Long Son petrochemical complex recently asked the government for incentives to get the project rolling.
Accordingly, it sought approval for 30 year materials, additives and chemicals import duty exemption, 5 per cent import duty imposition on its key items such as PE, PP and VCM once operational and 30-year excise tax exemption for raw production materials.
Under current regulations, the complex benefits from five year materials and accessories import duty exemption since starting production. The proposed 30-year import duty exemption may face the risk of impinging on the World Trade Organization (WTO) regulations, according to industry experts.
They said that imposing 5 per cent import duty on the complex’s key products would not be easy since they are input materials for many production sectors.
Construction of the complex project kicked-off in September 2008.
The project is said to be the biggest independent petrochemical complex in the country with total investment of $3.77 billion with capacity of over three million tonnes of products per year. It covers 400 hectares in PetroVietnam Long Son Industrial Park, next to Long Son oil refinery in southern Ba Ria Vung Tau province.
Investors of the project are PetroVietnam, Vinachem, Vina SCG Chemicals and the Thai Plastic and Chemicals Company (TPC).
The complex is scheduled to start operations in late 2012 and will act as the only supplier of HDPE and LDPE in Vietnam. Construction of the first phase is scheduled for late 2013 and an expansion of the complex is planned for 2016.
Once fully operation, the complex will produce 1.45 million tonnes of polyethylene (PE) and polypropylene (PP), meeting 65 per cent of domestic demands for PE and PP by 2017, contributing to stabilising input materials for petrochemical industry, plus 730,000 tonnes of chemical materials for production of polyvinyl clorua (PVC) and 840,000 tonnes of other key chemical materials for the oil refinery and petrochemical industry.
The complex plays an important role in strong and stable development of Vietnam’s petrochemical and plastic industries, helping reducing reliance on imports of polyolefin products, save foreign currencies, curb inflation and stabilising prices in Vietnam.
Construction of the project is expected to create jobs for some 10,000 workers and in the operational period, about 1,500 workers will be needed.