Prysmian puts plans to close Brazil plant on hold

Following Brazil’s decision to reopen a Chinese fiber dumping investigation, Italian cable multinational Prysmian announced that it is suspending plans to close a plant in Sorocaba, São Paulo state.

The dumping probe was officially relaunched on July 4 and first reported by BNamericas. The Chinese government was notified of the investigation beforehand.

Prysmian, together with Japan's Furukawa, was among the companies to request a new probe. The company’s Sorocaba plant is the only one in Latin America dedicated to the full production cycle of fiber optics.

“Prysmian has been publicly expressing its indignation with the context of unfair competition in the Brazilian telecom market, where Asian optical fibers arrive at a price historically far below that practiced in the international market,” the company said in its statement.

The company said that in recent times it has taken all appropriate measures, both legally and politically, with the aim of “returning fair competitive conditions to the market.”

In addition to filing requests for investigations into dumping and subsidies, the company directed efforts to educate the country's authorities about the urgency of the issue.

Among them are federal lawmaker Vitor Lippi, who is traditionally involved in the ICT sector, and Brazil’s vice president Geraldo Alckmin, who received company executives in Brasília last month.

According to Prysmian, Alckmin, who is also minister of industry and commerce, said the government was interested in accelerating necessary measures to "restore balance" to the market. 

In the meantime, his ministry reopened the investigation.

A new meeting with Alckmin is scheduled for October. 

“The prospect that changes could be announced by then,” combined with the impact of the Sorocaba factory on other companies in the sector, led Prysmian to suspend the shutdown plans, according to the company.

“The signal was essential for us to be able to demonstrate to our headquarters that the government is truly concerned about the unfair competition scenario, which keeps us confident about the possibility of reversing the closure of this important factory.”

A company source told BNamericas that Prysmian’s headquarters in Milan want to close the unit, but the team in Latin America has been able to rework the scenario for now.

The dumping probe will take at least two months, which is why Prysmian has defended the application of import duties on Chinese fiber via decree, similar to what was done in Mexico.