On 21 May 2021, the International Trade Administration Commission of South Africa (ITAC) announced the proposed creation of a rebate facility in terms of Schedule No.3 to the Customs and Excise Act, 1964 for titanium dioxide classifiable under tariff subheading 3206.11 for use in the manufacture of white masterbatch classifiable under tariff subheading 3206.19.90 as follows: “Pigments and preparations containing 80 per cent or more by mass of titanium dioxide calculated on the dry matter, classifiable under tariff subheading 3206.11, in such quantities, at such times and subject to such conditions as the International Trade Administration Commission may allow by specific permit for use in the manufacture of white masterbatch, containing 70 per cent of titanium oxide and 25 per cent polymer, classifiable under tariff subheading 3206.19.90.”, on which comment is due by 22 June 2021.
The application was lodged by Ferro South Africa (Pty) Ltd who reasoned that:
(i) Titanium dioxide is a vital raw material used in the manufacture of white masterbatch and consists of approximately 75% of white masterbatch. Currently there is no local manufacturer of titanium dioxide. The last local manufacturer closed down its titanium dioxide manufacturing facility in 2016.
(ii) Since the closure of Huntsman, all titanium dioxide used in the manufacture of white masterbatch can only be sourced from foreign suppliers. Despite, there being no local manufacturer, there is a 10% import duty on the vital raw material.
(iii) In this regard, the duty currently serves no protection purpose as there is no local industry to protect. As it stands, the duty serves to unnecessarily increase the cost of importing titanium dioxide and consequently the cost and price of white masterbatch, which is a vital raw material, particularly in the plastics industry.
(iv) Given the escalating global prices of titanium dioxide, it is imperative that an industrial rebate be created to reduce the cost burden. Further exacerbating the situation are the increasing costs of raw materials, labour, electricity, and fuel among other business costs. These have a significant impact and are negatively impacting manufacturing costs and consequently final prices to consumers and users of end products produced by the downstream manufacturing industry.
(v) The importance of providing protection on the investment being made by Nyanza Light Metals, is acknowledged. However, the rebate provides an equitable solution to all parties as the industrial rebate does not lead to a complete elimination of the duty on titanium dioxide.
The tariff application is accessible at:
Story by: Riaan de Lange