MRC - A group of deputies of the Verkhovna Rada has introduced in parliament committee the bill N 9241 from Oct 04, 2011 to amend the law "On Customs Tariff of Ukraine" in order to increase import duties on PVC-S to 5%, according to MRC analysts.
The changes deal with the introduction of import duty on virgin PVC (FEACN code 3904 10 00 00) to 5% with the aim to develop domestic chemical industry, create the conditions to strart production of new chemical raw materials and their processing, domestic producers support and increase of the inpayments to the state budget.
Previously, MRC analysts expected that the list of goods subject to import duty to be introduced can enter HDPE and PVC-S, as well as other products of the polymer group. Economically reasonable level of import duty, according to MRC analysts could be 6.5%, since it agreed with WTO requirements.
This law project plans to implement the import duties on Jan 1, 2012. According to the financial and economic bill grounds, the introduction of 5% fee will bring only in 2012 more than USD 3 mln of additional income to the Ukrainian state budget. The adoption of the project is expected to satisfy domestic producer demand for virgin PVC, increase loading capacity and reduce import dependence.
The explanatory note to the bill predicts following economic figures for the Ukrainian PVC market in 2012: production - 285 KT, import - 55 KT, export - 175 KT, consumption - 160 KT.
Before this year May, Ukrainian converters were completely dependent on PVC imports from Europe and the USA. Following last year results, PV-S imports made 125.2 KT, PVC-E - 28.6 KT. Over the eight months, these figures were 85.6 KT and 21.42 KT respectively.
In May, Karpatneftechem launched a new PVC-S production of 300 KT/year capacities . The investments in PVC production complex made USD 234 mln. Over less than five months the total PVC-S production in Ukraine has exceeded 53.6 KT.
By: MRC analyst, Sergey Karaychentsev.
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