Sinar Mas Cepsa Inaugurates Rp 4.77t Oleochemical Plant in Dumai, Riau

Sinar Mas Cepsa inaugurated its oleochemical plant in Dumai, Riau, on Thursday (14/09). (Antara Photo/Aswaddy Hamid)

By : Sarah Yuniarni | on 3:02 PM September 16, 2017
Category : Business, Corporate News

Dumai, Riau. Sinar Mas Cepsa, a joint venture of the world's second largest plantation company Golden Agri Resources and Cepsa Quimica — a chemical unit of Spanish energy giant Compañía Española de Petróleos — inaugurated its oleochemical plant in Dumai, Riau, on Thursday (14/09), to produce fatty alcohol, the main material in personal and home care products.

The company operates the Rp 4.77 trillion ($357 million) Dumai plant through Energi Mas Sejahtera. The plant will produce 160,000 tons of fatty alcohol, about 20,000 tons of fatty acids and 20,000 tons of glycerin.

Sinar Mas Cepsa has commenced its oleochemical operations in March. In its first production, the company will produce 70 percent of its total capacity. It is expected to gradually increase the production to 260,000 tons per year in the future.

Golden Agri Resources, a Singapore-listed holding company that controls Indonesia's Sinar Mas Agro Resources and Technology, established a 50-50 joint venture with Cepsa in February 2014.

"This joint venture was created with a mutual vision to develop a global leading position in fatty alcohols and its derivatives, based on a supply of sustainably sourced raw materials. Sinar Mas Cepsa's vertical integration and the launch of the Dumai plant is a critical step in achieving this vision," Golden Agri Resources (GAR) chief executive Franky Widjaja said in a statement on Friday (15/09).

With growing demand for fatty acids as raw materials for liquid detergents and personal care products, the company will bring its products to Germany to process them in a sulphation plant located in Genthin and serve European markets as well.

Sinar Mas Cepsa acquired its Germany plant in 2015 for 8 million euro ($9.56 million) from Gemini Holding, a private investment company operating in Switzerland.

"It's the first time we will produce chemical products that are not derived from petrol, but are instead vegetable-based, in a new location, with a new business and new markets," Sinar Mas Cepsa deputy chief executive Jose Maria Solana said.

According to United States-based market research company BCC Research, the global market for natural fatty acids will keep growing and is projected to reach $16.2 billion in 2021. In 2016, it was worth $12.4 billion. The bulk of the projected revenue will be coming from Asia Pacific.

Through its subsidiaries, GAR operates integrated palm oil plantations, mostly in China and Indonesia. Its subsidiaries' businesses range from crude palm oil production to refining it into value-added products.

Cepsa is an integrated energy company, which explores, produces and refines crude oil and natural gas. It also operates in the biofuels industry.

Cepsa's overseas businesses are based in Kenya, Brazil, Suriname, Portugal, Panama, Peru, Malaysia and Thailand. It is fully controlled by International Petroleum Investment Company, an investment vehicle of the government of Abu Dhabi, the United Arab Emirates.

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