Emery set aside USD200m capex

30 Jun 2010 - EMERY Oleochemicals Group, an equal joint venture between Thailand-based PTT Chemical International Pte Ltd and Sime Darby Plantation Sdn Bhd, has set aside US$200 million (RM644 million) as capital expenditure (capex) for the next five years.

“The global demand for oleochemicals has recovered and we’re in the right place and right time to leverage on the prospects. We’ll be expanding our capacity,” said Emery chief executive officer Dr Kongkrapan Intarajang.

Emery, whose global capacity touches 1 million tonnes a year, plans to double its Asian capacity to around 650,000 tonnes a year.

“We want to continue our lead in this industry. In expanding, we could acquire or grow organically. We’ve set aside US$150 million to US$200 million (RM483 million to RM644 million) as capex until 2015 but only a portion of this sum is for the capacity add-on,” he told Business Times in an interview in Subang, Selangor, recently.

Two months ago, it was reported that Emery is keen to buy Kulim (M) Bhd’s oleochemicals plant in Pasir Gudang, Johor, which is designed to produce 380,000 tonnes of fatty acids, 7,500 tonnes of methyl esters and 47,500 tonnes of soap noodles in a year.

Asked on the progress of plant buyover talks with Kulim, Intarajang said, “We’re still in talks and there’s nothing certain on the deal. It looks like we may need to build our own plant. Time is of essence.”

In explaining Emery’s five-year expansion plan until 2015, Intarajang said, “We not only want to sell more, we want to sell better. We want to make more specialty oleochemicals as the profit margin is much higher than the basic ones,” he said.

“We target significant growth in our specialty oleochemicals facilities in Europe, America and Asia.”

Already, the group is building a 15,000 to 20,000 tonne a year specialty oleochemicals plant next to its Teluk Panglima Garang refinery.

Examples of specialty oleochemicals offered by Emery include a plastic additive brand-named Loxiol, used as a lubricant in polyvinyl chloride (PVC) processing. There is also Dehylub, an oilfield chemical made from renewable feedstock that works as a surfactant and blends well with deep sea ecology.

Apart from supplying drilling fluids, Emery also provides eco-friendly solutions to contain oil spills in the ocean.

The Emery trade name began in the 1840s, when Thomas Emery started selling lard in Cincinnati, Ohio, the US. His company, much later, became part of German soap and chemicals producer Henkel KgaA. In 2001 Henkel spun off Cognis that handled its oleochemicals, care chemicals and organic specialties businesses to a consortium of investors comprising Permira (formerly known as Schroder Ventures Europe), GS Capital Partners and Schroder Ventures Life Sciences.

In 2006, half of Cognis oleochemical business was sold to Golden Hope Plantations Sdn Bhd, now part of Sime Darby Bhd. In November 2008, Cognis sold its remaining 50 per cent stake to PTT Chemical for e104 million (RM412.88 million).

Renamed as Emery, the oleochemicals group continued to provide job opportunities to more than 1,000 people in the US, Europe and Asia.

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