TRADING SYMBOL: Toronto Stock Exchange - HWD
LANGLEY, BC, March 1, 2013 /CNW/ - Hardwoods Distribution Inc.
("Hardwoods" or the "Company") today announced that the US Department
of Commerce ("Commerce") had issued its preliminary determination
regarding countervailing duties against hardwood plywood manufactured
in China and imported into the United States.
As previously announced by the Company, on September 27, 2012 an unfair
trade petition was filed in the United States seeking the imposition of
countervailing duties ("CVD") and antidumping duties ("AD") against
Chinese hardwood plywood. The trade petition was brought by a coalition
of U.S. plywood manufacturers, alleging that Chinese imports are sold
in the United States at prices below cost and are subsidized by the
Government of China.
On February 27, 2013 Commerce announced it had completed the preliminary
stage of its CVD investigation and determined preliminary duty rates as
follows:
-
3 Chinese exporters were selected as mandatory respondents, and were the
focus of a detailed investigation by Commerce. Commerce found no
subsidies against the mandatory respondents, and accordingly these
exporters all received 0% CVD duty rates;
-
15 Chinese exporters that were requested to submit specific information
to Commerce were deemed not to have provided a satisfactory response,
and those 15 Chinese exporters were assigned a 27.16% CVD duty rate;
-
For all remaining Chinese exporters, which comprises several hundred
producers/exporters and the majority of Chinese production imported
into the United States, Commerce assigned a 22.63% CVD duty rate.
Substantially all of Hardwoods current suppliers of Chinese imports
come from mills that fall into the 22.63% CVD duty rate category.
Hardwoods sells hardwood plywood, lumber and related sheet goods and
specialty wood products to customers in North America. Hardwoods
strategy includes selling both imported and domestically produced
hardwood plywood to satisfy demand and product preferences from
Hardwoods customers. The Company sells more domestically sourced
hardwood plywood than imported, and estimates that approximately 14% of
its total sales is product imported from China that would be subject to
the preliminary CVD. Hardwoods has active supply lines for hardwood
plywood both in the US and in international markets other than China.
Although markets would be disrupted in the short-term if duty rates
ultimately result in the price of Chinese plywood no longer being
competitive in the United States, the Company believes that it is well
positioned to respond to its' customer needs through other sourcing
channels that are not dependent upon Chinese production.
The Company expects that this preliminary CVD duty rate will result in
an immediate increase in market selling prices to customers of both
imported Chinese and domestically produced hardwood plywood products.
Additional market impacts, such as changes in production volumes from
hardwood plywood producers both domestically and in China, and short
term fluctuations in gross profit margins as product prices are
adjusted, may also occur. However, the resulting impact of the
preliminary CVD duty on markets and therefore on Hardwoods business
cannot be determined at this time.
The CVD rates announced by Commerce represent their preliminary CVD
determinations only, and are subject to further investigation and
revision. The final determination regarding CVD is expected to be
issued by Commerce in October of 2013.
Commerce is also conducting a separate investigation into antidumping
duties and no AD duty determination has yet been made. Commerce is
expected to announce their preliminary AD duty decision on April 29,
2013, with their final AD duty decision at the same time as the final
CVD decision is announced in October of 2013.
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
Company estimates that approximately 14% of its total sales is product
imported from China that would be subject to the preliminary CVD; the
Company's belief that it is well positioned to respond to its' customer
needs through other sourcing channels that are not dependent upon
Chinese production; the Company's expectation that the preliminary CVD
announcement will result in an immediate increase in market selling
prices to customers of both imported Chinese and domestically produced
hardwood plywood products; the Company's perspective that additional
market impacts, such as changes in production volumes from hardwood
plywood producers both domestically and in China, and short term
fluctuations in gross profit margins as product prices are adjusted,
may also occur, but that the resulting impact of the preliminary CVD
duty on markets and therefore on Hardwoods business cannot be
determined at this time; the Company's expectation that Commerce is
expected to announce their preliminary AD duty decision on April 29,
2013, and their final CVD and AD duty determinations in October of
2013.
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 (including trade outcomes that impact upon our
business); 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, the Company 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.
About Hardwoods
Hardwoods is one of North America's largest wholesale distributors of
hardwood lumber and related sheet good products, operating a network of
31 distribution centres in the US and Canada.
SOURCE: Hardwoods Distribution Inc.
