SEMINAR ON OLEOCHEMICAL INDUSTRY IN MALAYSIA:
Downstream Expansion & Sustainability
C H E M I C A L A N D A D V A N C E D M A T E R I A L I N D U S T R I E S D I V I S I O N
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CONTENT OUTLINE:
About MIDA
Malaysian Investment Performance
Chemical & Advanced Material Industries Division
A Global Scenario of Oleochemical Industry
Oleochemical Industry In Malaysia
Oleochemical Projects Approved by MIDA
Oleochemical Value Chain in Malaysia
Current Policy
Challenges
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SERVICES PROVIDED by MIDA
Services (Initial Stage)
• Meetings with State Authorities • Business matching with Malaysian companies • Visit to companies/suppliers • Visit to potential locations
Evaluating & Granting Approval
• Manufacturing License • Tax Incentives • Expatriate Posts • Import Duty Exemptions
Project Implementation Stage
• Handhold and assist investor until project is implemented
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San Jose
Los Angeles New
York
Boston
Stockholm
Frankfurt
Munich
Milan Paris
London
Dubai
Mumbai
Guangzhou
Taipei
Shanghai
Seoul
Osaka
Tokyo
Sydney
22 Overseas Centres
Chicago
Houston
Singapore
MIDA WORLDWIDE NETWORK
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ALOR SETAR
KOTA BHARU
IPOH
KOTA KINABALU
KUCHING
JOHOR BAHRU
KUANTAN
SEREMBAN
MIDA
HEADQUARTERS
MELAKA
PENANG
KUALA TERENGGANU
MIDA’S STATE OFFICES
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NKEAs selected which can materially
impact economic
growth
Greater KL
Agriculture
Palm oil
Comms Content
Infrastructure
Education
Electrical &
electronics
Oil, gas
& energy
Tourism Wholesale
and retail
Financial
services Business
services
Healthcare
ESTABLISHMENT OF 12 NATIONAL KEY ECONOMIC
AREAS (NKEAs)
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Sector 2012 2013 Percentage of Growth
(%) US$ million
Agriculture, Forestry and
Fishing 104 328 215.7
Mining and Quarrying 3,146 3,643 15.8
Manufacturing 4,282 4,762 11.2
Construction 68 292 328.8
Services 2,568 3,647 42.0
TOTAL 10,169 1,2671 24.6
Source: DOSM
Manufacturing sector continues to be the largest contributor to FDI inflows
FDI INFLOWS TO MALAYSIA BY SECTOR
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2012: USD 54 billion
2013: USD 66 billion
Increased by
29%
USD 66 billion Approved investments
A new record for
approved investments
5,669
Projects Approved
192,000 Jobs Created
TOTAL INVESTMENTS APPROVED IN 2013
72.5 : 27.5 Domestic-to-Foreign investment ratio
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2.6
2.1
2.0 1.3
1.2
1.1
0.6 0.4
0.4 0.4
1.3 3.0
2.0
1.9
1.8 1.7
1.3
1.1
0.7 0.6
0.4 0.4 0.9
Machinery & Equip.
E&E, Transport, Petroleum & Chemical Industries contribute the lion’s share of approved investments in 2013
2012 2013
Basic Metals
Petroleum E&E
Rubber
Food Chemical
Fabricated Metals
Transport
Petroleum
E&E
Chemical
Basic Metal
Scientific & Measuring Equip.
Non-Metalli
c
Food
Fabricated Metal
Rubber
USD Billion Others
USD 15 bil. USD 13 bil.
Transport
Machinery & Equip.
Others Plastic
MANUFACTURING SECTOR
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CHEMICAL AND
ADVANCED MATERIALS INDUSTRIES DIVISION
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CHEMICAL & ADVANCED MATERIALS
CHEMICAL & CHEMICAL PRODUCTS
OLEOCHEMICAL
ADVANCED MATERIALS
PLASTICS
PETROLEUM PRODUCT
INCLUDING PETROCHEMICAL
Subsectors under the Purview of the Division
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24.62
19.22
1.6 0.9 0.91 0.53 0.521.66
0.00
5.00
10.00
15.00
20.00
25.00
30.00
Indonesia Malaysia Thailand Colombia Nigeria PNG Ecuador Others
Million tonnes
Source: MPOB website, 2013 Statistics, Oil World Statistic Update (March 2013)
Major World Producers of Palm Oil (2013)
Total global crude palm oil
production in 2013 : 50.47
million tonnes
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Opportunities
Rising cost of doing business & raw
materials in Europe
Palm oil is proven to be healthy and trans
fats free
High demand for sustainable & bio gradable products
Commitments towards the
Responsible Care Initiative with
regulations under REACH Programme
Natural/plant based products, greener
alternatives to petrochemical
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Global Scenario
Significant expansion in production of fatty acid
and fatty alcohol capacities in the Asia region.
Asia has the highest capacity in the world of
which 65% comes from SEA region (Malaysia
& Indonesia)
Major oleochemical producers in the world
market : KLK, Oleon, Musim Mas, Croda,
Emery, IOI, Wilmar.
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Major Producers of Basic Oleochemical in the world
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Oleochemical Industry in Asia
Asia creates large market for Oleo Industry
major consumer & producer of oleochemical
products. 68% of the world consumption and
60% of world production.
Vertical Integration
Large plantations have started to invest in
downstream feedstock processing
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Plantation companies who have ventured into downstream oleochemical activities through
Joint Ventures
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OLEOCHEMICAL
INDUSTRY IN MALAYSIA….
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Source : Economic Reports/Bank Negara Annual Report, Malaysia 11/12
1970s
1980s
Today
Resource-Based Food Industries
Started producing basic
Oleo
Innovation, R&D Driven
Specialty Oleo Chemical
Derivatives
By 2020
One of the largest basic oleo chemical producers with 20% of global production
SUCCESS STORY – PALM BASED OLEOCHEMICAL INDUSTRY
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Comprises of the basic oleo chemical and oleochemical derivatives subsector.
Malaysia is the largest producer of oleochemicals in the
world : 20% of global capacity.
Almost 16 oleochemical plants are established in Malaysia.
Major Home Grown Players : IOI, KLK, Emery, Natural
Oleochemical, Oleon, FGV.
Malaysia has the raw material but still lack on the
technology innovation.
Related supporting regulation bodies;
MPIC
MPOB
MPOC
Oleochemical Industry In Malaysia
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Oleochemical Projects Approved by MIDA
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Approved Oleochemical Projects in 2013
Domestic Investment :
RM333 Million
Foreign Investment :
RM149 Million
283 Job Opportunities
4 Projects
RM482 Million
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Approved Oleochemical Projects From January- May 2014
Domestic Investment : RM6.2 billion
Foreign Investment : RM7.6 billion
2,791 Job Opportunities
8 Projects
RM 13.8 billion
OLEOCHEMICAL VALUE CHAIN
IN MALAYSIA
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FEEDSTOCK BASIC DERIVATIVE SPECIALTY CONSUMER
Oleochemical Value Chain
MAJOR OPERATING COMPANIES IN MALAYSIA
Plantation /Millers
ME,Fatty Acid, Fatty Ester, Glycerine
PRODUCTS
Sulfo Fatty Acid
Ester, Alkyl
Chlorides, Fatty
Acid Ethoxylates
EGMS, Methyl Ester
Sulphonate (MES)
Methyl Ester
Food Industry, Toiletries
Confectionary, Pharmaceutical
Oil & Gas, Dairy Products
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Existing and Emerging
Applications
Bio lubricants
Surfactants *
Agro Chemicals
Glycerol Additives
Biopolyols Surfactants
Soaps and Detergents
Cosmetics
Food Emulsifiers
EMERGING EXISTING
* better improved performance
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TAX INCENTIVE
Pioneer Status (PS)
Income Tax Exemption
70 % or 100 % for 5 or
10 years
Investment Tax Allowance (ITA)
60 % or 100 % on qualifying capital
expenditure for 5 or 10 years
Second Round of Incentive for resource based
industry
production > 100 MT per day,
comply to the EIA (Environmental
Impact Assessment)
CATEGORY: A. General List IV Manufacture of Palm Oil Products and their Derivatives; Oleochemical or
oleochemical derivatives or preparations.
B. Small Scale Companies List V. Manufacture of Oil Palm products and their derivatives; processed products from
palm oil / processed products from palm from biomass/waste/by product
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Challenges
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Thank you
PROMOTED INDUSTRY
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Global Oleochemical capacity by Region from 2005-
2013 (000’ tonnes)
MALAYSIA HAS SIGNED SEVEN (7) BILATERAL FTAs
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• 20 Public And 21 Private Universities :-
(6 Chemical Engineering & UKM has a specific course on
Oleochemicals)
• 400 Colleges, Polytechnics, Industrial Training Institutes and Private Colleges
• 7 reputable foreign University branch campuses in Malaysia
University of Nottingham Malaysia
Curtin University Sarawak
University of Southampton Malaysia
Newcastle University Medicine Malaysia
Heriot-Watt University Malaysia
Swinburne University Of Technology, Sarawak
Monash University Malaysia
(source: MOHE 2013)
HUMAN CAPITAL
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