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• Evyap Sabun Malaysia Sdn BhdBuilding Chemistry with You

20th August 2014

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Oleochemical Production & Value chain

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SE Asia48%

India9%

China20%

Japan 2%

South America

1%

North America

9%

Europe11%

Global Splitting Capacity

• The SEA can boost of the largest splitting capacity in the world.

• The basic oleo chemicals are the building blocks for downstream or second generation oleo chemicals.

• Oleo chemicals have numerous commercial applications like soaps, cosmetics, pharmaceuticals, rubber, plastics, confectionaries and many more.

Source :www. Worlpalmoil.com & Internal

Oils & FatsOils & Fats

Fatty AcidFatty Acid

Methyl EsterMethyl Ester

Fatty AlcoholFatty Alcohol

GlycerineGlycerine

• Bath Soap• Metal Soap• Sorbitan Esters• Glycol Esters• Mono/Di/Tri Glycerides

• Alkonamides• Sugar Ester• Methyl Ester Sulphonates• Biodiesel & Lubricants

• Alkyl suphate• Alkyl phosphate• Alkyl Amide• Alkyl Glucoside

• Glycol Ester• Polyglycerine• Monoglyceride

Vegetable Oil86%

Animal Fat 14%

World Production of Oils & fats

Oils & Fats Production (2013/14) (193 Mio Tonnes)

• Palm Stearin & Tallow

Present Scenario…

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0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2005 2010 2013 2018-20

MTs

Global Supply &Demand for Oleochemicals

Supply

Demand

0

500

1000

1500

2000

2500

Announced capacity expansion in different regions (2012 - 2015)

Fatty Acids

Fatty Alcohols

• The Oleochemicals is growing at a CAGR of 5% for the period from 2013 to 2018.(in terms of both demand and production)

• Fatty Acids, demand is growing at CAGR 6% , the increase in demand due to expansion of soap noodles market & fatty alcohol.

• Fatty Alcohol,expected to grow at CAGR 5.6% and will expand to 4.8 Mio Tonnes by 2020

• SEA leading region in terms of production estimates and annual growth of 6.6% per annum

Source : LMC International

-

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

Fatty Acid Fatty Alcohols Glycerine

MTs

.

Global Vs Asia (Production of Fatty Acids, Fatty Alcohols & Glycerine ,2013)

Global

Asia

World Oleochemical Capacity (Region-wise)

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• The oleochemical started as Tallow based, in the process of development, plants started utilizing the more competitive sources of raw material available to them, like Palm Oil.

• Palm Oil produced primarily in Malaysia & Indonesia is the most competitive source.

• The tallow based plants can still be found in Europe, US, Japan (*)• Global Market Shift

-

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

1980 1990 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013

1980 1990 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013ROW 100.00 100.00 100.00 190.00 190.00 190.00 190.00 190.00 190.00 190.00 250.00 250.00SA - - 100.00 100.00 100.00 170.00 250.00 330.00 330.00 380.00 400.00 400.00Asia 440.00 1,244.00 2,914.00 3,940.00 4,395.00 6,020.00 6,650.00 6,975.00 7,335.00 7,720.00 9,515.00 11,100.0Europe 1,500.00 1,800.00 2,295.00 2,295.00 2,295.00 2,345.00 2,345.00 2,345.00 2,075.00 2,075.00 2,075.00 2,175.00NA 1,300.00 1,600.00 1,700.00 1,800.00 1,800.00 1,740.00 1,740.00 1,740.00 1,740.00 1,740.00 1,740.00 1,740.00

AsianDominance

Source : LMC International

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Asian Regional Oleochemical Capacity

1980 1990 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013

India 220.00 220.00 460.00 460.00 460.00 475.00 485.00 490.00 590.00 590.00 750.00 1,030.00

China 116.00 116.00 284.00 510.00 570.00 1,550.00 1,830.00 2,030.00 2,110.00 2,220.00 2,360.00 2,480.00

Japan 104.00 108.00 370.00 370.00 370.00 370.00 370.00 370.00 370.00 370.00 370.00 370.00

South East Asia - 800.00 1,800.00 2,600.00 2,995.00 3,625.00 3,965.00 4,085.00 4,265.00 4,540.00 6,035.00 7,220.00

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2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00M

Ts

2005 2006 2007 2008 2009 2010 2011 2012 2013

North America 1,800.00 1,800.00 1,740.00 1,740.00 1,740.00 1,740.00 1,740.00 1,740.00 1,740.00

Europe 2,295.00 2,295.00 2,345.00 2,345.00 2,345.00 2,075.00 2,075.00 2,075.00 2,175.00

Asia, of which 3,940.00 4,395.00 6,020.00 6,650.00 6,975.00 7,335.00 7,720.00 9,515.00 11,100.00

South East Asia 2,600.00 2,995.00 3,625.00 3,965.00 4,085.00 4,265.00 4,540.00 6,035.00 7,220.00

Japan 370.00 370.00 370.00 370.00 370.00 370.00 370.00 370.00 370.00

China 510.00 570.00 1,550.00 1,830.00 2,030.00 2,110.00 2,220.00 2,360.00 2,480.00

India 460.00 460.00 475.00 485.00 490.00 590.00 590.00 750.00 1,030.00

South America 100.00 100.00 170.00 250.00 330.00 330.00 380.00 400.00 400.00

Rest of the World 190.00 190.00 190.00 190.00 190.00 190.00 190.00 250.00 250.00

Total 8,325.00 8,780.00 10,465.00 11,175.00 11,580.00 11,670.00 12,105.00 13,980.00 15,665.00

Points :

• By 2013 the demand for oleochemicals has reached approx 15 Mio Tonne and expected to reach 18 Mio.Tonnes by 2018/20

• Major share in Asia by SEA, followed by China & India

Source : LMC International

Structural Changes & Evolution

� Upstream integration� Geographical and structural shift w.r.t Production & Demand� Growth of Biodiesel & expansion of Glycerine market� Rationalization and consolidation in Asia Pacific continues.� Diverse strategy of plantation players (Regional vs Global Oil Players)� Fiscal incentive remains major driver of investment� Advent of fracking technology in US & stable crude oil prices , the

synthetic oleochemical producers play significant role

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Challenges for Oleochemical producers

� Commoditization of products� Volatility of Palm Oil� Trade Barriers� Higher margins in up stream products� Technical manpower� Competition from Substitutes (Petroleum based products)� Producers outside tax incentive zones will have to cut down on

margins to remain competitive� Sustainability & Traceability

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Way Forward

Saudi Arabia

Mexico

South Africa

India

Turkey

Indonesia

ArgentinaBrazil

Australia

USA

Canada

South Korea

Spain

UK

FranceJapan

Germany

Italy

Russia

China

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

15 20 25 30 35 40 45 50

GDP per Capita vs Median Age G-20GDP per Capita, $K

M e d i a n a g e / y e a r s

‘POOR, BUT YOUNG’

‘POOR AND AGEING’

‘RICH BUT OLD’GDP per Capita = country GDP value relative to USA = These economics are 79% of global GDP ($70t)

� Seek opportunities down the value chain

� Focus in the growth markets

� Strategic tie ups

Income Levels & Age Profiles

Emerging Growth Markets

Source : Internal

**Global Soap Market

Future of Oleo Business§ Asia, Middle East & LATAM are going to drive

growth in consumption. § Emerging economies are future market.§ This trend is likely to continue due to

demographic reasons.§ Growth in Personal care market & Soap &

Detergent market will drive oleochemicaldemand

§ ROW region is moving towards surfactant/alcohol driven consumption.

§ Growth of Oleo Chemicals is estimated to be in the range of up to 9 to 11%. Considering the volume growth in the emerging markets.

Share of population under age 30 by Region :2030

Middle East & Africa 61.70%

World 44.70%

Latin America 43.70%

Asia Pacific 43.70%

Australasia 37.60%

North America 36.50%

Western Europe 32.60%

Eastern Europe 32.06%

Source : Euromonitor

Way Forward

� Oleochemical companies going downstream – calls for Govt. encouragement� Differential pricing on oil (raw material) for oleochemical

producers� FDI in FMCG sector, which will help increase domestic

demand� Support by promoting subsidiaries/tax incentives for

investment in R&D, Innovation in downstream sector� Develop Manpower

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Evyap

§ Founded in 1927.§ One of the largest soap making capacity in the world with

350,000 Ton per year.§ Exporting to more than 100 countries.§ Market leader in Turkey, Russia & MENA regions.§ Operates in Soap, Personal Care, Cosmetics, Hygiene Care &

Glycerin.§ Operates in multi location plant in Turkey, Egypt and

Malaysia.§ Started commercial port called Evyap Port in 2003.§ Employs 5,000 people.

Our Foray in South East Asia

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Proximity to a more sustainable feed stock

Backward integration for cost optimisation & quality

Changing customer preference towards vegetable base

Well developed infrastructure & ease of doing business

Opportunities in the emerging Asian Markets

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EVYAP SABUN MALAYSIA SB Now Commissioning…..

Splitting

Distillation

Fractionation

Neutralization

Saponification

Hydrogenation

Oleic Acid

Personal Care Product

• Largest integrated Oleochemical & Personal Care complex.

• State of art production facility• Production capacity of

400,000 Mts. • Investment of USD 200 Mn.

Evyap Sabun Malaysia Sdn BhdJalan Nibong 4,Tanjung LangsatIndustrial Estate,81700 PasirGudang, Johor, Malaysia

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