Sinopec chemical plant boosts efficiency, competitiveness under Hainan FTP policies

Following the official launch of Hainan's special customs operations, policies such as tariff exemption on processing value-added and zero tariffs have been effectively implemented at Sinopec Hainan Refining and Chemical Co. Ltd. This has significantly reduced raw material costs, enhanced product market competitiveness and promoted coordinated development across the upstream and downstream industrial chain.

The wharf at Sinopec Hainan Refining and Chemical Co. Ltd. in Hainan, Jan. 16, 2026. [Photo courtesy of China Pictorial]

Song Pengjun, deputy manager of the Planning and Operations Department of Sinopec Hainan Refining and Chemical Co. Ltd., explained that after reviewing relevant policies, the company focuses on implementing two key measures: first, products achieving a processing value-added rate of 30% are exempt from import raw material tariffs when sold domestically; and second, eligible processing trade businesses enjoy zero-tariff treatment.

Regarding the processing value-added policy, the company imports propane and processes it into polypropylene, which is further used to produce high-end plastic materials, packaging films and other products. After technological upgrades and improvements in product value, the overall processing value-added rate exceeds 30%. According to the policy, import raw material tariffs are exempted for domestic sales. To date, this policy has helped the company save more than 9 million yuan ($129.2 million) in tariffs, significantly enhancing its market competitiveness amid complex international conditions and relative domestic overcapacity in the petrochemical sector.

Moreover, the newly introduced policy following Hainan's special customs operations supports the cumulative calculation of processing value-added across upstream and downstream enterprises, breaking the previous restriction that required a single enterprise to independently achieve a 30% processing value-added rate. This adjustment has encouraged more enterprises to participate in various stages of the industrial chain, promoting chain extension and upgrades while enhancing overall industrial competitiveness.

In terms of the zero-tariff policy, Hainan Refining and Chemical has actively explored processing trade business operations since the launch of Hainan's special customs operations. In December 2025, the company imported 25,000 metric tons of mixed xylene and processed it into related chemical products for export to European markets, successfully enjoying zero-tariff benefits and saving more than 2 million yuan in tariffs.

Song said that as the only Sinopec enterprise located within the Hainan Free Trade Port (FTP) area, Hainan Refining and Chemical shoulders the responsibility of being a bridgehead and pioneer. Looking forward, supported by Hainan FTP policies, the company will focus on driving the petrochemical industry toward high-end, intelligent and green low-carbon development, contributing to the establishment of a trillion-yuan-scale ethylene industry, advancing industrial chain extension and upgrading, and achieving high-quality development.