MALAYSIAN investors in China?s oleochemical industry are gaining from the rising demand for eco-friendly soaps and detergent as consumers there pursue better living standards, said Malaysian Palm Oil Board (MPOB) director- general Datuk Dr Choo Yuen May.
?Household cleaning products made from oleochemicals are increasingly seen as sustainable alternative to petrochemical variants,? she told Business Times in a recent interview.
Detergent made from cheaper petroleum by-products like kerosene, containing an active ingredient called linear alkylbenzene sulfonates (LABS), takes a very long time to biodegrade. This can cause foaming at rivers and excessive algae growth in the lakes. The algae covered lakes robs oxygen from the water, leaving fishes and other aquatic organisms to die.
As detergent manufacturers seek to improve their environmental profile, many replaced LABS with methyl ester sulfonates (MES), eventhough it is a little bit more expensive.
Since the 1990s, MES-based laundry detergent started to gain popularity as it is readily biodegradable, renewable, agreeable to vegetarians and most importantly ? cleans well, even in cold water.
Current market leaders of such a green product include Japan?s Lion Corp and America?s Stepan and Huish Detergents.
When contacted, Emery Oleochemicals (M) Sdn Bhd group chief executive officer Dr Kongkrapan Intarajang concurred with Choo that the bright outlook for palm oil-based detergents is fuelled by the global trend towards formulations derived from renewable plant-based ingredients instead of depleting fossil fuel.
In China, Emery with one of its shareholders Sime Darby Plantation Sdn Bhd partnered detergent manufacturer Guangzhou Lonkey Industrial Co Ltd to form Guangzhou Keylink Chemical Co.
The joint venture company is setting up a 40,000-tonne a year MES plant.
?Our MES plant in China is nearing completion. We hope to commission it next year in first quarter,? said Kongkrapan.
Choo noted MPOB?s research in MES is applicable in China because this biodegradable detergent cleans well at low dosage, even in washing water that has high mineral content.
?Although China?s household waters tend to be high in mineral content, it is not a problem. Detergent manufacturers like Lonkey will find it easy to formulate concentrated washing powder using MES,? she said.
Among Lonkey?s laundry detergent brands in the Guangzhou include Gaofuli and Yeshu.
In Malaysia, KLK Oleochemicals Group?s unit, KL-Kepong Oleomas, operates a 50,000-tonne per year MES plant.
?We?re carrying out some upgrading works and doubling the capacity to 100,000 tonnes,? said KLK Oleochemicals managing director A.K. Yeow.
As the world?s top oleochemicals producer, Malaysia exports around 2.2 million tonnes every year.
Malaysia?s lead is partly driven by its community of engineers and chemists having the ability to process palm oil and palm kernel oil into more than 100 types of downstream products.
With such technical prowess and advantage, Malaysians have become pioneers and key investors in China?s oleochemical industry.
Among the earliest to set foot there are Wilmar International Ltd, in which Robert Kuok?s Kuok Group is a substantial shareholder. The other pioneer is Kuala Lumpur Kepong Bhd?s (KLK) unit KLK-Taiko Palm Oleo Co Ltd. Other Malaysian investors include Teck Guan Perdana Bhd and Kwantas Corp Bhd.
Wilmar?s pioneering investments have given it a headstart over its competitors. Today, it is the biggest player in China?s oleochemical industry with an estimated annual capacity of 800,000 tonnes.
As early as 1999, Yeow frequently flew to China to assess the benefits of producing oleochemicals there.
He recalled scouting for an affordable industrial site equipped with basic infrastructure of piped water and consistent electricity supply.
The management finally chose Zhangjiagang, a town two hours drive from Shanghai, and yet easily accessible by sea.
During the last five years, KLK-Taiko Palm-Oleo had invested some RM200 million there. Today, the facility is able to churn out 220,000 tonnes of fatty acids, soap noodles and glycerine in a year.
Teck Guan?s oleochemical plant at Rugao town, about four hours drive from Shanghai, is able to produce up to 200,000 tonnes of fatty alcohol, fatty acid and glycerin per year.
Kwantas? unit Dongma (Guangzhou Free Trade Zone) Oleochemicals Co Ltd plants in Zhangjiagang near Shanghai and in Guangzhou have a combined 200,000-tonne annual capacity.
These plants make soap noodles, glycerine and other oleochemical derivatives.
Asked on China?s oleochemical demand in the next five years, Choo said: ?Last year, China consumed some 2.5 million tonnes. The market continues to grow because consumption of soaps, detergent, cosmetics and bioplastics will expand as living standards improve?.
She also noted that through China?s Cleaning Industry Association?s appeal for affordable and steady supply of oleochemical ingredients from Southeast Asia, the China government had lowered palm stearin import duty to 2 per cent.
Choo, however, sees the demand for oleochemicals moderating in future. The operating environment there has become highly competitive.
?It will not be as fast as previous years, around 10 to 15 per cent annually.?
Nevertheless, she remains optimistic that new applications like biolubricants, green chemicals, bioplastics and biopolymers will continue to drive the oleochemicals industry there.
Choo also expects more usage of palm-based polyols in China?s polyurethane industry.
Source: http://www.btimes.com.my/articles/20111226232711/Article/
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