14 December 2009 07:18 [Source: ICIS news]
By Chow Bee Lin
SINGAPORE (ICIS news)--Plastic resins manufacturers in southeast Asia are bracing for the enforcement of a zero tariff within the region effective next year, but a number of them are hoping implementation will be deferred to 2015, industry sources said on Monday.
Concerns that the policy would erode market shares of individual companies in each member country make the plastics players wary about tearing down the trade barriers, according to industry associations across the region.
Regional polyolefins producers were particularly concerned about competition from the region’s largest resins production bases –
The zero-tariff policy could be reversed soon after its implementation when an affected player complains, they said.
Indonesia may also reinstate its 5% duty on polyolefin imports from ASEAN “if it believes that a zero import duty policy would render the local polymer makers uncompetitive”, said Budi Susanto Sadiman, secretary general of the Indonesian Olefins and Plastic Industry Association (INAPLAS).
The Indonesian government was expected to make a call on the issue in the first quarter next year, Sadiman added.
The three resin producers in Singapore, namely ExxonMobil, The Polyolefin Company and Chevron Phillips, export polyolefins to Malaysia mainly by trucking the material across the border that links Singapore and the southern part of the Malaysian peninsular.
Thailand, on the other hand, is expected to increase its polyethylene (PE) capacity by 88% to 3.6m tonnes and its polypropylene (PP) capacity by 56% to 1.95m tonnes by the end of 2010, when major Thai producers PTT Chemical and Siam Cement start up all their new plants.
“The question is whether the Thai producers will be flooding the southeast Asian market, or strategically they would rather find better opportunities elsewhere,” an
In the event
The Ministry of International Trade and Industry (MITI) of
Malaysian plastics converters would be put to a disadvantage if plastics finished products are duty free while the resins are subject to an import duty, said Lim.
But MPMA has always been for promoting free trade within ASEAN, he said, citing that
Thai resin producers were unlikely to lobby for a retaliatory measure if
“Local polyolefins producers (in Thailand) are more concerned about how their share of the local market would be affected when recently started up plants in the Middle East achieve normal production and start exporting large volumes to Asia regularly,” a source at the Petroleum Institute of Thailand (PTIT) said.
Middle East polyolefins imports are subject to a 5% duty in
“The emphasis would be on regional competitiveness and more importantly, ensuring a level playing field for the region,” the SCIC spokesman said.
“We perceive that the zero duty would benefit the producers in
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