Sinar Mas Cepsa opens $300m oleochemicals plant in Indonesia


Cepsa and Golden Agri-Resources (GAR) joint venture (JV) Sinar Mas Cepsa has opened an oleochemicals plant in Indonesia with an investment of nearly $300m over two years. 

Located in Dumai at Sumatra, the facility will use sustainably sourced palm kernel oil to develop fatty alcohol, which is used to make household cleaning goods and personal care products.

Sinar Mas Cepsa CEO Kung Chee Whan said: "The Dumai plant leverages Cepsa’s technology and expertise in oleochemicals, and relies on GAR for raw materials, marking the second plant of this partnership.

"Having already secured a foothold in Europe through the acquisition of our surfactant plant in Germany, we will definitely look into further downstream projects or expansion capacity in this part of the world."

The Dumai plant is capable to produce 160,000mt of fatty alcohol per annum.

It is expected to leverage the increasing demand of vegetable-based alcohols as a raw material over conventional petroleum derivatives for making personal care products and liquid detergents.

"The Dumai plant leverages Cepsa’s technology and expertise in oleochemicals, and relies on GAR for raw materials, marking the second plant of this partnership."

The facility will cater serve markets in Asia, as well as, service demand from Sinar Mas Cepsa’s surfactant plant in Germany that serves eastern and western European markets. 

By 2025, the global market for fatty alcohols is estimated to grow to 4.1 million metric tonnes that represents a five-year compound annual growth rate of 3.5%. 

A bulk of the revenue generated from this market will come from Asia that currently intakes 40% of overall demand.

Sinar Mas Cepsa is a wholly owned JV between integrated energy company Cepsa and Golden Agri-Resources (GAR), a part of the Indonesian consortium of Sinar Mas businesses that focuses on palm oil production.


Image: General view of the Sinar Mas Cepsa oleochemical plant in Indonesia. Photo: courtesy of Cepsa.