Chemical & Petrochemical
THE BACKBONE OF VARIOUS MODERN INDUSTRIES
Chemical and petrochemical industries play a vital role in global industry, and Vietnam is rapidly emerging as one of the sector’s most attractive investment destinations.
The chemical industry, such as petrochemicals, is one of the largest sectors globally. Asia-Pacific remains the top region for revenue, with China and India being the biggest consumer markets. However, Vietnam is poised to become a regional leader in petrochemical products due to strategic geographic location, government support and investment incentives, as well as our role as a manufacturing hub.
Market Overview
Market demand for petrochemical products in Vietnam is fueled by growing downstream sectors such as plastics and textiles. Considering the two biggest refineries (Dung Quat and Nghi Son) and other sources, the current domestic supply of petroleum can reach around 13.5 million tons, meeting roughly 70% of demand. However, the supply ratio can fall to 40% in 2030 and 20% in 2045 if there are no added domestic supply Each year, Vietnam spends billions of US dollars to import petrochemical products to meet market demand (PetroVietnam). This reflects the urging investment opportunities for domestic and foreign investors to cease their shares of the pie.
New investments in chemical and petrochemical industries also present the need for advanced technology and high-value products. As recent and upcoming environmental regulations take place to reduce greenhouse emissions, traditional chemical and petrochemical processing will affect long-term revenue. It is an opportunity to explore the potential of digital technologies in enhancing productivity and reshaping current business models within the industry.
Government Support
- Corporate Income Tax (CIT) incentives – preferential rates or exemption for priority sectors (e.g., production of basic chemicals, purified chemicals, new materials).
- Decree 44/2023/NĐ-CP – Reduced VAT for basic chemicals sector
- Reduced Export Tax (for strategic projects): Under the revised Petroleum Law (effective July 1, 2023), tax incentives include a reduced corporate income tax rate of 32% (down from 50%) and a crude oil export tax rate of 10% (down from a potential range of 6-25%). Strategically significant petroleum projects can enjoy even more favorable terms, such as a 25% CIT rate and a 5% crude oil export tax rate.
- Strategic Project Support: The government encourages large-scale, integrated refinery and petrochemical complexes to meet domestic demand and ensure national energy security. These “national key projects” often receive specific attention and support in infrastructure construction, site clearance, and utility supply (e.g., water, port access).
- Focus on Localization and R&D: The government’s chemical industry development strategy aims to increase the local supply of petroleum and chemical products, encouraging investment in related supporting industries and potentially offering incentives for R&D activities (which can include tax deductions).
Invest in DEEP C
With nearly 30 years of proven petrochemical park operations at DEEP C Haiphong 1, DEEP C offers specialized infrastructure for petrochemical and chemical investors across Hai Phong and Quang Ninh:
- Petrochemical-ready land aligned with approved detailed master planning of industrial zones in Hai Phong and Quang Ninh.
- Dedicated petrochemical zone with integrated port infrastructure for efficient import–export.
- Shared liquid jetties with pipeline and pipe-rack systems connected directly to factory boundaries.
- Direct access to Lach Huyen Deep Seaport, and the China borders in northern Vietnam through expressway to Mong Cai border and rail links to Kunming.
Case Study
Chevron – A Global Energy Pioneer Anchoring Early Investment in DEEP C
- A global energy leader with a 145-year legacy, operating in 180+ countries across the full hydrocarbon value chain.
- First mover in DEEP C, demonstrating confidence in DEEP C long before we became an industrial hub.
- Catalyst for future investments, influencing 100+ multinational and domestic companies to invest in DEEP C.
- Strategic alignment with Vietnam’s petrochemical growth, with ongoing expansion in lubricants, chemicals, and petrochemicals.
