InfoSAWIT, KUALA LUMPUR — Several major fatty alcohol producers in Asia are racing to expand their production capacities to meet the surge in global demand, particularly from the cleaning and personal care sectors. This expansion marks a new chapter in the supply chain of key raw materials for the soap, detergent, and plastic industries.
Wilmar, a major player based in Gresik, Indonesia, is constructing a new plant with a capacity of 110,000 tons per year, expected to be completed in the first quarter of 2025. With this addition, Wilmar's total capacity will increase to 560,000 tons per year.
Meanwhile, Kuala Lumpur Kepong (KLK) is also in the race. The Malaysian company is completing a plant in Port Klang with a capacity of 50,000 tons per year. If completed on schedule in the first quarter of 2025, KLK's total capacity will reach 300,000 tons per year.
In Indonesia, Permata Hijau is building a plant in Medan with a capacity of 120,000 tons per year, planned to start operations in the second quarter of 2025. In Thailand, Global Green aims to complete a new plant in Rayong with a capacity of 100,000 tons per year by 2027. If completed as planned, its total capacity will reach 250,000 tons per year.
This trend of increasing production is driven by high global market demand. Data shows that about 48% of fatty acid demand comes from the cleaning and personal care industries, while 55% of fatty alcohol demand is used in soap, detergent, antioxidants, and body care products.
However, the industry also faces challenges. Raw material costs are expected to remain high until mid-2025, although there is potential for price reductions in the third quarter. Consumption of key raw materials such as palm oil, coconut oil, and animal fats is projected to increase in the fourth quarter of 2025.
On the regulatory side, global trade dynamics continue to change. The implementation of anti-dumping duties (ADD) keeps Indonesia's exports strong in the US market, while Malaysia excels in the European market. Additionally, the implementation of the European Union Anti-Deforestation Regulation (EUDR) is predicted to boost demand for vegetable oils by the end of 2025, affecting prices and purchasing patterns globally.
With this growth trend, the Asian fatty alcohol industry is expected to play an increasingly strategic role in the global chemical industry landscape in the coming years. (T2)
For more details, read the April 2025 edition of InfoSAWIT Magazine.
