International Conference
Oleochemicals Outlook
22-23 Aug, 2013 - Jakarta
Le Meridien Jakarta
Indonesia boasts as a favorable oleochemicals investment location as the nation offers readily available
feedstock.
With
consumer
demands
and
trends
leaning
towards
natural
ingredients
and
environmentally-friendly products, industry players and investors are gearing up for the shift towards
oleochemicals. As Indonesia’s oleochemicals sector is mainly in the hands of the private sector, the nation’s
government has since seen the need to up its stakes in this industry, spurring extensive investments in this
field. Now we would like to describe the current situation ahead to “Oleochemical Outlook” conference in
Jakarta.
Industrial clusters have since been stipulated for the downstream palm oil industry, with the oleochemicals
sector planned in Sei Mangke, North Sumatra, Kuala Enok, Duma, Riau and Maloy, East Kalimantan.
Attractive incentives and tax schemes in the new tax regime, including lower export tax, has made Indonesia’s
oleochemicals and palm oil downstream industries appealing.
Recently, Executive Director of Indonesian Vegetable Oil Refiners Association (GIMNI), Sahat Sinaga, said
that “investments will be channeled by 20 local and foreign processors, 12 of which will pour more than Rp 1
trillion into the palm oil downstream industry”, thereby boosting Indonesia’s oleochemical production capacity
to 4.22 million tons in 2014. These investment plans include oleochemical and oleofood plants by leading
industry players Sinar Mas Group, Musim Mas Group and Permata Hijau Group.
PT Unilever Oleochemical is also one of the major players investing in Indonesia and has recently headlined
with the groundbreaking of its Rp 1.45 trillion oleochemical plant in Sei Mangkei on June 28, 2013. The new
oleochemical plant will take about 12 to 15 months to construct before coming onstream with a capacity of
200,000 tons per year. PT Unilever Indonesia Tbk (UNVR) is certainly conducting groundbreaking of its
oleochemical plant in the Special Economic Zone Sei Mangkei, North Sumatra on June 28, 2013. Coordinating
Minister for Economic Affairs Hatta Rajasa will be invited in the groundbreaking ceremony.
Commissioner of PT Unilever Oleochemical Indonesia Sancoyo Antarikso said it allocated a capital
expenditure totaling Rp1.45 trillion for the purchase of land and construction of oleochemical plant.
On the other hand, Kao, manufacturer of downstream products and oleochemical field, will build a new
plant of surfactant in order to expand its business base in Indonesia, and held a completion ceremony.
Following to start running sequentially from August, it is expected to launch a new plat for household products
such as laundry detergent and diapers by end of this year.
The company relocates existing plant of surfactant to the new plant facilities, raises to 5% of conventional
production capacity. In addition to building a full-house production system of laundry detergent in the
household goods, they establish a system to switch diapers that had been imported to local production and take
actively growing market.
Kao Indonesia Chemicals (95% owned Kao) has secured a land of 120,000 square meters industrial park in
Karawang in West Java province Karawang and will build new plant of surfactant there. Initial investment
amounted to more that 4 billion yen, they produce industrial chemicals addition of surfactant used in raw
materials for detergent and shampoo. Production facilities of existing plant in Bekasi, West Java province
Tambun, will be integrated into new plan.
The company starts “K15” three-years medium-term management plan by 2015 and has target of more
than 30% overseas sales ratio. It has to be one of the growth strategy of strengthening oleochemical business,
they aim and further business expansion in growth markets and strengthening through integration with end
product. By the way, except Indonesia, they schedule for operation in the near future to expand 40% production
capacity of higher alcohol to invest about 3 billion yen in the Philippines.
Also, they build a factory of industrial chemical products, such as non-ionic surfactant and laundry
detergent to an investment of about 5 billion yen, operating next year in Jinshan, Shanghai in China.
Back to subject, as well as surfactant in Indonesia, the second plant as a new factory of household goods
is also under construction.
It has built in the land of 140,000 square meters adjacent to the new plant of surfactant, it is planed
running at the end of the year. Investment is about 10 billion yen. Kao Indonesia (capital of 50% is Kao, the
rest funded local consumer goods major Rodamasu) responsible for the manufacture and sale of household
goods.
In addition to the production of laundry detergent in the first plant in West Java province Cikarang
Bekasi, it has commissioned production in cooperation factory for household goods now. As it was decided the
construction of new second plant mainly because the first plant has outgrown, it is expected that in-house
production switch all after second plant running. Disposable diapers had been imported and sold so far, it is
able to embark on local production due to demand.
Indonesia, the world’s biggest palm oil producer, will spend at least US$2.7 billion to build crude palm oil
(CPO) processing facilities until 2014 to further boost the country’s CPO production capacity, an executive from
the palm oil producer association has said.
The new facilities will boost Indonesia’s processing capacity to 39.46 million tons a year in 2014, which
will comprise 30.9 million tons for refining and fractionation capacity, 4.22 million tons for oleochemical
production capacity and 4.34 million tons for biodiesel manufacturing capacity of 4.34 million tons.
[ Tax structure in Indonesia ]
In the first quarter of this year, investors have spent around $1.02 billion on new processing facilities. The
new investments are expected to increase the country’s total processing capacity to 30.9 million tons a year by
year’s end, a 19.31 percent increase from the past year.
Local industry players have said that the inflow of such sizeable investments was attributed to the
government’s decision to change the export tax structure in late 2011, which effectively makes investments in
the downstream industry more attractive.
The new tax structure generates a margin of export tax on crude palm oil and downstream products,
such as RBD palm olein of between 5.5 percent and 9.5 percent, making Indonesian products more competitive
than those produced by Malaysian producers.
Under the new tax regime, the export tax on processed palm oil products declines from 25 percent to 10
percent.
At the same time, a progressive tax is also charged on crude palm oil (CPO) with levies starting at 22.5
percent whenever the commodity’s prices shore up beyond $750 per ton. For every $50 price rise from the
ceiling, exporters must pay an export tax of 1.5 percent.
This measure supports the Industry Ministry’s aim to see palm oil exports comprise 60 percent processed
products and 40 percent crude palm oil by 2015.
Prior to the introduction of the tax rule, CPO made up 60 percent of overall exports, while processed palm
oil represented the other 40 percent. However, a marked change took place last year that saw processed oil
account for 61 percent of total exports, while CPO represented 39 percent.
Sahat said that the domestic downstream industry aimed to push up processed palm oil output for exports to
21.7 million tons this year, up 4.63 percent from last year. This figure would account for 62.6 percent of
Indonesia’s palm oil exports throughout 2013.
While the new tax rule proved to help boost the utilization of domestic refining capacity and to provide a
competitive edge for Indonesia’s palm oil exports, it should be further supported by other policies to spur more
industry growth, he added.
“The impact of the tax rule has been positive but we need other instruments to draw more sizeable
investments in the future,” Sahat said, referring to easier procedures to obtain a tax holiday facility and a
simplified tax system, particularly for the payment of value-added tax restitution.
Introduced in late 2011, the tax holiday facility offers five-to-10 year tax breaks in five industrial sectors —
base metal, oil refining and petrochemicals, renewable energy and telecommunication equipment — with an
investment of at least Rp 1 trillion.
[Oleochemical Outlook conference ]
Oleochemical sector in Indonesia and global outlook will be discussed by the best executives in
Oleochemical Outlook conference in Jakarta, 22-23 August 2013. Conference will be conducted in the following
schedule. This Conference is opened by Centre for Management Technology, and please register from the
link in advertisement page.
Day 1 - [22 Aug, 2013 - Thursday]
Mr. Ashok D.Pol, Vice President, Sales & Marketing –
08:00 Registration & Coffee
Oleochemicals VVF(India) Limited
09:00 Chairman’s Welcome Remarks & Introduction
10:45
09:10
ALTERNATIVES
PALM TO OLEO – VALUE ADDITION
FEEDSTOCK – DEMAND/SUPPLY &
THROUGH INTEGRATION
- Supply consistency & price outlook
- Developing oleo business & where the industry will
- Supply of CPO, PKO, Coconut Oil, Tallow and stearin
be heading in the next 5 years?
- Price volatility & trends
- Sustainability initiatives and how RSPO will value
- Alternative feedstock consideration
add to the downstream industry
Mr. Chris de Lavigne, Global VP, Industrial Practices
- Challenges facing the industry
Frost & Sullivan
Mr. Steve Goei, COO PT. Socimas
09:40
ASIA
OLEOCHEMICAL
11:20
MARKET
INDONESIA – GROWING OLEO &
DOWNSTREAM INDUSTRY
OUTLOOK
- Demand/supply projections
- Fatty alcohols and fatty acids growth prospect
- Staying competitive in an increasingly crowded
- How are industry reacting to new capacities coming
market
on-stream?
- CPO tax incentives & its competitiveness against
- How will supply/demand change?
Malaysia
- Will margins be further squeezed?
- Oleochemicals investment update
- Growing importance of sustainability & its impact on
- Progress of developing downstream market
oleo industry
Mr. Togar Sitanggang, Chairman
Apolin (Indonesian Oleochemicals Manufacturers
Association)
11:50
TECHNOLOGY
Mr. Manfred Hoffmann, Director Sales Business
CHINA’S OLEOCHEMICALS MARKET &
Group Oleochemicals Lurgi GmbH
DOWNSTREAM DEMAND
16:50 Discussion followed by End of Day One
- Demand/supply projections
Day 2 - [23 Aug, 2013 - Friday]
- Downstream market trends & emerging applications
09:00 Chairman’s Introduction
- Feedstock challenges
09:10 SOAP NOODLE OUTLOOK
Dr. Douglas Furtek, Director - Operational Innovation
- Global demand & projections
R&D Teck Guan Group (Malaysia, Indonesia, China)
Mr. Sovakar Nayak, Vice President
12:20 Discussion followed by Networking Lunch
Resources Pte Ltd
13:45 Afternoon Chairman’s Introduction
09:45
13:50 ECONOMIC OUTLOOK IN INDONESIA
CLEANING MARKET
- Impact of global performance on Indonesia's growth
TRENDS
Pte Ltd
- Fiscal & monetary policy implications
10:15
- Risks & challenges
Refreshment
Bank
Danamon
14:20
TECHNOLOGY
VS
TRADITIONAL CULTURE OF RURAL INDIA AND
THE
CHALLENGES
FOR
SUSTAINABLE
DEVELOPMENT
AND
Discussion
followed
by
Networking
RENEWABLE
SURFACTANTS
FROM
BIOREFINERY
Mr. John YS Lim, General Manager-Asia Elevance
Renewable Sciences Singapore Pte Ltd
11:15 MCT – MEDIUM CHAIN TRIGLYCERIDE
Mr. Ritum Jain, CEO Safechem Industries
14:50
CARE
10:45 LATEST INNOVATIONS & PERFORMANCE
OF
INDISPENSABLE
FABRIC
Mr. Aseem Puri, Marketing Director Unilever Asia
- Is Indonesia ready for AEC 2015?
Mr. Anton H Gunawan, Chief Economist
IN
Palms
SKIN CARE MARKET & TRENDS IN
AND NEW APPLICATION POSSIBILITIES
- Market demand and supply
INDONESIA
- New applications with MCT
- Emerging trends and its impact on formulation
11:45 LATEST ADVANCEMENT/ DEVELOPMENT
- Changing lifestyle & its impact on product
OF
innovations & ingredients selection
SECTOR
Mr. Samuel Eduard Pranata, Marketing Director
Martha Tilaar Group
15:20
Discussion
OLEO
APPLICATION
IN
INDUSTRIAL
- Focus on polymers, lubricants, textile, coatings & etc
Dr . Zainab Idris, Head of Process Engineering and
followed
by
Networking
Designs Malaysian Palm Oil Board (MPOB)
Refreshment
12:15 Final Discussion followed by Closing Lunch
15:50
13:45 End of Conference
BIODIESEL INDUSTRY OUTLOOK -
MALAYSIA EXPERIENCE
- Supply and demand outlook
- Is it on the wane again? The impact on global
oleochemicals market
- Impact on the crude palm oil price in specific - setting
up of the Malaysia Biodiesel Co.
Ir. Samsudeen Ganny, Chief Operating Officer
Mission Biotechnologies Sdn Bhd
16:20
DEVELOPMENT IN OLEOCHEMICALS