Emery Oleochemicals to ramp up capacity
EMERY Oleochemicals, the world's largest firm in the sector, plans to ramp up capacity in Malaysia by 300,000 tonnes over the next two years to feed growing demand in the consumer products industry.
Malaysia, the world's No. 2 supplier of palm oil, has a large oleochemicals industry whose top players include plantation firms such as IOI Corp and Kuala Lumpur Kepong.
Emery, a joint venture between Sime Darby and Thai PTT Chemical Public Co Ltd, manages 1 million tonnes of plant processing capacity that is evenly split across Europe, North America and Asia.
Chief executive Kongkrapan Intarajang said Emery was also building a plastic additives processing plant with a capacity of 25,000-30,000 tonnes, due to launch in the first quarter of 2011.
"Demand for oleochemicals is on the rise and plastic additives demand has a slow but steady recovery," Intarajang said on the sidelines of an industry meet in the Malaysian capital yesterday.
He was referring to additives used by the auto industry, which has recently been propped up by the US and European governments to stabilise car sales and stave off collapse.
Emery supplies oleochemicals to the growing consumer products industry, driven by rising populations in Asian giants India and China and dominated by firms such as Procter & Gamble and Unilever.
"This year we are committed to work on our five-year plan and focus on growth areas like oleochemicals as well as speciality chemicals and plastics," Intarajang said.
"Asia is a big part of the plan. And Malaysia will be a good base to start from." But he declined to give investment figures for the plants.
Both new plants will be in Selangor, near Sime Darby's plantations, which provide raw materials to Emery, cutting logistics costs and cushioning margins as palm oil prices trend higher in 2010.
"Also palm oil is only used in our Asian operations, so the threat of volatile feedstocks is not great," Intarajang said.
Foreign firms like Oleon, a unit of French oilseeds group Sofiproteol, have also set up oleochemical plants in Malaysia.
http://www.btimes.com.my
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