China fatty alcohol makers to face stiff competition from SE Asia

10 August 2012 11:05  [Source: ICIS news]

Nanning, CHINA (ICIS)--China’s fatty alcohol producers are expected to face increased competition, with around 300,000 tonnes/year of new capacity coming on stream between the fourth quarter of 2012 and 2013 in palm oil-rich southeast Asia, a Chinese trader said on Friday.

The new plants will have a cost advantage as they have access to more competitively priced feedstock crude palm oil (CPO) and crude palm kernel oil (CPKO), said Shanghai Union Oleochemicals’ director Hu Jeihua in a presentation at the China International Oleochemical Market Forum in Nanning.

Integrated palm oil producers Wilmar International, Musim Mas and Kuala Lumpur Kepong are expected to bring on stream a combined capacity of around 300,000 tonnes/year of fatty alcohol facilities in Indonesia and Malaysia between the fourth quarter of 2012 and early 2013, he said.

Plant utilisation rates in China are already at low levels as a result of surplus capacity, he said.

Domestic fatty alcohol production in 2011 was estimated to be around 130,000 tonnes/year, far below the nameplate capacity of more than 500,000 tonnes/year, he said.

China’s total import demand, he said, was around 240,000 tonnes annually, he said.

“When the new plants start up in southeast Asia, there will be more consolidation happening in China. The smaller producers will face the biggest threat,” he said.

The oleochemicals conference runs from 9-10 August.


By: Yeow Pei Lin



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