In an interview with World Of Chemicals News, Dr Kongkrapan Intarajang, CEO, Emery Oleochemicals, gives an update of the current oleochemicals market. He also gives a comparison between the Oleochemical market of Malaysia & China and India.
South East Asia has become the centre of oleochemicals industry, with investment from major companies of the world. What are the factors that make South East Asia a major oleochemicals hub?
The region has successfully developed its feedstock production as well as its chemical transformation industry, offering customers vertical integration and a more reliable and efficient supply chain with many plantations located here.
The existing strong base market in this region, shaped by an increasingly affluent population, drives both demand and innovations in oleochemicals. Its close proximity to other high growth markets such as China and India are additional catalysts as demand continues from the automotive, packaging, building and construction, home and personal care, and agriculture industries.
Emery Oleochemicals uniquely illustrates this dynamism with our global operations headquartered in Malaysia. Benefitting from our access to sustainable feedstock, we continue to expand our manufacturing facility and solutions offering through significant investments in South East Asia (Malaysia). Asia by and large, represents a key geographic market for us.
Major use of oleochemicals is the production of biodiesel. What are the other sources for biodiesel production and what effect it has on the current oleochemicals industry?
Both bio-diesel and oleochemicals are derived from renewable-based feedstock. Where they differ is in its value-adding capabilities and/or supply chain.
The journey of renewable resources in bio-diesel ends at the production of fuel while in oleochemicals, be it basic chemicals (fatty acid, fatty alcohol, glycerine, etc) or specialty chemicals (plastic additives, pelargonic acid, drilling muds, etc) support a myriad of industries ranging from home and personal care, food and beverages, pharmaceuticals, packaging, electronics, automotive, construction, paper, paints and coatings, and many more.
Oleochemicals production is expanding in India and China, when will India and China be seen in par with the Malaysian oleochemical industry?
China and India oleochemicals business model differs from that of Malaysia with industry players of the former two countries serving mainly in-market demands.
Manufacturers in South East Asia however, have the advantage of more sustainable feedstock supply and are able to support both local needs and that of nearby countries like China and India. With supply chain being one of the key competitive advantages, feedstock proximity plays a big role.
What are the major challenges faced by global oleochemicals industry?
With many new investments from Indonesia-based producers on building new oleobasics capacity, the Oleochemicals industry will eventually face an overcapacity and oversupply issue. This reinforces our strategy in growing the downstream business, where we utilise our own oleobasics products for captive use.
The European oleochemicals industry is increasingly concerned that Commission proposals to reduce the environmental impact of biofuels may well lead to higher greenhouse gas emissions and job losses in Europe. Share your views on the same.
In our opinion, renewable resources have various value-added and economic benefits in many products and/or industries but in bio-diesel the value chain ends at the fuel production. Job creation is certainly a plus point in the making of value-add solutions with industries mentioned earlier (Question 2) being just some of the beneficiaries.
The shale gas discovery has revolutionized the trends in energy sector, how will this affect the biodiesel production from oleochemicals?
The only similarity between oleochemicals and bio-diesel is that they are derived from the same feedstock. How they are being produced, marketed, consumed, are independent from each other.
The shale gas has revolutionized many industries, including Oleochemicals. Given where the shale gas deposits are largely found, US-based oleochemicals manufacturers/operations will benefit from a cheaper energy source, making products more competitive. In contrary, other industries, including petrochem-based solutions is also enjoying the benefit as well.
Oleochemicals are derived from plant and animal fats. Does this have any effect on the food sector?
The food industry will take a natural precedence over oleochemicals. Feedstocks for Oleochemicals are either derived from non-edible feedstock (animal fat) or unutilised portion of veg-based feedstock (CPO,CPKO). Oleochemicals products offer various environmental benefits; as renewable resources that are biodegradable, have low ecotoxicity, and emit no net CO2 to the atmosphere. These benefits, compared with other products derived from natural-based feedstock (bio-diesel), create benefits to the customers and the environment multiple folds.
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