Oleochemical firms invest more in Europe

KUALA LUMPUR: Asian oleochemical producers are investing more money in Europe despite a lingering economic recession there.

"We're in this business for the long term. Although Europe is facing recession, the demand for oleochemicals is sustained because they are a necessity. Oleochemicals are present in household cleaning products, toiletries, cosmetics and industrial and pharmaceutical items," said KLK Oleo Group managing director A.K. Yeow.

He said the company has committed close to RM200 million to expand and upgrade its oleochemical facilities in Emmerich, Germany.

"By the third quarter of this year, our Emmerich capacity would have expanded to 250,000 tonnes a year," he told Business Times at the sidelines of the Palm and Lauric Oils Conference and Exhibition 2013, here, yesterday.

Oleochemical production is mainly centred on the manufacture of fatty acids, fatty alcohols, methyl esters and refined glycerin. These are further processed into surfactants, soap and detergents, cosmetics, food emulsifiers, paints and inks, and lubricants.

The use of oleochemicals is very much stimulated by consumers wanting more renewable ingredients in their toiletries, cosmetics and household items.

Emery Oleochemicals Sdn Bhd group chief executive officer Dr Kongkrapan Intarajang said this has spurned innovative applications in biolubricants, green agro-solution and green polymer additives.

"Our higher-value oleo derivatives, which we supply to the personal care, automotive and construction industries, are doing well," he said in a separate interview.

In view of good prospects in specialty chemicals, Emery Oleochemicals, an equal joint venture between Thailand-based PTT Chemical International Pte Ltd (now known as PTT Global Chemical) and Sime Darby Plantation Sdn Bhd, has pumped as much as €20 million (RM93.8 million) to expand its Loxstedt green polymer business located north of Germany.

Kongkrapan said the facility will also incorporate a technical development centre that will support product formulation for plastic additives, coatings additives and biolubricants.