THe Malaysian oil palm industry must develop more downstream oleochemical products to address the global demographic and social changes, increasing wealth as well as improvements in well-being due to rapid urbanisation.
Global demand for value-added products such as industrial chemicals, nutraceuticals and special needs foods, cosmeceuticals, food supplements and pharmaceutical products is increasing.
The global oleochemicals market has reached US$22.5 billion in 2021. Global demand for oleochemicals may increase to US$33.9 billion by 2027, with a high compounded annual growth rate of 7.2 per cent throughout 2022-2027.
This indicates that the global oleochemicals market is still growing rapidly with a high demand for oleochemicals. As such, investors should venture into the high potential oleochemicals sector in Malaysia which is backed by MPOB's continuous research and development initiatives.
Malaysia's oleochemical industry began in the 1980s, with the construction of oleochemical plants for the production of basic oleochemicals such as fatty acids, methyl esters (used in biodiesel), glycerin, fatty alcohols and soap chips.
In the early 1990s, Malaysia was a major producer of basic oleochemicals, accounting for 20 per cent of the global market.
Today, the country's downstream of the palm oil industry is driven by research and development (R&D) activities for the production of more oleochemical derivatives that are more valuable than basic oleochemicals. The strategy of the downstream sector is to diversify the value-added products through R&D activities driven by market demands and the use of the latest technologies.
As of August this year, there are 50 refineries, 42 palm kernel crushing plants and 20 oleochemical plants operating in Malaysia.
Our R&D activities for the oleochemical downstream sector cover eight main areas namely surfactants, polyols & polyurethanes, cosmetics, agrochemicals, art chemicals, bio-lubricants, technology and the environment.
MPOB also provides pilot plant facilities and technical know-how for feasibility study and offers quality control and setting services.
The palm-based oleochemical products produced through our R&D activities that lead to the commercialisation of developed products include cosmetics, personal care products, aluminium sheets, textile materials, detergents, plastic materials, polymer processing materials, oil exploration and petroleum for transportation, pharmaceutical creams and lubricating oils, pesticide formulations, concrete admixtures, shampoos, lipsticks, softeners, gel candles, car cushions, decorative panels, sanitisers and shower gels.
Huge opportunities await investors who are keen to explore and invest in the country's oleochemical sector. Development of oleochemical plants in Sabah and Sarawak, for example, has great potential for success as currently there is no oleochemical plant operating in both states.
Another potential advantage for investors is the flexible supply and use of palm raw materials in Sarawak and Sabah.
Sarawak has the largest oil palm planted area in Malaysia while Sabah is the country's biggest palm oil producing state.
MPOB's research has also successfully formulated animal feeds for commercialisation, using oil palm products and by-products such as crude palm oil and palm fatty acid distillates as energy sources, oil palm fronds, empty fruit bunches, oil palm trunks and palm pressed fibres as fibre sources, and palm kernel cakes as a protein source.
MPOB's formulation can reduce the cost of animal feeds which is rising due to the high prices of imported raw ingredients such as corn and soybean for feed meals, which is of concern to local feed manufacturers.
] The use of oil palm by-products in animal feeds is one of the strategies to increase livestock productivity and sustainability, while reducing the cost of feed production and concurrently lowering the reliance on imported feed materials.
Besides, oil palm biomass can be a raw material for many products such as medium density fiberboards, particleboards, pulps and papers, plastic composites, and bio-composites and it is also used for bio-energy.
Oil palm biomass can be a good alternative to replace wood in many applications.
We have also developed technologies for extracting and retaining carotenoids in RBD (refined, bleached & deodorised) palm oil. A few manufacturers have adopted these technologies and are now producing red palm oil specifically to meet the demand for healthy cooking and eating lifestyles.
Scientific studies have revealed the evidence of health benefits of palm oil consumption. Many experts who have realised the unique properties of Malaysian palm oil, advocated the inclusion of palm oil in daily nutrition to achieve a balanced and healthy diet. Palm oil is rich in carotenoids, tocotrienols, sterols and squalene, Lecithin, co-enzyme Q and phytosterol.
*The writer is the director-general of the Malaysian Palm Oil Board