Hardwoods Announces Update Regarding US Trade Investigation Against Chinese Import Plywood
TRADING SYMBOL: Toronto Stock Exchange – HWD
LANGLEY, BC, June 20, 2017 /CNW/ - Hardwoods Distribution Inc. ("Hardwoods" or the "Company") today announced that the US Department of Commerce ("Commerce") has issued its preliminary determination regarding antidumping duties against hardwood plywood manufactured in China and imported into the United States.
As previously announced by the Company, on November 18, 2016 a trade case was filed in the United States seeking the imposition of countervailing duties ("CVD") and antidumping duties ("AD") against Chinese hardwood plywood. The trade case was brought by a coalition of U.S. plywood manufacturers (the "Petitioners"), alleging that Chinese imports are subsidized by the Government of China and are sold in the United States at prices below fair value. As previously announced on April 19, 2017 Commerce completed the preliminary stage of its CVD investigation and imposed a preliminary CVD rate of 9.89% against product imported to the U.S. from substantially all Chinese mill producers.
On June 20, 2017 Commerce announced it had completed the preliminary stage of its AD duty investigation, imposing a preliminary AD duty rate of 57.36% against most Chinese mill producers. As a result of this announcement, once the preliminary AD duty takes effect, the combined preliminary CVD/AD duty rate on hardwood plywood imported from China into the United States will be 67.25%. The preliminary AD duty will come into force upon being formally published in the US Federal Register, which is expected to occur in the next few days.
The Company estimates that approximately 11% of its total sales is product imported from China that would be subject to the trade case. The Company has no retroactive AD duty exposure.
"Our job as a distributor is to make available a wide range of architectural building products to our over 35,000 customers," said Rob Brown, President and CEO of Hardwoods. "In the hardwood plywood category, we offer both domestic and import product alternatives to meet the varied manufacturing needs of our customers. The imposition of preliminary CVD/AD duties of 67.25% will make Chinese hardwood plywood a less competitive option, but will allow us to bring other sourcing solutions to our customers. We are well positioned to do so and will adjust our sourcing if needed and as the trade case proceeds to its final determination phase near the end of 2017. We remain confident in our ability to successfully service the diverse product requirements of our customers, regardless of the final outcome of this trade case."
The CVD/AD duty rates announced by Commerce represent their preliminary determinations only, and are subject to further investigation and revision. The final determination regarding CVD/AD duty rates is expected to be issued by Commerce in November 2017.
Once final CVD/AD determinations have been made by Commerce, the final phase of the case passes to a separate U.S. government agency, the International Trade Commission ("ITC"). The ITC rules on whether the domestic plywood industry has been or is threatened to be injured which determines if final CVD/AD duties are to be implemented or rejected. The ITC's final decision regarding the trade case is expected to be rendered late in 2017.
About Hardwoods Distribution Inc.
Hardwoods is North America's largest distributor of architectural building products to the residential and commercial construction markets. The Company operates a North American network of 58 distribution centres, as well as one sawmill and kiln drying operation.
Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
This news release includes forward-looking statements. These involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "estimate", "expect", "may", "plan", "will", and similar terms and phrases, including references to assumptions. Such statements may involve, but are not limited to: The preliminary AD duty will come into force upon being formally published in the US Federal Register, which is expected to occur in the next few days; the final determination regarding CVD/AD duty rates is expected to be issued by Commerce in November 2017; and the ITC's final decision regarding the trade case is expected to be rendered late in 2017.
These forward-looking statements reflect current expectations of management regarding future events and operating performance as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to: national and local business conditions; political or economic instability in local markets; competition; consumer preferences; spending patterns and demographic trends; legislation or governmental regulation; acquisition and integration risks.
Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, management cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements reflect management's current beliefs and are based on information currently available.
All forward-looking information in this news release is qualified in its entirety by this cautionary statement and, except as may be required by law, Hardwoods undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise after the date hereof.
SOURCE Hardwoods Distribution Inc.
For further information: Faiz Karmally, Chief Financial Officer, Phone: (604) 881-1982, Email: [email protected], Website: http://www.hardwoods-inc.com
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