SCG Chemicals faces delays in plans to begin production at Vietnam plant by mid-2023

Thailand petrochemical major Siam Cement Group has announced plans to start commercial production at Long Son Petrochemicals, its unit in South Vietnam by mid-2023.

The facility, which costs $5 billion, is in Ba Ria Vung Tau province and will produce 1.4 million mt of plastic resins/year, it said.

Its will also produce 500,000 mt/year of high-density polyethylene, 500,000 mt/year of linear low density polyethylene and 500,000 mt/year of polypropylene, it said.

The complex’s raw materials which include naphtha and propane will be imported mostly from the Middle East.

However, construction of the complex could be possibly delayed due to issues with investment incentives, that are tax related, according to local news reports mid-March.

The company said that the work is in final stages and the plant is on schedule to begin operations, but it has yet to receive the tax incentives- this includes 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.

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