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Sinar Mas Cepsa starts production at alcohols plant

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Hydrocarbon Engineering,

Sinar Mas Cepsa has inaugurated its first oleochemicals plant in Indonesia, which represents an investment of EUR 300 million made over 2 years. The plant will produce fatty alcohols from sustainably-sourced palm kernel oil, a key ingredient in the manufacture of everyday products such as household cleaning goods and personal care products.

Sinar Mas Cepsa is a wholly-owned joint venture (JV) between Cepsa and Golden Agri-Resources (GAR). The plant’s inauguration ceremony was held in Dumai, Sumatra, and attended by officials and dignitaries from the Indonesian Ministry of Industry.

The Dumai plant has an annual production capacity of 160 000 tpy of fatty alcohol. Sales of vegetable-based alcohols, rather than conventional petroleum derivatives, increasingly in demand as a raw material for personal care products and liquid detergents, will primarily focus on markets in Asia. The plant will also service demand from Sinar Mas Cepsa’s surfactant plant in Germany, which serves markets in Eastern and Western Europe.

The global market for fatty alcohols is predicted to expand to 4.1 million t by 2025, up from 3.1 million t in 2016, demonstrating a five year compound annual growth rate (CAGR) of 3.5%. Of this, a bulk of the revenue generated will come from Asia which currently commands over 40% of overall demand.

GAR’s Lubuck Gaung refinery, which is certified by the Roundtable on Sustainable Palm Oil (RSPO) and located nearby, supplies the plant with sustainable, traceable palm kernel oil. The Dumai plant is also fully self-sufficient, capable of producing its own electricity, treating its waste water and managing its own logistics.

Chairman and CEO of GAR, Franky Widjaja, said: “This joint venture was created with a mutual vision to develop a global leading position in fatty alcohols and its derivatives, based on a supply of sustainably sourced raw materials. Sinar Mas Cepsa’s vertical integration and the launch of the Dumai plant is a critical step in achieving this vision.”

Sinar Mas Cepsa CEO, Kung Chee Whan, said: “The Dumai plant leverages Cepsa’s technology and expertise in oleochemicals, and relies on GAR for raw materials – marking the second plant of this partnership. Having already secured a foothold in Europe through the acquisition of our surfactant plant in Germany, we will definitely look into further downstream projects or expansion capacity in this part of the world.”

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