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Oleochem exports to grow 20pc

KUALA LUMPUR: Malaysia’s oleochemical exports are expected to expand by 20 per cent to 2.7 million tonnes, thanks to manufacturers’ efforts in upgrading their fatty acids and fatty alcohol throughput.

“We’ve been churning out 2.2 million tonnes per year since 2009. But this year, we think we can breach 2.7 million tonnes,” said Malaysian Oleochemical Manufacturers Group president Tan Kean Hua.

“Since the change in the CPO (crude palm oil) tax structure this year, it has somewhat levelled the playing field and allowed our exports to be more competitive. 

“We’re now shipping out more in volume,” he told Business Times here recently.

According to the Malaysian Palm Oil Board, the country exported RM8.5 billion worth of oleochemicals in the first 11 months of the year. 

“I think we’ll be able to do around RM9 billion this year. The export value is expected to be 20 per cent lower than last year’s record high of RM11.5 billion because of lower crude palm oil and crude palm kernel oil prices,” Tan said.

Asked if the lower oleochemical export value forecast is a cause for concern, he replied: “We are a cost-plus business and oleochemicals are a necessity. They are present in the household cleaning products, toiletries, cosmetics and industrial and pharmaceutical items we use everyday.”

The industry remains optimistic of prospects in the years ahead. Since 2010, the government had been calling on the palm oil industry to move up the value chain under the Economic Transformation Programme.

In accepting this challenge, Tan said, major oleochemical manufacturers had started to debottleneck and upgrade their fatty acids and fatty alcohol throughput to leverage on economies of scale.

Tan, who is also IOI Oleochemical Industries Bhd executive director, said his company is investing RM130 million to build a new fatty acid ester plant and a 20,000-tonne specialty oleo derivative plant at the Prai Industrial Complex in Penang.

Meanwhile, KLK Oleo Group’s near RM700 million investment in an integrated methyl ester sulphonate and fatty alcohol plant in Shah Alam and a specialty fatty ester facility in Klang are scheduled to go into commercial operations next year.

Emery Oleochemicals’ RM400 million top-up investment at its Telok Panglima Garang facilities to produce biolubricants, green polymer additives and surfactants will soon contribute to the group’s bottom line.

Turkey-based Evyap Sabun reportedly said it is investing RM500 million in a 400,000 tonne-a-year oleochemical plant at Pasir Gudang, Johor. “Evyap’s investment is the first greenfield basic oleochemical investment in Malaysia in more than two decades. As for IOI Oleo, KLK Oleo and Emery, the expansion works are at various stages of completion,” Tan said.

Smaller entities that are investing further downstream to make more specialty chemicals include ICM Specialty Chemicals, Carotino, UniOleon and Ancom Crop Care.

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