Investing in Malaysia
Oleon Testimonial
2June 4th 2014
1.Oleon NV
2.Oleon’s activities in Malaysia
3.Why Malaysia?
Agenda
Vegetable Oils & Animal Fats
Fats and oils
Triglycerides
Base oleochemicals
GlycerineFatty acids Esters Derivatives
Oleochemical derivatives
I. Oleon NV – Natural Chemicals
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Beauty, Health & Home care
Oilfield Chemicals
Nutrition : Food & Feed Additives
Agrochemicals
Coatings, Inks, Solvents & Green plasticizers
Lubricants & specialty additives
I. Oleon NV – Business segments
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OLEON History
1835Candle factory Oelegem
1958Start of oleochemical plants Ertvelde & Oelegem
2000-2003Acquisition of SandefjordNew glycerine refinery in ErtveldeDimer plant in Oelegem
1970-1980New investments in Ertvelde & Oelegemtowards surfactant oleochemicals underOleofina/PetroFina
2006Closure of Sandefjord fatty acidsAcquisition of Akzo Nobel Oleochemicals plantConstruction of the first dedicated biodiesel plant in Belgium
2007Construction of new FA3 plant in Ertvelde after fire
2008Ester plant in Malaysia
2009Take-over by Sofiprotéol of 100 % ofthe shares
2010Doubled capacity in Port Klang
2011New distillation unit in Oelegem
2012Start up of PG-plant in Ertvelde Start up of new reactor line in Port Klang Start up of glycerine plant in Porto Corsini
2014Start up of UniOleon new food emulsifier plant
I. Oleon NV – History
2013New distillation unit in Oelegem
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Our shareholder SOFIPROTEOL was founded in 1983 with a unique mission to develop and promote oilseed crops in France.
I. Oleon NV – Our Shareholder
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Oleon is integrated in the agro-alimentary chain of
Sofiproteol :
I. Oleon NV – Our Shareholder
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849 employees
8 8 production plants
Ertvelde (+ HQ)
– Belgium
Oelegem –
Belgium
Compiègne –
France
Sandefjord – Norway
Emmerich –
Germany
2x Port Klang –
Malaysia
Porto Corsini –
Italy
11 sales affiliatres in Europe, USA and Asia
No. 1 in Europe with estimated market share 23%
725 mio €/y turnover in 2013
600.000 tons of Oleochemicals in
2013
I. Oleon NV – Facts & figures
54 R&D Scientists based in 3 R&D centres
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1.Oleon NV
2.Oleon’s activities in Malaysia
3.Why Malaysia?
Agenda
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Jan 2008
Before 2000 Office in Fina Singapore
Jan 2001 Office in JB
Office in Klang
Jun 2009 Plant in P. Indah – Phase I
Jun 2012 Plant in P. Indah – Phase II
Jul 2014 Plant in P. Indah – UniOleon
II. Malaysia – Our history
100% Owned
Support Americas and Asia SAP projects and rollout
Oleon Sdn Bhd
Oleon (Asia-Pacific) Sdn Bhd
Oleon China
Marketing communication and market research
Raw material sourcing
• Manufacturing (Ester for Food, F&F, Lubricant, P. Care, Polymer)
Oleon NV
Unioleon Sdn Bhd (Joint Venture)
• Manufacturing (Emulsifiers for Food, Personal Care, Polymer)
50% Owned
50% UP
100% Owned
• Trading (marketing products from all plants globally to AP & ME)
• OHQ (rendering services to Oleon NV, Oleon China and Oleon Americas)
1. Purchasing2. Marketing Services
3. SAP Support
4. Application Support5. Advisory (Consulting)6. Finance Services
Application research
Provide Finance Services to affiliates in AP & ME
II. Malaysia – Current Setup
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II. Malaysia – Investment I : Oleon Sdn Bhd
The factory is located 50km west of Kuala-Lumpur on Pulau Indah or “Beautiful Island” of the coast near Port Klang. Close to Westport (5km) and Northport (25km), which is the 13th busiest container port in the world (mainly GP box). As a comparison, Antwerp ranks 14th.
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Goal : Support our growing presence in North America, and support our future growth in AP
Why Malaysia?
•Asia-Pac vs USA : Produce where raw materials are & future growth market
•In Asia : China vs Malaysia vs Singapore
Start up May 2009 (I) & Aug 2012 (II)
Total Investment 17 Mio € (I) + 12 Mio € (II)
Annual turnover 65 Mio €
NWC Requirement 27%
Employees 75
II. Malaysia – Investment I : Oleon Sdn Bhd
June 4th 2014
• Established 1sty of January 2013
• Sales Turnover 2014 : 230 Million MYR• Trading : 95% • OHQ Services : 5%
• Human assets : Moved from 2 people to 24 people at the
end of 2013. Growing to 35 people.
• Oleon China : Also overseeing and managing Oleon China
which was established in Feb 2012
Trading ● OHQ Services
2011201020092008200720062005200420032001 2002
Sales Turnover(MYR)
Profit After Tax (MYR)
20132012
All figures are shown in MYR (Millions)
II. Malaysia – Investment II : OHQ
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Central
Asia
East Asia
Southeast Asia
Oceania
South
Asia
Middle East
2013 Turnover:MYR 230 Million
II. Malaysia – Investment II : OHQ
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II. Malaysia – Investment II : OHQ
SERVICES & SUPPORT > SAP Competence center & Helpdesk > PS&RA support > Management & Finance Services
MARKETING SERVICES > Promote all products from Oleon factories to Asia
Pacific and Middle East Countries.
APPLICATION SERVICES & COMPETENCY DEVELOPMENT CENTRE
> Regional customer support center > Training/Technical Knowledge center for both internal as external sales organization.
RAW MATERIALS SOURCING > From Asia Pacific region for all Oleon plants & Trading.
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II. Malaysia – Investment III : UniOleon
50/50 Joint Venture between United Plantations Bhd and Oleon nv through the company UniOleon Sdn. Bhd.
UniOleon Sdn. Bhd.MISSION : United plantations & Oleon NV the perfect match to produce food emulsifiers with the highest possible technical performance, and this by using raw materials and production processes complying with the most severe quality & sustainability standards.
U N I T E D P L A N T A T I O N S B H D
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II. Malaysia – Investment III : UniOleon
KEY Facts & figures :•Total investment : 16 Mio € (I) + 10 Mio € (II)•Capacity : 25.000MT•Employees : 50•Star up date : Q3 2014 (I) + S1 2016 (II)
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II. Malaysia – Investment IV : Global Innovation Hub
Key Facts : Total Investment : 4,5 – 5 Mio €Scientists : 20
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II. Malaysia – Investment IV : Global Innovation Hub
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II. Malaysia – Investment IV : Global Innovation Hub
Business Model
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1.Oleon NV
2.Oleon’s activities in Malaysia
3.Why Malaysia?
Agenda
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KEY Drivers to invest in Malaysia :• Access to raw materials
• Lower investment costs (especially for land)
• Centrally located in the region
• Good export infrastructure
• Good incentive package & support offered by MIDA which resulted in pioneer status (10 years) + R&D grant.
• SSIC support when constructing plant to get permits/certificates & utilities Fast track approvals
III. Why Malaysia?
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• Slow-down in the China’s economy is putting pressure on inter-Asian trade which could impact Malaysia’s exports.
• Loss of GST Status
• Energy cost (natural gas and electricity) is increasing and moving towards the Asian level.
• Energy cost in the US, due to larger availability of natural gas at low prices (around 4USD/mmBTU) is turning Asia uncompetitive for energy dependent activities.
• Increments of salaries outpaces the rest of the world with a small base to find good talents and competition for talents can further erode bottom line (talent turn over & retention)
• Congestion, typical to growing economy, actions are being undertaken.
• The image of some of Malaysias largest natural resources is under pressure by the European public opinion (forestry and palm oil).
Economic
Energy
Employment
Image
III. Why Malaysia? – Challenges
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Infrastructure
• South-East Asian mentality is fairly close to the Flemish: Pragmatic, a can-do mentality & a fair amount of business is done (after the working hours) through personal network
• Do not rely on local consultants : Opt for using your own Flemish/Belgian/European presence (that you can rely upon)
• For export oriented activities, be aware of fast increasing CPI which could turn business uncompetitive. Make your business plan realistic considering real prices and costs and not the ones consultants tend to provide. Do not consider South-East Asia as a low-cost region (with the exception
of some labor intensive activities where a few countries are still attractive e.g. Cambodia, Myanmar, Indonesia, …), but not Singapore, Malaysia or even Thailand.
• For regional markets activities, consider your logistics and supply chain very well The region is huge with sometimes fairly poor infrastructure.
III. Some Tips
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Thank you
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Back up
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III. Energy prices
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Oleon’s Employment in Malaysia
– Currently Oleon Sdn. Bhd. employs approximately 70 people. Oleon (Asia-Pacific) Sdn. Bhd. Employs approximately 30 people in Sales & Marketing, Finance, SAP, application specialists and QA.
– For phase III and IV, the total employment will further increase with 35 and 45 people respectively as a minimum.
– Of all staff at Oleon Sdn. Bhd. nearly 50% is having a certificate or diploma (bachelor or master). All staff have completed secondary education levels.
– Minimum wages are MYR32,700 gross per year (excluding bonuses potentially adding up to 4 months pay).
– We are hiring in-house specialists to provide global services to Oleon Group (e.g. SAP consultancy, procurement,...)
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Oleon’s Contribution to Malaysian Economy
• Total investment of Phase I, II and UniOleon Phase I and II amounts to RM210 million
• Total Working capital commitment (inventory, receivables,...) another RM160 million
• This brings total investment in the Malaysian economy to RM370 million
• Construction mainly carried out by Malaysian companies. Even core equipment such as reactor is designed and built in Malaysia
• UniOleon phase I and II will provide work for 450-500 temporary workers
• 80% of our Raw materials are sourced in Malaysia• Oleon produces high value added derivatives that provide a
downstream valorization of palm oil
Investment
Construction
Added Value
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