Hardwoods Distribution responds to US hardwood plywood manufacturers' anti-dumping petition against China, predicts impact on prices, margins, product availability if countervailing duties are imposed
LANGLEY, British Columbia
September 30, 2012
– TRADING SYMBOL: Toronto Stock Exchange - HWD
Hardwoods Distribution Inc. ("Hardwoods" or the "Company") today announced that on September 27, 2012 an unfair trade petition was filed in the United States with respect to imported hardwood plywood from China.
The action was filed by the Coalition for Fair Trade of Hardwood Plywood (CFTHP), an association of U.S. manufacturers of hardwood and decorative plywood. The petition, filed with the U.S. Department of Commerce and the U.S. International Trade Commission, alleges that imports of Chinese manufactured hardwood plywood are sold in the United States at prices below cost, and are subsidized by the Government of China. The petition claims that U.S. manufacturers of hardwood and decorative plywood have suffered material competitive injury and that the industry continues to be threatened by further injury from Chinese imports. The filing requests that the U.S. Government investigate, and seeks antidumping and countervailing duty in excess of 300 percent to be applied against the value of imported hardwood plywood originating from China. In announcing the filing, the CFTHP indicated it expects a preliminary ruling to be implemented by Spring 2013 and a final ruling by late Fall 2013.
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 from Hardwoods customers. The majority of the imported hardwood plywood which is sold by Hardwoods is sourced from China. If trade duties were levied against Chinese hardwood plywood, this would impact upon Hardwood's business in the United States. These impacts may include material changes to the selling prices, margins, and/or product supply availability of both imported and domestically manufactured hardwood plywood. Hardwoods is analyzing the trade petition filing. However, the resulting impact on markets and therefore on Hardwoods business cannot be determined at this time. It is estimated that sales of hardwood plywood imported from China for resale to customers located in the United States currently comprises approximately 13.2% of Hardwoods total revenues.
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 CFTHP's expectation that a preliminary ruling will be implemented by Spring 2013 and a final ruling by late Fall 2013; our belief that if trade duties were levied against Chinese hardwood plywood, this would impact upon Hardwood's business in the United States; our belief that these impacts may include material changes to the selling prices, margins, and/or product supply availability of both imported and domestically manufactured hardwood plywood; Hardwoods belief that the resulting impact on markets and therefore on Hardwoods business cannot be determined at this time; and Hardwoods estimate that sales of hardwood plywood imported from China for resale to customers located in the United States currently comprises approximately 13.2% of Hardwoods total revenues.
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.
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.