"Dealing with slowing demand, increased capacities & certification requirements!"

PHI Group Partners with Malaysian Company, Fusion Crest to set up Oleochemical Plant in Johor, Malaysia

6/4/15, http://www.marketwired.com/

Kuala Lumpur Kepong Bhd (KLK) has proposed to acquire Emery Oleochemicals GMBH’s assets and business in Dusseldorf, Germany for 40.5mil Euros or RM162mil. The proposed acquisition is expected to be completed in 3Q2015.

28/5/2015, http://www.klse.i3investor.com/

According to Frost & Sullivan, SE Asia has become a hotbed for oleochemicals production due to the abundant availability of raw materials, increasing consumer preference for vegetable-based products  and low manufacturing costs. Producers who are integrated will have a cost advantage as feedstock account for large percentage of cost of fatty acids or fatty alcohol. Consequently, the frequent fluctuations in the prices of vegetable oils, such as palm oil and coconut oil, ripple into the oleochemicals market.

Volatility caused by global overcapacity and increasing competition from Indonesia and China means that a non-integrated producer such as Emery Oleochemicals cannot compete effectively in commodities outside of the US, according to the Group’s new CEO, Ramesh Kana. Emery strategy is to move away from commodities into specialties. He expects oversupply of fatty acids to last for 7 years and, 10 years for fatty alcohols. 

Supply of crude glycerine, a by-product of biodiesel production, is expected to grow in Indonesia, when the country implements its export levies of $50/tonne on crude palm oil and $30/tonne on processed palm oil products. How soon will the regulation be implemented and what is the implication to the industry?

Attend CMT's 3rd Oleochemicals Outlook conference on 26-27 Aug 2015 in Bali, Indonesia to gain first hand insight on the latest development in the Oleo value chain.