Malaysia: A Reliable Source of Feedstock and Biodiesel
Malaysia: A Reliable Source of Feedstock and Biodiesel
Malaysia: A Reliable Source of Feedstock and Biodiesel
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<strong>Malaysia</strong>: A <strong>Reliable</strong> <strong>Source</strong><br />
<strong>of</strong> <strong>Biodiesel</strong> & <strong>Feedstock</strong><br />
T. (Tiger) Thiagarajan<br />
<strong>Malaysia</strong>n Palm Oil Board<br />
Washington, DC
Palm oil is the fastest growing commodity in<br />
the global fats <strong>and</strong> oils arena.<br />
800<br />
700<br />
600<br />
500<br />
400<br />
300<br />
PalmOil<br />
SoyOil<br />
Tallow<br />
Total<br />
200<br />
100<br />
1980 1985 1990 1995 2000 2005<br />
Production Growth Index <strong>of</strong> Selected Oils<br />
<strong>Source</strong> <strong>of</strong> data: OilWorld
Global Production <strong>of</strong> Palm & Soybean Oils<br />
(million tonnes)<br />
40<br />
35<br />
30<br />
25<br />
20<br />
15<br />
10<br />
5<br />
0<br />
Palm<br />
Soy<br />
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006<br />
Palm oil<br />
is now<br />
the<br />
world’s<br />
favorite<br />
oil!<br />
<strong>Source</strong>: OilWorld/MPOB
World Production in 2006 (tonnes)<br />
Palm oil 36,700,000<br />
Soybean oil 35,200,000<br />
Rapeseed oil 18,300,000<br />
Sunflowerseed oil 11,100,000<br />
Coconut oil 3,100,000<br />
Palm kernel oil 4,300,000<br />
Total (all 17 oils) 149,400,000<br />
~24.6%<br />
~23.6%<br />
<strong>Source</strong>: OilWorld/MPOB
World Exports in 2006 (tonnes)<br />
Palm oil 28,700,000<br />
Soybean oil 10,300,000<br />
Sunflower oil 4,500,000<br />
Tallow 2,100,000<br />
Coconut oil 2,000,000<br />
Palm kernel oil 2,200,000<br />
Rapeseed oil 2,000,000<br />
Total (all 17 oils) 55,700,000<br />
~51.5%<br />
<strong>Source</strong>: OilWorld?MPOB
Palm Oil Producers in 2006 (tonnes)<br />
<strong>Malaysia</strong>* 15,800,000<br />
Indonesia* 15,800,000<br />
Nigeria 800,000<br />
Thail<strong>and</strong>* 780,000<br />
Colombia 700,000<br />
Ecuador 350,000<br />
Total (all producers) 36,700,000<br />
(all producers) 36,700,000<br />
*south east Asia<br />
~43.1%<br />
~43.1%<br />
<strong>Source</strong>: OilWorld/MPOB
Palm Oil Exporters in 2006 (tonnes)<br />
<strong>Malaysia</strong> 14,400,000<br />
Indonesia 12,000,000<br />
PNG 270,000<br />
Colombia 220,000<br />
Total (all exporters) 28,700,000<br />
(all exporters) 28,700,000<br />
~50%<br />
~42%<br />
<strong>Source</strong>: OilWorld/MPOB
Premier position <strong>of</strong> palm oil in the world<br />
trade is largely attributed to its<br />
competitive position in the market place.<br />
A position that has been defined by palm oil’s:<br />
• assured supply &<br />
availability<br />
• product diversity &<br />
versatility<br />
• competitive market<br />
prices<br />
• superior product<br />
performance<br />
• process cost<br />
benefits<br />
• wholesomeness &<br />
nutritive values
Assured Supply & Availability<br />
Supply & availability <strong>of</strong> palm oil,<br />
particularly from <strong>Malaysia</strong>, is<br />
assured for the OIL PALM can<br />
claim a number <strong>of</strong> advantages as<br />
a reliable source <strong>of</strong> supply <strong>of</strong> oils<br />
<strong>and</strong> fats compared with the<br />
competing annual oilseed crops<br />
<strong>and</strong> animal fats.
Palm oil is derived from a perennial tree crop<br />
(Elaeis guineensis).
Advantage ….. palm oil!<br />
• economic life<br />
span: 25 – 30 years<br />
• slightly affected<br />
by season <strong>and</strong><br />
weather<br />
• harvested<br />
throughout the year
Oil palm is a non-GM crop
The oil palm starts bearing fruits after 2.5 to 3 years
Oil Palm Advantage<br />
Highest oil yielding plant<br />
Oil Yield: kilograms per hectare<br />
Palm 3000-5000 <strong>of</strong> palm oil<br />
300-500 <strong>of</strong> palm kernel oil<br />
Soybean 400-600<br />
Rapeseed 800-1100<br />
Sunflower 600-1000<br />
Groundnut 600-1000
Oil Palm Productivity<br />
World Harvest Area<br />
All Oil Crops to Oil Palm Ratio = 100 : 003<br />
World Oil Output<br />
All Oil Crops to Oil Palm Ratio = 100 : 028
1700<br />
1600<br />
1500<br />
1400<br />
1300<br />
1200<br />
1100<br />
1000<br />
900<br />
800<br />
Harvesting is done throughout the year<br />
Example shown here is for year 2006<br />
700<br />
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec<br />
<strong>Malaysia</strong>: Monthly CPO Production Trend (‘000 tonnes)
PLANTATIONS<br />
fresh fruit bunches (ffb(<br />
ffb)<br />
OIL PALM / PALM OIL<br />
PROCESSING FLOW CHART<br />
MILLS*<br />
*no solvent used in the extraction process<br />
crude palm oil (cpo(<br />
cpo)<br />
REFINERIES<br />
processed palm oil products<br />
palm kernels (by-product)<br />
KERNEL CRUSHING PLANTS<br />
kernel meal<br />
crude palm kernel oil (cpko(<br />
cpko)<br />
REFINERIES<br />
processed palm kernel oil products
Crude Palm Oil<br />
Crude Palm Olein<br />
Crude Palm Stearin<br />
RBD Palm Olein<br />
RBD Palm Stearin<br />
RBD Palm Oil<br />
PalmFattyAcidDistillate<br />
RBD Palm Olein<br />
RBD Palm Stearin<br />
Super Palm Olein<br />
Palm Mid Fraction<br />
Very Hard Stearin<br />
Legend<br />
Refining<br />
Fractionation<br />
By-product
Product Diversity<br />
In the world market, palm oil is<br />
available in more than 20 grades<br />
Palm Oil Range<br />
smp: 33-39 C<br />
Palm Stearin Range<br />
smp: 48-60+ C<br />
Palm Mid Fractions<br />
smp: + 35 C<br />
Palm Olein Range<br />
smp: 22-24 C<br />
Super Olein<br />
smp:
Product Diversity
<strong>Feedstock</strong> option:<br />
Crude vs RBD oils<br />
• Crude palm oil<br />
– discount to RBDs<br />
– export duty factor*<br />
– crude: 5% FFA<br />
– limited availability<br />
• RBD palm oils<br />
– premium over crude<br />
– export duty: exemption<br />
– processed: 0.1% FFA<br />
– greater availability<br />
*In <strong>Malaysia</strong>, varies according to price <strong>of</strong> crude palm oil.<br />
Formulae for <strong>Malaysia</strong> is found on www.mpob<br />
mpob.gov.my
<strong>Malaysia</strong>: Exports in 2006 (tonnes)<br />
Crude palm oil 2,380,000<br />
Crude palm olein 580,000<br />
RBD palm oil 1,500,000<br />
RBD palm olein 6,970,000<br />
RBD palm stearin 1,440,000<br />
P. Fatty Acid Distillate 590,000<br />
Others 960,000<br />
TOTAL 14,420,000
Assured Supply & Availability<br />
from <strong>Malaysia</strong><br />
• Climate is free from typhoons <strong>and</strong><br />
other natural disasters<br />
• Small domestic dem<strong>and</strong> for palm oil<br />
does not effect export availability<br />
• Political stability further assures<br />
long-term availability<br />
• Highly export oriented industry<br />
• Consistent export policies
<strong>Malaysia</strong>n Palm Oil Industry<br />
• Oil palm (elaeis(<br />
guineensis) ) : native <strong>of</strong><br />
west Africa<br />
• In 1870s : Introduced into Malaya as an<br />
ornamental plant<br />
• 1917 : Small scale commercial planting<br />
• 1960s : Organized large scale cultivation<br />
• Exponential growth since then<br />
• Leading producer & exporter in the world
<strong>Malaysia</strong>n Palm Oil Industry<br />
• Cultivated Area : approx. 4.17 million<br />
hectares<br />
• Oil palm cultivation : estate management<br />
system<br />
• Estate ownership<br />
– ~60% private estates: mainly by public listed<br />
companies<br />
– ~30% government l<strong>and</strong> schemes : federal &<br />
state<br />
– ~10% independent smallholders
<strong>Malaysia</strong> : CPO Production<br />
(million tonnes)<br />
18<br />
16<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
1960 1970 1980 1990 ------ 1999 2000 2001 2002 2003 2004 2005 2006
<strong>Malaysia</strong> exports almost all it produces!<br />
18<br />
16<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
palm oil products in million tonnes<br />
1999 2000 2001 2002 2003 2004 2005 2006<br />
Production<br />
Exports
<strong>Malaysia</strong>n Palm Oil Industry<br />
• Plantation<br />
– 4.17 mil hectares<br />
• Mills<br />
Status in 2006<br />
– 397 mills. Annual capacity = 86.24 mil mt FFB<br />
• Refineries<br />
– 51 refineries. Annual capacity = 18.51 mil mt<br />
– All refineries have fractionation capacities<br />
– Palm oil <strong>and</strong> palm kernel oil processing<br />
• Oleochemical plants<br />
– 20 plants. Annual capacity = 2.69 mil mt<br />
• Port bulking installations<br />
– 33 installations. Total capacity = 1.16 mil mt
<strong>Malaysia</strong>n <strong>Biodiesel</strong> Sector
<strong>Malaysia</strong>n <strong>Biodiesel</strong> Sector<br />
• At its infancy<br />
• 90+ licenses issued<br />
• Half a dozen (6) refineries have started<br />
operation<br />
• Ten (10) refineries are expected to start<br />
within a year or so<br />
• Export oriented industry: readily produces<br />
pME that meets international st<strong>and</strong>ards<br />
such as ASTM <strong>and</strong> EN.
<strong>Malaysia</strong>n <strong>Biodiesel</strong> Projects<br />
annual capacity (tonnes) & status<br />
Carotino 180,000 Started<br />
Golden Hope 90,000 Started<br />
Vance Bioenergy 150,000 Started<br />
<strong>Biodiesel</strong> SP 100,000 Q2 2008<br />
Sterling Bi<strong>of</strong>uels 100,000 Q3 2007<br />
Titan Asli 60,000 ?<br />
Zoop 100,000 Started<br />
Nexsol 100,000 Q4 2007<br />
PGEO 100,000 Started<br />
IJM 90,000 Q2 2008<br />
Carotech 120,000 Started<br />
Global <strong>Biodiesel</strong> 200,000 Q4 2007<br />
MVO 150,000 ?<br />
Lereno 60,000 Q4 2007<br />
Platinum Energy 200,000 Q4 2007<br />
Mission Bi<strong>of</strong>uels 100,000 Q3 2007<br />
TOTAL 1,900,000<br />
MPOB technology
Advantage ….. <strong>Malaysia</strong>!<br />
• Since 1960s: Government policies<br />
introduced <strong>and</strong> legislations implemented<br />
to develop <strong>Malaysia</strong>’s s palm oil industry as<br />
an export oriented industry that is<br />
recognized as a reliable supplier <strong>of</strong> palm<br />
oil products.<br />
• <strong>Malaysia</strong> has several unique features that<br />
ensure the orderly conduct <strong>of</strong> the<br />
international palm oil trade & that the<br />
customers’ experience is a good one<br />
when dealing with <strong>Malaysia</strong>n palm oil.
<strong>Malaysia</strong>n<br />
Palm Oil<br />
Board<br />
www.mpob<br />
mpob.gov.my
State <strong>of</strong> SABAH<br />
• Furthest East State in <strong>Malaysia</strong><br />
– Closer to the US<br />
• Largest oil palm state<br />
– 1.24 mil planted hectares<br />
» 30% <strong>of</strong> <strong>Malaysia</strong>’s s planted area<br />
– 5.4 mil tonnes <strong>of</strong> CPO<br />
» 34% <strong>of</strong> <strong>Malaysia</strong>’s s production<br />
• Proximity <strong>of</strong> state <strong>of</strong> Sarawak &<br />
Indonesia<br />
– sources <strong>of</strong> more CPO
Palm Oil Industrial Cluster (POIC),<br />
Lahad Datu, Sabah<br />
<strong>Source</strong>: MR Ch<strong>and</strong>ran, , IASC 2006
PALM OIL INDUSTRIAL CLUSTER (POIC), LAHAD DATU, SABAH<br />
Palm Oil Industrial Cluster (POIC),<br />
Lahad Datu, Sabah<br />
• Wholly owned by the state government<br />
• registered Jan 06 & operational July 06<br />
• Dedicated palm oil logistics hub<br />
• first phase: 1150 acres<br />
• CPO within state <strong>and</strong> from Indonesia’s s Borneo<br />
• Rotterdam <strong>of</strong> the East<br />
<strong>Source</strong>: MR Ch<strong>and</strong>ran, , IASC 2006
Thank you<br />
for the opportunity!
Contact details:<br />
T. (Tiger) Thiagarajan<br />
<strong>Malaysia</strong>n Palm Oil Board (MPOB)<br />
Washington, DC<br />
202.572.9719<br />
mpobtas@aol.com
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