Decision No. 1621/QD-TTg of September 18, 2013, approving the master plan on development of Vietnam’s chemical industry through 2020, with a vision to 2030

THE PRIME MINISTER

Decision No. 1621/QD-TTg of September 18, 2013, approving the master plan on development of Vietnam’s chemical industry through 2020, with a vision to 2030

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the Government s Decree No. 92/2006/ND-CP of September 7, 2006, on the formulation, approval and management of socio-economic development master plans, and the Government’s Decree No. 04/2008/ ND-CP of January 11, 2008, amending and supplementing a number of articles of the Government s Decree No. 92/2006/ND-CP;

At the proposal of the Minister of Industry and Trade in Report No. 4635/Ttr-BCT of May 29, 2013, and Official Letter No. 7102/BCT-HC of August 12, 2013,

DECIDES:

Article 1.To approve the master plan on development of Vietnam’s chemical industry through 2020, with a vision to 2030 with the following principal contents:

1.   Development viewpoints

a/ To develop the chemical industry in a sustainable manner and in conformity with the country’s socio- economic development strategy.

b/ To develop the chemical industry based on the mobilization of domestic and foreign resources; effective use of natural resources and domestic materials; the attraction of foreign investment for projects that the country is not yet able to meet their demands for large capital and high- technology; and bringing into play the potentials and strengths of each region and locality.

c/ To invest in developing the chemical industry that are based on the application of advanced technologies to turn out high-quality products competitive in price and environment friendly.

2.   Development objectives

a/ Overall objectives

-    To build the chemical industry with a relatively complete structure, including the manufacture of means of production and means of consumption to serve other induces, better meet the domestic demand and boost export of products such as fertilizers, rubber products, basic chemicals, petrochemicals, pure chemicals, pharmaceutical chemicals, consumer chemicals.

-    To rationally distribute production forces by sector and territorial region, creating a balanced and reasonable development within the chemical industry and establishing and bringing into play industrial parks and complexes and large-sized chemical production groups.

-    The growth rate of chemical industry production value will reach 14-16% on average and the chemical industry will account for up to 14 percent of the whole industrial sector by 2020 and 15 percent by 2030.

b/ Specific objectives

-    The group of fertilizers: To basically meet the needs of agricultural production for various kinds of fertilizers, ensuring national food security and to export a number of fertilizers based on intensive investment and existing plants’ technological renovation in manufacturing phosphate, NPK, organic and micro fertilizers, investment in or raising the production capacity of di-ammonium phosphate (DAP), potassium, and sulfate of ammonium (SA) fertilizers.

-    The group of plant protection chemicals: To meet domestic consumption demands and be exported; to apply advanced technologies, replace hazardous organic solvents and chemicals, pay attention to using new microorganism active ingredients and plant extract active ingredients to turn 65 easy-to-use, biodegradable and environment-friendly products.

-    The group of petrochemical products: To build petrochemical industrial complexes associated with domestic oil refineries to supply raw materials for manufacturing plastics such as polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), polystyrene (PS), acryl-butadien- styrenesty- (ABS), additives, semi-finished products as raw materials for other industries.

-    The group of pharmaceutical products: To invest in cutting-edge technologies, step by step meeting the pharmaceutical industry’s demand for raw materials; to build establishments producing antibiotics and raw materials for production of essential medicines; to develop production of medicine materials that are Vietnam’s advantages, especially herbal medicine materials.

-    The group of basic chemicals: To make intensive investment in, upgrade and build production establishments to ensure sufficient supply of basic chemicals such as sulfuric acid, phosphoric acid, hydrochloric acid, nitric acid and caustic soda for industrial and civil sectors.

-    The group of electrochemical products: To make intensive investment and expand common battery and accumulator manufacture capacity to meet domestic demand and for export; to continue investing in manufacturing hi-tech products such as absorbent glass mat batteries, NiMH and NAS batteries and other new-generation rechargeable batteries such as solid fuel cells, NiMH and Lithium-ion batteries, etc.

-    The group of industrial gas products: To satisfy domestic demand for common industrial gas; to invest in manufacturing rare gas to reduce the import rate.

-    The group of rubber products: To invest in expanding existing production facilities and renovating technologies to improve product quality; to focus investment in and expand the manufacturing of technical rubber products to serve industrial and civil sectors.

-    The group of detergent products: To modernize existing technology lines so as to satisfy domestic demand for products’ quantity and quality and promote export.

-    The group of paints and printing inks: To continue investing in cutting-edge technologies in order to raise productivity and product quality, satisfy the economic-technical and civil sectors’ demands for common and special paints; to develop some new environment-friendly paints.

3. The master plan on development of Vietnam’s chemical industry through 2020, with a vision to 2030

a/ Development of the fertilizer group

-    To 2020:

Establishments will gradually shift production of single superphosphate to rich superphosphate containing about 28% P2O5; produce multi- component NPK fertilizer with nutrient content of about 30-40%; invest in producing fertilizers containing micronutrients and growth stimulants; expand the production of organic fertilizer with a total annual capacity of about 500,000 tons based on available materials.

To continue investing, upgrading and expanding the Ha Bac fertilizer plant and the DAP plant No. 2 to raise the total annual capacity of DAP plants to 1 million tons; to consider expanding and raising the annual capacity of the potassium fertilizer plant in Laos from 320,000 tons in the first phase to more than 700,000 tons; the NPK fertilizer plants with a total annual capacity of 3.5 to 4.0 million tons. To make intensive investment and renew technologies to raise the combined capacity of the fused magnesium phosphate fertilizer plants to around 1-1.2 million tons per year.

Apatite ore materials for fertilizer production: To expand and raise the annual capacity of the Bac Nhac Son apatite ore type III plant to 700,000 tons; to build an 800,000-ton-per-year apatite ore type II plant.

-    To 2030:

To consider investment in producing ammonium sulfate; to maintain and develop fertilizer plants using cutting-edge technologies and eradicate production facilities using obsolete technologies and turning out poor quality products.

b/ Development of the plant protection chemical group

-          To 2020:

By 2020, to strive to produce and process plant protection chemicals to meet domestic consumption demands; to raise the annual capacity of carbamate-based active ingredients to 10,0   00 tons; to invest in a new plant with an annual capacity of 1,000 tons of active ingredients of azole group and derivatives (technical products); to invest in two plants with a combined-annual capacity of around 1,500 tons of around 4-5 active ingredients of pyrethroid group (technical products); to invest in a surfactant plant with an annual capacity of 8,000-10,000 tons to supply to the plant protection chemical industry and other industries.

-    To 2030:

To continue intensive investment by applying advanced production and processing technologies to create easy-to-use, environment- friendly and biodegradable products.

c/ Development of the petrochemical product group

To build a 300,000-ton-per-year acid (PTA) plant, a 60,000-ton-per-year (PS) plant, a 270,000-ton-per-year polyester fiber plant and a 300,000-fen-per-year polypropylene (PP) plastic plant, a 200,000-ton- per-year mono-ethylene glycol (MEG) plant. A 300,000       ton-per-year    polyvinyl chloride (PVC) plastic plant, a 300,000-ton-per-year methanol production plant and raise the annual capacity of the plasticiser plant to 75,000 tons.

-    To 2030:

To study the construction of a chemical complex using coal materials (PP products, butadien, etc.).

To build a 100,000- ton-per-year PS plant, a 100,000-ton-per-yearacrylonitrile-butadiene- styrene (ABS)plant and a 300,000-ton-per-year polyethylene terephthalate (PET) plant.

d/ Development of the pharmaceutical chemistry product group

-    To 2020:

To invest in cutting-edge technologies, renovating facilities and management to supply basic material sources to the pharmaceutical industry, a plant having an annual capacity of extracting 150-200 tons of pharmaceutical products of natural and semi-synthetic origins, an inorganic pharmaceutical product and nonnal excipient plant with an annual capacity of 200- 400 tons, the first generation cephalosporins plant with an annual capacity of 600 tons, a plant with an annual capacity of 150 tons of cephalosporins from second to fourth generation, an advanced excipient production plant with an annual capacity of 150-200 tons, a plant with an annual capacity of 1,000 tons of other essential drugs (including fever relief, anti-inflammatory analgesiqdrugs, anti-bacterial drugs), a 30,000- ton-per-year sorbitol plant to feed a 1,000-ton- per-year vitamin C plant.

-    To 2030:

To make intensive investment to improve product quality and study the manufacturing of new products.

dd/ Development of the basic chemical product group

-    To 2020:

In addition to commercial caustic soda and sulfuric acid manufacturing projects of domestic facilities and integrated acid plants in existing fertilizer plants, two 200,000-ton- per-year ammonium nitrate plants will be built to serve industrial explosive materials based on the balance of gas sources together with a 450,000-ton-per-year ammonia plant and a 200,000-      ton-per-year ammonium nitrate plant in the south and two ammonia plants with a total annual capacity of 500,000 tons in the north and investing in a chlorine-soda production line with an annual capacity of around 900,000 tons.

-    To 2030:

To continue maintaining production to basically satisfy domestic needs for a number of basic chemicals.

e/ Development of the electrochemical product group

-    To 2020:

To make intensive investment, improve product quality, increase accumulator output to 3.0- 4.2 million kWh and battery output to 700 million units per year; to invest in manufacturing high-grade special accumulators and batteries such as absorbent glass mat batteries and fixed accumulators With a capacity of 2.0 million kWh, 200,000 solid fuel cells per year, 1.5- 2.0 million nickel metal hydride batteries or Lithium-ion batteries per year; to invest in manufacturing a number of basic materials for domestic battery and accumulator products.

-    To 2030:

To accelerate the development and improve the quality of new electricity sources meeting the market demands for clean energy sources such as Lithium-ion batteries and accumulators for electric and hybrid electric cars.

g/ Development of the industrial gas product group

To invest in expanding and raising the capacity of existing industrial gas production facilities to 8,000 cubic meters per hour and the oxygen, nitrogen and liquid argon plants with a combined capacity of around 12,000 cubic meters per hour.

-    To 2030:

To invest in a 7,000-ton-per-year solid and liquid carbon dioxide production line.

h/ Development of the rubber product group

-    To 2020:

To invest in renovating equipment and technologies to raise the annual capacity of existing production establishments to 15 million tires, expanding technical rubber production in existing plants and building a 700,000-cubic-meter-per-year conveyor belt plant and a one-million-meter-per-year V belt and steel fiber plant.

Raw materials for manufacturing rubber products: To invest in building a 115,000-ton- per-year black coal plant.

-    To 2030

To maintain the production and invest in building a one-million-cubic-meter-per-year conveyor belt plant and the two-million- meter-per-year V belt plant using cutting-edge technologies.

i/ Development of the detergent product group

-    To 2020:

To invest in expanding and building material and detergent production facilities to meet the basic domestic needs; to invest in a 24,000-ton- per-year LAS production plant, a 100,000-ton- per-year linear alkylbenzene (LAB) production plant to feed LAS production plants; and a 10,000 -   ton-per-year         deluxe cosmetic plant.

-    To 2030

To invest in a 50,000-ton-per-year zeolite plant, a 48,000-ton-per-year LAS plant and a 20,000 - ton-per-year cosmetic plant.

k/ Development of the paint and printing ink group

-    To 2020:

To focus investment in expanding and modernizing existing paint and printing ink facilities by using cutting-edge technologies to improve product quality, gradually eradicating production facilities using obsolete technologies; to invest in special paint products and environment-friendly paints; coating, antifouling and protective paints.

To expand and raise the capacity of raw material production plants (alkyd and acrylic resins, etc.) for paint and printing ink industry.

-    To 2030:

To make intensive investment, renew technologies and build high-quality paint and printing ink plants.

4.   The chemical industry’s major investment projects

The list of investment projects in the master plan on development of Vietnam’s chemical industry through 2020, with a vision to 2030, is attached to this Decision(not translated).

5.   Investment capital demand

a/ Estimated investment capital demand

The investment capital demand for the development of Vietnam’s chemical industry to 2020 is estimated at around USD 15,118 million, including around USD 9,335 million in the 2011 -2015 period and around USD 5,783 million in the 2016-2020 period.

b/ Estimated investment capital sources

-    Domestic capital sources:

+ Domestic loans.

+ Joint venture capital.

+ Accumulated capital of enterprises

-    Foreign capital sources:

+ Concessional loans.

+ FDI capital.

6.   Solutions, mechanisms and policies to implement the master plan

a/ Finance and credit solutions

-    To encourage and create conditions for enterprises of all domestic and foreign economic sectors to invest in developing the chemical industry.

-    Joint venture capital and foreign investment capital sources will be focused on building large scale hi-tech projects manufacturing raw materials for domestic production.

-    The state capital will be focused on key projects without thinned-out investment with priority given to product groups related to food security, petrochemistry and pharmaceutical chemistry.

-    To prioritize enterprises wishing to borrow loans to renew technologies and apply new science and technology to production; to adopt preferential credit mechanisms for intensive investment, technology renewal and modern technology projects.

b / Tax solutions

- To grant import tax incentives for the import of raw materials and machinery that have not yet been produced in Vietnam for production; to increase import duty on domestically available finished products and products in conformity with Vietnam Commitments upon WTO accession.

-    Tax incentives for home-made chemical products directly serving agricultural production to ensure food security and promote food exports.

-    Tax and fee incentives for technology contracts.

c/ Market solutions

-    To perfect mechanisms and policies to limit the import of domestically available chemical products, poor-quality and polluting products in conformity with Vietnam’s international commitments upon WTO accession as well as other international commitments; to intensify the fight against counterfeit and smuggled goods.

-    To invest in building capacity for chemical market research institutes to make timely and accurate market forecasts; to effectively develop and use media of communication and make public annual trade promotion programs and other programs to help enterprises devise appropriate production orientations.

-    To encourage enterprises to expand their product distribution systems to rural and remote areas.

d/ Human resource assurance and development solutions

-    To promote intensive training to build capacity for science and technology researchers of specialized research institutes and technique, technologies and management sections of chemical enterprises.

-    To promote training at universities and colleges and vocational training to train qualified managers and technical workers for the chemical industry; to adopt modem training methods associated with enterprises’ demands; to pay attention to the transfer and learning of experiences in using human resources for chemical projects.

-    To step up international cooperation in training project managers and operations.

dd/ Scientific and technological potential development solutions

-    To build the capacity for professional research institutes and agencies’ technology technical sections to be able to access, research and apply new technologies.

-    To formulate suitable mechanisms so as to bring into play the efficiency of national key chemical laboratories, support the research and application of modem technologies.

-    To apply cutting-edge technologies in new investment projects.

-    To organize the proper implementation of the Law on Technology Transfer, improve the quality of technology appraisal work and assure the interests of parties selling technologies and enterprises receiving technologies.

e/ Environmental protection solutions

-    Operating plants and new investment projects must fully observe the laws on environmental protection and chemical safety; chemical production establishments using obsolete technologies and polluting the environment will be shut down.

-    To minimize the setting up of small chemical processing and producing establishments. To prioritize the development of chemical projects using cutting-edge environment-friendly technologies geneting less waste, energy conservation solutions, increase the efficiency of new materials, and reuse all types of waste generated from the manufacture and processing of chemical products.

-    To plan the relocation of chemical production plants to industrial parks and clusters for centralized management and environmental pollution reduction.

-    To continue market research and assess the loading capacity of the environment in areas zoned off for chemical projects for adjustment of their production scale.

g/ Investment solutions

-    To formulate investment mechanisms and policies toward state management and planning control; to decentralize and authorize to the utmost investors in the course of the implementation of projects who will take responsibility for the efficiency of investment; to encourage domestic and foreign economic sectors to invest and develop chemical projects; investment projects which are not listed in the master plan will not be carried out without competent agencies’ permission.

-    To mobilize all resources and create favorable conditions for attracting domestic and foreign investment capital and from many economic sectors, prioritize investment in developing socio-economic infrastructure facilities in regions zoned off for the chemical industry development.

-    To extend concessional loans for investment in devising chemical production projects and supporting training project managers for enterprises.

hi Solutions to ensure raw material sources

-    Solutions to supply coal and natural gas: Coal and natural gas for nitrogenous fertilizer production will be provided by the Vietnam National Coal and Mineral Industries Corporation and the Vietnam Oil and Gas Group while import plans will be taken into account.

-    Solutions to ensure apatite material sources: The Vietnam National Chemical Group shall coordinate with related agencies providing sufficient apatite ore for the production of superphosphate, fused magnesium phosphate fertilizer and diammonium phosphate (DAP).

-    Other materials for chemical Industry: To adopt specific production and import plans for timely supply and avoid the temporary suspension of projects and plants due to the shortage of raw materials.

Article 2.Organization of implementation

1.   The Ministry of Industry and Trade shall:

a/ Take responsibility for organizing and monitoring the implementation of the master plan, and based on the country’ economic development, submit update contents to the Prime Minister for the appropriate adjustment of the master plan.

b/ Assume the prime responsibility for, and coordinate with ministries and sectors in, effectively deploying investment projects under the master plan.

2.   The Ministries of Planning and Investment; Finance; Natural Resources and Environment; Construction; National Defense; Science and Technology; Health; and Education and Training, shall, according to their functions and tasks, closely coordinate with the Ministry of Industry and Trade in concretizing solutions, mechanisms and policies specified in this Decision.

3. The People’s Committees of provinces and centrally run cities shall facilitate the synchronous implementation of chemical industry development investment projects in consistency with the industrial development master plan and local socio-economic development master plans.

4. Associations, unions and related organizations shall function as a bridge to link chemical production and business enterprises, coordinate with the Ministry of Industry and Trade and related ministries and sectors in managing chemical production and trading, and proposing mechanisms and policies for the development of Vietnam’s chemical industry.

Article 3.This Decision takes effect on the date of its signing.

Article 4.Ministers, heads of ministerial- level agencies and government attached agencies, provincial-level People’s Committees and related agencies Shall implement this Decision.-

Prime Minister

Nguyen Tan Dung