Winnipeg Free Press - PRINT EDITION

CG Power launches dumping complaint

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A Winnipeg electrical power transformer manufacturer that competes with companies in China, Mexico, Brazil, Israel and the United States has had it with some South Korean competitors.

CG Power Systems of Winnipeg has lodged a complaint with the Canada Border Services Agency about allegations of dumping by South Korean transformer makers.

"We just felt at this point in time we have to protect our business," said Ian Harrison, general manager of CG Power Systems Canada Inc. of Winnipeg. "We would like to compete on a level playing field."

Last week, Canada Border Services Agency the (CBSA) announced it is probing the alleged dumping of transformers originating in South Korea.

Dumping occurs when goods are sold to importers in Canada at prices less than their selling prices in the exporter's domestic market or at unprofitable prices. Transformers are used to increase, maintain or decrease electric voltage in high-voltage transmission and distribution systems.

Harrison said over the last three or four years, Korean exporters have captured a great deal of the Canadian market.

Remote industrial facilities such as mines and oilsands projects as well as renewable-energy generators are growth markets for CG Power and ABB Inc. of Varennes, Que., another transformer manufacturer that initiated the complaint to the CBSA alongside CG Power. They are the only Canadian manufacturers of large transformers.

The Canadian International Trade Tribunal is undertaking a preliminary inquiry to determine whether the imports are harming Canadian producers and will issue a decision by June 22.

Harrison said it's difficult to say how much his company has been affected.

"We have concern about prices in the market that have been depressed significantly in the last three years due to low-cost imports coming into the country," he said.

CG Power System is one of only three facilities in North America capable of building large, 500-kilovolt transformers. It employs about 330 people.

Last year, the U.S. Department of Commerce investigated after similar anti-dumping complaints regarding the same South Korean producers.

A few months ago, U.S. regulators imposed import duties of 22 to 37 per cent on transformers from South Korea.

U.S. petitioners claimed large power transformers from South Korea increased U.S. market share between 2008 and 2011 by selling transformers at prices that were sometimes lower than U.S. producers' cost of materials.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition May 2, 2012 B5

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