Wednesday , May 29 2024

$5.4B petrochemical complex may be delayed

Construction of the US$5.4-billion Southern Petrochemical Complex in Ba Ria Vung Tau might be delayed if problems with investment incentives, mainly tax-related, are not resolved, its investor said.

Long Son Petrochemicals Company told the Ministries of Planning and Investment and Finance that the work is in the final stages and the plant is slated to begin operation this year, but it has yet to receive the investment incentives it had been promised.

They include import tax waiver for main inputs such as propane, butane, naphtha, industrial salt, and certain kinds of coal for 30 years, preferential import tax of 3% for polypropylene (PP), polyethylene (PE), sodium hydroxide, and vinyl chloride monomer for 10 years and corporate income tax of 10% for 30 years.

Besides, income tax is fully waived for four years and by 50% for the next nine years.

The company said it had planned to import inputs in February for which it had to place the orders one or two months in advance.

“This [delay] can cause the Southern Petrochemical Complex to fall behind schedule and incur additional costs. It will adversely affect Vietnam’s investment reputation.”

It called on the ministries to speed up the review and finalization of the incentives.

One of Vietnam’s first large integrated petrochemical complexes with multiple functions and flexible input handling capabilities, the plant will have a capacity of over two million tons a year.

They include 1.6 million tons of olefin besides high-density polyethylene, PP and PE.

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