Emery Oleochemicals enters into Strategic Joint Venture with AK Chemtech
09 Feb 2011 - Kuala Lumpur – Emery Oleochemicals Group (“Emery Oleochemicals”) has entered into a strategic joint venture agreement with AK ChemTech Co., LTD. (“AK ChemTech”), a move that will significantly increase both companies’ thrust and presence in the global home and personal wellness market.
The joint venture generates significant synergies for both partners, driven by AK ChemTech’s technology in product development and applications know-how coupled with Emery Oleochemical’s globality and market intimacy.
Dr Kongkrapan Intarajang, Group CEO of Emery Oleochemicals said, “This partnership is very much in line with our company’s growth strategy and represents a strong start in our efforts to expand our portfolio of specialty performing materials into the home and personal wellness market. Our customers will also have better access to our products and expertise as we can now work much closer with our customers in formulating differentiated products for this segment.”
In terms of its global footprint, Emery Oleochemicals is a significant global player with presence in countries like Japan, China, Germany and the US, and counts as one of the world’s largest producers of oleochemicals. The company boasts of wide marketing coverage and capabilities, which come from having an extensive network of strategic distribution partners from around the world. AK ChemTech, currently one of the market leaders in Korea that exports primarily to South East Asia and European market, will be able to further increase its market penetration into Asia Pacific and the US through the network, while gaining significant cost advantages from the proximity of source feedstock in Malaysia to its key manufacturing sites.
M.B. Kim, President of AK ChemTech said, “AK ChemTech will realize strong competitive advantages as a result of this joint venture. We are extremely excited at the significant synergies which will flow from combining strengths with Emery Oleochemicals. This partnership will not only help us reach and serve our customers better but also provide our company with the next impetus for international growth.”
AK ChemTech, an affiliate of the Aekyung Group, is a leading player in the home and personal wellness market in Korea with strong product development and applications capabilities in specialty esters, a derivative of oleochemicals formulated for personal wellness products. The company’s research and development (R&D) facility is situated in Daejeon, Korea, and to-date comprises sixty-nine persons who cover R&D work on applications related to markets like coatings, home and personal wellness and construction. The company spends on average 4% of its annual revenues on R&D investments, which is above the industry average for the sector.
Commenting on future growth plans, Dr. Kongkrapan said, “We are continuously looking for opportunities either through joint ventures such as this one with AK ChemTech, or even via acquisitions to grow our business and build presence in the home and personal wellness market.”
The home and personal wellness market is a fast-growing applications field due to rising global consumption rates that are fuelled by increasing consumer affluence and heightened awareness around health and personal wellness trends. Another rising trend in the industry sees the health and personal wellness market becoming increasingly ‘green’ due to consumer demand, which represents significant opportunities for Emery Oleochemicals who will be able to develop more green solutions for its customers, in line with its vision of being the world leader in value-added natural based chemicals.
For Emery Oleochemicals, this joint venture also represents a stronger focus towards the high-value oleo-derivatives segment, a move that is aligned with the Malaysian government’s efforts to further develop the potential of the industry. A recent recommendation under the Malaysian key economic sector (National Key Economic Area or NKEA) of palm oil and related products has identified surfactants, the key oleo-derivative used for home and personal wellness products, as one of the five main product segments that will drive gross national income (GNI) worth USD1.8 billion to the country in the next ten years.