Golden Hope forms MES joint venture in China

Golden Hope forms MES joint venture in China

FOCUS And one product of palm oil biodiesel production is C16 methyl ester, the desired feed for higher-quality MES. The indications are there that bi...

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FOCUS And one product of palm oil biodiesel production is C16 methyl ester, the desired feed for higher-quality MES. The indications are there that biodiesel production could finally provide the impetus for MES to be considered as a real commercial alternative to LABS. Proponents suggest that by using MES rather than LAB, a company with a 36,000 tonnes/y plant could make savings of up to $19.9 M/y. Palm oil company Golden Hope and Cognis Oleochemical have recently formed a joint venture with a Chinese detergent manufacturer to build a MES plant. According to Golden Hope, LAB prices are now $1200-$1500/tonne as a result of spiralling petroleum prices whereas MES from the Chinese plant has a projected cost of $700$800/tonne. Lonkey would be the first customer to source MES from the plant but Golden Hope is also in talks with some major foreign detergent manufacturers like Procter & Gamble and Unilever. Elsewhere, long-time champion Lion Corp reports that MES samples are being evaluated by customers, while recent financial results from Stepan also highlight the company’s capabilities to make methyl esters as a feedstock for its surfactant products. Finally, chemical processing equipment manufacturer Chemithon, which, among other things produces sulfonation equipment for detergent and surfactant production, cites the installation of a world-scale methyl ester sulfonation plant at Huish Detergents in Houston among its recent projects. So after all these years MES may finally make the leap into the mainstream. Caroline Edser

RAW MATERIALS Linear alkylbenzene/ paraffins Fushun Petrochemical increases liquid paraffin variety Fushun Petrochemical Co Ltd has commissioned a C16 removal column 2



in the molecular sieve dewaxing unit of its liquid paraffin facility in Liaoning province, China. Startup of the column will enable the firm to produce more than 9000 tonne/month of paraffin II for use as a raw material in fatty alcohol production. The rising demand for fatty alcohols is the main reason for the shift to paraffin II production. China Chemical Reporter, 26 Jun 2006, 17 (18), 10

oleochemicals (fatty acids, glycerine and soap noodle). The remaining sales came from specialities such as performance additives, esters, polymerized fatty acids and alkoxylates. Uniqema has a total production capacity of around 700,000 tonnes/y with sites in Europe, the US and Malaysia. Croda has a base fatty acid capacity of around 40,000 tonnes at its site in Hull, UK.

Shell eyes coal-to-fuels and chemicals project in China

Chemical Market Reporter, 17 Jul 2006, (Website:

Shell and Shenhua Ningxia Coal Industry Co (Shenhua-Ningmei) have agreed to conduct a joint feasibility study for a coal-to-liquids project at China’s Ningdong coal centre, one of 13 main coal sites approved for construction by the Chinese government. The proposed plant, to be based on Shell technology, will have a production capacity of 70,000 bbls/day, and will typically produce gasoil, naphtha, kerosene, base oils, light and heavy detergent feedstock, waxes and LPG. The type of products can be modified to meet market demands. Project costs will range from $5-6 bn, with Shell owning a minority interest. Shenhua-Ningmei has already entered a joint study agreement for a coal-to-chemical plant with Dow Chemical.

KLK sees good long-term return from China plant

Chemical Week, 19 Jul 2006, (Website:

Oleochemicals Uniqema oleo restructurings ahead? The world oleochemical market is likely to undergo further restructuring following the acquisition by Croda of Uniqema from ICI for $742 M. Uniqema is a leading world producer of fatty acids and glycerine. It has been affected by competition from low cost producers in Asia, mainly in Malaysia. Croda is to combine its oleochemical assets with those for Uniqema and integrate speciality sales into its personal care, healthcare, agricare, polymer additive, home care and functional specialities and lubricant business groups. The firm plans selected disposals of manufacturing assets. Uniqema had sales of £626 M in 2005 with 34% coming from base

China is considered an ideal place for oleochemical investment as it imported 300,000 tonnes of fatty acids in 2005. Kuala Lumpur Kepong Bhd (KLK) has invested $70 M for a 90% stake in Taiko Palm-Oleo (Zhangjiagang) Co Ltd (Taiko) [see Focus on Surfactants, Mar 2004], while, Malaysian company Taiko Marketing Sdn Bhd holds the remaining 10% stake. Taiko has capacity to manufacture 150,000 tonnes of fatty acids, glycerine and soap noodles. KLK foresees longterm benefits from its new oleochemical plant Taiko, though it is unlikely to yield significant profits in the near term. KLK’s current total capacity is over 550,000 tonnes/y and this is likely to be augmented to 650,000 tonnes/y by the end of 2006. Primarily an oil palm company, which only recently moved into downstream oleochemicals production, KLK still generates profitability mainly from its plantation division. Earnings from the oleochemical division are expected to be affected by losses from KLK’s new fatty alcohol plant in Klang and potentially small losses at its Chinese fatty acids plant. The Star, 14 & 27 Jul 2006, (Website:

Golden Hope forms MES joint venture in China Malaysia’s Golden Hope Plantations Bhd has signed a memorandum of understanding (MoU) with Guangzhou-based detergent manufacturer Lonkey Industrial Co Ltd to set up a palm-oleochemical product plant used for the commercial SEPTEMBER 2006

FOCUS production of methyl ester sulfonate (MES). Golden Hope and Cognis Oleochemical (Golden Hope’s existing 50:50 jv with Cognis) will together hold a 51% stake in the Chinese joint venture. Golden Hope would invest about $13-15 M in the plant. The environment friendly MES produced at the plant is forecast to cost about $700-800/tonne. The new plant will have a capacity of 36,000 tonnes/y. The Star, 28 Jul 2006, (Website:

Palm oil prices likely to rise as biofuel demand grows The increasing demand for biofuels is likely to result in a steep hike in palm oil prices from the present Ringgit 1450/tonne to range between Ringgit 1600/tonne and Ringgit 1700/tonne in 2007. Malaysia is expected to produce around 15.5 M tonnes of palm oil in 2006 (14.9 M tonnes in 2005). The capacity for biodiesel production will also increase to 1.5 M tonnes by 2007, with 10 plants under construction and 10 more to be set up in future. The Government of Malaysia has already approved 32 manufacturing licences for units estimated to produce 3 M tonnes/y of biodiesel, but has now decided against granting further licences to new producers, amid concerns about the availability of crude palm oil (CPO) for the food and oleochemicals sectors and the extent of the potential effect on both downstream processors and consumers from the resulting increase in CPO price. However, investors are likely instead to choose Indonesia, the secondlargest palm oil producer. CPO production in Indonesia is expected to rise from 13.6 M tonnes in 2005 to around 15 M tonnes in 2006. By Jan 2010, Indonesia intends to replace 10% of oil products with biofuels. Palm oil plantations in the country are likely to increase by 2-3 M ha by 2010. In related news, Malaysia and Indonesia have reached an agreement to reserve 40% of their CPO output – around 6 M tonnes/y of CPO each – as feedstock for the production of biofuels and biodiesel. Analysts suggest that this decision will bring about an increase in palm SEPTEMBER 2006



oil prices, especially in developing nations like India, China and Pakistan. The Star, 13 & 21 Jul 2006, (Website: & ICIS Chemical Business, 10 Jul 2006, 1 (27), 12 (Website:

Other BASF, Dow pursue joint ventures BASF and Sinopec have signed a $500 M deal to expand their 50:50 joint petrochemical complex at Nanjing, in China’s Jiangsu province. The BASF-YPC expansion will involve increasing cracker capacity by 25% and expanding downstream facilities. The cracker at Nanjing will be expanded by 25% to 750,000 tonnes/y ethylene. The project also features an 80,000 tonnes/y increase in ethylene oxide (EO) capacity to 330,000 tonnes/y, and development of EO derivatives to strengthen the ethylene value chain: the jv plans to establish a 60,000 tonne/y unit for nonionic surfactants for detergents and a 80,000 tonne/y unit for the solvent butyl glycol ether. BASF-YPC will raise production at its oxoalcohols unit to 300,000 tonnes/y from 250,000 tonnes/y. The new capacities are expected onstream in 2009. When the $2.9 bn Nanjing complex opened in 2005, BASF announced plans to invest a further €1 bn in Asia by 2009. By 2010 the group hopes to make 10% of its sales and profits in China. Meanwhile, Dow Chemical is to partner Saudi Arabian Oil Co (Saudi Aramco) in a potential joint venture to erect and operate a chemicals and plastics complex at Ras Tanura, Saudi Arabia. The venture would produce “an extensive and diversified slate of chemicals, and introduce new value chains and specialty products” to Saudi Arabia. Chemical and Engineering News, 17 Jul 2006, 84 (29), (Website:, ICIS Chemical Business, 17 Jul 2006, (Website: & Chimie Pharma Hebdo, 17 Jul 2006, (348), (Website: (in French)

Jubail, Saudi Arabia [Focus on Surfactants, Jul 2006]. Sabic has appointed BNP Paribas, Arab Banking Corp and Samba Financial Group to manage the loan. The complex is due to be completed in 2009. The chemicals that will be produced there include aminoethanols, aminomethyls, dimethylformamide, choline chloride, dimethylethanol, dimethylethanolamine, ethoxylates, phenol, cumene, polycarbonate, ethylene, propylene, polypropylene, ethylene glycol and 1-butene. Saudi Kayan Petrochemical’s capital is $3.2 bn. The company is 35% owned by Sabic, 20% owned by Kayan Petrochemical with the remaining 45% due to be offered to the public. Samba will serve as financial adviser and initial public offer (IPO) manager for the proposed public subscription of Saudi Kayan. Chemical Market Reporter, 24 Jul 2006, (Website:

BASF raises prices for ethanolamines BASF has raised its ethanolamine prices around the world from 21 Jun 2006, or as existing contracts permit. The mark-up comes in response to the increased cost of the feed products ethylene and ethylene oxide and increased energy costs. The increase amounts to €60/tonne for monoethanolamine, €80/tonne for diethanolamine and €100/tonne for triethanolamine in Europe. In Asia, NAFTA, South America and other non-European countries, the price will go up by $75-126/tonne. The products in question are intermediates used in the manufacture of surfactants for detergents and cleaning products, wood protectants, agrochemicals, process chemicals for gas scrubbing, lubricants and cement additives. BASF produces ethanolamines at its sites in Ludwigshafen and Antwerp. Press release from: BASF AG, Ludwigshafen, Germany. Website: (21 Jun 2006)

Sabic arranges $4.8 bn in financing

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