Industry News

To boost the export of processed oil, the world’s largest palm oil producer, Indonesia will cut export duties on refined, bleached and deodorized palm oil from 23% to 10%. Sahat Sinaga, second deputy chairman of the Indonesian Palm Oil Board said that shipments of palm oil may rise this year, to benefit from the lower taxes.

In response to this, Malaysia, world’s second-largest palm oil producer, will proceed to help local refiners to stay in the running. Minister of Plantation Industries & Commodities, Bernard Dompok stated at a press conference that changes in tax structure on palm oil will be included in a plan and presented to the government.  “This is certainly a big challenge for refiners in Malaysia and India,” said Dompok. “We are trying to see a balance between growers and refiners,” he added.

According to Ivy Ng, an analyst with CIMB Group Holdings Bhd, “The Malaysian refiners should get a cost advantage of feedstock similar to that currently being enjoyed by the Indonesian refiners so that they can compete on the same level playing field.” She also said that Malaysia may consider cutting the export tax on crude palm oil and abolish a quota for tax-free exports of as much as 3.5 million tons annually.

Meanwhile, the world’s biggest palm oil buyer, India, may raise the benchmark import price of refined palm oil to protect refiners from a surge in imports, as said by a government official recently. About 89% of the oil’s global shipments stem from Malaysia and Indonesia.

At the 4^th Palm Oil Summit on 09-10 July in Bali, Mr. Mohammad Jaafar Ahmad, CEO at Palm Oil Refiners Association (PORAM), will share more on the refining margins and what standalone refiners can do to tackle the problem, with a session titled “Outlook for Malaysian Palm Oil Refineries in Challenging Times”. Additionally, Mr. Chris de Lavigne, Global VP, Industrial Practices, at Frost & Sullivan will present a talk on “Global Outlook for Oleochemicals & Shaking Up of Indonesia’s Markets”.  Register here to attend this event, or forward enquiries to Ms. Hafizah at hafizah@cmtsp.com.sg

Extracted from Businessweek.com

22 Jun, 2012

The recently restructured tax incentives in Indonesia, the world’s biggest palm oil producer, are an effort to attract investments for cooking oil, oleochemicals and biodiesel.  To encourage higher refining capacity and downstream activities, the government had raised export taxes on crude palm oil, eight months ago.

The nation’s current annual refining capacity is estimated at 23 million tonnes, with expected annual capacity to reach 35 million tonnes in 2013.

Managing Director of Lipochem Sdn Bhd, Koh Pak Meng said in an interview that the company recently won a bid to put up a refinery in Indonesia. He also remarked that clients now want super-sized refineries to reap economies of scale. The new multi-fed plants are designed for energy efficiency and water-saving, while being fail-safe and fully-automated.

In another interview, Desmet Ballestra Malaysia’s managing director, Khoo Kiak Kern said that they too were putting up new plants in Indonesia. “Here in Malaysia, we're doing some expansion and upgrading works for the refiners," he added.

Yet another European-headquartered entity establishing itself in Indonesia is Alfa Laval Malaysia Sdn Bhd. The added advantage they have is because it doubles as an equipment manufacturer too.

At the 4^th Palm Oil Summit in Bali on 09-10 July, industry experts will share their viewpoints and discuss at length the refining challenges and downstream markets. The presentations will provide a more comprehensive outlook on the opportunities in Indonesia including topics covering specialty oils and fats, information on high performance chemicals from palm oil, as well as MES and palm biodiesel. To attend the event, Register here, or contact hafizah@cmtsp.com.sg for further queries.

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29 May, 2012

The downstream activity of the Malaysian palm oil industry is negatively affected by the high and rising cost of crude palm oil (CPO) and strong Indonesian competition. To overcome this, the Palm Oil Refiners Association (Poram) in Malaysia is planning to submit a comprehensive proposal to the government. This includes seeking government incentives as well.

PORAM’s chief executive officer Mohamad Jaafar Ahmad  said, “The proposal will involve a whole range of proposals that will see some give and take from industry players but more importantly, it is palatable to all — the refiners, plantations companies and smallholders.” He also said that the proposal was the culmination of feedback from industry players. The price of feedstock or CPO had risen by about 18% since the past year. The local palm oil refiners were also facing a local CPO supply shortage – the country’s production is about 18 million tonnes per year, while the refinery capacity stands at 23 million per year, which calls for importing the shortfall. CPO production in Indonesia is much cheaper, with one industry executive commenting that the prices are about 15% cheaper than Malaysia. According to Felda Global group President Datuk Sabri Ahmad the tax structure could be the reason for the cheaper CPO prices enjoyed by the neighbouring republic.

Discussion on the above matters plus more are expected to be included in the agenda for the 4^th Palm Oil Summit in Bali on 09-10 July where invited speakers will also explore latest innovations in value addition in downstream processing and improved agricultural practices and mechanisation.

Details of the conference are currently being finalized and will be available soon.

Pre-Register to reserve seats for this event.

Direct further queries to Ms. Hafizah, hafizah@cmtsp.com.sg

View complete article here.