We are disappointed and surprised at the recent call for boycotts of our drywall products by some Canadian customers and certain Western Canadian Associations, and through commentary in the Canadian media, related to our Anti-Dumping Complaint and the subsequent Provisional Duties announced by the Canadian Border Services Agency on September 6.
We would like to put this issue into clear context: This is about Canadian law and Canadian jobs.
We filed an Anti-Dumping Complaint because drywall manufacturers based in the US were exporting large and growing volumes of products into Western Canada in the last few years at prices materially lower than those at which they are sold in the US.
Such dumping creates material injury to domestic manufacturers in the form of share loss and price and margin suppression. Under Canadian law, this is considered an unfair trade practice sanctioned through an offsetting duty or tariff. The magnitude of the Provisional Duty announced is indicative of the very large price difference between the US and Canada and the enormous margin of dumping, which is having a devastating impact on the value of gypsum board in Western Canada.
To give some context as to the seriousness of the current situation, there was a historical antidumping case involving gypsum board that was filed in Canada in 1992. The current dumping situation is significantly worse than what Canadian producers faced back in 1992. The market share of US imports in the 1992 case was in the range of 8 to 9 percent, while in the current case US imports account for over half of the market in Western Canada. The dumping margins determined by the Canadian government in the 1992 case were around 27 percent, whereas the preliminary margins in this case range from just over 100 percent to 276 percent.
Our actions are meant to stop this practice and bring a level playing field and fair competition to the Western Canadian marketplace by having all manufacturers conform to regulatory and legal requirements as prescribed under Canadian law. Faced with increasing injury from dumping, we had to terminate Western Canadian employees, reduce investment in our manufacturing plants, mine operations and business, and put in jeopardy the continued viability of our plants. We could not allow our business and the jobs of our Canadian employees to be further harmed, and the viability and survival of our plants to be put at risk due to unfair dumping, without seeking the legal redress which is available under Canadian Trade Law.
We have maintained our commitment to Canada over many decades, and since the financial crisis in 2008, are the only manufacturer to have kept all of our Western Canadian plants and operations open, while US companies closed theirs. We have gypsum board plants in Vancouver, Calgary and Winnipeg and mines in Windermere, BC and Amaranth Manitoba supplying those plants. Across Canada we employ over 1,000 people and are proudly committed to manufacturing building materials in Canada and servicing and supplying Canadian customers coast to coast.
The Provisional Duty will not have any direct impact on supply, however, it seems with the resulting market uncertainty, Canadian drywall manufacturers are seeing an increase in demand for products. We are now rehiring employees we had to terminate due to the dumping injury and restarting shifts at our plants in Western Canada to increase supply to help meet the increased needs of our customers.
We understand the concern and uncertainty regarding the potential price consequences of gypsum board post the Duty. Very shortly after we filed the Complaint, we informed all our customers in early May of this year that the Complaint had been filed in order to give as much notice and time possible to prepare and react. We will continue to work closely with those customers to keep them informed and assist them where we can during this time of transition and change with the Anti-Dumping Complaint process.
- Matthew Walker, General Manager, CertainTeed Gypsum Canada