Oleochemicals Industries in Indonesia

Abun Lie – 19 Nov 2019

Triglycerides

Outlines

Raw Materials andProducts

Industries

Application

Oleochemicals in2020

Q &A

Raw Materials

Elaeis guineensisNative to West Africa

Kernel 0.9-1.5cmFresh Fruit Bunch(FFB) Produce fruits after 30months

Productive for 20-30years

Yield 5 Ton CPO + 0.5 Ton PKO per ha/year

1 fruit contains 30-35%oil

Fruit is harvested every 10days

CO2

H2OTriglycerides

Food

Feed

Chemicals

Biofuel

6

Carbon Description CPO CPKOC6 Caproic 0.3C8 Caprylic 3.9C10 Capric 4.0C12 Lauric 0.3 49.6C14/0 Myristic 1.1 16.0C16/0 Palmitic 45.1 8.0C16/1 Palmitoleic 0.1C18/0 Stearic 4.7 2.4C18/1 Oleic 38.8 13.7C18/2 Linoleic 9.4 2.0C18/3 Linolenic 0.3C20/0 Arachidic 0.2 0.1

Tri glycerides

FATTY ACID

GLYCERIN

FATTYALCOHOL

METHYL ESTER

Hydrolysis Trans-esterification

Hydrogenation Hydrogenation OLEO-CHEMICALS

Esterification

GLYCERIN+ +

Physical properties

Chemical properties

R - XAlkyl group Functional group

Viscosity Solid point Density Pour point

Oleochemicals properties

CH3-

CH3-CH2- -COOH

-OH

-COOCH3

-COONR2

Reactivity Acidity/Basicity Oxidation states Flash point

CH3-(CH2)n

R’-CH=CH-

Characteristics of Oleochemicals

n Carbon Chain length à type of oil, availability, price

Ø Short Chain: C8, C10, C8C10

Ø Mid Cuts: C12, C14, C12C14, C12C16

Ø Long Chain: C16, C18, C16C18

n Degree of saturation / unsaturation

Ø Full hydrogenation

Ø Partial hydrogenation

Ø No hydrogenation or sometime even enrichment of unsaturation

Oleochemicals Industries in Indonesia

Oleochemicals Industries inIndonesiaCompanies Acid Alcohol M. EsterCisadane RayaChemicalsSumi AsihEcogreen OleochemicalsSOCIMasMusim MasWilmarPermata HijauUnilever Oleochemicals Ind.Energi Sejahtera MasApical KaoDomas Agrointi Prima

Application of Oleochemicals

Source: The Changing World of Oleochemicals, Wolfgang Rupilius and SalmiahAhmad

Fatty A c i d s Appl i ca t ions

%

%

S o a p & d e t e r g e n t

Intermediate 1 8 %

Plastic 14%

C o a t i n g & r e s i n 6 %

L u b r i c a n t & g r e a s e 6 %

Paper 6 %

Rubber 6 %

P e r s o n a l c a r e 5 %

F o o d & f e e d 2

Candle 2

Various 5 %

12

Source: Internal

Fat t y A lcohol Appl icat ions

9 %

4 %

3 %

3 %

2 %

2 %

4 %

7 %

7 %

1 1 %

4 8 %D e t e r g e n t & C l e a n e r

A n tio x id a n t

F l a v o r & F r a g r a n c e

P e r s o n a l C a r e

P e tro le u m

F o o d

A g ric u ltu re

F a b r i c S o f t e n e r

P o l y m e r E m u l s i o nT e x tile

O th e rs

13

Source: Internal

F a t t y A l c oho l D e r i v a t i v e s

1 9 .5 %

1 . 1 %

1 .3 %

2 .5 %

3 .1 %

1 4 .8 %

2 2 .0 %

3 5 .7 %

O th e rs

A P G

A m i n e o x i d e

M e t h a c r y l a t e e s t e r s

Q u a t e r n a r y a m m o n i u m

A S

A E

A E S

14

Fatty Alcohols à Surfactants

15

FATTY ALCOHOL

ALCOHOL ETHO-

XYLATES

ALCOHOL ETHOXY SULFATE

ALCOHOL SULFATE

Heavy Duty Powders / Tooth paste

Heavy DutyLiquids

Shampoo / DishwashingLiquid

Ethoxylation

Sulfation

Sulfation

2012 World Consumption of 5 MajorSurfactants (‘000 ton)

16

1,000

0

2,000

3,000

5,000

4,000

ABS +APE AE + AES +AS

APE / AS ABS /AES AE

17

G l y c e r i n e App l i c a t i ons

S o a p , c o s m e t i c , p h a r m . 3 7%

A l k y d r e s i n 1 3%

Food 1 2%

Polyurethanes 1 1%

Tobacco 9 %

Explosive 3 %

Others 1 5%

Source: The Changing World of Oleochemicals, Wolfgang Rupilius and SalmiahAhmad

Oleochemicals in 2020 and Beyond

Situation in >= 2020

n Raw Materials

Ø Availability: plant capacity, competition in usage (e.g. with Food)

Ø Price stability

Ø Flexibility: depends on plant configuration

Situation in >= 2020

n Market

Ø Price stability

Ø Natural growth

Ø New application

Ø Change in life style à consumption per capita

Ø Substitution or inter-changeability

n There are still rooms for growth due to

change in consumption behavior,

increase in income

Basic Raw Mat

Benzene

Linearalpha oleofins

Oil &Fats

Ethylene

Normal Paraffins

Surfactant

Linear Alkylbenzene

Sulfonates

Alpha Olefin

Sulfonates

Secondary Alkene

Sulfonates

FattyAmineOxides

Fatty Alkanol Amides

Alkyl Glyceryl Ether Sulfate

Alcohol Sulfates

Alcohol Ether

Sulfates

Alcohol Ethoxylates

Application

Heavy duty laundrypowdersLight duty liquiddish detergents Heavy duty laundry liquids Specialty Cleansers

Light duty liquid dishdetergents

Light hand soapsLight duty liquiddish detergents Shampoos

Light duty liquid dishdetergentsShampoos SpecialtyCleaners

Light duty liquiddish detergents Shampoos

Toiletsoaps Shampoos

ShampoosHeavy duty laundrypowders

Heavy duty laundry liquidsHeavy duty laundrypowdersSpecialty Cleansers

Light duty liquid dishdetergentsHeavy duty laundry liquids Heavy duty laundrypowders Shampoos

FattyAcids

Detergent RangeAlcohols

Ethylene Oxide

RawMat

LinearAlkylBenzene

VARI

OU

S RA

W M

ATER

IALS

AND

TY

PE O

FSU

RFAC

TANT

S

Situation in >= 2020

n Regulatory and “Sustainability”

Ø Tariff barrier

Ø Non tariff barrier

Ø Certification

Ø Social compliance

Ø Negative campaign

Ø Infrastructure: port, road, system

Ø National or local regulatory: perpajakan, perijinan, LH, SDM

n Is 6% of our land (of 190 Mio ha) or 0.08% of World land

n Contribution to Indonesia economy: 50 Mio MT x > USD 500/MT

= > 25 B USD/year

Q & A