure on the Union market during the period considered. On this basis the anti-dumping measures in force were in overall effective.

The Union industry's average unit sales price to unrelated customers in the Union increased by 3 % over the period considered. These price levels were nevertheless lower than the ones observed during the previous review investigation when they had increased from 786 EUR/m³ in 2006 to 887 EUR/m³ during the RIP, peaking at 930 EUR/m³ in 2008

See recital (53) of Implementing Regulation (EU) No 82/2011.

Over the period considered the unit cost of production decreased slightly by 1 %.

The Commission established that the Union industry has been adapting to the deteriorated market situation by reducing its production capacity and its cost of production in comparison with the RIP of the previous review. As explained in the recital (77), this has entailed closures of large Union producers and reductions of production before the period considered and improvements in productivity during the period considered as described in the recital (84).

Between 2012 and the RIP, the average labour costs per employee of the sampled Union producers was stable. It only slightly increased by 1 %.

Usually, as also observed during the original investigation, the okoumé plywood is produced on order and the stock levels are therefore typically low. The stock levels however increased during the period considered of the previous review reaching 6 589 m³ during the RIP of a the previous review as a consequence of dropping sales volumes. During the period considered of the current review they still remained on a relatively high level, and decreased only during the current RIP. In any event, they still remained above the level that could reasonably be considered to reflect the amounts of goods sold but not yet delivered.

Overall closing stocks decreased by 25 % over the period considered. Closing stocks as a percentage of production decreased from 9 % in 2012 to 7 % during the RIP, i.e. by 2 percentage points.

The Commission established the profitability of the sampled Union producers by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales. During the whole period considered, the Union industry profitability was very low. It was negative at the beginning of the period considered and turned only slightly positive in 2014 and during the RIP. Overall it improved from – 3,5 % in 2012 to 0,3 % during RIP. This level is markedly lower than the one observed in the previous review where it varied between 4,3 % and 9,8 %. As explained in the recitals (86) to (89) above, the improvement in profitability was due to a slight increase of sales prices and sales volumes and also a slight decrease of cost of production, which was also partly due to the improvement in productivity.

The net cash flow is the Union industry's ability to self-finance their activities. The cash flow increased from 2012 to 2014 and decreased during the RIP, reaching levels below the one of 2012. Overall, in absolute terms cash flow was at a low level throughout the period considered and it was markedly lower than during the period considered of the previous review where it varied between 10,5 million EUR and 15,9 million EUR. The low level of cash flow is in line with the low profitability observed throughout the period considered of the current review.

Linked with the downscaling of the Union industry, the investments at the beginning of period considered (2012) were at a very low level and materially below the levels observed during the previous review as well as below the level necessary to compensate the depreciation of the fixed assets. They reached comparable levels with the previous review (between 3,6 million EUR and 8,1 million EUR) in the years 2013 and 2014 but reduced again during the RIP of the current investigation.

The return on investments is the profit in percentage of the net book value of fixed assets. As the other financial indicators, the return on investment from the production and sale of the like product was negative in 2012 and 2013 and slightly positive in 2014 and RIP following the trend of profitability. Overall, return on investments increased from – 8,2 % to 0,7 % over the period considered.

As far as the ability to raise capital is concerned, the low profit of the Union industry and its weak ability to generate cash made the increase of the internally generated funds very low. Consequently, the ability to raise capital had deteriorated from the previous review. In some cases this had an impact on the ability to carry out investments.