DECREE

APPROVING THE STRATEGY ON DEVELOPMENT OF VIETNAMS CHEMICAL INDUSTRY TO THE YEAR 2010 (WITH A VISION TO THE YEAR 2020 TAKEN INTO ACCOUNT)

THE PRIME MINISTER

Pursuant to the December 25,2001 Law on Organization of the Government;
At the proposal of the Industry Ministry in Report No.412/TTr-CLH of September 23, 2003, Official Letter No.6207/CV-CLH of November 29,2004, and Official Letter No.3034/CV-CLH of June 10,2005, and the Planning and Investment Ministrys appraisal opinions in Official Letter no.3403/BKH-TD&GSDT of June 4,2004.

DECIDES:

Article 1: To approve the strategy on development of Vietnams chemical industry to the year 2010 (with a vision to the year 2020 taken into account) with the following principal contents:

1. Development viewpoint

a. Chemical industry is one of the key industries, which is given priority for development in line with the national socio-economic development strategy in each period.

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c. The chemical industry shall be developed on the basis of mobilizing all resources at home and abroad, efficiently using natural resources such as minerals and tropical plants. Appropriate policies shall be developed to attract foreign investment for capital-intensive projects for which domestic capital is insufficient and which require high technologies.

d. The chemical industry shall be invested with advanced technologies so as turn out high-quality products competitive in price and ensuring the ecological environment.

e. The development of the chemical industry must be associated with industrial restructuring, re-distribution of productive forces on a national scale and acceleration of the process of economic restructuring.

2. General objectives

a. To contribute to the coordinated and uniform implementation of the national socio-economic development strategy: The strategy on development of the chemical industry must be comprehensive and consistent with the strategies on development of other industries with a view to creating a uniform development in the whole industrial sector.

b. To build the chemical industry with a relatively complete structure, including the production of production materials and consumption materials in service of other industries, better meeting the domestic demands and promoting export.

c. To contribute to rationally distributing production forces by branch and territorial region, creating a balanced and reasonable development within the industrial sector.

3. Orientations for development of a number of product groups

a. Chemical products in service of agricultural production:

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- Plants protection drugs: to replace backward processing technologies with advanced ones to turn out easy-to-use and environmentally friendly products. To step up research into and production of products of biological origin, use new-generation active elements and solvents which cause less environmental pollution in compliance with regional and international regulations.

b. Petrochemical products: To attract investment capital from all economic sectors, especially foreign investment, with a view to efficiently exploiting oil and gas resources. To efficiently combine oil refinery, petrochemical and gas processing projects in order to turn out upstream petrochemical products for use as raw materials for other industries.

c. Chemical products in service of industrial production:

- Base chemical products: Chemical products with base chemical products as the core, in service of industrial production, should be given concentrated investment to ensure adequate acids for the production of fertilizers and sodas for the textile, paper, one sorting and detergent industries, and other products. To select an appropriate time for investment in the production of sodas and a number of metal oxides such as titanium oxide, manganese oxide and others.

- Electrified products and industrial gas products: To step up the production and raise the quality of products to meet the domestic consumption demand. To step by step access new technologies for the production of products requiring high technologies, such as special batteries and rare gases.

d. Chemical products in service of consumption: To continue promoting the production thereof with larger volumes, diversified forms and better quality in order to meet the increasing demands of the domestic market.

4. A number of solutions and policies for implementation of the strategy

Steaming from the demands of the economy and the requirements on ensuring national food security, security and defense, the chemical industry is divided into the following 3 groups:

- Group I: Production of nitrogenous and phosphorus fertilizers (including DAP), production of plant protection preparations, production of petrochemical products, production of assorted base chemicals with large volumes, exploitation of raw materials in service of fertilizer production.

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- Group III: Production of NPK fertilizer and microbiological organic fertilizer, production of electrified products, production of industrial gas products, production of detergent products, production of paint products, production of other chemical products.

a. Solutions and policies based on the structure of the industry:

Investment shall be made based on the structure and competitiveness of each group of products:

- Group I, including products in which the State needs to make direct investment.

- Group II, including products in which the State needs to give investment preferences.

- Group III, including other products.

b. solutions and policies to raise competitiveness:

- To apply mechanisms to reduce input prices of a number of important products relating to food security, security, defense and the health of communities.

- To draw up plans on the reasonable use of domestic natural resources and limitation of the import of intermediary products.

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- To invest in upgrading the infrastructure system.

- To attach importance to training human resources and rising the capability of managerial officials.

c. Technological renewal solutions and policies:

To perform key scientific and technological programs in parallel with the establishment and development of a scientific and technological market. Scientific and technological solutions must ensure the sustainable development requirements and at the same time, raise the quality of human resources for scientific and technological development.

d. Solutions and policies based on regional structure:

To create a balanced development across territorial regions, meeting the socio-economic development strategy in each period. Solutions and policies based on regional structure shall be applied in the form of enhancing the states interference through policies to restrict or encourage enterprises to make investment in a specific region in order to reduce the imbalance among regions.

e. Trade solutions and policies: The following solutions may be applied:

- To perfect mechanisms and policies to limit the import of inferior-quality products which are unsafe for users and the health of communities.

- To limit the import of raw materials and semi-finished products which can be produced at home with a high quality and at a reasonable prices.

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- To apply reasonable tax policies.

To encourage and create all conditions for different economic sectors to invest in the development of the chemical industry. The States capital sources in support of such investment include budget capital, the State-guaranteed credit capital, investment capital of state enterprises. Other capital sources include ODA loan capital, domestic and foreign commercial loans, FDI capital, and capital mobilized from the issuance of enterprise bonds.

Article 2: Organization of implementation

- The ministry of industry shall assume the prime responsibility for, and coordinate with concerned ministries and branches as well as localities in, organizing the implementation of the strategy on development of Vietnams chemical industry to the year 2010 (with a vision to the year 2020 taken into account).

- The Ministries of Planning and Investment; Finance; Health; Agriculture and Rural Development; Construction; Trade; science and Technology; Natural Resources and Environment; and Transport; the State Bank of Vietnam, and the Development Assistance Fund shall, according to their assigned competence and functions, coordinate with the Ministry of Industry in organizing the implementation of this strategy.

- Provincial/municipal Peoples Committees shall appropriately concretize the strategy on development of the chemical industry in their respective localities.

Article 3: This Decree takes effect 15 days after its publication in CONG BAO

Article 4: Ministers, heads of ministerial-level agencies, heads of Government-attached agencies, presidents of provincial/municipal Peoples Committees, and concerned agencies shall have to implement this Decision.

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Phan Van Khai