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The growth and challenges of the oleochemicals industry in South East Asia(SEA)

The growth and challenges of The growth and challenges of the the oleochemicalsoleochemicals industry in industry in South East AsiaSouth East Asia(SEA)(SEA)

By S.C. CheahIOI Oleochemical Industries

Presented at the ICIS 6thWorld Oleochemicals Conference 2007,Sheraton Hotel, Brussels, Belgium.

October 24, 2007

PRESENTATION OVERVIEW

1.Development of Oleochemicals Industry 2. Current Oleochemicals producers in SEA

¤ Malaysia¤ Indonesia¤ Philippines¤ Thailand

3. Expansion in India & China4.Challenges' faced by SEA’s OleochemicalsIndustry

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Development of OleochemicalsIndustry

¤ 18th century:

� Initial used for consumer and candle products

¤ 70s:

� 1st petroleum crisis

� oleochemicals started to replace petrochemical

¤ 80s:

� Global population expand

� 1st company in the world to produce Oleochemicalsusing PO/PKO- ACIDCHEM INTERNATIONAL, Malaysia.

� Increasing demand on vegetable based material

� ‘Green Drive’

Development of OleochemicalsIndustry-Cont’

¤ 90s:� supply of tallow and coconut oil unable to keep up the increasing demand

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¤ 90s:� supply of tallow and coconut oil unable to keep up the increasing demand

� Palm oil (PO) & Palm Kernal Oil (PKO) has been identified as a sustainable supply of feedstock to the oleochemicals.

Development of OleochemicalsIndustry-Cont’

World Production of PKO & CNO (1980-2006)

05001000150020002500300035004000

1980

1983

1986

1989

1992

1995

1998

2001

2004

Year

MT ('000)

Palm Kernal Oil Coconut OilReference: Statistics from IOI Corp. (2007)

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World Production of PO & Tallow (1980-2006)

0500010000150002000025000300003500040000

1980

1983

1986

1989

1992

1995

1998

2001

2004

Year

MT('000)

Palm Oil TallowReference: Statistics from IOI Corp. (2007)

Development of OleochemicalsIndustry-Cont’

¤ 90s:� supply of tallow and coconut oil unable to keep up the increasing demand

� Palm oil (PO) & Palm Kernal Oil (PKO) has been identified as a sustainable supply of feedstock to the oleochemicals.

� PO & PKO annual growth up to 9% annually.

¤ 21st Century:� SEA - the largest OC producing region

� >80% PO & PKO produced from Malaysia, Indonesia & Philippines

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Fatty Acid & Alcohol Producers in SEA

MalaysiaMalaysia

IndonesiaIndonesia

PhilippinesPhilippinesThailandThailand

SingaporeSingapore

FATTY ACID=800,751 MT

FATTY ALCOHOL=414,249 MT

Cisadane

70,000 MT/yr

PT Sinar

Oleochemicals Int

80,000 MT/yr

PT Ecogreen

Oleochemicals

80,000 MT/yr

Permata Hijau

120,000 MT/yr

PT Musim Mas

280,000 MT/yr

PT Sumi Asih

40,000MT/yr

PT Flora Sawita Chemindo

50,751 MT/yr

PT Flora Sawita Chemindo

39,249 MT/yr

PT Musim Mas

100,000 MT/yr

PT Ecogreen Oleochemicals

115,000 MT/yr

Sinar Oleo

80,000 MT/yr

Dumba Mas

160,000 MT/yr

FATTY ACID=2,160,000 MT

FATTY ALCOHOL=471,000 MT

Palm Oleo/Uniqema

390,000 MT/yr

Acidchem/Pan Century

720,000 MT/yr

Natural Oleochmicals

400,000 MT/yr

Inai Bumi Sdn Bhd

10,000 MT/yr

Cognis & Cognis

Rika

80,000 MT/yr

FPG Oleochemicals

92,000 MT/yr

Oleo Mas

110,000 MT/yr

Fatty Chemical

179,000 MT/yr

Pacific Oleo Ind

140,000 MT/yr

Cognis & Cognis Rika

110,000 MT/yr

Iffco

140,000 MT/yr

Southern Acids & Pofachem

80,000 MT/yr

Thai OleoChemicals

100,000 MT/yr

Imperial Ind Chemicals

4,500 MT/yr

Thai Fatty Alcohol

100,000 MT/yr

FATTY ACID=104,500 MT

FATTY ALCOHOL=100,000 MT

United Coconut

Chemical Inc.

36,487 MT/yr

Philippines Kao Inc.

100,000 MT/yr

United Coconut

Chemical Inc

73,302 MT/ yr

Pan Century

Surfactant

30,000 MT/yr

FATTY ACID=73,302 MT

FATTY ALCOHOL=166,487 MT

Reference: Statistics from Acidchem Int. (2007)

Development of OleochemicalsIndustry-Cont’

¤ 90s:� supply of tallow and coconut oil unable to keep up the Oleochemicals demand

� Palm oil (PO) & Palm Kernal Oil (PKO) has been identified as a sustainable supply of feedstock to the oleochemicals.

� PO & PKO annual growth up to 9% annually.

¤ 21st Century:� SEA - the largest OC producing region� >80% PO & PKO produced from Malaysia, Indonesia & Philippines

¤ 21st Century:� Economic growth in Asia eg. China & India will push for further development of Oleochemicals industry

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Fatty Acid & Alcohol Producers (China & India)

MalaysiaMalaysia

IndonesiaIndonesia

PhilippinesPhilippinesThailandThailand

ChinaChina

IndiaIndia

SingaporeSingapore

FATTY ACID=2,333,520 MT

FATTY ALCOHOL=777,000 MTKerry

150,000 MT/yr

Taiko

157,000 MT/yr

RugaoShuangmaChem

200,000 MT/yr

Boxing Huarun oleo

50,000MT/yr

Feixiang Chem (Zhangjiagangi)

60,000 MT/yr

Yihai Sasol Oleochemicals Co. Lts.

60,000 MT/yr

Shanghai Soap

Grp. Rugao

80,000 MT/yr

Kwantas

100,000 MT/yr

China Resource

110,000 MT/yr

Boxing Huarun oleo

120,000 MT/yr

Dong Ma

Palm(Zhangjiagang)

135,000 MT/yr

Luzhou Natural Gas

15,000MT/yr

Zhejiang Fenghuang Chemical

20,000 MT/yr

Wuxi Tongtai Chemicals

20,000 MT/yr

Dalian Sifang United Chemicals Co.

20,000 MT/yr

Sangqiu Longning Chemicals

40,000 MT/yr

Guangdong Jiangmen Jianghai

15,000 MT/yr

Dong Ma Oleochem

(Guangzhou)

75,000 MT/yr

Others

484,520 MT/yr

Others

39,000 MT/yr

NJC

18,000 MT/yr

Teck Guan

80,000 MT/yr

Tengta Northern Chemicals Co. Ltd

80,000 MT/yr

Liaoyang Huaxin Chemicals Corp

140,000 MT/yr

Liaoyang Huaxin Chemicals Corp

140,000 MT/yr

Wilmar

264,000 MT/yr

Yihai Oleoche

(Lianyungang)

360,000 MT/yr

Reference: Statistics from Acidchem Int. (2007)

FATTY ALCOHOL=160,000 MT

VVF

180,000 MT/yr

Godrej

160,000 MT/yr

Others

450,000 MT/yr

VVF

120,000 MT/yr

Godrej

40,000 MT/yr

FATTY ACID=790,000 MT

Outlook on SEA’sOleochemicals Industry

¤ Strong expansion of Palm Oil production

¤ Plantation Companies to Invest Profits in Oleochemicals

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Challenges faced by SEA’sOleochemical Industry

¤Development of biodiesel industry

Biodiesel Producers in SEA

MalaysiaMalaysia

IndonesiaIndonesia

PhilippinesPhilippinesThailandThailand

SingaporeSingapore

BIODIESEL=279,520 MT

Others

82,720MT/yr

Romtron

8,800 MT/yr

Senbel Fine Chemical

22,000 MT/yr

Chemrez Incorporated

66,000 MT/yr

PNOC

100,000 MT/yr

BIODIESEL=866,000 MT

CMS Resource

16,000 MT/yr

Peter Cremer

100,000 MT/yr

MAE Engineering

150,000 MT/yr

Natural Fuel

600,000 MT/yr

BIODIESEL=35 MT

Bangchak Petroleum

35 MT/yr

BIODIESEL=1,478,000 MT

PT Sumi Asih

36,000 MT/yr

Bakrie Sumatera

100,000 MT/yr

PT Astra Agro Lestari

150,000 MT/yr

Domba Mass

12,000 MT/yr

CMS Resources

16,000 MT/yr

PT Asian Agri

200,000 MT/yr

Wilmar Holding

1,000,000 MT/yr

BIODIESEL=4,670,000 MT

Zurex Corp

200,000 MT/yr

Biodiesel LD SdnBhd

300,000 MT/yr

Global Bio-Diesel

350,000 MT/yr

BiodieselSP Sdn Bhd

350,000 MT/yr

DXN Oleochemicals

900,000 MT/yr

Empee Industries

60,000MT/yr

Carotina Sdn Bhd

60,000 MT/yr

Ganz Biofuels

30,000 MT/yr

Global Bioenergy

30,000 MT/yr

Lereno Sdn Bhd

30,000 MT/yr

Success Nexus

175,000 MT/yr

QL Bioenergy Sdn. Bhd

175,000 MT/yr

DXN Biofuels Sdn Bhd

200,000 MT/yr

ECO Solutions Co. Ltd

200,000 MT/yr

Himpunan Sari

200,000 MT/yr

Kumpulan Fima

60,000MT/yr

Kemasul Forest

60,000 MT/yr

JC Chang

60,000 MT/yr

Golden Hope M'sia

60,000 MT/yr

Fima Bulkers

60,000 MT/yr

MAE Engineering

60,000 MT/yr

YPJ Palm Int.

120,000 MT/yr

Carotech

150,000 MT/yr

Weschen Tech

60,000 MT/yr

PGEO Edible Oils

100,000 MT/yr

Golden Hope

30,000 MT/yr Inai Bumi Sdn Bhd

100,000 MT/yr

IJM/CTI Biofiels

90,000 MT/yr

GS Palm Sdn Bhd

100,000 MT/yrKulim (M) Bhd

100,000 MT/yr

Zelmac Resources

100,000 MT/yr

Global Bonanza

100,000 MT/yr

Reference: Statistics from Acidchem Int. (2007)

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Biodiesel Producers (India & China)

ChinaChina

IndiaIndia

BIODIESEL=3,070,000 MT

Bioflux Biofuel

300,000 MT/yr

Huacheng Biofuel

400,000 MT/yr

Sunshine Tech Group (Britain)

500,000 MT/yr

Zhonghe Energy

500,000 MT/yr

Qingjiang Bioenergy Tech

750,000 MT/yr

Gushen Biodiesel

100,000 MT/yr

Huawu Group

100,000 MT/yr

CNOOC

100,000 MT/yr

Guofeng Group, Zhonglian Co.

200,000 MT/yr

Biolux International (Austria)

250,000 MT/yr

Zhuoyue New Energy

50,000 MT/yr

Fujing Oils Group HK Fuel

(Asia) Grp

100,000 MT/yr

Yuanhua Energy Tech

30,000 MT/yr

Tianguan Group

30,000 MT/yr

Zhenghe (Hainan)

Bioenergy

10,000 MT/yr

Groundnut Research

10,000 MT/yr

Jintongfu Biodiesel

10,000 MT/yr

Tianyuan Bio Clean

Energy

20,000 MT/yr

China East River

50,000 MT/yr

Gushan Oleochem

10,000 MT/yr

MalaysiaMalaysia

IndonesiaIndonesia

PhilippinesPhilippinesThailandThailand

SingaporeSingapore

BIODIESEL=12,000 MT

Southern Online

Biotech

12,000 MT/yr

Reference: Statistics from Acidchem Int. (2007)

Challenges faced by SEA’sOleochemical Industry

¤Development of biodiesel industry

¤Over expansion resulting in over capacity

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¤Development of biodiesel industry

¤Over expansion resulting in over capacity

¤Oversupplied of glycerine/glycerol in the market

Challenges faced by SEA’sOleochemical Industry

World Supply & Demand of Fatty Acid (2005-2009 est.)

Year

Million (MT)

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World Supply & Demand of Fatty Alcohol (2005-2009 est.)

Million (MT)

Year

Oleochemicals Production in SEA

Reference: Statistics from Acidchem Int. (2007)

MT

SEABiodiesel Fatty Acid Glycerine Alcohol

Malaysia 4,145,000 2,160,000 264,280 471,000

Indonesia 1,478,000 800,751 99,140 414,249

Philippines 279,520 73,302 31,018 166,487

Thailand 35 104,500 650 100,000

Singapore 866,000 - - -

Total 6,768,555 3,138,553 395,088 1,151,736

India 12,000 790,000 - 160,000

China 3,070,000 2,333,520 240,000 777,000

Total 9,850,555 6,262,073 635,088 2,088,736

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Challenges faced by SEA’sOleochemical Industry-Cont’

¤Higher production cost

¤Shortage of cargo space

¤ Increasing freight rate

Challenges faced by SEA’sOleochemical Industry-Cont’

¤ Scarce of Land Resource for future plantation development

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¤ Scarce of Land Resource for future plantation development

¤ REACH Legislation

Challenges faced by SEA’sOleochemical Industry-Cont’

THANK YOU.