2nd icis asian oleochemicals conference was opened · pdf file2nd icis asian oleochemicals...
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2 GREEN CHEMICAL Mar. / 2014 Tel 03-6382-6580
INTERNATIONAL CONFERENCE? /
2nd ICIS Asian Oleochemicals Conference was
opened in New Year 2014(1)
2nd ICIS Asian Oleochemicals Conference was opened in Park Royal Hotel in Kuala Lumpur, Malaysia
between Wednsday 15th January and Thursday 16th January 2014. This issue is a first highlight of this
conference.
Day 1 Day 1 Day 1 Day 1 9:10 Chairperson’s opening address9:10 Chairperson’s opening address9:10 Chairperson’s opening address9:10 Chairperson’s opening address by by by by
Norman Ellard, Managing Director Asia, IP Norman Ellard, Managing Director Asia, IP Norman Ellard, Managing Director Asia, IP Norman Ellard, Managing Director Asia, IP
SPECIALTIES ASIASPECIALTIES ASIASPECIALTIES ASIASPECIALTIES ASIA
Norm Ellard was born in London UK and
emigrated to Canada in 1965. Norm attended the
University of Toronto for Math and Physics. He
joined P&G Canada in 1973, and after that joined
the Chemicals Division in 1977. He moved to
Cincinnati, OH USA in 1990 to assume the role of
International Sales Manager where he was
responsible for Asia, Latin America and Canada. He
was responsible for the start-up of P&G Chemicals
Asia business (oleochemicals) and the FPG Joint
Venture started in 1993. In 1996, Norm became
Global Sales Director for P&G Chemicals. Besides
responsibility for over $1 billion sales, he also had
various responsibilities over this period for all
advertising and external relations for P&G
Chemicals. Ultimately he also assumed
responsibility for New Business Development
including Food Ingredients, various bio ventures
and bioplastics. He relocated to Singapore in 2005
and became responsible for all the P&G Chemicals
Asia business and MD of FPG., while also
continuing as Global Sales Director. He is
3 GREEN CHEMICAL Mar. / 2014 Tel 03-6382-6580
responsible for multimillion dollar projects in this
arena. After more than 34 years with P&G and over
30 years in the oleochemicals industry he retired
from P&G October 2008 to pursue other interests
and become Director of Rohen Pte. Ltd in Singapore,
a company engaged in consulting and trading. Most
recently he joined IP Specialties, a global trading
company specializing in oleochemicals. He might be
a best chairman of this conference.
●Alternative feedstocks: what else is challenging Alternative feedstocks: what else is challenging Alternative feedstocks: what else is challenging Alternative feedstocks: what else is challenging
the palm oil market?the palm oil market?the palm oil market?the palm oil market?
Meezy Park, Meezy Park, Meezy Park, Meezy Park, Research EconomistResearch EconomistResearch EconomistResearch Economist, LMC , LMC , LMC , LMC
INTERNATIONALINTERNATIONALINTERNATIONALINTERNATIONAL
Outline ofOutline ofOutline ofOutline of herherherher presentation presentation presentation presentation
• Overview of the vegetable oil market for the past
Decade
• Outlook for the feedstocks
• Impact of Indonesian export tax on oleochemical
products
• EU biodiesel policy and the influences on the
oleochemical feedstocks
Conclusion: Conclusion: Conclusion: Conclusion: If enthusiasm for biodiesel continues
to wane, extra production will have to price itself
into the fuel markets. While palm oil has emerged
as a competitive fuel in South East Asia, other oils
have relied on local biofuel mandates to lift their
prices. However, support for biofuels is slipping in
the EU (and US). As a result, other oils may
increasingly find that they will have to buy their
way into more price-sensitive fuel markets, thus
following the path taken by palm oil. Rather than
reversing the price band, the easing back of biofuels
policy will strengthen the importance of the crude
oil markets in determining the price of oleochemical
feedstocks.
● SuperSuperSuperSuper----high oleic safflower oil: a potential high oleic safflower oil: a potential high oleic safflower oil: a potential high oleic safflower oil: a potential
gamegamegamegame----changer for the Asian oleochemicalschanger for the Asian oleochemicalschanger for the Asian oleochemicalschanger for the Asian oleochemicals industry?industry?industry?industry?
Ross Fellowes, Ross Fellowes, Ross Fellowes, Ross Fellowes, Business ManagerBusiness ManagerBusiness ManagerBusiness Manager, CSIRO, CSIRO, CSIRO, CSIRO
4 GREEN CHEMICAL Mar. / 2014 Tel 03-6382-6580
He explained new technology to cultivate Super
high oleic safflower oil(SHO).
A paradigm change in raw-material feedstock is
happened. SHO is ~95% oleic acid in a large-scale
commodity crop oil, and More products in the
pipeline. Oleic applications are wide, and dozens
of derivativesare exist. Multiple applications are as
under:
• Cooking oil; margarine
• Food additives
• Soaps, shampoos, surfactants
• Lubricants
• Pharmaceutical formulations
• Cosmeceutical formulations
• Polymers
• Biofuels
Why safflower? CSIRO think its not a major traded
food crop, not related to other crops – does not
out-cross, technically amenable to genetic
engineering, hardy, widely adapted, easy to grow
with conventional technology, processing uses
conventional facilities. So they regard safflower is
very suitable as a low cost industrial oil crop.
◎◎◎◎EPA's latest Renewable Fuel Standard proposal: EPA's latest Renewable Fuel Standard proposal: EPA's latest Renewable Fuel Standard proposal: EPA's latest Renewable Fuel Standard proposal:
impact on biofuels and oleochemicalsimpact on biofuels and oleochemicalsimpact on biofuels and oleochemicalsimpact on biofuels and oleochemicals markemarkemarkemarke
(((( Dennis Griesing, Principal, DCG PUBLIC Dennis Griesing, Principal, DCG PUBLIC Dennis Griesing, Principal, DCG PUBLIC Dennis Griesing, Principal, DCG PUBLIC
AFFAIRS LLCAFFAIRS LLCAFFAIRS LLCAFFAIRS LLC))))
He explained change or amend of American rule for
Revised Renewable Fuel Standard (RFS2).,
EPA’s 2014 Proposal
On November 15, 2013, the US EPA published a
Notice of Proposed Rule Making (NPRM) that
proposes to lower the mandated levels of biofuels to
be blended into the gasoline and diesel
transportation fuel pools. This is a significant
change in regulatory direction to which the biofuels
industry has reacted strongly. Comments are due by
January 28, 2014.
How can we creates a mandatory market for
biofuels.
– “Blenders,” i.e., refiners, blenders and importers,
must incorporate minimum levels of biofuels in
annual transportation fuel sales
• Note: Non-transport fuels: heating oil, jet and
ship fuels count towards the mandates but are not
part of transportation fuels calculation
– Creates four separate but “nested” categories of
biofuels
5 GREEN CHEMICAL Mar. / 2014 Tel 03-6382-6580
– Establishes minimum GHG standards
– Establishes feedstock standards, i.e., “renewable
biomass”
– Creates an expanded Renewable Identification
Number (RIN) program
– Amends the earlier “Equivalence Value” of
biomass-based diesel(BBD)
2014: What Happened? American Petroleum
Institute (API) went to Court!
– API challenged EPA’s 2012 cellulosic biofuel
projections and refusal to reduce the applicable
2012 advanced biofuel volumes accordingly
– Court found EPA methodology was not neutral,
therefore “an unreasonable exercise” of discretion
• EPA 2011 Cellulosic Volumes was 6.9 million/gals
projected, but reality was effectively “zero” said the
Court
• EPA 2012 Cellulosic Volumes was 8.65
million/gals
• Court found that EPA failed to use DOE data and
its methodology failed the “neutrality test”.
Biofuel producers face privileged status loss because
RFS has historically been “Producer-centric”. 2014
Volume Proposal is More User-centric”.
Marketplace realities are given greater status:
• Ethanol blendwall realities
• Infrastructure & Vehicle Constraints
• Reduced gasoline consumption
• EPA has proposed lower mandated volumes
based on real world conditions – not industry
aspirations
– Previously, for example, EPA allowed BBD to fill
cellulosic void instead of reducing overall advanced
and renewable mandates.
– Advanced Biofuels is now cut by 1.55 b/gals
– Total Renewable is now cut by 2.94 b/gal
• Reduced volumes of Advanced and Total
Renewable Fuels diminish the advantages of
“nesting effect”.
– Overall bucket of fuels is smaller
– Fuel types, e.g., whose production exceed category
mandates would have less place to go in RFS2.
• Greater opportunities for non-food source
materials.
– Food vs. Fuel – RFS2 was intended to promote
2nd generation fuels with non-food sources, e.g.,
switch grass.
– EPA claims its proposal would assist in this.
( Biodiesel Tax Credit)
– $1/gal. ended December 31, 2013 was not
extended
– Has been extended, even retroactively, in the past
– EPA cites credit as uncertain production factor
A green revolution: keeping up witA green revolution: keeping up witA green revolution: keeping up witA green revolution: keeping up with the growing h the growing h the growing h the growing
trend of sustainabilitytrend of sustainabilitytrend of sustainabilitytrend of sustainability The supplier’s perspectiveThe supplier’s perspectiveThe supplier’s perspectiveThe supplier’s perspective
Alexandra Booth, Manager of Sustainability, Alexandra Booth, Manager of Sustainability, Alexandra Booth, Manager of Sustainability, Alexandra Booth, Manager of Sustainability,
OLAM INTERNATIONALOLAM INTERNATIONALOLAM INTERNATIONALOLAM INTERNATIONAL
Olam in Brief
•Olam is a leading global player in agricultural and
food ingredient supply chain- we are in 20 platforms
across 65 countries.
•Our uniquely shaped business portfolio has grown
consistently based on a repeatable and scalable
adjacency formula.
•Growing Responsibly: our aim is to create value on
an ethical, socially responsible and environmentally
sustainable basis.
Olam Palm Plantations
•JV with the Government of Gabon to develop
commercial and smallholder palm oil plantations in
6 GREEN CHEMICAL Mar. / 2014 Tel 03-6382-6580
the Republic of Gabon
•Land availability, good agro-climatic conditions
and political stability in Gabon offer attractive
investment opportunities
• Olam is aligned with the Roundtable on
Sustainable Palm Oil (RSPO) Principles and
Criteria; first plantation likely to be certified in
FY16.
Emerging market demand for palm is growing;
Africa is prime for investment
•Globally the oleochemical market is worth US$ 15
billion- annual growth @ 5%-8%; demand closely
tied to global economic growth
•Consumption is flattening out in the US, Europe-
emerging markets will be the growth drivers
•Demand for palm oil in Africa is estimated to
increase significantly from 4.4 mn MT to about 7.7
mn MT by 2025
•Proportion of people with discretionary income
may increase from 43% in 2010 to 52% in
2020;Consumer spending is anticipated to rise to
~$1 trillion by 2020 making the region an attractive
household & personal care market
•Per capita detergent consumption: India/China
2kg-3kg pa vs USA 10kg pa; African consumption
negligible compared to developed markets but set
for growth
Conclusions: Present & Future of Sustainability in
the Supply Chain
•RSPO will remain a relevant multi-stakeholder,
consensus based organization; However, consensus
results in a slower pace of decision making
• The transition to a physical value chain for
derivatives will largely depend on B2B
partnerships; RSPO has made progress through
establishing guidelines for trading certificates on
GreenPalm in the meantime
• Commitment by supply chain players to
traceability and sustainability is critical-global
MNCs will increasingly demand traceable palm oil
products, even for emerging markets
■■■■ Panel discussionPanel discussionPanel discussionPanel discussion based on questions from based on questions from based on questions from based on questions from
audienceaudienceaudienceaudience : Overcoming challenges in the Asian : Overcoming challenges in the Asian : Overcoming challenges in the Asian : Overcoming challenges in the Asian
oleochemicals industryoleochemicals industryoleochemicals industryoleochemicals industry
Tan Kean Hua, Tan Kean Hua, Tan Kean Hua, Tan Kean Hua, Executive DirectorExecutive DirectorExecutive DirectorExecutive Director, IOI , IOI , IOI , IOI
OLEOCHEMICALSOLEOCHEMICALSOLEOCHEMICALSOLEOCHEMICALS
Chris de Lavigne, Chris de Lavigne, Chris de Lavigne, Chris de Lavigne, Global ViceGlobal ViceGlobal ViceGlobal Vice----President of President of President of President of
Consulting for the Industrial PracticeConsulting for the Industrial PracticeConsulting for the Industrial PracticeConsulting for the Industrial Practice, FROST &, FROST &, FROST &, FROST &
SULLIVANSULLIVANSULLIVANSULLIVAN
Suresh Gunaratnam, Suresh Gunaratnam, Suresh Gunaratnam, Suresh Gunaratnam, Senior Manager Senior Manager Senior Manager Senior Manager ---- Marketing Marketing Marketing Marketing, , , ,
WILMAR TRADINGWILMAR TRADINGWILMAR TRADINGWILMAR TRADING
Tanuj Roy, Tanuj Roy, Tanuj Roy, Tanuj Roy, Managing DirectorManaging DirectorManaging DirectorManaging Director, EVYAP, EVYAP, EVYAP, EVYAP
(To be continued)