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INTRODUCTIONThis paper will provide an overview of how the issue of environmental degradation and the depleting of natural resources and how oil palm can contribute in managing the solution. It will also look at how development over the years has evolved especially in the oils and fats sector. Developed by Massachusetts Institute of Technology (MIT) researchers using data from 1900 to 1970, this model shows the limits of growth model with insights into the management of these issues. In a nutshell, the limit of growth model professes that to maximize global output, the world needs to be efficient in using natural resources and minimise environment destruction in the production process.
The Global Growth modelA computer generated model was developed by researchers at the Massachusetts Institute of Technology (MIT) forty years ago to predict how global production of food and non-food products, resource usage, waste production and population growth changes as the world progresses from 1900 to 2100. (Refer to Chart 1). The results obtained are consistent with the views of many economists which state that volume of goods and services which the world can produce is limited due to scarcity of resources, technological
constraints and the extent which the earth biosphere can provide a clean environment to support life.
The model has been proven to be accurate over the years of global progress. The earth environment has degraded and resources are depleting. Statistics from the Planetforlife and National Oceanic and Atmospheric Administration (NOAA) of the United States shows that global oils and gas production will reach its peak in 2020 and the CO² concentration per part per million has risen from 384 to 392 from 2008 to 2013. (Refer to Chart 2 and 3). The green house effect of rising CO² concentration led global temperature to increase by 0.13 ˚F during the period.
The rehabilitative efforts of continuously cleaning the environment and conserving natural resources falls on government
and private initiatives through legislations and monetary incentives. While private entities are obligated to obey established
legislation, it is expensive for them to address the environment issues individually. Among the monetary incentives currently available include the:
a) UN-REDD Programme – A program with a collaborative initiative by the United Nations (UN) on Reducing Emissions from Deforestation and forest Degradation in developing countries, which was launched in 2008 and built on the convening role of FAO and UNEP (UN-REDD, 2009).
MPOC FORTUNE
MALAYSIAN PALM OIL COUNCIL KKDN PP 14669/05/2013 (032704) VOL: 4 2014
®
DIRECTOR
Faudzy Asrafudeen Sayed Mohamed [email protected]
MANAGERS
Muhammad Kharibi Zainal Ariffin [email protected]
Mohd Izham Hassan [email protected]
MARKET ANALYSTS
Asia Pacific Lim Teck Chaii (China) [email protected]
Asia Pacific Mohd Hafezh Bin Abdul Rahman (Excl. China) [email protected]
South Asia Fatimah Zaharah Md Nan [email protected]
Middle-East Mohamad Suhaili Hambali [email protected]
Africa Nor Iskahar Nordin [email protected]
Europe Azriyah Azian [email protected]
Americas Mohd Izham Hassan [email protected]
MARKETING & MARKET DEVELOPMENT DIVISION
For more information, please contact Tel : 603 - 7806 4097 Fax: 603 - 7806 2272
Continued on page 6
Global Food Security - Leveraging on Palm Oilfor Higher Limit of Oils & Fats Output
Chart 1: The Limits of Growth Model
1900 1920 1940 1960 1980 2000 2020 2040 2060 2080 2100
Pollution Ind. Output Population Food Resources
Source : Meadows D. H. et. al. (1974)
504540353025201510
501930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Chart 2: Oil & Gas Production Profiles
Gbo
e
RegularOil
Heavyetc
Deepwater Polar NGL Gas Non-ConGas
Source: Planetforlife
MPOC FORTUNE • 3
MARKETInsightsIns g
About Us1. Changzhou CityLocated in the center of Yangtze River Delta, the most prosperous and dynamic region in China, Changzhou is a fast-growing industrial city, situated in the middle between Shanghai and Nanjing. As one of the central cities in Grand Shanghai Economic Circle, Changzhou is an important base of manufacturing and logistics.
- An ancient city with a history of more than 3,200 years
- 4,385 km² with 4.69 million registered population
- Top 4 of Livable Cities in China in 2013- Gold Award of International Garden City
in 2012- No.9 of the Best Commercial Cities in
China by Forbes
2. CZBJ ProfileJiangsu Changzhou Binjiang Economic Development Zone (CZBJ), formerly called Jiangsu Xinbei Industrial Park, was established in April 2006 with the approval of Jiangsu Provincial Government and verification of National
Development and Reform Commission. Covering an industrial area of 34.5 km², CZBJ achieved great economic performance in 2013:
CZBJ has long become a hotspot for
investors from both home and abroad. In recent years, many World Fortune 500 and leading industrial enterprises have been set up in our development zone, i.e. Ashland, Novelis, Micarta from the USA; Lanxess, Linde, Wurth from Germany;
AkzoNobel from Netherlands; DIC from Japan; Saint-Gobain from France and etc. Both central state-owned enterprises and producer services develop fast, i.e. China Resources, State Grid, Dongfeng
Continued on page 8
Changzhou Binjiang EconomicDevelopment Zone (CZBJ) – Gateway toPalm BioenergyInvestment in China
North Port, Port Klang
- Fima Bulking Services Berhad
- Fimachem Sdn Bhd
- Fima Liquid Bulking Sdn Bhd
- Fima Freight Forwarders Sdn Bhd
Butterworth
- Fima Palmbulk Services Sdn Bhd
Jalan Parang, 2nd Extension, North Port, 42000 Port Klang, Selangor, MALAYSIATel: +603 - 3176 7211 Fax: +603 - 3176 5641 Email: [email protected]
http://www.fimabulking.com
Located in a free commercial zone offer excellent opportunities for• Import and export• Transhipment• MDEX tender (approved
delivery point)• Regional collection / distribution hub
Facilities available : • Carbonsteel• Coated & stainless tanks come
with heating facilities & nitrogen blanketing.
Malaysia’s Largest Independent Common-user Multi-purpose Liquid
Bulk Terminal Operator
MPOC FORTUNE • 5
Continued on page 7
Much has been said and written about India’s continuing reliance on imported vegetable oils to meet the increasing demand for edible consumption. Domestic production continues to stagnate and demand continues to rise on the back of the multiplier effect of rising population and economic wellbeing of the population. Not much thought has been given to the potential for increased imports emanating from industrial growth, particularly in the oleo chemicals industry.
Increasing demand for biodegradable and sustainable products, coupled with recent changes in regulations, are increasing the importance of oleochemicals in various segments of the chemicals industry, like lubricants and biosurfactants for eg., all of this offer significant opportunities for companies in the long run. Companies that explore organic and/or inorganic growth options in this market space could be poised for major growth.
Traditionally, oleochemicals have been used for applications in surfactants, personal care, soaps, detergents and food additives. However, various new applications are emerging where they can replace petroleum-based products, creating exciting growth opportunities.
Oleo-chemicals is a fast growing sector in India, with major demand for oleo products coming from the below segments.
SOAPSPersonal Care products are likely to experience a great thrust in consumption, where Indian consumption lags far behind world standards. In so far as soaps are concerned, they have a 99% market penetration but the per capita consumption is significantly lower than the global average. Compared to a per capita consumption of 6500 gms per annum in USA and 4000 gms in China, Indian soap consumption lags way behind at only about 730 gms per capita per annum. This, by itself, points to the possibility of a much larger palm oil requirement from the soap segment alone. Although bar soaps are the largest component, there is tremendous potential for growth in the hand wash segment as well.
Soap consumption has experienced a CAGR of about 4% in 2008-13. It is likely to grow at a CAGR of 3% to 5% between 2013 to 2020. The main thrust of the FMCG sector is to target rural areas which seem to show the greatest potential as more than 50% of the population lives in rural areas.
The greatest potential is for liquid soaps where consumption levels are extremely low. This segment is expected to achieve a CAGR rate of 16% in the 2013-20 period.
Personal care – Bar SoapsBar Soaps are the largest FMCG product segment and is expected to see a growth of 6% in volume over FY13-20
DETERGENTSLaundry detergents are the biggest segment accounting for about 90% of the total detergent market. These detergents are available as bars, powders and liquids. Powders comprise majority of the laundry market in India while liquid detergents are still in a nascent stage of market development.
Dishwashing detergents are available as bars, powders and liquids; bars and powders account for about 85% of the total market by value but this is expected to decrease to 75% by 2020. Overall
dishwashing detergent penetration in India is expected to grow from about 30% of households to about 40% by 2020.
Liquid detergents constitute about 5% of the volume and 15% of the value in dishwashing detergents and are expected to increase to 11% in volume and 30% value by 2020. The first liquid laundry detergent product was launched in India by Hindustan Lever in May 2013. Liquid laundry detergents are expected to grow to about 5% of the volume by 2020.
Consumers from rural areas and smaller towns are increasingly shifting towards use of detergent cleaning products owing to growing concerns for hygiene. Extensive marketing by FMCG companies in these newer markets has provided impetus to growth in per capita consumption
Premium detergent products such as machine wash and post-wash softeners still have low penetration in India even in urban areas but are expected to ramp up over the next few years. Another emerging trend in the detergents industry is the focus on using less water in low temperature washes and producing lower waste during production and usage.
MARKETInsightsIns g
1400
1200
1000
800
600
400
200
0FY08 FY09 FY10 FY11 FY12 FY13 FY20
688 717 764 816 855 900
1,241CAGR 5%CAGR 6%
Country Grams Per Year (FY13)
India ~730
China 4,000
USA 6,500
Per capita consumption – Bar Soaps
Source: Indiastat, KPMG Analysis
India's per capita consumptionisprojected to increase to ~920gramsby FY20
Bar Soap Volume
Good Potential forPalm Oleo Chemicals in India
Source: Euromonitor, analyst reports,KPMG analysis
b) Clean Development Mechanism (CDM) – A mechanism developed as defined in Article 12 of the Protocol, which allows countries with emission-reduction commitment to implement emission- reduction projects in developing countries to earn saleable certified emission reduction (CER) credits to meet the Kyoto targets (UNFCC, 2014).
c) EU’s Renewable Energy Directive (RED) – A directive which requires that 20% of the energy consumed within the European Union is from renewable sources by 2020 with specified targets for use of renewable fuels and reduction of greenhouse gas (GHG) emission across all energy sector (Glass, 2013).
d) USA Renewable Fuel Standard (RFS) – A standard established under the Energy Policy Act (EPAct, 2005) to develop and implement regulations to ensure transportation fuel in United States (US) contains a minimum volume of renewable fuel, which will increase each year, escalating to 36 billion by year 2022 (EPA, 2013).
In the oils and fats trade, consumers especially those in developed countries are demanding for sustainably produced and environmental friendly products. This new purchasing behaviour is created by NGOs who often create issues to further their cause and make their claim without the backing of justifiable facts and figures (Yusof, 2013). These NGO’s are blaming the palm oil industry for environmental destruction and they blow issues out of proportion just to entice financial support. As a result, the consumers are now demanding and governments especially in Europe has developed stringent production guidelines which is applied to producers through certification schemes.
The certification schemes ensure products comply with the requirement imposed in various concerns such as environment, social and legislation to satisfy consumer needs. Certification ensures products are produced in compliance with the consumer requirement including Sustainability, which has become a major concern. Amongst the notable sustainability certification schemes are the Roundtable on Sustainable Palm Oil
(RSPO) Certification Scheme, Indonesia Standard for Sustainable Palm Oil (ISPO) and EU’s International Sustainability & Carbon Certification (ISCC). As for Malaysia, there are plans to introduce the Malaysian Standard for Sustainable Palm Oil (MSPO) certification in the near future.
Financial institutions are also taking a cue from this development amidst the new consumer demands to strengthen their brand value. For example, HSBC has recently announced that they will not finance oil palm companies whose business activities result in environmental destruction. (HSBC, March 2014)
Although the limits of growth model together with some economist predict that global output volume will, upon reaching
its peak will start to decline, it is yet to be proven in the global food production. Based on FAO statistical trend of food production, it shows that yearly growth of food production is 3.4% which exceeds population growth of 1.6%. A similar trend was observed for global oils and fats production trend. (Refer to table 1 and 2). One possible reason is that the production level has not hit the maximum limit.
However, there is still a risk of reduction in global food production as arable land per capita has declined from 1961 to 2012. (Refer to table 3). Based on the limits of growth model, environmental degradation and global depletion of natural resources are other factors which could contribute to
6 • MPOC FORTUNE
394
392
390
388
386
384
3822008 2009 2010 2011 2012 2013
Chart 3: Recent Global Monthly Mean CO²
Par
ts P
er M
illio
n
Source: NOAA, 2014
200180160140120100
80604020
0
876543210
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Table 2: Population Vis-a-vis Oils & Fats Production growth
Average population growth: 1.6%
Mn MT Billion
Average O&F production growth: 2.4%
’Mn
MT
Bill
ion
peop
le
Source: Oil World Annual, Jan - Mar 2014
Continued from page 1
MARKETInsightsIns gGlobal Food Security- Leveraging on PalmOil for Higher Limit of Oils & Fats Output
Continued on page 9
9876543210
1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009
Table 1: Population Vis-a-vis Global Food Production
Average population growth: 1.6%
Population (Billion) Food Production (Billion MT)
Average food production growth: 2.4% Source: FAO19
6119
6319
6519
6719
6919
7119
7319
7519
7719
7919
8119
8319
8519
8719
8919
9119
9319
9519
9719
9920
0120
0320
0520
0720
0920
11
Table 3: Global arable land per capita
Hectares per capita
Source: FAO
0.140.120.100.080.060.040.020.00
Hec
tare
s pe
r ca
pita
MPOC FORTUNE • 7
4,000
5,0004,500
3,5003,0002,5002,000
1,000500
1,500
0
Detergents Volume
Country Kg Per Year (FY10)
India 2.5
China 4
USA 10
Per capita consumption – Laundry detergents
Laundry Dishwashing
Source: Analyst reports, KPMG analysis
India’s per capita consumptionis projected to increase to 3.4kg per annum by FY20
FY08 FY09 FY10 FY11 FY12 FY13 FY20
CAGR 7%
CAGR 9%
2,103
228
2,215
251
2,409
274
2,640
294
2,790
318
3,006
345
4,651
545
250
200
150
100
50
0
36 44 48 55 66 79
222
CAGR 16%
CAGR 17%
Skin care volume
FY08 FY09 FY10 FY11 FY12 FY13 FY20
Source: Feedback Industry Report SkinCare 2013; Indiastat, KPMG analysis
Country USD Per Year Country USD Per Year
India 0.6
China 6.6
USA 32
Germany 55.4
Per capita consumption – Skin care
Source: Unilever Investor Seminar 2010; Note: India (2012), Others (2010)
Per capita consumption of laundry detergents in India is estimated at 2.5 kg per annum in 2013 and is projected to increase to 3.4 kg per annum in 2020
Detergents - Laundry and dishwashingDetergents are likely to have a modest growth in volume with laundry detergents continuing to remain the largest category
SKIN CAREKey products in the Indian skin care market include fairness creams (45%) and moisturisers (22%). The remaining 33% include specialized products such as toners and astringents, antiseptic creams, premium skin care creams, etc…
India’s per capita spend on skin care is estimated to be only 1/10th of China’s. This indicates a large potential for future growth. Per capita consumption of skin care products in India is expected to increase from about 64 gms in 2013 to approx. 164 gms by 2020.
Personal Care – Skin Care & cosmeticsVolume growth in the skin care segment is expected to be driven by premium & men’s grooming products
COSMETICSThe industry consists of lip paint, nail paint, eye makeup and facial make up. Lip and nail make-up are estimated to account for about 80% of the market. Cosmetics industry in India has grown at
about 25% per annum over 2008-13 and is expected to continue to sustain the growth momentum going forward, growing at about 22% over 2013-20.
Per capita spending on cosmetics in India remains significantly lower than other developed countries and indicates significant growth potential. Higher discretionary spending, strong media exposure leading to increased fashion consciousness, entry of several international cosmetic manufacturers, demand from men’s grooming segment are key drivers leading industry growth.
Personal care – Skin Care & CosmeticsCosmetics is still under-penetrated in India but is expected to continue its high growth momentum
OTHER SECTORSOther major sectors of oleo chemicals users include pharmaceuticals, tobacco processing, rubber processing, paints, plastics, etc. Palm based products account for a significant portion of the feedstock for the oleo chemicals industry, with soaps accounting for the major chunk.
Continued from page 5
MARKETInsightsIns gGood Potential for Palm Oleo Chemicals in India
Continued on page 11
Motor, China National Salt Corporation, Guodian Power (Changzhou), Longcheng Steel Market, Turbo-logistics, ABLE logistics and etc.
At present, three pillar industrial sectors have been formed:
Advantages for Biofuel/ Biomass Industry With the only professional chemical park in Changzhou, CZBJ focuses on developing new materials and new energy. In 2013, gross industrial output realized by new materials and new energy enterprises reached 60.5 billion CNY, accounting for about 65% of that of large-scale enterprises in CZBJ.
To promote biomass and biofuel industry, CZBJ demonstrates advantages in four aspects:
1. Sufficient Land CapacityCZBJ has reserved a land of about 790 hectares with port and logistic resources for quality projects. Moreover, the land has been approved by provincial and municipal government to develop chemical, chemical new material and new energy (biomass energy) industry.
2. Convenient Traffic NetworkPossessing the entire Yangtze River waterfront resources in Changzhou, CZBJ enjoys “4D” transportation network:
Changzhou port is a first class ocean going port approved by the State Council and one of the 63 ports directly connected to Taiwan. Changzhou Port is planned to build 15 berths of 100,000 DWT and 52 berths of 1000DWT. By 2015, the handling capacity will be 6MT, and reach 100 MT in 2020. Customs supervision station and bonded warehouses are available in the park, providing 24-hour onsite service for enterprises.
Changzhou Airport is a 4E level airport, providing 20 domestic airlines to major cities in China. Flights to some Asian cities including HK will be open within 2014.
Continued on page 10
Changzhou Binjiang EconomicDevelopment Zone (CZBJ) – Gateway toPalm Bioenergy Investment in China
Continued from page 3
MARKETInsightsIns g
8 • MPOC FORTUNE
Table 6: Major emitters of GHG of palm biodieselEmission sources Amount (kg CO²/ tonnes biodiesel)Production of fertilizers used 185 (11.5%)Nitrous oxide emitted 130 (8.1%)Use of pesticides 34 (2.1%)Transportation & machinery use 89 (5.6%)Milling & refining of palm oil 19 (1.2%)EFB 87 (5.4%)Effluent ponds 824 (51.5%)Transportation to mills, refineries 36 (2.3%)Biodiesel refining 197 (12.3%)Total 1,601 (100%)Production & use of fossil fuel 4,228Palm biodiesel savings 2,627GHG emission saving relative to fossil diesel 65%
Source: van Zutphen ( 2007)
MPOC FORTUNE • 9
the risk of down trend in global food production.
How palm oil fits into the modelWith the inclusion of oil palm into the equation it is quite definite that the maximum global output limit will be higher than the figure predicted by the researchers from the Massachusetts Institute of Technology (MIT). The model did not factor in the contribution of the oil palm sector as their model was built for the period from 1900 to 1970 before the global palm oil industry was developed by Malaysia and Indonesia in the 1970s. (Yusof, 2007)
As a crop, oil palm has helped to save the amount of land utilised to produce edible oils to feed the world. Oil palm is a high yielding crop producing 11 times more oil compared to soybean, 10 times more compare sunflower oil and 7 times more than rapeseed (Khosla & Sundram, 2010). In 2013, global palm oil production was at 56.2 million MT and accounted for almost 30% of global oils and fats production of 190 million MT (Oil World, 2014).
Oil palm crop also has a high carbon sequestration. In Malaysia’s case, oil palm could cover the carbon emission of land use change by the rice sector and emission from other minor system of the economy (Ministry of Natural Resources & Environment Malaysia, 2011). It is quite close to the CO² removal of forest. In 2007, the amount of CO² removed by the oil palm sector is high at 68% of the amount removed by the forest. Life Cycle analysis done by van Zutphen shows that CO² emission from the production of 1 MT of palm bio-diesel is lower than soyabean and canola based biodiesel. The emission is also lower than the production of 1 MT of diesel. (Refer to table 4 & 5 for the detail).
Unfair trade practices on palmIn spite of the superior qualities and the versatility of palm oil in safeguarding the world’s food security and environment, it is not included in the EU-RED and USA-RFS programmes. Such decisions might have been made due to specific countries interest to protect local agricultural industry and policy by deliberately ignoring palm oil’s superior contribution. The testing method use to
establish the GHG savings emission in EU and USA may not be inclusive or representative of palm oil’s GHG savings. Based on Van Zutphen (2008) study, the oil palm industry Green House Gas saving relative to fossil diesel is 65%. This savings exceeds the threshold value of EU-RED of 35%.
The USA-RFS differs from EU-RED in its computation of GHG emission as it include emission from palm kernel processing but does not include emission from land use change resulting in a threshold value of 20%. As for life cycle analysis on palm based biodiesel production conducted by MPOC, it shows a 101% savings over fossil fuels.
Therefore, the two studies conducted by van Zutphen and MPOC show that palm oil biodiesel feedstock should qualify for the benefits of US-RFS and EU-RED programme.
ConclusionOil palm is a perennial crop which supports the basis for the development of the limits of growth model. The model promotes efficient use of resource while minimizing environmental destruction during production. In line with the basis of the model, oil palm cultivation enables efficient land usage with high productivity of agricultural crop on limited land while promoting greener environment. Every
Continued from page 6
MARKETInsightsIns gGlobal Food Security- Leveraging on PalmOil for Higher Limit of Oils & Fats Output
Continued on page 12
20072000
167Forest
82Palm
147
40.5
35.6
147*Forest
100*Palm
Plantation
217
49
26.9
Total CO²Emission 223.1
Total CO² removal by
LULUCF 249.8
Total CO² removal byLULUCF 247
Total CO² Emission 292.9
Emissions by others
LULUCF+
Rice Sector
350
300
250
200
150
100
50
0
Source: Ministry of Natural Resources & Environment Malaysia
Table 4 : Malaysian Greenhouse Gas Emission and Removal (MT)
Land Use, Land Use Change and Forestry (LULUCF)is made of Forestry and (Oil Palm) Plantation sector
Table 5 : Palm oil biofuel is superior to other biofuels to arrest climate change
Source: van Zutphen ( 2008)45004000350030002500200015001000500
0
kg C
O²
/ ton
ne
Palm Oil Soya Canola Diesel
byns
10 • MPOC FORTUNE
Continued from page 8
MARKETInsightsIns g
3. Broad Market ProspectUsually palm oil is used to produce biofuel, food and daily chemical products. Due to the superior location, Changzhou is surrounded by many enterprises of these three kinds.
4. Sound Public Facilities
Power Supply Two 220kV and two 110kV power substations, with a total capacitance of 540,000KVA. Dual-circuit input line of 10kV, 20kV, 35kV and 110kVcan be provided.
Water SupplyYangtze River provides abundant water resource.
One tap water plant: 1,000,000t/d, and one industrial water plant: 80,000t/d.
The demineralized water can be supplied.
Steam SupplyThree thermal power plants with a capacity of 1200t/h. High pressure: 4.5MPa, low pressure 0.4~1.0Mpa.
Natural Gas The “West-East” and “Sichuan-East” National Gas Transmission Projects have distribution stations in the zone. The pipelines have been laid along the main roads to ensure civil and industrial utilization.
Sewage Treatment Two sewage treatment plants with a capacity of 330,000t/d, (another 100,000t/d-plant is under construction), including 30,000 t/d chemical wastewater treatment capacity.
Residue Treatment There are professional residue treatment plants with an incineration capacity of 9,900t/a, another 30,000t/a incineration unit is under planning, collection capacity
of 1,000t/a, and comprehensive utilization capacity of 28,000 t/a.
Industrial Gases Linde, a professional gases supplier from Germany, offers gas service such as nitrogen, oxygen, hydrogen and argon.
Pipe Rack Raw materials, products, steam and industrial gases can be delivered through the public pipe rack, which is about 10 km.
Fire Fighting CZBJ has been equipped with an advanced firefighting station.
Tank Storage The current capacity is 520,000 m3, of which 149, 000 m3 are bonded. (Besides, another 370,000 m3 tank farm is under construction.) There are around 100,000m3 exclusive solid warehouses (including 20,000 m3 for hazardous chemicals).
Land-Level Land will be leveled to the natural height before delivered to investors, with supporting infrastructures connected to the boundary of the land. Desmond Ng,
MPOC Shanghai
(1) Biomass Industry:
(2) Daily Chemical Industry:
(3) Food Industry:
Changzhou Binjiang EconomicDevelopment Zone (CZBJ) – Gatewayto Palm Bioenergy Investment in China
T
MPOC FORTUNE • 11
800
700
600
500
400
300
200
100
0
900
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
CAGR 4%
598 627 655 682 708 732 755 776
Source: KPMG analysis
Palm - based feedstock demand for soap production
CAGR 9%
Palm - based feedstock demand from oleochemicals for different end-user segments (Non-soap)
64
38
30
339
1415
71
44
33
3410
1416
79
50
36
3612
1517
87
57
40
37
14
1518
96
64
45
38
16
1519
106
71
50
39
18
1520
115
79
55
40
20
1621
126
87
62
40
23
1622350
300
250
200
150
100
50
0
400
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Personal care
Detergents
Plastics
Rubber
Pharma
Processed food
Tobacco
Paint
’000
MT
Continued from page 9
Good Potentialfor Palm OleoChemicals in India
MARKETInsightsIns g
The below chart shows the potential CAGR of 4% from 2013-2020 from the soap segment:
Palm – based feedstock demand from oleochemicalsDemand of palm-based feedstocks for oleochemical applications expected to increase at a CAGR of 5% over FY 13-20
Palm-based feedstock demand from oleochemicals for different end-user segments (Non-soap)
Similarly, the below chart shows the potential for a CAGR of 9% from the non-soap segments over the same period:
Based on what was presented, we can conclude that there is immense potential for increased usage of palm based products in the manufacture of oleo chemicals especially in the non food sector. Although there are several oleo manufacturers in India, this sector is one of the growth sectors and it definitely offers opportunities for further investments, including joint ventures. The newly elected Indian government promises to be more business friendly and this bodes well for the development of Malaysia – India joint business ties and a new avenue for palm based products to be marketed in India.
Bhavna, MPOC India.
30
25
20
15
10
5
0FY08 FY09 FY10 FY11 FY12 FY13 FY20
Country USD Per Year (FY13)
India 0.4
China 1
Per capita consumption – Cosmetic
Source: Analyst reports, KPMG analysisUSA 37
Cosmetics volume
2 1 13
1 13 2 1
42 1
52 1
63
1
24
15
6
CAGR 22%
CAGR 25%
Lip paint Face make-up Nail paint
Source: Euromonitor, Analyst Reports,news articles, KPMG analysis
MPOCOffices
WorldwideMalaysian Palm Oil Council (MPOC)2nd Floor Wisma Sawit Lot 6, SS 6, Jalan Perbandaran47301 Kelana Jaya, SelangorTel: 603-7806 4097Fax: 603-7806 2272www.mpoc.org.my
American Palm Oil Council 1010 Wisconsin Av, Suite 307Washington DC 20007Tel: +1 (202) 333 0661Fax: +1 (202) 333 0331www.americanpalmoil.comE-mail: [email protected]: Mohd Salleh Kassim
MPOC Africa Regional Office5 Nollsworth Crescent, Nollsworth ParkLa Lucia Ridge Office Estate,La Lucia 4051, KwaZulu-Natal, South AfricaTel: +27 (31) 5666 171Fax: +27 (31) 5666 170E-mail: [email protected] Address:P.O.Box 1591M.E.C.C. 4301, South AfricaContact: Kamal Azmi
MPOC Bangladesh62-63 Motijheel Commercial Area,7th Floor, Amin Court Building,Dhaka, BangladeshTel: +88 (02) 9571 216Fax: +88 (02) 9551 836E-mail: [email protected]: Fakhrul Alam
MPOC ShanghaiShanghai Westgate Mall Co. Ltd.Room 1610B, 1038 Nanjing Rd. (w)Shanghai 200041, P. R. ChinaTel: +86 (21) 6218 2085 / 6218 2513Fax: +86 (21) 6218 1125E-mail: [email protected]: Teah Yau Kun
MPOC Pakistan11 – 3rd Floor, Leeds CentreMain Boulevard Gulberg, 111 Lahore, PakistanTel: +92 (42) 3571 6600 / 3571 6601Fax: +92 (42) 3571 6602E-mail: [email protected]: Faisal Iqbal
MPOC India S-4, New Mahavir Building, Cumballa Hill Road Kemps Corner, Mumbai 400 036Tel: +91 (22) 6655 0755 / 6655 0756Fax: +91 (22) 6655 0757E-mail: [email protected]: Bhavna Shah
MPOC Europe Regional Office31 Avenue Emile Vendervelde1200 Brussels BelgiumTel: +32 (2) 7748 860Fax: +32 (2) 7794 371E-mail: [email protected]: Uthaya Kumar
MPOC MoscowMoscow, 4th Dobrininskiy side-street,8 BC 'Dobrinya', 1st floor, Office R00-126Tel : +790 963 520 40Email: [email protected]: Aleksey Udovenko
MPOC Cairo3 Gamal E1-Din Afify Street, Nasir CityZone No.6, 11371 Cairo, EgyptTel: +20 (2) 2273 8108Fax +20 (2) 2273 8106E-mail: [email protected]: Zainuddin Hassan
MPOC IstanbulGuzel Konutlar SitesiDilek Apartment Daire 3Balmumcu, Besiktas - Istanbul, TurkeyTel: +90 (212) 2668234Fax +90 (212) 2668236E-mail: [email protected]: Norhaznita Husin Publisher: Malaysian Palm Oil Council (MPOC)
2nd Floor Wisma Sawit, Lot 6, SS 6, Jalan Perbandaran, 47301 Kelana Jaya, Selangor
Printed by: Aktiara Corporation Sdn Bhd 1 & 3, Jalan TPP 1/3, Taman Industri Puchong Batu 12, 47160 Puchong, Selangor
characteristic and property of oil palm makes it superior compared to other oil crops. On the field, the Malaysian palm oil industry has developed good agricultural practices which include zero burning, zero waste and integrated pest management which minimise chemical controls. Oil palm plantations act as effective carbon sequesters with cumulative benefits of cultivation to rural population and the economy. In Malaysia, the oil palm sector provides employment to approximately 800,000 people while palm oil sector export revenue registered RM61.36 billion in 2013.
Anthony K. Veerayan & Lim Teck Chaii, MPOC HQ
References1. Food and Agricultural Organisation of the United
Nations, (FAO) http://faostat3.fao.org/faostat- gateway/go/to/download/R/RL/E
2. Malaysian Palm Oil Council’s comments on EPA’s NODA concerning renewable fuels produced from palm oil under the RFS Scheme (EPA-HQ-OAR-2011-0542)
3. Meadows Donella H., Meadows Dennis L. Meadows, Randers Jorgen, Behrens III William W, ( 1974), The limits to growth, Pan Books Ltd. U.K.
4. Ministry of Natural Resources & Environment Malaysia ( 2011). Malaysia Second National National Communication to the UNFCCC, p. 1115
5. Oil World Annual (Jan – March 2014) ‘Statistics for 17 Oils and Fats & Biodiesel.
6. Pramod Khosla and Kalyana Sundram, (2010) ‘A Supplement on Palm Oil – Why? The Journal of the American College of Nutrition, Vol.29, No. 3(S) pp.237s-239s.
7. van Zutphen, H (2007) The CO² and Energy Balance of Malaysian Palm Oil, Zwolle, Netherlands
8. van Zutphen H ( 2008) ‘Comparative LCA analysis of different edible oils and fats’ International Palm Oil Sustainable Conf., Kota Kinabalu, Sabah, p. 18
Websites.1. Clean Development Mechanism - CDM (2014)
https://unfcc.int/kyoto_protocol/ mechanisms/ clean_development_mechanisms/items/2718.php, Accessed on 1 may 2014
2. Glass D. (2013) ‘European Union Renewable Energy Directive-Advanced Biotechnology for Biofuels http://dglassassociates.wordpress. com/2013/01/22/european-union0renewable-energy-directive/, Accessed on 27 may 2014.
3. HSBC Statement on Forestry and Palm Oil (March 2014) http://www.hsbc.com/~/media/ HSBC-com/citizenship/sustainability/pdf/hsbc-statement-on-forest, Accessed on 28 may 2014
4. Renewable Fuel Standards (RFS) – Fuel and Fuel Additives (2013) http://www.epa.gov/ OTAQ/fuels/renewablefuels, Accessed on 1 may 2014
5. The Hubbert Curve for the whole world, http://planetforlife.com/oilcrisis/oilpeak.html Accessed in 28 may 2014
6. The United nations Collaborative Programme on Reducing Emissions from Deforestation and Forest degradation in Developing Countries (2009) http://www.un-redd.org/ AboutUN-REDD Programme/ tab id /102613/Defau l t .aspx, Accessed on 1 may 2014.
7. Trends in Atmospheric carbon Dioxide (2014) US Department of Commerce, National Oceanic and Atmospheric Administration http://www.esrl. noaa.gov/gmd/ccgg/trends/ Accessed on 28 may 2014.
8. Yusof Basiron, Unjustified & Illogical campaigns against palm oil (2013) http://www.ceopalmoil. com/2013/02/unjustified-illogical-campaigns-against-palm-oil/, Accessed on 28 may 2014
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Global Food Security- Leveraging on PalmOil for Higher Limit ofOils & Fats Output
MARKETInsightsIns g
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