Teknos suggests as an alternative a phase-in of TiO2 anti-dumping duties

Teknos, a Finnish family-owned company, proposes phased introduction of anti-dumping duties on titanium dioxide (TiO2) to ensure level playing field. This will safeguard that the EU paints and coatings industry remains competitive and better equipped to absorb the additional costs concerning its second biggest raw material. Teknos asks the EU Commission and Member State Authorities to consider this approach, which would limit the potential damage to a key industry in EU.

Teknos has submitted two statements in response to the European Commission’s (EC) disclosures regarding anti-dumping duties on Chinese-sourced titanium dioxide (TiO2). We have highlighted the significant harm that we expect these duties will cause to the EU’s paints and coatings industry in terms of economic competitiveness as well as sustainability.

For sufficient availability of TiO2 in European markets, we need external supply, in normal economic situations; this amounts to 10% of the EU TiO2 consumption for use in paints, which China is currently supplying. As part of free trade on a global scale, any duties between countries should be carefully considered and only used to ensure fair trade. Teknos predicts that effectively in the long run, due to the implementation of anti-dumping duties, the demand will reduce to meet the current capacity rather than the capacity increasing to meet the current demand.

Teknos believes that should there be an immediate full application of all the elements of the current proposal, it will likely lead to a loss of competitiveness of EU business due to the inevitable price increases paid for by coating companies that depend on production within the EU. This competitive disadvantage for EU based companies will ultimately lead to bankruptcies and forces investments in production capacity to be made outside the EU. Due to the nature of the business, the timing and gradual introduction of the proposed duties would enable the whole value chain to adapt to the changes, and prevents EU manufacturers from being disadvantaged from day one. This situation differs between customer groups:

For decorative paints sold to construction companies or via distributors to the DIY sector, fixed pricing is typically required for each season. Contract negotiations are typically done 4-6 months before the start of the season to ensure the availability of products.

For industrial coatings, changes in market conditions can be reviewed on a quarterly basis, so there the lead time of the current quarter + 3 months is sufficient. To maintain competitiveness within the value chain, in case product adaptions are required to remain competitive, these changes must be carefully introduced through negotiation, taking several iterations as the value chain is long, and long-term customer projects with lengthy development and trial times required. This would require changes to be gradual and spread over time.

TiO2 is the second most significant raw material in the production of paints and coatings. Transitioning from Chinese-sourced TiO2 to non-Chinese alternatives requires time and resources to ensure product quality, performance and supply chain stability. The paints and coatings industry operates on stringent product standards, necessitating thorough testing and qualification processes. Teknos anticipates that a minimum of 18 months would be required to change suppliers, based on the time needed for the R&D technical activities and the qualification and certification lead times with customers.  

Teknos understands the need to apply some level of duty due to the Commission’s conclusions to their study into dumping activities by Chinese TiO2 suppliers. To ensure the continuation of fair trade, to ensure that the value chain will make the necessary investments to increase capacity and that the whole value chain understands the changes in the market conditions, we need to work together with the policymakers to maintain an economically healthy EU paints and coatings industry, operating in ‘a level playing field’ environment for the coming decade and to supporting sustainable industry practices. 

Statement to EC 25.7.2024 Statement: Anti-dumping duties conflict with EU green deal, sustainability and competitiveness - Teknos

Contact details:

Paula Salastie
CEO, Teknos Group
paula.salastie(at)teknos.com