6 GREEN CHEMICAL Nov. / 2013 Tel 03-6382-6580

Internatoinal Conference Report

OleochemicalsOutlook Conference(2)

Oleochemical Outlook Conference was opened during August 22-23 at Le Meridian Hotel in

Jakarta, Indonesia. We were invited as media partner of this conference. So we highlight 2nd

after conference report as under.

Day 1 -11:25 INDONESIA INDONESIA INDONESIA INDONESIA –––– GROWING OLEO & GROWING OLEO & GROWING OLEO & GROWING OLEO &

DOWNSTREAM INDUSTRYDOWNSTREAM INDUSTRYDOWNSTREAM INDUSTRYDOWNSTREAM INDUSTRY

●Demand/supply projections

- Staying competitive in an increasingly crowded

market

- CPO tax incentives & its competitiveness against

Malaysia

- Oleochemicals investment update

- Progress of developing downstream market

Mr. Togar Sitanggang, Chairman Apolin

(Indonesian Oleochemicals Manufacturers

Association)

●Indonesia export tax

•“Supporting” downstream industry

•System followed by Malaysia in Jan 2013

•Malaysia export tax for product palm oil is zero,

Indonesia not

•Refinery capacity increase from 25mio to 40mio by

2014

•Margin at refineries has diminished slowly as

New capacity come to market

•Nobody paid Malaysia old export tax scheme due

to quota system

●Oleochemical investment updates

•Oleochemical (Fatty alcohol & Fatty Acids)

expansion plan:

•SINARMAS OLEO (2014)

•PERMATA HIJAU GROUP (2014)

•MUSIM MAS (2013-2014)

•WILMAR (2013-2014)

•Oleochemical new plant:

•UNILEVER, SEI MANGKEI (2014-2015)

•SINAR MAS, DUMAI (2014-2015)

•KLK OLEOCHEMICAL, DUMAI (2013?)

•VVF, MEDAN (2014)

Oleochemical investment updates and progress of

developing downstream market

•Future Fatty Acids/Fatty alcohol plants:

•ASIAN AGRI

•FIRST RESOURCES

•Surfactant plants:

7 GREEN CHEMICAL Nov. / 2013 Tel 03-6382-6580

•KAO – EXPANSION

•EVONIK – EXPANSION

•Oleochemicals industry is unique in the sense

that it is more than producing commodity products.

•It is highly competitive due to evolution of new

process technology and products.

•The success or failure of an oleochemicals

producers is not determined solely by the general

demand and supply condition: while certain plants

may be running at full capacity, others may be idle.

customer bonding plays an important part.

•The future of oleochemicals industry lies in

constant updating of plant technology and

marketing skills.

•Indonesia will be (OR IS?) The important player

on the oleochemicals industry

12:00 CHINA’S OLEOCHEMICALS MARKET & CHINA’S OLEOCHEMICALS MARKET & CHINA’S OLEOCHEMICALS MARKET & CHINA’S OLEOCHEMICALS MARKET &

DOWNSTREAM DEMANDDOWNSTREAM DEMANDDOWNSTREAM DEMANDDOWNSTREAM DEMAND

- Demand/supply projections

- Downstream market trends & emerging

applications

- Feedstock challenges

Mr.. Song Zhi Guo, General Manager & Marketing

Director Dongma Palm Industries (Zhangjiagang)

Co. Ltd

1. Serious overcapacity of fatty alcohol and amine;

the fatty acid will follow next.

2.

2.For every one is fair: same opportunity, same

pressure and challenge.

3.Who will go further, who will win the end, depend

on who can get the advantage from the market

competition .

4, Including the resource(technique, equipment

function,comprehensive strength, complete

environmental protection(the continued power of

development), the longterm strategic plan.

5. Where is the government/industries committee?

10-12billion/(519*100)billion=0.02%.

6. My understanding of my ”market”: a group of

people’s business action.

7. Give back all things belonging of market to the

market.

8. Time is the best answer.

9.“Book of changes" tell us: today is my dynasty;

tomorrow maybe yours!

14:00 ECONOMIC OUTLOOK IN INDONESIAECONOMIC OUTLOOK IN INDONESIAECONOMIC OUTLOOK IN INDONESIAECONOMIC OUTLOOK IN INDONESIA

- Impact of global performance on Indonesia's

growth

8 GREEN CHEMICAL Nov. / 2013 Tel 03-6382-6580

- Is Indonesia ready for AEC 2015?

- Fiscal & monetary policy implications

- Risks & challenges

Mr. Anton H Gunawan, Chief Economist & EVP

PT. Bank Danamon Indonesia, Tbk.

Indonesian Economic Outlook 2013

GDP & Inflation Outlook

• Slowdown is expected as the economy is faced

with fuel price hike and interest rate hikes.

We expect economic growth to reach 5.88%yoy this

year.

a rebound as consumption may elevate with the

election process.

• CA Balance may slightly improve, helped by the

lower oil and gas imports following the fuel price

hike. However low commodity prices and weak

demand will still weigh on the exports performance.

We expect exports to contract further by -4.0% this

year. Imports will also declined as growth slows by

around -2.2%yoy. CA deficit this year may reach

• We expect rupiah to slightly strengthen by year

end to under pressure until mid-October 2013

(among others due to Haj Pilgrimage spending).

14:35 INDISPENINDISPENINDISPENINDISPENSABLE TECHNOLOGY VS SABLE TECHNOLOGY VS SABLE TECHNOLOGY VS SABLE TECHNOLOGY VS

TRADITIONAL CULTURE OF RURAL INDIA TRADITIONAL CULTURE OF RURAL INDIA TRADITIONAL CULTURE OF RURAL INDIA TRADITIONAL CULTURE OF RURAL INDIA

AND THE CHALLENGES FOR SUSTAINABLE AND THE CHALLENGES FOR SUSTAINABLE AND THE CHALLENGES FOR SUSTAINABLE AND THE CHALLENGES FOR SUSTAINABLE

DEVELOPMENTDEVELOPMENTDEVELOPMENTDEVELOPMENT

Mr. Ritum Jain, CEO Safechem Industries

In this presentation he talked based three sections.

●Section 1 Rural India and India by 2020

•India has a population of 1.2 billion and has 233

million households.

•There are over 600,000 villages in India.

•70% of India’s population, which is the rural India,

comprises of 12% of the world’s population

presenting a huge market.

•At present Rural market spending in US$ 68.05

billion while urban consumers spend US$ 54.25

billion.

• India is spanning over an area of 3,287,263

square kilometers.

• States and Union Territories : 35 nos.

• Unity of people springs largely from the

agricultural character of the country.

• 65% of Indian Population relies on agriculture for

livelihood.

• Agriculture sector contributes 16% to India’s GDP.

9 GREEN CHEMICAL Nov. / 2013 Tel 03-6382-6580

●Section 2 Wash Watch : How rural India washes

clothes

Detergent in the Village: Where Are They Used?

In a rural environment, detergents are typically

used at a community water source like :

• a river, tank or other water body

• a well or tubewell

• a community water supply reservoir

• water sources mainly used for irrigation

Used detergent typically is poured into the water

body or is soaked into the ground.

It is more critical to ensure that ingredients used in

the detergent are safe and biodegradable.

●Section 3 A Sustainable Future

Hand Wash detergent powder will remain

dominant in India

•While washing clothes in Rural, waste is disposed

in the open.

•Hand- Washing is a deep seated habit.

•Quality of detergent is judged by its high- foam

and alkalinity.

As detergent manufacturers, what can we do to

meet the challenge of sustainability?

The dry mix process is an energy efficient process of

manufacturing compared to the spray drying

process.

One of them comes from palm oil. Methyl Ester

Sulphonate or MES.

.

15:40 SKIN CARE MARKET & TRENDS IN SKIN CARE MARKET & TRENDS IN SKIN CARE MARKET & TRENDS IN SKIN CARE MARKET & TRENDS IN

INDONESIAINDONESIAINDONESIAINDONESIA

- Emerging trends and its impact on formulation

- Changing lifestyle & its impact on product

innovations & ingredients selection

Mr. Samuel Eduard Pranata, Marketing Director

Martha Tilaar Group

As the economy and middle class are growing,

looking good is a TREND YTD Growth*14% Higher

than food.

●Beauty & Personal Care Industry

Total market size U$ 3.3 billion

Predicted cosmetic product in 2013 will grow 18%.

Average growth of cosmetic in Indonesia around 13-

15% a year.

Skin care category contributes 30% of the market

Back to nature concept drives the product with

natural ingredients

The trend of metrosexuality starts to grow.

●Skin Care Market in Indonesia

Total Market Size U$ 1 billion

Prominent skin care products are still whitening

and anti aging categories.

BB Cream is starting to become popular product

Big players are Unilever, P&G, L'Oreal, and local

company such as Martha Tilaar Group

(Continued)