PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET
U.S. MARKET SEGMENTS/CHANNELS OF DISTRIBUTION
CFS paper is sold in three forms: web rolls, sheeter rolls, and sheets. The product is sold to be used in printed materials requiring high-gloss pages, including books, catalogues, magazines, posters, signage, playing cards, and packaging. Petitioner reported that approximately *** percent of its business is accounted for by commercial printing, which includes annual reports and direct mail.1 Petitioner reported that approximately *** percent of U.S. producers’ sales of CFS paper are made through distributors, typically referred to as paper merchants.2 The remainder of sales are directly to printers and other end users.3 Respondent importers estimate that *** percent of subject imports are sold to merchants.4 Respondent importers reported that there may also be a paper broker that arranges for a direct sale from a foreign manufacturer to an end user or from a manufacturer to a paper merchant.5 Therefore, while some importers serve as distributors, others serve as brokers and sell to other distributors.6
Petitioner reported that both the domestic product and the subject imports are sold to distributors and end users for the same types of applications.7 There is some overlap of customers of U.S. producers and subject importers. ***. Among importers from the subject countries, *** were all listed as customers. There was a wide variety of smaller printers also listed as customers by importers from each of the subject countries, but there was no clear overlap of these customers.
When firms were asked to list market areas in the United States where they sell CFS paper, the responses showed that the market areas tended to be nationwide. Eight of nine responding U.S. producers reported that they sell nationally. Respondents have reported that U.S. producers are sometimes reluctant to ship west of the Rocky Mountains because of higher transportation costs.8
Among responding importers of CFS paper from China, six of nine importers reported that they sold nationally. The others listed specific geographic regions, including the Northeast, the Mid-Atlantic, the Southeast, the Rocky Mountains, the Midwest, the west coast, and southern New England. Four of seven responding importers of CFS paper from Indonesia reported that they sold nationally. The others listed the Northeast, the Mid-Atlantic, the Southeast, the Midwest, the Rocky Mountains, the west coast, the Northeast, and Hawaii. Six of 12 responding importers of CFS paper from Korea reported that they sold nationally. The others listed the west coast, the Southeast, and the Midwest.
Official Commerce import statistics, by subject source and customs district, indicate that imports of CFS paper from China are most heavily concentrated on the west coast, accounting for 66.3 percent of total U.S. imports from China during 2005, followed by imports to the east coast, accounting for 22.4
Conference transcript, p. 92 (Tyrone). Petitioner’s postconference brief, exh. 1, p. 4.
3 Petitioner reported that it may sell directly to larger printers and publishers. Conference transcript, p. 74 (Tyrone).
4 Respondents also state that long lead times on imports necessitate the purchaser to hold inventories, which mostly precludes producers from subject countries from selling directly to end users who are unable to maintain large inventories. Chinese respondents’ postconference brief, p. 18.
Conference transcript, p. 144 (Dragone). *** of the *** responding importers of record listed distributors among their customers. Conference transcript, p. 48 (Jones). Conference transcript, p. 100 (Anderson).