New EU biodiesel antidumping tariff has "insignificant" impact on Wilmar

Wilmar has already diversified, reckons DBS.

DBS Vickers Singapore said that the newly reported provisional anti-dumping tariffs will impact a smaller share of Wilmar's biodiesel sales as the company will have already diversified into other markets, including the US.

Here's more from DBS:

According to Bloomberg, the EU Commission has on 27 May13 (published on 28 May13) put provisional anti-dumping tariffs on Wilmar's biodiesel sales to the EU at 9.6%; whereas those sold by First Resources were given none.

These measures were applied because of complaints filed by the European Biodiesel Board, which pointed to prima facie evidence of the dumping of biodiesel. This was considered sufficient to justify an investigation, the period of which lasted between 1 Jul11 and 30 Jun12.

The provisional anti-dumping rates as published in the EU Journal are as follows

Company / Provisional dumping margin
PT. Ciliandra Perkasa 0.0%
PT. Musim Mas 2.8%
PT. Pelita Agung Agrindustri 5.3%
PT. Wilmar Bioenergi Indonesia 9.6%
PT. Wilmar Nabati Indonesia 9.6%
Other cooperating companies 6.5%
All other companies 9.6%

The aforementioned provisional anti-dumping rates were calculated based on the following assumptions:
1. A biodiesel producers' profit margin of 15%
2. An EU importer's margin of 5%
3. Additional adjustments in selling expenses (transport/freight, insurance, handling, loading, export duties, bank charges, etc)
4. Additional adjustments in trading commission
5. A premium between CFPP 0 and CFPP 13 RME price to Indonesian biodiesel import price

We understand the affected parties have one-month to respond, before measures are implemented. Wilmar did not issue any statement; but we understand it had already diversified into other markets (we suspect the USA market now has a larger share), since the dumping investigation began. This should leave its current biodiesel sales volumes to the EU market smaller than the 2011/12 period. Hence, the impact to Wilmar on a consolidated basis since 4Q12 has indicatively been insignificant. Note that Wilmar does not disclose its biodiesel segment contribution to the Palm and Lauric Merchandising and Processing pretax.

We are maintaining our forecasts, TP and rating for the counter.

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