SINGAPORE (ICIS)–Turkey’s Evyap Sabun expects to ramp up to full production at its new oleochemicals facility in Malaysia this year, a company executive said on Wednesday.

The company invested about $200m for the 350,000 tonne/year facility – its first-ever oleochemicals production facility – located at the Tanjung Langsat Palm Oil Cluster in Pasir Gudang, Johor state, Evyap acting managing director Martin Rudolph told ICIS.

The plant was commissioned in October last year, with production rates at close to 100% currently, he said.

The Johor facility can produce 150,000 tonnes/year of soap noodles; 175,000 tonnes/year of fractionated fatty acids; and some 25,000 tonnes/year of glycerine, Rudolph said.

About 120,000 tonnes/year of soap noodles and part of the glycerine output were meant for captive use – for the company’s own production of downstream consumer goods, while the rest are exported to various markets, he said.

“We have 11 lines to produce all variants of soap bars which will be offered to the global market,” Rudolph said.

Key destinations for its oleochemical products are Asia, India, Europe. The company’s products are also marketed into its existing fast moving consumer goods (FMCG) customer base in Turkey, Middle East countries and Eastern European countries, he said.

The Johor facility is Evyap’s first production facility that uses vegetable-based fatty acids as feedstock, with Malaysia as its third manufacturing site after Turkey and Egypt.

The company produces downstream cosmetic products, diapers and soap bars at facilities in Tuzla, Turkey and Alexandria, Egypt.

Evyap Plant in Malaysia

For the Johor plant, the company does not have any plans to expand its production capacities at the site, but it is unlikely to set up a production line for fatty alcohols in the near future, Rudolph said.

Fatty alcohols market in Asia suffered in the recent years, amid rapid capacities expansions since 2011, resulting in heightened competition among southeast Asian suppliers, he said.

Market conditions for fatty alcohols have worsened late last year as the slump in crude oil made alternative raw materials such as synthetic fatty alcohol and linear alkyl benzene (LAB) cheaper, Rudolph said.

Moreover, price volatility in feedstock crude palm oil (CPO) and crude palm kernel oil (CPKO) markets make producers and customers hesitant to lock in on long-term contracts, he said.

Evyap is instead concentrating on optimizing its current facilities and improving its bar soap products to help boost sales to penetrate new markets, Rudolph said.

“Innovation is the key in this current market… and the best innovation comes after a period of [the ongoing global] recession,” he said.

Emerging economies in Asia, the Middle East and Latin America are expected to drive the growth in demand for consumer goods given their booming population, Rudolph said.

“Thus growth in personal care markets will be driven by demand for oleochemicals, in spite of new capacities,” he said.

“We have an optimistic view about [the] business, thus we believe a well-integrated player like us will be in much better position to leverage the market opportunities by having a clear understanding of the consumer market,” Rudolph said.

Interview article by Alexis Gan and Nurluqman Suratman