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What is Oleochemicals?

Chemicals derived from fats and oils are generally known as oleochemicals. Fatty acids, fatty esters, fatty alcohols and glycerine and all its derivatives come under oleochemicals.

The Malaysian Oleochemical Industry

The rapid production growth of palm oil and palm kernel oil in the 1980s spurred the oleochemical industry in Malaysia, including other ASEAN countries i.e. Indonesia and Thailand.

The first oleochemical plant in Malaysia was built in Prai, Penang by Palmco Holdings Berhad (now IOI Oleochemical Industries Berhad) in 1980. It produces palm-based fatty acids and glycerine to penetrate the market that was mainly dominated by tallow and coconut-based oleochemicals. Since then, the industry expanded rapidly.

Today the Malaysian oleochemical industry is a world-class player and accounts for 20% of global capacity; making Malaysia one of the world’s leading producers of oleochemicals. On average, MOMG members gave direct employment to 3 500 persons and indirect jobs for another 25 000 persons in manufacturing, transport and logistic sectors. Investments in the oleochemical industry also exceed RM 7 billion.

The oleochemical industry in Malaysia is nearly totally dependent on indigenous raw materials, i.e. palm oil and its derivatives, and palm kernel oil as the feedstocks for the various basic oleochemical products. In this respect, the Malaysian oleochemical industry contributes additional revenue over the basic value of the commodity oils.

The major end-user / applications for oleochemicals are the manufacturers of soap / detergents / surfactants, rubber and plastics, paper, lubricants, personal care products (toiletries and cosmetics), textile auxiliaries, paints and pharmaceuticals.

Industry Update