The head of a Maine company that manufactures flame-resistant fabrics says her firm’s products are being undercut by the “dumping” of similar products made by a Belarusian company believed to be at least partially owned by the controversial ruler of that country.

Kathie Leonard, president and CEO of Auburn Manufacturing Inc., said the dumping – selling products in the U.S. at a very low price, sometimes below the cost of production, to capture market share from domestic companies – is hurting her company as she tries to deal with the business impact of the coronavirus pandemic. It also comes just after Auburn Manufacturing successfully fought off dumping of the same products by China.

The flame- and heat-resistant fabrics, made with silica, are used for fire prevention and insulation. Leonard said they’re often used to wrap pipes on ships, replacing asbestos insulation, and also for protection in welding operations, to help prevent fires from sparks, particularly in small spaces.

Auburn Manufacturing was founded in 1979 and for years it ran smoothly, developing new products and reaching new markets. Its products were approved for use by the military, Leonard said, which helped fuel its growth, along with sales to industrial customers and even a few products for home use.

When China was similarly dumping its silica fabrics in the U.S. in 2016, Leonard said, Auburn Manufacturing lost about 30 percent of its sales. She was able to hire lawyers and argue her case to government officials, and the U.S. ultimately imposed high trade duties on the Chinese imports, leveling the playing field for domestic producers.

Challenging an alleged case of product dumping is a time-consuming and expensive process, said Douglas Heffner, a lawyer at Drinker Biddle & Reath in Washington, D.C., and one of the lawyers who worked for Auburn Manufacturing in the China case.

He said petitions alleging dumping must be filed with two government agencies: the U.S. Department of Commerce and the International Trade Commission. The ITC determines whether a U.S. company or companies have been harmed by imports, and then the commerce department determines whether that injury was the result of dumping and puts a dollar figure on the damage. Then the commerce department can impose duties to try to level the playing field, Heffner said.

Like China, Belarus has a state-controlled economy, and Heffner said he would “be totally surprised” if dumping wasn’t taking place. The government in state-controlled economies is more concerned with issues of employment than with profits and losses, and it will sometimes allow dumping to ensure its companies continue to operate, even if they’re not making money.

Weaver Dan Langlois sets up a loom at Auburn Manufacturing. The company lost about 30 percent of its sales when China was dumping its silica fabrics in the U.S. in 2016, said CEO and President Kathie Leonard. Shawn Patrick Ouellette/Staff Photographer

“They probably have huge losses and the government is bailing them out,” Heffner said, “but it’s hard to police.”

It was shortly after the China case was settled and Auburn Manufacturing began to recover its sales, Leonard said, that Belarus began dumping its products on the U.S. market.

She said the silica fabrics being dumped on the market come from a company called JFC Polotsk-Steklovlokno, which she believes is owned at least in part by Alexander Lukashenko, the president of Belarus. Belarus, once part of the Soviet Union, also supplies silica fabrics to the Russian military, she said.

JFC did not respond to multiple requests for comment sent via email this week.

The U.S. had imposed sanctions on Lukashenko and Belarus because elections there had been delayed, but the sanctions were lifted in 2017 after an election was held the year before. Observers have questioned the validity of the results of that election, which Lukashenko won with 84 percent of the vote, and protests against him flared inside and outside of Belarus this summer.

On Monday, the European Union voted to impose new economic sanctions on Lukashenko, although they won’t take effect immediately, and his opposition in Belarus is calling for nationwide strikes if he doesn’t resign.

Lukashenko has been described as “Europe’s last dictator.” During the protests, he took to walking around armed with an assault rifle.

Leonard said it’s hard to quantify the sales price of the Belarusian silica fabric – because it typically goes through several distributors before being sold to the end buyer – and its impact on her company. She said the pandemic also has impacted her business, hurting sales, and it can be hard to figure out how much to attribute to the alleged Belarusian dumping and how much to the pandemic.

Leonard said she’s managed to keep her 50 employees on the job despite the pandemic, although two shifts have been consolidated into one.

She’s also not sure how to respond to the dumping, because she learned from the China incident how difficult it is to press her case to the government. She has yet to reach out to Maine’s congressional delegation but said she hopes getting her story out through the news media will help raise awareness and possibly lead to government intervention.

“I don’t have the appetite or the wherewithal (to pursue a case), and that’s why I’m frustrated,” Leonard said.

Some former customers have told her the Belarusian products are not as good as those made by Auburn Manufacturing, Leonard said, and they have inquired about doing business again.

“But when you tell them what the price is, they say, ‘that’s a lot,’ ” she said.

But, Leonard said, at least there’s a starting point for opening negotiations to try to win back the business.

“It’s coming back, but it’s slow and uneven,” and difficult to deal with in the middle of a pandemic, she said.

Dumping affects some Maine businesses, but generally only on an “intermittent” basis, said Wade Merritt, president of the Maine International Trade Center. He said dumping usually involves products made by big industrial producers, such as steel, chemicals or plastics, and that Maine has few of those industries.

Maine-farmed salmon producers complained about unfair competition from Canada in the 1990s, Merritt said, and they were successful in getting duties imposed. But a similar dispute over potatoes from Canada ended unsuccessfully in the 1980s, he said.

“It’s not an issue we deal with a lot,” he said, but “for those who are involved in it, it’s a very critical issue.”

Merritt also said he’s aware of the difficulty of pursuing a case involving allegations of dumping.

“It definitely takes a lot of determination” but can have a big impact if successful, he said.


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