Dr Zainab IdrisAdvanced Oleochemical Technology Division

MPOB

CONFERENCE on NEW BUSSINESS OPPORTUNITIES in OLEOCH EMICALS, BIOMASS & NUTRACEUTICALS SECTOR

(Jointly Organized by MPOB & POIC Sabah Sdn Bhd)

1st March 2011

Name : Zainab binti IdrisSpecialization : Fatty nitrogen based surfactants, surfactants,

fabric softener,

Higher education: 1988 B. Sc. (Chemistry) –Laurentian University, Ontario,Canada. 1998 M. Sc. (Organic Chemistry)-Universiti Putra Malaysia. 2010 Ph. D (Chemistry) - Universiti

Kebangsaan Malaysia

Working Experience :1989-1990 Assistant Chemist, Rubberex Sdn.Bhd. (IGB),1990-1991 Chemist, Rubberthread Sdn Bhd.(IGB), Jan 1992- Sept 1992 Attachment Research Officer, PORIM1992-2000 Research Officer, PORIM (now known as MPOB)

Current Senior Research Officer (MPOB)Group Leader of Specialty Chemical Group Head of Process Engineering and Design Unit of MPOB

� Introduction� Palm Oil and Oleochemicals� Functions of basic oleochemicals� Functions of intermediates/ derivatives� Application in personal care and consumer

products� Opportunities for new business avenue

Palm Oil and Oleochemicals

� Government effort to increase GNI to RM 47 Billion by 2020� 12 industry sectors were identified and Palm oil

industry is 2nd

� 8 Entry Point Projects (EPP) identified for Palm Oil Industry� Oleo and Derivatives – EPP No 6� Increase GNI to RM 5.8 Billion by 2020

� Key stakeholders: MPOB, MPOC, Private sectors, MIDA

� Shift focus of production from basic oleo-chemicals to higher value oleo-derivatives

� Focus development of 4 key products i) Agro chemicals ii) Surfactants iii) Bio lubricantsiv) Bio Polyols v) Glycerol derivatives.

� Capture part of global demand of USD 215 Billion by 2020, given easy access to feedstock

02468

10

2002 2003 2004 2005 2006 2007

CA

GR

(%)

Demand Capacity

CAGR (’02-’07): 5.1% CAGR (’09-’14): 4.6%

0%

10%

20%

30%

Basics

Surfactants

Biopol yol

Bi o-lub.

Agroch

em.

…suffers from low margins and overcapacity…

…and 98% of Malaysia’s production is focused on basic oleos

� Promote local oleo-derivative industry/players�Pilot plants - JV with SMEs�R&D efforts on identif ied high value products�Focused global market research support

� Incentivize end-users to set up factories in Malaysia�Integration w ith local derivatives producers�Removing bureaucratic hurdles of setting-up business

� Exploit synergies w ith petro-chemical players�Sharing of raw materials for oleo-derivatives

� Support local players to set up plant/JV abroad�Support to local players through networks, market know ledge, collaboration with investors/technology providers

MESOCARP (CPO): Fatty acid composition equivalent to tallow

KERNEL(CPKO): Fatty acid composition equivalent to coconut

MesocarpKernel

Chemicals derived from plant and animal

CH2

HC

CH2 OCOR3

OCOR2

OCOR1

3 H2O

CH2

HC

CH2 OH

OH

OH R1COOH

R2COOH

R3COOH

Triglyceride Water Glycerol Fatty acids

R1, R2 and R3 vary in chain length and unsaturation

� Fatty acids, � Methyl esters (FAME), � Fatty alcohols, � Fatty amines and� Glycerols

Oleochemicals derivatives : Activation of the functional group on basic

oleochemicals

CR

O

OX if X=H, fatty acidif X=CH3, methyl ester

H3C Funtional group

2 commom functional group on basic oleochemicals

CR Y

H

H

if Y= OH, fatty alcoholif Y= NH2, fatty amines

where R is hydrocarbon moiety

General basic oleochemical structure

HO OHOH

Back bone of triglyceride: Gly cerol

� Alcohol ethoxylates, � Alcohol sulfates, � Alcohol ether sulfates, � Quaternary ammonium salts� Monoacylglycerols (MAG), � Diacylglycerols (DAG), � Structured triacylglycerols (TAG), � Sugar esters

Plant based and Animal Based• Even numbered carbon chain

Petroleum based• Branched and odd numbered carbon chain.• Fatty alcohols and fatty amines

Differences or absence of one characteristic in either one of the resources create an

opportunity for synergism between both resources

� Incorporation of a small portion of oleo based intermediates in petroleum based products� Oil well stimulating agent: performed and

degrade.� Oil field recovery� In polyurethane formulation� Stick formulation� Candle formulation� Industrial textile

Price of crude oil Price of crude oil rose rose in the late 1970s in the late 1970s

manufacturers switched manufacturers switched from petrochemicals tofrom petrochemicals tooleochemicalsoleochemicals

� Lauric oils are for detergent� Low production cost and abundant

supply

The “Bad Prions”

� Production Capacity: 2.6 million ton/year� Export capacity: 2.17 million tonne in 2009� Export value: RM6.56 billion in 2009� Major markets:

� EU � China� USA� Japan

Application of basic and intermediates in Personal care and Consumer products

• Basic oleochemicals: Hydrocarbon/oil phase

• Intermediates: Surface active properties

• Water soluble ingredients

SURFACTANTS

Palm fruits

Palm Kernel (CPKO)

Mesocarp oil (CPO)

Olein

s tearin

Fatty acids , glycerol, methyl es ters , fatty alcohol and fatty amines

Surfactants

Finished productsPackaging industryRetailers , consumer

� Direct use and as intermediate for surfactants � Trendy-Branding� Population-target market� Competitiveness-how fast it change with

demand and trend� Environmental concern� Economics of production-raw material, labour,

logistic, transportation

Waxy body to formulated productsCreamyStickEmmoliency/ lubricating/ protection

� What are these chemicals?� Why very useful?� Surface coating industry?� Delivery of cosmetic ingredients? Why we need

delivery?� Performance enhancer?

Amphiphilic compound used to mix oil and water in one emulsion system

Hydrophillic head(water loving)

Lypophillic tail (oil loving)

Functions:o Cleansing agento Emulsifying agento Foam boosterso Hydrotropeso Solubilizing agento Suspending

agent

Types/classification :o ANIONICS - soap, fatty

alcohol sul fate, fatty alcohol ether sulphate

o NON-IONICS - fatty acid ethoxylate, fatty alcohol ethoxylate

o CA TIONICS - esterquatso AMPHOTE RICS - betaines

ANIONICS :

MES for laundry detergent, liquid cleaner, etc.

CATIONICS : Esterquat for Household fabric softerner

A class of anionic surfactants derived from neutralization of fatty acid or

saponification of triglycerides

Palm oil : Palm kernel oil80:20, 75:20, 70:30 & 60:40

� mois ture 9-12.5%

� Total Fatty Matter 79-83%

� Free fatty acid 1.3 - 7.0%

� Glycerine 0.4 -0.6%

� Sesq. Present

� Titre 38-52oC

1. AMALGAMATOR2. ROLL MILL3. PLODDER4. PNEUMATIC PRESS MOULD

1 2 3

4

� Specialty soaps - contain special additives for specific functionality (1- 5%)

� Process similar to toilet soaps� Additives:

� Emollients, humectant,

� Moisturisers, occlusive agents, dermabrasive agents, medicaments, anti-irritants, etc.

Trendy Palm-based soap noodles to replace tallowProcess - neutralization of fatty acidsPlus other additives to enhance transparency, appearance and performancesCan be used for decoration and skin care or gifts

41

Item RM/year

A. Capital Investment:• Machinery & Equipment• Renovation• Vehicles • etc

RM 556,500

B. Operational Cost• Raw material• Labor• Utilities• Rental • Packaging• etc.

RM 704,700

Production Capacity: 150,000 kg/yr

Sales and Revenue

COST BENEFIT ANALYSIS

Internal Rate of Return (IRR) 33.08

Benefit : Cost RM 1.12

Net Present Value @ 12% RM 488,383

Return of Investment (ROI) 2.8 years

Item Per year

Sales price/ 3 kg packing RM 18.00

Total sales (packs) 50,000

C. Revenue RM 900,000

D. Gross Profit (C – B) RM 195,300

Use of basic oleochemicals and derived surfactants for efficient

performance

Formulated products to support the SMI

Shampoo for dyed hair

Anti-hair loss shampoo

Personal Care ProductsPersonal Care Products

Liquid foundation

Lipstick

Blusher

CosmeticsCosmetics

Sunscreen

Retsch Grinder

Roll Mill

Compact Powder Press

Item Main Company Contract manufacturing Company

A. Capital Investment:• Machinery & Equipment• Renovation• Vehicles • etc

�

�

�

�

�

RM 1,200,150

--�

�

RM 94,500

B. Operational Cost• Bas ic cosmetic raw material• Specialty cosmetic raw material• Labor• Utilities• Rental • Packaging• Marketing• etc.

�

�

�

�

�

�

�

�

�

RM 536,150

-�

�

�

�

--�

RM 93,404

Sales and RevenueItem Main Company Contract

manufacturing Company

Basic Cosmetic:Sales price/kgTotal sales (kg/year)Revenue (per year)

RM 1010,500 kgRM 105,000

Specialty Cosmetic:Sales price/unitTotal sales (Unit @ 30 g/year)Revenue (per year)

RM 4021,000 unitsRM 840,000

RM 403,000 unitsRM 120,000

C. Total Revenue RM 945,000 RM 120,000

D. Gross Profit (C – B) RM 408,850 RM 26,596

Economic Analysis Economic Analysis (Cosmetic Product: Basic & (Cosmetic Product: Basic &

Specialty)Specialty)

COST BENEFIT ANALYSIS Main Company Contract Manufacturing

Company

Internal Rate of Return (IRR) 35.09% 23.16%

Benefit : Cost RM 1.21 RM 1.02

Net Present Value @ 12% RM 1,163,459 RM 36,683

Return of Investment (ROI) 2.7 years RM 3.6 years

Emulsion systems using colloid technology to be formulated into agro products for efficient delivery of active

into plant.

� Herbicides, insecticides, fungisides, fertilizers and soil treatments� Adjuvants, surfactants for emulsifying,

dispersing, and foaming action for stable emulsion building

� Palm-based Adjuvant in Glyphosate Herbicides Formulation for Weed Control• Imaspro Biotech Sdn Bhd

� Palm-based Inerts in EW Insecticides Formulations for Pests Control• Ancom Crop Care Sdn Bhd

� Distributor : � Logistic/warehouse

� Trans portation� Packaging: 25 L, 4 L & 1 L

� Licensing : Pesticide Board of Malaysia & Manufacturer

To support the downstream activities of palm oil industries

Biodegradation Test Acute Toxicity TestAnalytical Services

For claims substantiation of consumer products

Efficacy tests ( in vivo and in vitro) for claims substantiation particularly for EU marketMicrobiology tes t

SPF claims

Skin color

Patch tes t for product safety

� Creates new job� New branding business� Opportunity for packaging industries� Creates market for local chemicals� Creates market for local consumer products� Abundance of raw material and plant based

resources � Higher profit margins

Acknowledgment:Datuk Dr Choo Yuen May (DG of MPOB), Dr Hazimah Abu Hassan (Director of AOTD), Pn Rosnah Ismail, Dr Yeong Shoot Kian, Pn Zulina Abd Maurad, En Zailan Abu Bakar, Pn Noor Azeerah Abas