Investing in Malaysia

Oleon Testimonial

2June 4th 2014

1.Oleon NV

2.Oleon’s activities in Malaysia

3.Why Malaysia?

Agenda

Vegetable Oils & Animal Fats

Fats and oils

Triglycerides

Base oleochemicals

GlycerineFatty acids Esters Derivatives

Oleochemical derivatives

I. Oleon NV – Natural Chemicals

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Beauty, Health & Home care

Oilfield Chemicals

Nutrition : Food & Feed Additives

Agrochemicals

Coatings, Inks, Solvents & Green plasticizers

Lubricants & specialty additives

I. Oleon NV – Business segments

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OLEON History

1835Candle factory Oelegem

1958Start of oleochemical plants Ertvelde & Oelegem

2000-2003Acquisition of SandefjordNew glycerine refinery in ErtveldeDimer plant in Oelegem

1970-1980New investments in Ertvelde & Oelegemtowards surfactant oleochemicals underOleofina/PetroFina

2006Closure of Sandefjord fatty acidsAcquisition of Akzo Nobel Oleochemicals plantConstruction of the first dedicated biodiesel plant in Belgium

2007Construction of new FA3 plant in Ertvelde after fire

2008Ester plant in Malaysia

2009Take-over by Sofiprotéol of 100 % ofthe shares

2010Doubled capacity in Port Klang

2011New distillation unit in Oelegem

2012Start up of PG-plant in Ertvelde Start up of new reactor line in Port Klang Start up of glycerine plant in Porto Corsini

2014Start up of UniOleon new food emulsifier plant

I. Oleon NV – History

2013New distillation unit in Oelegem

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Our shareholder SOFIPROTEOL was founded in 1983 with a unique mission to develop and promote oilseed crops in France.

I. Oleon NV – Our Shareholder

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Oleon is integrated in the agro-alimentary chain of

Sofiproteol :

I. Oleon NV – Our Shareholder

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849 employees

8 8 production plants

Ertvelde (+ HQ)

– Belgium

Oelegem –

Belgium

Compiègne –

France

Sandefjord – Norway

Emmerich –

Germany

2x Port Klang –

Malaysia

Porto Corsini –

Italy

11 sales affiliatres in Europe, USA and Asia

No. 1 in Europe with estimated market share 23%

725 mio €/y turnover in 2013

600.000 tons of Oleochemicals in

2013

I. Oleon NV – Facts & figures

54 R&D Scientists based in 3 R&D centres

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1.Oleon NV

2.Oleon’s activities in Malaysia

3.Why Malaysia?

Agenda

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Jan 2008

Before 2000 Office in Fina Singapore

Jan 2001 Office in JB

Office in Klang

Jun 2009 Plant in P. Indah – Phase I

Jun 2012 Plant in P. Indah – Phase II

Jul 2014 Plant in P. Indah – UniOleon

II. Malaysia – Our history

100% Owned

Support Americas and Asia SAP projects and rollout

Oleon Sdn Bhd

Oleon (Asia-Pacific) Sdn Bhd

Oleon China

Marketing communication and market research

Raw material sourcing

• Manufacturing (Ester for Food, F&F, Lubricant, P. Care, Polymer)

Oleon NV

Unioleon Sdn Bhd (Joint Venture)

• Manufacturing (Emulsifiers for Food, Personal Care, Polymer)

50% Owned

50% UP

100% Owned

• Trading (marketing products from all plants globally to AP & ME)

• OHQ (rendering services to Oleon NV, Oleon China and Oleon Americas)

1. Purchasing2. Marketing Services

3. SAP Support

4. Application Support5. Advisory (Consulting)6. Finance Services

Application research

Provide Finance Services to affiliates in AP & ME

II. Malaysia – Current Setup

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II. Malaysia – Investment I : Oleon Sdn Bhd

The factory is located 50km west of Kuala-Lumpur on Pulau Indah or “Beautiful Island” of the coast near Port Klang. Close to Westport (5km) and Northport (25km), which is the 13th busiest container port in the world (mainly GP box). As a comparison, Antwerp ranks 14th.

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Goal : Support our growing presence in North America, and support our future growth in AP

Why Malaysia?

•Asia-Pac vs USA : Produce where raw materials are & future growth market

•In Asia : China vs Malaysia vs Singapore

Start up May 2009 (I) & Aug 2012 (II)

Total Investment 17 Mio € (I) + 12 Mio € (II)

Annual turnover 65 Mio €

NWC Requirement 27%

Employees 75

II. Malaysia – Investment I : Oleon Sdn Bhd

June 4th 2014

• Established 1sty of January 2013

• Sales Turnover 2014 : 230 Million MYR• Trading : 95% • OHQ Services : 5%

• Human assets : Moved from 2 people to 24 people at the

end of 2013. Growing to 35 people.

• Oleon China : Also overseeing and managing Oleon China

which was established in Feb 2012

Trading ● OHQ Services

2011201020092008200720062005200420032001 2002

Sales Turnover(MYR)

Profit After Tax (MYR)

20132012

All figures are shown in MYR (Millions)

II. Malaysia – Investment II : OHQ

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Central

Asia

East Asia

Southeast Asia

Oceania

South

Asia

Middle East

2013 Turnover:MYR 230 Million

II. Malaysia – Investment II : OHQ

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II. Malaysia – Investment II : OHQ

SERVICES & SUPPORT > SAP Competence center & Helpdesk > PS&RA support > Management & Finance Services

MARKETING SERVICES > Promote all products from Oleon factories to Asia

Pacific and Middle East Countries.

APPLICATION SERVICES & COMPETENCY DEVELOPMENT CENTRE

> Regional customer support center > Training/Technical Knowledge center for both internal as external sales organization.

RAW MATERIALS SOURCING > From Asia Pacific region for all Oleon plants & Trading.

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44

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II. Malaysia – Investment III : UniOleon

50/50 Joint Venture between United Plantations Bhd and Oleon nv through the company UniOleon Sdn. Bhd.

UniOleon Sdn. Bhd.MISSION : United plantations & Oleon NV the perfect match to produce food emulsifiers with the highest possible technical performance, and this by using raw materials and production processes complying with the most severe quality & sustainability standards.

U N I T E D P L A N T A T I O N S B H D

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II. Malaysia – Investment III : UniOleon

KEY Facts & figures :•Total investment : 16 Mio € (I) + 10 Mio € (II)•Capacity : 25.000MT•Employees : 50•Star up date : Q3 2014 (I) + S1 2016 (II)

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II. Malaysia – Investment IV : Global Innovation Hub

Key Facts : Total Investment : 4,5 – 5 Mio €Scientists : 20

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II. Malaysia – Investment IV : Global Innovation Hub

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II. Malaysia – Investment IV : Global Innovation Hub

Business Model

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1.Oleon NV

2.Oleon’s activities in Malaysia

3.Why Malaysia?

Agenda

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KEY Drivers to invest in Malaysia :• Access to raw materials

• Lower investment costs (especially for land)

• Centrally located in the region

• Good export infrastructure

• Good incentive package & support offered by MIDA which resulted in pioneer status (10 years) + R&D grant.

• SSIC support when constructing plant to get permits/certificates & utilities Fast track approvals

III. Why Malaysia?

June 4th 2014

• Slow-down in the China’s economy is putting pressure on inter-Asian trade which could impact Malaysia’s exports.

• Loss of GST Status

• Energy cost (natural gas and electricity) is increasing and moving towards the Asian level.

• Energy cost in the US, due to larger availability of natural gas at low prices (around 4USD/mmBTU) is turning Asia uncompetitive for energy dependent activities.

• Increments of salaries outpaces the rest of the world with a small base to find good talents and competition for talents can further erode bottom line (talent turn over & retention)

• Congestion, typical to growing economy, actions are being undertaken.

• The image of some of Malaysias largest natural resources is under pressure by the European public opinion (forestry and palm oil).

Economic

Energy

Employment

Image

III. Why Malaysia? – Challenges

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Infrastructure

• South-East Asian mentality is fairly close to the Flemish: Pragmatic, a can-do mentality & a fair amount of business is done (after the working hours) through personal network

• Do not rely on local consultants : Opt for using your own Flemish/Belgian/European presence (that you can rely upon)

• For export oriented activities, be aware of fast increasing CPI which could turn business uncompetitive. Make your business plan realistic considering real prices and costs and not the ones consultants tend to provide. Do not consider South-East Asia as a low-cost region (with the exception

of some labor intensive activities where a few countries are still attractive e.g. Cambodia, Myanmar, Indonesia, …), but not Singapore, Malaysia or even Thailand.

• For regional markets activities, consider your logistics and supply chain very well The region is huge with sometimes fairly poor infrastructure.

III. Some Tips

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Thank you

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Back up

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III. Energy prices

June 4th 2014

Oleon’s Employment in Malaysia

– Currently Oleon Sdn. Bhd. employs approximately 70 people. Oleon (Asia-Pacific) Sdn. Bhd. Employs approximately 30 people in Sales & Marketing, Finance, SAP, application specialists and QA.

– For phase III and IV, the total employment will further increase with 35 and 45 people respectively as a minimum.

– Of all staff at Oleon Sdn. Bhd. nearly 50% is having a certificate or diploma (bachelor or master). All staff have completed secondary education levels.

– Minimum wages are MYR32,700 gross per year (excluding bonuses potentially adding up to 4 months pay).

– We are hiring in-house specialists to provide global services to Oleon Group (e.g. SAP consultancy, procurement,...)

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Oleon’s Contribution to Malaysian Economy

• Total investment of Phase I, II and UniOleon Phase I and II amounts to RM210 million

• Total Working capital commitment (inventory, receivables,...) another RM160 million

• This brings total investment in the Malaysian economy to RM370 million

• Construction mainly carried out by Malaysian companies. Even core equipment such as reactor is designed and built in Malaysia

• UniOleon phase I and II will provide work for 450-500 temporary workers

• 80% of our Raw materials are sourced in Malaysia• Oleon produces high value added derivatives that provide a

downstream valorization of palm oil

Investment

Construction

Added Value

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