TRADING SYMBOL: Toronto Stock Exchange - HWD
LANGLEY, BC, Sept. 18, 2013 /CNW/ - Hardwoods Distribution Inc.
("Hardwoods" or the "Company") today announced that the US Department
of Commerce ("Commerce") has issued its final determination regarding
countervailing duties ("CVD") and antidumping duties ("AD") against
hardwood plywood manufactured in China and imported into the United
States. The trade petition was brought by a coalition of U.S. plywood
manufacturers ("U.S. Manufacturers"), alleging that Chinese imports are
sold in the United States at prices below cost and are subsidized by
the Government of China. Hardwoods estimates that currently 14% of its
total sales are of product imported from China that would be subject to
the outcomes of this trade dispute.
In its ruling Commerce imposed a final CVD rate of 13.58% and final AD
rate of 59.46%, for a total combined final CVD/AD duty rate of 73.04%.
These final CVD/AD duty rates need to affirmed by a second U.S.
government agency, the International Trade Commission ("ITC"). The ITC
must determine whether the U.S. Manufacturers have been injured or are
threatened to be injured ("Injury Ruling") by competition from imported
Chinese plywood. The ITC is expected to issue their Injury Ruling at
the end of October. If the ITC rules "for" injury, then the final
combined CVD/AD duty rate of 73.04% shall come into effect. If the ITC
rules "against" injury in its Injury Ruling, then the trade case is
dismissed. Hardwoods does not expect to receive any refund of
previously paid CVD/AD duties, even if the trade case is dismissed.
As announced previously by Hardwoods, actions taken by Commerce earlier
in its investigation had imposed a preliminary CVD rate of 22.63% and a
preliminary AD rate of 22.14%. Under US trade law, preliminary duties
can only be collected for an interim period. As a result the
preliminary CVD rate expired on July 12, 2013. The preliminary AD rate
of 22.14% currently remains in effect, but is expected within a few
days to be increased to the level of the final AD rate of 59.46% and to
stay in place until October 30, 2013, approximately the time that the
ITC issues their Injury Ruling.
If the final CVD/AD duty rate of 73.04% is affirmed by the ITC's Injury
Ruling at the end of October, the Company expects this will make
imported Chinese plywood uncompetitive in the U.S. market. 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 Hardwoods has active supply lines
for hardwood plywood both in the U.S. and in international markets
other than China.
For those Hardwoods customers that today utilize imported Chinese
plywood, the Company has inventory in its warehouse for several months'
time to meet their needs while working to transition the customer to
alternative supply that meets their product specifications. However
given the upset condition introduced to the U.S. hardwood plywood
market by this trade decision it is uncertain how much of Hardwoods
sales to these customers, which comprise approximately 14% of the
Company's total sales, will be impacted. In addition, if final CVD/AD
duty rates are affirmed at 73.04%, reduced import volumes from China
may result in pressure on the availability of domestic supply. At a
time when current volume demand for hardwood plywood is strong
reflecting the ongoing recovery in the U.S. housing market, this could
increase prices for hardwood plywood products in North America.
However, the resulting effect on markets, and therefore on Hardwoods
business, cannot be fully determined at this time.
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:
Hardwoods estimates that currently 14% of its total sales are of
product imported from China that would be subject to the outcomes of
this trade dispute; that the ITC is expected to issue their Injury
Ruling at the end of October; that Hardwoods does not expect to receive
any refund of previously paid CVD/AD duties, even if the trade case is
dismissed; that the preliminary AD rate of 22.14% currently remains in
effect, but is expected within a few days to be increased to the level
of the final AD rate of 59.46% and to stay in place until October 29,
2013; that if the final CVD/AD duty rate of 73.04% is affirmed by the
ITC's Injury Ruling at the end of October, the Company expects this
will make imported Chinese plywood uncompetitive in the U.S. market;
the Company's belief that given the upset condition introduced to the
U.S. hardwood plywood market by this trade decision it is uncertain how
much of Hardwoods sales of import Chinese plywood, which comprise
approximately 14% of the Company's total sales, will be impacted; that
if final CVD/AD duty rates are affirmed at 73.04%, reduced import
volumes from China may result in pressure on the availability of
domestic supply; the Company's perspective that at a time when current
volume demand for hardwood plywood is strong reflecting the ongoing
recovery in the U.S. housing market, this could increase prices for
hardwood plywood products in North America; the Company's perspective
that the resulting effect on markets, and therefore on Hardwoods
business, cannot be fully determined at this time.
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
32 distribution centres in the US and Canada.
SOURCE Hardwoods Distribution Inc.
