THE COMMISSION OF THE EUROPEAN COMMUNITIES,Having regard to the Treaty establishing the European Community,Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European CommunityOJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation (EC) No 2117/2005 (OJ L 340, 23.12.2005, p. 17). (the "basic Regulation") and in particular Article 7 thereof,After consulting the Advisory Committee,Whereas:1.PROCEDURE1.1.Initiation of the proceeding(1)On 11 November 2006, the Commission announced by a notice published in the Official Journal of the European UnionOJ C 275, 11.11.2006, p. 25. (notice of initiation), the initiation of an anti-dumping proceeding concerning imports into the Community of dihydromyrcenol originating in India.(2)The anti-dumping proceeding was initiated following a complaint lodged on 29 September 2006 by the following Community producers: Destilaciones Bordas Chinchurreta S.A. and Sensient Fragrances S.A. (the complainants) representing a major proportion, in this case more than 25 %, of the total Community production of dihydromyrcenol. The complaint contained evidence of dumping of the said product and of material injury resulting therefrom, which was considered sufficient to justify the initiation of a proceeding.1.2.Parties concerned and verification visits(3)The Commission officially advised the complainants, other known producers in the Community, exporting producers in India, importers and users known to be concerned and their associations and the representatives of India of the initiation of the investigation. The interested parties were given the opportunity to make their views known in writing and to request a hearing within the time limit set out in the notice of initiation. All interested parties who so requested and showed that there were particular reasons why they should be heard, were granted a hearing.(4)In view of the apparent high number of Indian exporting producers and importers into the Community, sampling was envisaged in the notice of initiation for the determination of dumping and injury, in accordance with Article 17 of the basic Regulation. In order to enable the Commission to decide whether sampling would be necessary and, if so, to select a sample, all Indian exporting producers and all importers in the Community were asked to make themselves known to the Commission and to provide, as specified in the notice of initiation, basic information on their activities related to the product concerned during the period 1 October 2005 to 30 September 2006. However, only two Indian exporting producers and two importers of the product concerned in the Community came forward and provided the requested information for sampling within the deadlines set out in the notice of initiation. Therefore, it was decided that sampling was not necessary.(5)The Commission sent questionnaires to all parties known to be concerned and to all other parties that requested so within the deadlines set out in the notice of initiation.(6)Questionnaire replies were received from two Indian exporting producers, from four Community producers of the like product, from two importers not related to the exporting producers and from one user in the Community.(7)The Commission sought and verified all the information it deemed necessary for a provisional determination of dumping, resulting injury and Community interest and carried out verification visits at the premises of the following companies:a)Community producersDestilaciones Bordas Chinchurreta S.A., Granada, Spain,Sensient Fragrances S.A., Dos Hermanas (Sevilla), Spain,Takasago International Chemicals (Europe) S.A., Murcia, Spain.b)Exporting producers in IndiaNeeru Enterprises, Rampur,Privi Organics Limited, Mumbai.1.3.Investigation period(8)The investigation of dumping and injury covered the period from 1 October 2005 to 30 September 2006 (the "investigation period" or "IP"). The examination of trends relevant for the assessment of injury covered the period from 1 January 2003 to the end of the IP (the "period considered").2.PRODUCT CONCERNED AND LIKE PRODUCT2.1.Product concerned(9)The product concerned is dihydromyrcenol of a purity by weight of 93 % or more, originating in India (the "product concerned"), normally declared within CN code ex29052290.(10)The product concerned is a colourless to pale yellow liquid with a powerful, fresh lime-like, citrusy-floral and sweet odour with little or no terpenic undertones, soluble in paraffin oil and alcohol and insoluble in water. It belongs to the family of acyclic terpenic alcohols. Its chemical name is 2,6-dimethyloct-7-en-2-ol (CAS RN 18479-58-8).(11)Typical applications of the product concerned are in detergents, soap fragrances and as a powerful supporting note in citrus and lime-type perfumes.2.2.Like product(12)The product concerned and dihydromyrcenol produced and sold on the domestic market of India, as well as dihydromyrcenol produced and sold in the Community by the Community industry, were found to have the same basic chemical and technical characteristics and end-uses. Therefore, these products are provisionally considered to be alike within the meaning of Article 1(4) of the basic Regulation.3.DUMPING3.1.Normal value(13)For the determination of normal value the Commission first established, for each of the two co-operating exporting producers, whether their total domestic sales of the like product were representative in comparison with their total export sales to the Community. In accordance with Article 2(2) of the basic Regulation, the domestic sales of the like product were found to be representative for only one of the cooperating companies since the domestic sales volume of this company exceeded 5 % of its total export sales of the product concerned to the Community.(14)The Commission subsequently identified for this company on the basis of purity the types of the like product sold domestically which were identical or directly comparable to the types sold for export to the Community. For each of those types, it was established whether domestic sales were sufficiently representative for the purposes of Article 2(2) of the basic Regulation. Domestic sales of a particular type were considered sufficiently representative when the total domestic sales volume of that type during the IP represented 5 % or more of the total sales volume of the comparable type exported to the Community. This was the case for all domestic types comparable to those exported to the Community.(15)The Commission subsequently examined whether the domestic sales of each type of the product concerned, sold domestically in representative quantities, could be considered as being made in the ordinary course of trade pursuant to Article 2(4) of the basic Regulation. This was done by establishing the proportion of profitable domestic sales to independent customers, of each exported product type.(16)Since for all product types more than 80 % by volume of sales on the domestic market were sold at a net sales price equal to or above the calculated cost of production, and since at the same time the weighted average sales price was equal to or higher than the cost of production, normal value, by product type, was calculated as the weighted average of all domestic sales prices of the type in question, irrespective of whether these sales were profitable or not.(17)For the exporting producer which did not have representative domestic sales of the like product during the IP (see recital 13 above), normal value was determined on the basis of the domestic prices in the ordinary course of trade of the other exporting producer (see recitals 14 to 16 above), pursuant to Article 2(1) of the basic Regulation.3.2.Export price(18)All sales of the two cooperating exporting producers were made directly to unrelated customers in the Community. For those sales, the export price was established in accordance with Article 2(8) of the basic Regulation, on the basis of prices actually paid or payable by these independent customers in the Community.3.3.Comparison(19)The comparison between normal value and export price was made on an ex-works basis. In order to ensure a fair comparison, account was taken, in accordance with Article 2(10) of the basic Regulation, of differences in factors which affect price comparability. Allowances for differences in transport costs, ocean freight and insurance costs, handling costs, loading and ancillary costs, discounts, commissions, credit costs and import charges were granted where applicable and justified.3.4.Dumping margins(20)Pursuant to Article 2(11) and (12) of the basic Regulation, dumping margins for the two co-operating exporting producers were established on the basis of a comparison of a weighted average normal value by product type with a weighted average export price by product type as established above.(21)On this basis, the provisional dumping margins expressed as a percentage of the CIF Community frontier price, duty unpaid, are:

Company	Provisional dumping margin
Neeru Enterprises, Rampur	3,3 %
Privi Organics Limited, Mumbai	7,5 %

(22)For those exporting producers which did not cooperate, the dumping margin was established on the basis of facts available in accordance with Article 18 of the basic Regulation. To this end, the level of cooperation was first established. A comparison between Eurostat data concerning imports originating in India and the volume of exports to the Community reported by the cooperating exporting producers showed that the level of cooperation was high (more than 80 %). Therefore, and since there were no indications that the non-cooperating companies were dumping at a lower level, it was considered appropriate to set the dumping margin for the remaining companies, which had not cooperated with the investigation, at the level of the higher dumping margin found for the two cooperating companies. This approach is in accordance with the standing practice of the Community institutions and was also considered necessary in order not to provide an incentive for non-cooperation. Therefore, the residual dumping margin was calculated at the rate of 7,5 %.4.INJURY4.1.Community production and Community industry(23)Within the Community, the like product is manufactured by five producers. The output of these five Community producers is therefore deemed to constitute the Community production within the meaning of Article 4(1) of the basic Regulation.(24)Of these five producers, a total of four replied to the questionnaire. However, one of these respondents did not expressly support the complaint, i.e. it did not take a position on it. Therefore, this company could not form part of the Community industry and, consequently, of the injury analysis. Nevertheless, the situation of this company was taken into account and examined as another factor of injury in part 5 — Causation.(25)The three remaining co-operating producers represent more than 40 % of the total Community production of the like product. It is noted that one of them had made substantial imports of dihydromyrcenol from India in the IP. However, importation was not its core business and these imports were considered to have been made in reaction to the influx of dumped imports significantly depressing prices, in particular in order to improve its financial situation and to maintain its own production of the like product viable. Therefore, it was not considered appropriate to exclude this producer from the definition of the Community industry.(26)On this basis it is considered that the three Community producers referred to in recital 25 above are deemed to constitute the Community industry within the meaning of Article 4(1) and Article 5(4) of the basic Regulation. They will hereinafter be referred to as the "Community industry".4.2.Determination of the relevant Community market(27)In order to establish whether or not the Community industry suffered injury and to determine consumption and the various economic indicators related to the situation of the Community industry, it was examined whether and to what extent the subsequent use of the Community industry’s production of the like product had to be taken into account in the analysis.(28)Dihydromyrcenol is used as an intermediate material for production of derivates, such as tetrahydromyrcenol and myrcetol, or in compounding fragrances. It was found in the investigation that the Community industry used certain quantities of dihydromyrcenol (around 10 % of its total production volume) internally, for the aforesaid purposes. To this end, dihydromyrcenol was simply transferred without invoice within the same company; it did not enter the free market, because it was used by the producer itself for further processing and/or compounding. Such situations are referred to as captive use.(29)The Community industry also sold dihydromyrcenol to related parties in the Community and in third countries for resale or use by these parties. However, it was established in the investigation that these sales cannot be considered as being captive, i.e. sales on the captive market, because they were made at market prices and the buyers had a free choice of supplier. On the contrary, they should be considered as sales on the free market.(30)The distinction between the captive and the free market is relevant for the injury analysis because products destined for captive use, i.e. internal use by the producers themselves in this case, are not exposed to direct competition with imports. By contrast, production destined for free market sale was found to be in direct competition with imports of the product concerned.(31)In order to provide as complete a picture as possible of the situation of the Community industry, data have been obtained and analysed for the entire dihydromyrcenol activity and it was subsequently determined whether the production was destined for captive use or for the free market.(32)For the following economic indicators relating to the Community industry, it was found that a meaningful analysis and evaluation had to focus on the situation prevailing on the free market: sales volume and sales prices on the Community market, market share, growth, profitability, return on investment, cash flow and export volume and prices.(33)As regards other economic indicators, however, it was found on the basis of the investigation, that they could reasonably be examined only by referring to the whole activity. Indeed, production (for both the captive and the free market), capacity, capacity utilisation, investments, stocks, employment, productivity, wages and ability to raise capital depend upon the whole activity, whether the production is captive or sold on the free market.(34)Finally, it is noted that the development of captive use by the Community industry was examined as other factor of injury in part 5 — Causation in order to establish whether it could have impacted on their situation.4.3.Community consumption(35)Community consumption was established on the basis of the volumes of the Community producers’ own production destined for free sale on the Community market and for captive use by these producers and the volumes of imports into the Community obtained from Eurostat.(36)In respect to Eurostat, it is noted that products other than dihydromyrcenol may be included in these statistics, since dihydromyrcenol is declared within an ex CN code. Data from Eurostat were thus compared with the Community industry's market knowledge. As a result, imports from Japan were excluded since they were considered to be entirely composed of products other than dihydromyrcenol as there is no known production of that product in Japan. For imports from third countries other than Japan, Eurostat statistics appeared to be reasonably precise (i.e. they appeared not to include significant volumes of products other than dihydromyrcenol which would substantially distort the picture) and, thus, no adjustments to these data were carried out for the purpose of the injury and causation analysis.(37)In the first half of the period considered, the Community market for dihydromyrcenol was relatively stable. It started to increase in 2005 and in the IP it reached a level by 23 % higher than in 2003, i.e. around 4400000 kilograms.

Source: verified questionnaire replies from the Community industry, information collected from other Community producers, Eurostat.

	2003	2004	2005	IP
Consumption (kg)	3586447	3571795	3819904	4409093
Index: 2003 = 100	100	100	107	123

4.4.Imports from the country concerned4.4.1.Volume, price and market share of dumped imports from the country concerned(38)The volume of dumped imports of the product concerned into the Community rose dramatically in 2004, i.e. by more than 1600 %. It further almost doubled in 2005, before slowing down in the IP and closing at a level 2963 % higher than at the beginning of the period considered, i.e. around 760000 kilograms in the IP compared to around 25000 kilograms in 2003.

Source: Eurostat.

	2003	2004	2005	IP
Imports (kg)	24900	430600	751800	762600
Index: 2003 = 100	100	1729	3019	3063

(39)The average import price dropped by almost 20 % in 2004, it increased to its original level in 2005 and increased by 11 % in the IP. As can be seen from recitals 41 and 42 below, the import prices were significantly below the Community industry prices in the IP.

Source: Eurostat.

	2003	2004	2005	IP
Average import price (EUR/kg)	3,45	2,79	3,45	3,81
Index: 2003 = 100	100	81	100	111

(40)The market share of dumped imports from India increased by almost 17 percentage points during the period considered, i.e. from 0,7 % in 2003 to 17,3 % in the IP. Significant market share was gained in 2004, in line with the above described sharp increase in import volumes and steady Community consumption. In the IP, expressed in absolute terms, the Indian exporters, despite an increase in sales volumes, saw their market share decrease by 2,4 percentage points. However, bearing in mind that Community consumption only increased by 23 % over the period considered, it is evident that the presence of dumped imports from India on the Community market increased much more significantly over the period.

Source: Eurostat.

	2003	2004	2005	IP
Market share	0,7 %	12,1 %	19,7 %	17,3 %
Index: 2003 = 100	100	1736	2835	2491

4.4.2.Price undercutting(41)For the purpose of analysing price undercutting, the import prices of the cooperating exporting producers were compared to the Community industry prices, on the basis of weighted averages for directly comparable product types (on the basis of purity) during the IP. The Community industry prices were adjusted to an ex-works level, and compared to CIF Community frontier import prices, plus customs duty. This price comparison was made for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts.(42)On the basis of the cooperating exporting producers’ prices, the undercutting margins found, and expressed as a percentage of the Community industry’s prices, are 5,8 % and 7,4 %.4.5.Situation of the Community industry(43)Pursuant to Article 3(5) of the basic Regulation, the Commission examined all relevant economic factors and indices having a bearing on the state of the Community industry.(44)It is recalled that the existence of captive use of the like product by the Community industry had to be taken into account in the injury analysis. Certain injury indicators were thus examined by focusing on the situation prevailing on the free market, whilst certain others could reasonably be examined only by referring to the whole activity (see recitals 27 to 34 above).a)Production, capacity and capacity utilisation(45)The Community industry's production of the like product increased by 6 % over the period considered. Specifically, it remained stable in 2004, increased slightly by 2 % in 2005 and by additional 4 percentage points in the IP. Since production capacity remained stable, its utilisation has slightly improved in line with the increased production volumes.

Amendments and corrections
January 29, 2008	See Art. 3
July 29, 2007	Entry into force - Date pub. + 1 See Art 3

Commission Regulation (EC) No 896/2007 of 27 July 2007 imposing a provisional anti-dumping duty on imports of dihydromyrcenol originating in India