Canadian Duties on U.S. Corn; Impact on Corn Products International
Corn Products International Inc. (CPI) in a press release expressed disappointment in the Canadian government's decision to initiate an anti-dumping and/or countervailing duty investigation on corn imported from the United States. CPI's subsidiary, operating under the Casco name, is among Canada's largest industrial corn users and the sole processor of corn-refined starches, sweeteners, corn oil and animal feeds. It has operated in Canada for more than 100 years and employs more than 400 people. The company does not believe that the potential duties are in the best interest of the various stakeholders who may be affected, including customers, vendors, employees or the Canadian agricultural industry. As a result, CPI opposes this action and plans to pursue all regulatory and other measures available to it to counter the decision.
Depending upon their amount, the company believes that the potential duties, which it would not expect to take effect until mid-December 2005 at the earliest, could have a significant impact on its Canadian operations. However, CPI is exploring actions to minimize the impact to the company as a whole. Taking these actions into account, the company does not believe that the potential imposition of duties would have a negative effect on its consolidated operating results on an ongoing basis, excluding the impact of any potential restructuring activities that may occur.
The company's efforts to minimize the impact could include the reconfiguration of the its North American business, operations, customers and market, as well as the potential closure of one or all of its existing three Canadian plants.
"We are understandably concerned about the plight of Canada's corn growers," said Sam Scott, chairman, president and chief executive officer of CPI. "However, we believe that a duty would severely reduce the market for Canadian corn farmers and have a negative impact on Canada's agricultural industry."