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The nature of “two highs and one capital†and the climate this year will still exert pressure on the two alkali industries.
The news from the State Administration of Taxation on August 15 stated that the Joint Ministry of Finance of the State Administration of Taxation issued a “Circular on Adjusting the VAT Rate of Industrial Salts and Edible Salts†recently. Since September 1, 2007, the main chemical composition has been issued. The applicable VAT rates for sodium chloride industrial salt and edible salt, including sea salt, well salt and lake salt, have been uniformly adjusted from 17% to 13%. This adjustment has not only eased the operational difficulties of the salt industry, but has also brought great benefits to the two alkali industries that use salt as raw material.
It is understood that the current VAT rate for salt products is unified at 17%. According to a rough calculation, the adjustment of the VAT rate of salt products will increase the profits of the salt industry by 600 million yuan. With the adjustment of the salt tax revenue standard in February this year, the salt industry will increase profits by nearly 1 billion yuan.
The two alkali industries are big salt users. In the consumption structure of raw salt, about two-eight percent of the alkali industrial salt is used. According to the statistics report of China Salt Industry Association, from January to June 2007, salt consumption was 34.02 million tons, an increase of 26% over the same period of last year. Among them, 27,100,000 tons of salt for industrial use of the two alkalis, an increase of 30%, accounted for 79.7%. According to the predictions of China Chlor-Alkali Industry Association and China Soda Industry Association, in 2007, the new production capacity of soda ash and caustic soda was 2 million tons, and 2.7 million tons of raw salt should be consumed. After the reduction of industrial salt value-added tax rate, only this one, the two alkali industries can increase efficiency of 12.96 million yuan.
Shandong Haihua Group is currently the largest salt chemical company in China. The group produces 2 million tons of raw salt each year, and the production of two alkalis a year consumes about 3.5 million tons of raw salt. According to the current price of crude salt, the company estimates that sea salt after taxation will drop by 4.8 yuan per ton, then 2 million tons of raw salt companies can increase efficiency by 9.6 million yuan. At the same time, the company's "two alkali" products will benefit from a tax reduction of about 8.4 million yuan.
However, industry insiders reminded that the two alkali industries should not be too optimistic and blindly expand production. On the one hand, the two alkali products belong to “two high and one capital†products, and the state has introduced various measures to strictly control the production capacity of the two alkalis; on the other hand, the supply of crude salt is greatly affected by weather and market factors. According to a report released recently by the National Development and Reform Commission, affected by the first half of the year, the high-grade brine in the Haiyan district, which accounts for nearly 50% of the country's total production, has been generally damaged, and the production of sea salt has become a foregone conclusion. In July, the ex-factory price of tons of salt in Shandong and Hebei first increased by 20 to 25 yuan. This will inevitably affect the production of the two alkali industries.
The news from the State Administration of Taxation on August 15 stated that the Joint Ministry of Finance of the State Administration of Taxation issued a “Circular on Adjusting the VAT Rate of Industrial Salts and Edible Salts†recently. Since September 1, 2007, the main chemical composition has been issued. The applicable VAT rates for sodium chloride industrial salt and edible salt, including sea salt, well salt and lake salt, have been uniformly adjusted from 17% to 13%. This adjustment has not only eased the operational difficulties of the salt industry, but has also brought great benefits to the two alkali industries that use salt as raw material.
It is understood that the current VAT rate for salt products is unified at 17%. According to a rough calculation, the adjustment of the VAT rate of salt products will increase the profits of the salt industry by 600 million yuan. With the adjustment of the salt tax revenue standard in February this year, the salt industry will increase profits by nearly 1 billion yuan.
The two alkali industries are big salt users. In the consumption structure of raw salt, about two-eight percent of the alkali industrial salt is used. According to the statistics report of China Salt Industry Association, from January to June 2007, salt consumption was 34.02 million tons, an increase of 26% over the same period of last year. Among them, 27,100,000 tons of salt for industrial use of the two alkalis, an increase of 30%, accounted for 79.7%. According to the predictions of China Chlor-Alkali Industry Association and China Soda Industry Association, in 2007, the new production capacity of soda ash and caustic soda was 2 million tons, and 2.7 million tons of raw salt should be consumed. After the reduction of industrial salt value-added tax rate, only this one, the two alkali industries can increase efficiency of 12.96 million yuan.
Shandong Haihua Group is currently the largest salt chemical company in China. The group produces 2 million tons of raw salt each year, and the production of two alkalis a year consumes about 3.5 million tons of raw salt. According to the current price of crude salt, the company estimates that sea salt after taxation will drop by 4.8 yuan per ton, then 2 million tons of raw salt companies can increase efficiency by 9.6 million yuan. At the same time, the company's "two alkali" products will benefit from a tax reduction of about 8.4 million yuan.
However, industry insiders reminded that the two alkali industries should not be too optimistic and blindly expand production. On the one hand, the two alkali products belong to “two high and one capital†products, and the state has introduced various measures to strictly control the production capacity of the two alkalis; on the other hand, the supply of crude salt is greatly affected by weather and market factors. According to a report released recently by the National Development and Reform Commission, affected by the first half of the year, the high-grade brine in the Haiyan district, which accounts for nearly 50% of the country's total production, has been generally damaged, and the production of sea salt has become a foregone conclusion. In July, the ex-factory price of tons of salt in Shandong and Hebei first increased by 20 to 25 yuan. This will inevitably affect the production of the two alkali industries.
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