The Office of Control of the Chemical Industry and the Agro-Industrial Complex FAS (UKKhPiAK) considered the appeal of the Chairman of the Board of PJSC “SIBUR Holding” D.V. Kononov does not zero the current rates of import customs duties on base polymers (low density polyethylene (LDPE), linear low density polyethylene (LLDPE), high density polyethylene (HDPE) and polypropylene) as part of the creation of the EurAsEC free trade area with the Republic of Singapore, Government of the Russian Federation No. P9-62769 of 29 November 2017.
In addition, the management of SIBUR Holding asks to increase the import duties on LLDPE and HDPE from 0% to 6.5% to protect the domestic market from the import of goods from the Singapore FTZ since 2020 (the year the ZapSibNeftekhim complex was commissioned). The signing of the agreement on the establishment of a free trade zone of the FTA of Singapore with the EurAsEC was planned before the end of 2017. At present, the Eurasian Economic Commission has started an active phase of elaborating an agreement between the EurAsEC member states and the Republic of Singapore. According to the analysis of materials and information received during the consideration of this appeal, according to the analysis of materials and information received during the consideration of the said appeal, under the existing market structure, in particular LLDPE, the introduction of restrictions (import customs duty rate of 6.5%) is inappropriate, since these measures may lead to an increase in prices for this type of polymer in the domestic market.
The department also notes that the internal markets of the base polymers of the EurAsEC countries are an undeveloped competitive environment. A copy of the FAS decision has been sent to the Union of Plastics Processors (CPR). The Union of Plastic Processing Plants (SPP) stands for zero import duties on all polymers, including linear low-density polyethylene. According to Petr Valerievich Bazunov, director general of the NGO “SPP”, “an increase in the import duty from 0 to 6.5% will lead to a deterioration in the economic situation of Russian plastics processors. Especially, this concerns the LLDPE market, which is the main raw material for the production of films in the packaging industry (including straight-film, etc.).
According to Plastimfo.ru, the consumption of LLDPE in Russia in 2016 increased by 9% and amounted to 245 thousand tonnes. At the same time, the share of foreign brands of LLDPE produced outside the EurAsEC was 67.3%.