Malaysia Petrochemical Industry 2015

52
Internal Malaysia Petrochemical Country Report 2014 Presented to APIC – THE ASIA PETROCHEMICAL INDUSTRY CONFERENCE KOREA May 2015

description

jm

Transcript of Malaysia Petrochemical Industry 2015

Page 1: Malaysia Petrochemical Industry 2015

Internal

Malaysia Petrochemical Country Report 2014

Presented to

APIC – THE ASIA PETROCHEMICAL

INDUSTRY CONFERENCE

KOREA

May 2015

Page 2: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 2 of 52

TABLE OF CONTENTS

CHAPTER ONE ......................................................................................... 4

MALAYSIAN ECONOMY........................................................................................4

1.1 OVERVIEW OF THE MALAYSIAN ECONOMY IN 2014 ..............................4

1.2 TRADE PERFORMANCE IN 2014 ...................................................................6

1.3 INVESTMENTS ..............................................................................................11

1.4 ECONOMIC OUTLOOK FOR 2015 ................................................................13

1.5 MALAYSIA – KEY ECONOMIC INDICATORS ...........................................15

CHAPTER TWO ...................................................................................... 16

Petrochemical Industry in Malaysia ............................................................................16

2.1. OVERVIEW...................................................................................................16

CHAPTER THREE .................................................................................. 22

Committee Reports...................................................................................................22

3.1. GENERAL MATTERS & RAW MATERIALS COMMITTEE...........................22

3.2. POLYOLEFINS COMMITTEE ..........................................................................25

3.2.1 PE 27

3.2.1 LDPE ...........................................................................................................27

3.2.2 LLDPE ..........................................................................................................28

3.2.3 HDPE ...........................................................................................................29

3.3. STYRENICS COMMITTEE ...............................................................................31

3.4. PVC COMMITTEE.............................................................................................33

3.5. SYNTHETIC RUBBER COMMITTEE...............................................................35

3.6. SYNTHETIC FIBER RAW MATERIALS COMMITTEE ..................................40

3.7. CHEMICALS COMMITTEE ..............................................................................43

Page 3: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 3 of 52

CHAPTER FOUR..................................................................................... 49

4.0. Malaysian Petrochemicals Association (MPA) ............................................49

4.1. BACKGROUND.................................................................................................49

4.2. MPA MEMBERS................................................................................................49

4.3. MPA COUNCIL..................................................................................................51

4.4. MPA SECRETARIAT.........................................................................................52

Page 4: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 4 of 52

CHAPTER ONE

MALAYSIAN ECONOMY

1.1 OVERVIEW OF THE MALAYSIAN ECONOMY IN 2014

Malaysia recorded a 6.0% growth in 2014, stronger than the 4.7% achieved in 2013. The overall

growth was driven by the continued strong growth in domestic demand and supported by an

improvement in external trade performance. Net exports turned around to contribute positively to

growth after seven years of negative contribution, as Malaysia benefitted from the recovery in the

advanced economies and the sustained demand from the regional economies. While the growth in

private domestic demand remained strong, public sector expenditure registered slower growth,

consistent with the Government’s fiscal consolidation efforts.

In terms of sector performance, the services sector expanded by 6.3% in 2014 and remained the

largest contributor to growth, underpinned largely by sub-sectors catering to domestic demand. In

particular, the wholesale and retail trade sub-sector recorded higher growth benefiting from

continued strength in households’ retail spending. In the communication sub-sector, growth

remained robust, mainly on account of continued demand for data communication services.

Performance of the transport and storage sub-sector was sustained supported mainly by trade-

related activity. On the other hand, growth in the finance and insurance sub-sector improved

marginally due to higher growth in the insurance segment.

The manufacturing sector expanded by 6.2%, attributable to stronger performance of the export-

oriented industries and expansion in the domestic-oriented industries. Production in the export-

oriented industries was supported by stronger exports in both the E&E and primary-clusters, in

Page 5: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 5 of 52

line with rising global demand. Domestic-oriented industries recorded a sustained growth, mainly

driven by robust private consumption and construction activity.

Growth remained strong in the construction sector (11.6%), owing to robust activity in the

residential and non-residential sub-sectors. Growth in the residential sub-sector was underpinned

by the continued progress in high-end housing projects in Klang Valley, Penang and Johor. In the

non-residential sub-sector, commercial and industrial projects supported growth.

In the agriculture sector, growth was stronger at 2.6% due to higher production of palm oil as a

result of favorable weather conditions, especially in the middle of the year. This was augmented

by the higher production of food crops, particularly poultry and vegetables, which provided

further support to the sector during the year.

The mining sector registered a stronger growth of 3.1% in 2013, as a result of higher production of

natural gas and crude oil. Continued demand for liquefied natural gas (LNG) from North Asia led

to higher production of natural gas, while crude oil output registered higher growth, especially in

the second half of the year. This mainly reflected the commencement of production from a new

major oil field, namely Gumusut-Kakap at offshore Sabah.

The Malaysian labour market remained stable, as continued expansion across all economic sectors

sustained demand for labour. The unemployment rate declined to 2.9% in 2014 (2013: 3.1%),

while the labour force participation rate improved to 67.5% (2013: 67.0%) supported by higher

female participation in the labour force. Retrenchments, as reported to the Ministry of Human

Resources, were also lower at 10,431 workers (2013: 11,195 workers).

Page 6: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 6 of 52

The headline inflation rate, as measured by the annual change in the Consumer Price Index (CPI),

averaged at 3.2% in 2014 (2013: 2.1%). After rising in the earlier part of the year, inflation

moderated during the last four months due to lower food inflation, the lapse of the impact of the

September 2013 fuel price adjustments, and the downward adjustments in fuel prices following

the implementation of the managed float fuel pricing mechanism. Inflation during the year was

driven mainly by domestic cost factors arising from the adjustments in the prices of several price-

administered items since late 2013.

The extent of spillovers on the prices of other goods and services was, however, contained given

the subdued global prices, stable domestic demand conditions, and the firms’ ability to

accommodate some of the increase in input costs. As a result, core inflation averaged 2.4% (2013:

1.8%). The contained spillovers and the absence of excessive wage pressures also mitigated the

risk of second-round effects.

1.2 TRADE PERFORMANCE IN 2014

According to the report published by the Malaysian Ministry of International Trade and Industry,

total trade for 2014 expanded by 5.9% to reach a value of RM 1.449 trillion, compared to the RM

1.369 trillion registered in 2013. Malaysia’s exports for 2014 grew by 6.4% or RM 46.29 billion

to RM 766.1 billion, surpassing the forecast export growth of 6% in the 2014/2015 Malaysia

Economic Report, while imports rose by 5.2% to RM 683.0 billion. A trade surplus of RM 83.1

billion was recorded; the 17th consecutive year of trade surplus.

The PRC remained Malaysia’s largest trading partner for the sixth consecutive year since 2009.

Malaysia’s trade with the PRC expanded by 3.99% to RM 207.22 billion. Exports to the PRC

decreased by 4.4% to RM 92.7 billion. Increase in exports were contributed by higher exports of

Page 7: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 7 of 52

manufactured goods by 9.5% or RM 6.16 billion and mining goods by 37.3% or RM 3.22 billion.

Export products that contributed to the increases were manufacturers of metal primarily cathodes

of refined copper; refined petroleum products; chemicals and chemical products mainly

hydrocarbon and their derivatives; as well as, liquefied natural gas (LNG). Exports of E&E

products, valued at RM 40.22 billion, accounted for 41.5% of total exports to the PRC. Imports

from the PRC increased by 15.7% to RM 106.26 billion with higher imports of E&E products;

manufactures of metal; as well as, machinery, appliances and parts.

Total Trade by Major Countries in 2014

Total Exports and Imports by Major Countries in 2014

Page 8: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 8 of 52

ASEAN remained as an important and strategic trading partner for Malaysia, accounting for

26.8% of Malaysia’s total trade in 2014, valued at RM389.03 billion with an increase of 3.9%

from 2013.

Exports to ASEAN increased by 5.9% to RM213.58 billion, driven by improved economic and

investment conditions, growing middle income group as well as development and reform

initiatives carried out by ASEAN member economies. It is important to note that growing cross

border investments had strengthen industry linkages and intercompany transactions and this in

turn has had positive impact on intra ASEAN trade.

In 2014, exports to all ASEAN markets registered increases except for Indonesia. Exports to

Indonesia declined by 4.1% or RM1.35 billion due mainly to lower exports of refined petroleum

which declined by RM1.15 billion. Increase in exports to ASEAN was contributed mainly by

higher exports of petroleum products, crude petroleum, chemicals, palm oil (crude palm oil;

fractionated palm oil; and palm kernel oil, olein and stearin), optical and scientific equipment as

well as E&E products. Imports from ASEAN increased by 1.5% to RM175.45 billion. Main

imports from ASEAN were petroleum products, E&E products as well as chemicals.

Page 9: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 9 of 52

In 2014, exports of manufactured goods,rose by 7.1% or RM39.11 billion to RM587.25 billion

and accounted for 76.7% of total exports during the period. Exports of almost all manufactured

goods registered increases. Exports of E&E products expanded by 8.1% or RM19.16 billion to

RM256.15 billion, the highest export value since 2008. It accounted for 33.4% of total exports.

The growth is fuelled by stronger global demand for new applications of semiconductors and new

wave of technologies for Internet of Things (IOT). Higher demand for E&E products was led by

electronic integrated circuits which grew by 17.8% to reach RM92.21 billion and followed by:

• Apparatus for transmission or reception of voice, images and other data, increased by 58.5% to

RM7.4 billion;

• Parts for diodes, transistors, piezoelectric crystals and other semiconductor devices, ↑36.9% to

RM5.34 billion;

• Parts for electrical machinery and apparatus, ↑500.1% to RM1.56 billion;

• Parts and accessories for television, radio, transmission apparatus and other telecommunication

apparatus, ↑30.7% to RM4.15 billion; as well as

• Photosensitive semiconductor devices, ↑8% to RM11.19 billion.

Export markets with significant increases for E&E products were Hong Kong, the USA, the PRC,

Taiwan, Japan and Mexico. The recovery in the EU and stronger manufacturing activities in

ASEAN, saw increased exports of E&E products to these markets. Exports of E&E products to the

EU and ASEAN increased by RM4.92 billion and RM694.6 million, respectively.

Other manufactured products that contributed to the growth in exports for 2014 were:

• Chemicals, increased by 8.5% to RM51.51 billion, primarily alcohols, phenols and their

derivatives;

• Machinery, appliances and parts, ↑10.9% to RM30.01 billion, mainly machines and mechanical

appliances specialized for particular industries;

Page 10: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 10 of 52

• Optical and scientific equipment, ↑13.4% to RM23.64 billion, primarily automatic regulating or

controlling instruments and apparatus;

• Processed food, ↑16.3% to RM16.56 billion;

• Iron and steel products, ↑28.2% to RM9.57 billion;

• Petroleum products, ↑2.9% to RM70.36 billion;

• Textiles, clothing and footwear, ↑13% to RM12.12 billion;

• Manufactures of plastics, ↑11.6% to RM11.92 billion;

• Transport equipment, ↑10% to RM10.58 billion; and

• Wood products, ↑3.9% to RM14.72 billion.

The PRC was the largest import source, followed by Singapore, Japan, the USA and Thailand.

These countries accounted for 51.4% of total imports. Main imports from ASEAN were refined

petroleum products; E&E products; as well as, chemical and chemical products.

Higher demand of intermediate goods for manufacturing activities was the primary factor for

imports to rise by 5.3% to RM683.02 billion. The three main categories of imports by end use

were:

• Intermediate goods valued at RM408.38 billion or 59.8% of total imports, increased by 7.6%

from 2013;

• Capital goods(RM96.18 billion or 14.1%of total imports), ↓2.1%; and

• Consumption goods (RM50.32 billion or 7.4% of total imports), ↑5.7%.

The largest category of imports was manufactured goods, accounting for 86.3% of Malaysia’s

total imports. Major imports of manufactured goods in 2014 were:

• E&E products, accounted for 27.9% share of Malaysia’s total imports,

• Petroleum products mainly refined petroleum, 11.7% share;

Page 11: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 11 of 52

• Chemicals, 9.1% share;

• Machinery, appliances and parts, 8.4% share; and

• Manufactures of metal, 6.1% share.

The PRC was the largest import source, followed by Singapore, Japan, the USA, Thailand and

Taiwan. These countries accounted for 55.9% of total imports. ASEAN contributed RM175.45

billion or 25.7% of Malaysia’s total imports for the year 2014.

1.3 INVESTMENTS

Malaysia saw an impressive level of investments in 2014 with new approved direct investments

reaching RM 235.9 billion from RM 219.4 billion in 2013. This constitutes approved investments

in the manufacturing, services and primary sectors. The country’s investment performance in 2014

exceeds the average annual investment target of RM 148 billion set under the 10th Malaysia Plan.

Of the total investments approved, RM 171.3 billion (72.6%) were comprised of domestic

investments (DDI), while RM 64.6 billion (27.4%) came from foreign sources (FDI). The ratio of

foreign and domestic investments is in line with the Government’s drive to actively promost

domestic investments, as outlined in the Economic Transformation Programme (ETP) and the

10th Malaysia Plan.

The services sector accounted for the largest share of the total investments, contributing 63.4% or

RM 149.6 billion, followed by the manufacturing sector with investments of RM 71.9 billion or

30.5%, while the primary sector contributed the remaining approved investments of RM 14.4

billion (6.1%).

Page 12: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 12 of 52

Malaysia’s services sector continued to expand in 2014, attracting 5,059 approved projects with

investments amounting RM 149.6 billion. Domestic investments led the way with RM 131.9

billion or 88% of the total investments.

Within the services sector, the real estate sub-sector continued to be the leading contributor with

RM 88.5 billion worth of investments approved, followed by utilities at RM 9.1 billion,

distributive trade at RM 8.7 billion, financial services at RM 6.9 billion and hotel & tourism at

RM 6.7 billion. In 2014, MIDA approved 227 regional establishments with investments of RM 3.2

billion. MIDA also approved seven (7) projects that will make Malaysia their Global Operations

Hub with investments valued at RM 2.4 billion.

Malaysia’s manufacturing sector continued to draw a significant share of investments in 2014, a

surge of 38% from the total investments totaling RM 43.5 billion in 450 projects. This highlights

that Malaysia continues to be a location of choice for high value-added manufacturing activities.

Malaysia continues to attract encouraging levels of foreign investments in the manufacturing

sector despite the global economic slowdown. Foreign investments in approved manufacturing

projects amounted to RM 39.6 billion or 55.1% of the total investments approved for the year.

Japan was the manufacturing sector’s largest foreign investor in 2014 with investments of RM

10.9 billion in 55 projects, followed by Singapore (RM 7.8 billion in 121 projects), China (RM 4.8

billion in 24 projects), Germany (RM 4.4 billion in 13 projects), and the Republic of Korea (RM

1.5 billion in 11 projects). Together these five countries accounted for 74.2% of total foreign

investments approved in 2014.

The primary sector attracted investments worth RM 14.4 billion. This sector comprises three main

subsectors namely agriculture, mining and plantation and commodities. Investments by foreign

Page 13: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 13 of 52

sources totaled RM 7.3 billion or 50.6% while domestic investments contributed RM 7.1 billion or

49.4%.

The mining sub-sector took the lead with approved investments of RM 13.4 billion in 36 projects,

followed by the plantation and commodities sub-sector with investments of RM 724 million, and

the agriculture sub-sector making up the rest of approved investments. Investments in oil palm in

2014 amounted to RM 462 million, a threefold increase from last year’s investments of RM 107

million.

The total investments approved were in 5,942 projects and are expected to generate about 178,360

job opportunities, many of which will be in high technology and high value added industries. The

services sector accounted for the largest share of total potential employment in the economy with

98,540 job opportunities or 55.3%, followed by the manufacturing sector with 78,340 job

opportunities (43.9%) and primary sector with 1,480 employment opportunities (0.8%).

1.4 ECONOMIC OUTLOOK FOR 2015

Despite a challenging external environment, the Malaysian economy is expected to register a

steady growth of 4.5% – 5.5% in 2015, supported mainly by sustained expansion in domestic

demand amid strong domestic fundamentals and a resilient export sector.

Domestic demand will remain the key driver of growth, driven by private sector spending. Private

investment is forecast to register a robust growth of 9.0% amid lower investments in the mining

sector. Nevertheless, private investment growth will be supported by on-going projects and new

investments in the manufacturing and services sectors with firms benefitting from the continued

global recovery and expansion in domestic demand.

Public consumption is anticipated to record moderate growth, with lower spending on supplies

and services following the Government’s expenditure rationalization measures. Public investment

Page 14: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 14 of 52

is projected to register a positive growth, with higher capital spending by public enterprises and to

a lesser extent, by the Federal Government. Investments by public enterprises reflect the continued

implementation of key infrastructure projects, particularly in the utilities and transportation sub-

sectors.

Headline inflation is projected to be lower at 2%-3% in 2015, largely on account of lower global

energy and food prices. The decline in global oil prices will lead to lower domestic fuel prices

through the managed float fuel pricing mechanism. The more subdued external price pressures

would also mitigate increases in the cost of imports stemming from the ringgit depreciation,

thereby moderating imported inflation. While the implementation of GST would result in higher

prices for some goods and services, the impact on overall headline is expected to be contained.

The inflation rate in 2015 would also be affected by the new pricing mechanism for petrol prices

in which there would be a more direct transmission of global oil price volatility into domestic

prices given the market-based pricing of domestic fuel products. Nevertheless, the expectation is

for underlying inflation to still remain relatively stable, amid modest demand pressures.

The Government will continue to introduce various measures to enhance Malaysia’s

competitiveness to face domestic and external challenges and opportunities. These measures will

include fine-tuning its investment policies, enablers, fiscal and non-fiscal incentives, as well as

continually collaborating and engaging with industry players and stakeholders to attract investors

in all economic sectors.

Going forward, the Government will strengthen the ecosystem to attract quality

investment projects, without discounting the importance of investment volume. Efforts

will be further intensified to facilitate and realize the implementation of approved quality

investments.

Page 15: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 15 of 52

1.5 MALAYSIA – KEY ECONOMIC INDICATORS

1Beginning 2012, real GDP has been rebased to 2005 prices, from 2000 prices previously 2Exclude stocks 3All assets and liabilities in foreign currencies have been revalued into ringgit at rates of exchange ruling on the balance sheet date and the gain/loss has been reflected accordingly in the Bank’s account 4Effective from 2011, the Consumer Price Index has been revised to the new base year 2010=100, from 2005=100 previously 5Effective from 2015, the Producer Price Index has been revised to the new base year 2010=100, from 2005=100 previously 6Based on average USD exchange rate for the period of January-February 2015

pPreliminary

f Forecast

Page 16: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 16 of 52

CHAPTER TWO

Petrochemical Industry in Malaysia

2.1 OVERVIEW

Malaysia is the second largest oil and natural gas producer in Southeast Asia, the second

largest exporter of liquefied natural gas globally, and is strategically located amid

important

routes for seaborne energy trade. Malaysia's energy industry is a critical sector of growth

for the entire economy and makes up about 20 percent of the total gross domestic product.

New tax and investment incentives, starting in 2010, aim to promote oil and natural gas

exploration and development. These incentives are part of the country's economic

transformation program to leverage its resources and location to be one of Asia's top

energy players by 2020. Another key pillar in Malaysia's energy strategy is to become a

regional oil storage, trading, and development hub that will attract technical expertise and

downstream services able to compete within Asia. Malaysia is unveiling several major

upstream and downstream oil and natural gas projects in the next few years, with some

coming online in the next few months, as part of the country's strategy to enhance output

from existing oil and natural gas fields and to advance exploration in deep water areas.

The beneficiary of Malaysia's energy strategy, growing Malaysian petrochemical industry

is one of the pillars of Malaysian economy attributing its rapid growth to the steady

availability of oil and gas as feedstock, a well- developed infrastructure, a strong base of

supporting services, the country's cost competitiveness, as well as Malaysia's strategic

Page 17: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 17 of 52

location within ASEAN and its close proximity to major markets in the Asia Pacific

Region.

A wide range of petrochemicals are produced in Malaysia, including olefins, polyolefins,

aromatics, ethylene oxide (EO), glycols, oxo-alcohols, ethoxylates, acrylic acids, phthalic

anhydride, acetic acid, styrene monomer (SM), polystyrene (PS), ethylbenzene and

polyvinyl chloride (PVC). World-scale producers of low-density polyethylene (LDPE),

linear low-density polyethylene (LLDPE), high-density polyethylene (HDPE), PP,

expanded polystyrene (EPS), PVC, ABS and polyethylene terephthalate (PET) resins have

established plants in Malaysia, providing a steady supply of feedstock material for the

plastic industry. Natural gas and naphtha are the two locally available basic raw materials

for the petrochemical industry.

Malaysia's strategic location within the ASEAN and its proximity to the major Far East

markets augurs well for its exports in the Asia Pacific region. As such, state-owned oil

and gas company PETRONAS and the privately owned Lotte Chemical Titan dominate

the Malaysian petrochemicals companies. PETRONAS is the leading integrated

petrochemicals producer in Malaysia and one of the largest petrochemicals producers in

South East Asia, involved primarily in the manufacturing, marketing and selling a

diversified range of petrochemical products. The company operates two integrated

petrochemical complexes, one in Kertih, Trengganu and another in Gebeng, Pahang.

PCG also has four manufacturing complexes in Gurun, Kedah; Bintulu, Sarawak; and

F e d e r a l T e r r i t o r y o f Labuan that produce fertilisers and methanol including a

Page 18: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 18 of 52

new fertilisers manufacturing complex in Sipitang, Sabah (SAMUR Project) which will

commence production in 2016.

PETRONAS operates two ethylene plants, joint venture with South African-based Sasol

and Japan-based Idemitsu Petrochemicals Co. Ltd with a combined capacity of 1mn tpa.

PETRONAS also operates a range of downstream joint venture (JV) facilities at its Kerteh

and Gebeng complexes, along with global industry players. Lotte Chemical Titan is the

second-largest polyolefins producer in South East Asia. Lotte Chemical Titan currently

operates two of the nation's four ethylene plants and has a production capacity of

630,000tpa. The company currently operates eight plants on two integrated sites in Pasir

Gudang and Tanjung Langsat, Johor.

The plastic products industry comprises various sub-sectors with many useful applications.

The plastic packaging sub-sector, covering both flexible and rigid products, remains the

largest sub- sector and covers bags, sheet, film, hose and containers. The main production

processes in this industry are film extrusion, injection moulding, pipe and profile

extrusion, blow moulding and foam moulding. The growth of domestic downstream

plastic processing activities can be attributed to the developed petrochemical sector in

Malaysia. The sector provides a steady supply of materials to the plastic industry with

world-scale resin production facilities producing polyethylene (PE), polypropylene (PP),

polyvinylchloride (PVC), polystyrene (PS), acrylonitrile butadiene styrene (ABS),

polyacetal (PA), polyester copolymers, styrene acrylonitrile (SAN) and polybutylene

terephthalate (PBT).

Page 19: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 19 of 52

Growth in the Malaysian plastics industry accelerated in 2014, with the industry

registering a total turnover of RM20 billion, of which RM12 billion were exported. Plastic

product manufacturers were able to achieve the high export total turnover ratio because

they moved up the value chain to focus more on the quality of their products, even though

the total number of converters further reduced due to mergers and companies shutting

down.

The Malaysian plastics industry will continue to expand despite the gloomy global

outlook and strong challenges ahead. Total consumption of resins exceeded 2 million tons,

and most of the growth in demand were for the manufacture of flexible packaging, sheets,

bags and film.

Increased productivity and expansion in industry output over recent years have resulted in

improved export performance. Malaysia is expected to continue attracting foreign

investment, but the industry is reassessing its competitive status within the ASEAN and

the 'threat' posed by China's rapid industrial expansion. The petrochemicals industry is

facing tougher market conditions with downward pressure on product prices caused by a

massive increase in capacities in Asia and the Middle East. In order to sustain production

volumes, Malaysian producers will need to constrain feedstock costs. In the face of

intensified competitiveness in the global market, prospects for the Malaysian

petrochemicals industry depend on its ability to cultivate and maintain competitive

advantages over competing nations.

Page 20: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 20 of 52

The Third Industrial Development Plan (IMP3, 2006-2020) expects further expansion in

the industry and seeks to enhance competitiveness. Development investment of

MYR34bn (US$9.99bn) will be made during the plan period compared to the MYR27.8bn

(US$8.17bn) approved under the second master plan (1996-2005). The IMP3 targeted

petrochemicals exports worth approximately MYR27.6bn (US$8.11bn) by 2015 and

MYR36.7bn (US$10.79bn) by 2020. This IMP3 plan will focus on developing Bintulu

(Sarawak), Gurun (Kedah), Tanjung Pelepas (Johor) and Labuan into new petrochemicals

zones. The government plans to encourage the private sector to invest in support facilities,

infrastructure and supply services, which are important for the development of

petrochemicals zones. The investments are to be undertaken through a consortium of JVs.

This would enable the setting and sharing of the costs in building and maintaining the

facilities at competitive levels. Development of upstream and downstream linkages is also

a part of the plan. Efforts would also be made to realize the full potential of the existing

petrochemicals zones, Kerteh (Terengganu), Gebeng (Pahang) and Pasir Gudang-Tanjung

Langsat (Johor), through a systematic and coordinated approach. The plan also calls for

the construction of three new crackers by 2020. PETRONAS has majority stakes in two

existing gas-based crackers at Kertih, Malaysia. Lotte Tican Chemical operates the

country's other cracker, at Pasir Gudang. Two major cracker-based petrochemicals

complexes are planned in Kuantan and Johor.

Page 21: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 21 of 52

Page 22: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 22 of 52

CHAPTER THREE

Committee Reports

3.1. GENERAL MATTERS & RAW MATERIALS COMMITTEE

Recent Developments in Malaysia and its Industry Outlook in the coming years

The PETRONAS Board of Directors has approved the Final Investment Decision (FID)

for the development of the Pengerang Integrated Complex (PIC) in Southern Johor,

Malaysia.

The FID marks a significant milestone in the progress of the proposed PIC, which

comprises a world scale Refinery and Petrochemical Integrated Development (RAPID)

and other associated facilities. RAPID is estimated to cost about US$16 billion while the

associated facilities will involve an investment of about US$11 billion.

The PIC is scheduled to commence construction upon the full hand-over of the project site

to PETRONAS by the State Government. Based on the current progress, the project is

poised for its refinery start-up by early 2019. The project will further strengthen

PETRONAS’ position as a key player in the Asian chemicals market, focusing on key

growth areas of differentiated and specialty chemicals and capturing the growing

automotive, pharmaceutical and consumer products sectors. Domestically, the PIC will

Page 23: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 23 of 52

contribute towards meeting the growing demands for petroleum products and Euro 4M

and Euro 5 specification fuels.

Developed within a 6,242-acre site, the PIC will consist of a 300,000 bpd refinery and a

petrochemical complex with a combined capacity of producing 7.7 mtpa of various grades

of products including differentiated and specialty chemicals products such as synthetic

rubbers and high grade polymers. The project will also see the development of a host of

associated facilities i.e. the raw water supply facility, power co-generation plant, LNG

regasification terminal and other ancillary facilities.

At the peak of its construction, the PIC Project is expected to have a workforce of about

70,000 people with varying skills and disciplines. In its operational stage, the PIC will

require over 4,000 employees.

The PIC is part of the larger Pengerang Integrated Petroleum Complex (PIPC) proposed

and promoted by the Johor State Government. With its strategic location along one of the

world’s busiest shipping lanes and its proximity to international trading hub, the PIPC is

well positioned to be the next regional downstream oil and gas industrial hub.

Value of New Projects approved in 2014 and 2013

Domestic

Investment

Foreign

Investment

Total Capital

Investment

Domestic

Investment

Foreign

Investment

Total Capital

Investment

(USD) (USD) (USD) (USD) (USD) (USD)

Industry

Petroleum Products

(Incl.Petrochemicals) 3,215,799,883 1,350,440,930 4,566,240,813 892,315,244 988,971,341 1,881,286,585

Chemical &

Chemical Products 870,434,670 2,201,209,857 3,071,644,527 620,503,260 1,145,745,471 1,766,248,731

Page 24: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 24 of 52

NAMEPLATE CAPACITY 2013 2014 2015 2016 2017 2018 2019 2020

ABS Resins 350 350 350 350 350 350 350 350

Ethylene 1723 1,723 1723 1723 1723 1723 1723 2723

Expandable Polystyrene 0 0 0 0 0 0 0 0

High Density Polyethylene 485 585 585 585 585 585 585 585 Linear Low Density Polyethylene 100 100 100 100 100 100 100 100

Low Density Polyethylene 485 485 485 485 485 485 485 485

Polypropylene 373 373 373 373 373 373 373 373

Polystyrene 110 110 110 110 110 110 110 110

Polyvinyl Chloride 125 110 110 110 110 110 110 110

Styrene 240 240 240 240 240 240 240 240

Vinyl Chloride Monomer 0 0 0 0 0 0 0 0

Grand Total 3991 4076 4076 4076 4076 4076 4076 5076

IMPORTS 2013 2014 2015 2016 2017 2018 2019 2020

ABS Resins 46 44 61 66 66 71 61 61

Ethylene 40 31 16 11 11 11 11 1

Expandable Polystyrene 27 26 27 27 28 29 29 30

High Density Polyethylene 206 231 9 41 62 91 101 330 Linear Low Density Polyethylene 320 400 425 450 475 501 523 366

Low Density Polyethylene 132 136 131 131 131 131 131 131

Polypropylene 250 244 241 251 251 261 271 201

Polystyrene 56 59 60 59 58 56 56 56

Polyvinyl Chloride 192 207 211 211 216 221 231 231

Styrene 144 121 111 111 111 121 121 131

Vinyl Chloride Monomer 61 76 79 92 96 103 101 97

Grand Total 1474 1,575 1371 1450 1505 1596 1636 1635

EXPORTS 2013 2014 2015 2016 2017 2018 2019 2020

ABS Resins 196 197 221 231 238 241 237 234

Ethylene 150 129 81 111 121 101 101 101

Expandable Polystyrene

High Density Polyethylene 180 196 475

Linear Low Density Polyethylene 61

Low Density Polyethylene 398 399 382 339 323 318 315 418

Polypropylene 191 179 131 121 96 81 81 401

Polystyrene 53 55 56 56 56 54 51 51

Polyvinyl Chloride 37 37 36 39 39 41 41 31

Styrene 76 63 46 41 41 41 41 41

Vinyl Chloride Monomer

Grand Total 1281 1,255 953 938 914 877 867 1813

Page 25: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 25 of 52

3.2. POLYOLEFINS COMMITTEE

Malaysia was a net exporter of polyolefin products for the last five years ending in 2013.

The major export destinations were China (including Hong Kong), and countries in the

South East Asia region and Indian Sub-Continent. However, due to PETRONAS

Chemicals Group Berhad (PCG) subsidiary, Polypropylene Malaysia Sdn Bhd

mothballing its 80,000 tons/year PP plant in Kuantan, Malaysia at the end of December

2012 and capacity reduction at the second producer Lotte Chemical Titan from 480 to 400

kta in 2013 Malaysia became net polypropylene importer.

Indeed, Lotte Chemical Titan remains the only active PP capacity in Malaysia until

PETRONAS brings its new RAPID petrochemical project on-line. Lotte Chemical Titan

total PP capacity now stands at 400,000 tons/year. PETRONAS’ new RAPID project will

house a 300,000 barrels/day refinery, a naphtha cracker to provide olefins feedstock for

the downstream of other petrochemical and polymer units.

The domestic polyolefin demand in 2014 was growing at around 5.5% in line with the

positive growth rate of GDP, from 1475 to 551 MT. In 2015, the Malaysia economy is

projected to grow by 5% and the domestic polyolefin demand is expected to grow at the

same pace 1,551 in 2014 to 1632 mt 2015. Main export markets are expected to continue

struggling throughout 2015 which will be affecting demand for polymers. There will be

no capacity expansion or addition in 2015 for polyolefin products. Due to earlier capacity

shutdowns in 2014, Malaysia will become a net polyolefin importer.

Page 26: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 26 of 52

Page 27: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 27 of 52

3.2.1 PE

3.2.1.1 LDPE

Page 28: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 28 of 52

3.2.1.2LLDPE

Page 29: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 29 of 52

3.2.1.3 HDPE

Page 30: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 30 of 52

3.2.2 PP

Page 31: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 31 of 52

3.3. STYRENICS COMMITTEE

Page 32: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 32 of 52

Page 33: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 33 of 52

3.4. PVC COMMITTEE

Page 34: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 34 of 52

The landscape for PVC market in Malaysia and to some extent in South East Asia had

dramatically changed with PCG’s exit from VCM & PVC business at the end of 2012.

The vinyl business in PCG comprised of three plants located in the Kertih Integrated

Petrochemical Complex, Malaysia and in Vung Tau, Vietnam. The vinyl chloride

monomer (VCM) and polyvinyl chloride (PVC) plants in Kertih were owned by Vinyl

Chloride (Malaysia) Sdn Bhd (VCMSB), a wholly owned subsidiary of PCG, while the

PVC plant in Vietnam was owned by Phu My Plastics and Chemical Company Limited

(PMPC), also a subsidiary of PCG. As a consequence to the discontinuation, VCMSB

ceased operations from 1 January 2013. The plant was later decommissioned. PCG also

divested 93% of its stake in Vietnam’s Phu My Plastics to Japan’s Asahi Glass and

Mitsubishi Corporation, with the transaction being finalized in mid of 2014. Phu My

Plastics has a PVC capacity of 100,000 tons/year.

As a result, domestic converters had to start importing more PVC from SEA and NEA

producers in 2011 and 2012 due to overall lower operating rates of Malaysian producers.

FUTURE PROSPECTS

Demand in 2015 is expected to remain similar to 2014 although the industry will face

severe competitive pressure.

Page 35: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 35 of 52

3.5. SYNTHETIC RUBBER COMMITTEE

3.5 World Rubber Production

Industry Profile

In 2014, total world production of rubber was estimated to be 28.5 million tonnes, increasing at an

annual average rate of 2.9% from 23.4 million tonnes in 2007. Natural rubber, with production

estimated to be 11.8 million tonnes, accounted for 41% of world rubber production, while

synthetic rubber production accounted for 59%, with production estimated at 16.7 million tonnes.

Table 1 – World Production, Consumption and Trade of Rubber (‘000 Tonnes)

Page 36: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 36 of 52

Production, Consumption and Trade Performance

Malaysia is currently the world’s sixth largest producer of NR after Thailand, Indonesia,

Vietnam, China and India. NR production in Malaysia declined by 20.7% to 0.7 million

tnones in 2014 from 0.8 million tonnes in 2013. Exports recorded a decline of 9.3% for

the same period. Nonetheless, Malaysia is still a net exporter of NR. Consumers can look

towards Malaysia as a source of supply for quality raw rubber of SMR (Standard

Malaysian Rubber) grades, specialty rubber such as ENR, DPNR and TPENR and latex

concentrate products including Low Protein Latex.

Malaysia is the world eighth largest consumer of rubber and the seventh largest consumer of

natural rubber (NR). The other countries in the top ten ranking include China, the USA, Japan,

India, Thailand, Brazil, Indonesia, Germany and Republic of Korea. In terms of consumption of

Page 37: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 37 of 52

NR, Malaysia is behind China, India, the USA, Japan, Thailand and Indonesia. Other major

consumers of NR include Brazil, the Republic of Korea and Germany.

With the availability of quality raw materials, political stability and good infrastructure and

research and development support from the Malaysian Rubber Board (MRB) and the Tun Abdul

Razak Reasearch Centre (TARRC), Malaysia remains a global player in rubber, supplying the

world market with a wide range of rubber products.

Table 2: Malaysia’s Production, Consumption and Trade of Rubber (‘000 Tonnes)

Page 38: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 38 of 52

Table 3: Malaysia’s Export of Selected Rubber Products

Destination

Exports of rubber products from Malaysia surpassed RM 12 billion in 2010 and reached RM 15.2

billion in 2014. In 2009, exports experienced a slight decline of 5.7% due to the global recession

which led to lower demand for most rubber products. Nevertheless, Malaysia’s exports rebounded

the following year and have since continued to improve. In 2014, exports of rubber products from

Malaysia increased by 3.3% year-on-year, fuelled by strong growth in exports of general rubber

goods and tyres.

Malaysian rubber products are currently exported to more than 190 countries globally. The United

States (USA), Germany and Japan remained the largest markets for Malaysian rubber products,

accounting for more than 41% of Malaysia’s total exports of rubber products. Other important

Page 39: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 39 of 52

markets for Malaysian rubber products manufacturers include the United Kingdom (UK), China

and Australia.

Outlook

The natural rubber industry is expected to recover in 2015, supported by increased demand from

consuming countries amid low supply. The brighter prospects would be supported by China’s

mounting demand for the commodity which has been on the increase since 2014. The demand is

expected to exceed the world’s supply of natural rubber. Furthermore, the International Tripartite

Rubber Council (ITRC) consisting of Malaysia, Thailand and Indonesia are taking steps to curb

the fall in the commodities prices.

Prime Minister, Datuk Seri Najib Tun Razak said that Malaysia and Thailand will discuss further

cooperation to stabilise natural rubber prices. He said it was important for Malaysia, Thailand and

Indonesia to continue working together to support the work of the International Tripartite Rubber

Council (ITRC) to shore up the commodity's price.

Page 40: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 40 of 52

3.6. SYNTHETIC FIBER RAW MATERIALS COMMITTEE

Ethylene Glycols [Mono-Ethylene Glycol (MEG), Di-Ethylene Glycol (DEG)] as

Synthetic Fiber Raw Material

Malaysia’s leading Ethylene Glycol (EG) producer is PETRONAS Chemicals Glycols

Sdn Bhd (formerly known as OPTIMAL GLYCOLS (M) SDN BHD), which produces

three main products which are Mono-Ethylene Glycol (MEG), Di-Ethylene Glycol (DEG)

and Re-Distilled Ethylene Oxide (RDO).

PETRONAS Chemicals Glycols Sdn Bhd’s production capacity of MEG is 365kTa and is

applied in resins for fibers and PET containers or bottles, antifreeze as well as electronic

applications. PETRONAS Chemicals Glycols Sdn Bhd’s production capacity for DEG is

20kTa and is used in the production of unsaturated polyester resins (used for fiberglass)

and brake fluid formulation.

Although the production facility in Malaysia is relatively small compared to North East

Asia plant capacities, however its existence remains significant due to its cost

competitiveness, strategic location and significant exportable volume. Both, the MEG and

DEG are sold within Malaysia and to various countries throughout the Asia Pacific region.

The EG market growth relies heavily on the polyester supply and demand since it is a key

feedstock together with Purified Terephthalic Acid (PTA) in this industry. The global

economic downturn of 2008–2009 actually resulted in a contraction of global MEG

demand from the 2007 peak. However, the demand growth since 2010 was more than

Page 41: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 41 of 52

sufficient to recapture the demand volume losses. The Asia market is projected to

continue to have immense potential for the EG growth and consumption.

Today, major MEG producers include Saudi Arabia, China, Taiwan, Kuwait and Canada.

In the future global demand growth is expected to be about 5% per year, while China is

forecasted to grow at 6.5%. China is the largest MEG consumer and despite the new

capacity additions within the country, it will still be very much dependent on imports to

meet its demand.

In Malaysia, the EG market is expected to be stable until 2016 as domestic demand

growth is expected to be rather limited. Malaysia’s demand constitutes 15% of the MEG

demand in South East Asia. The MEG market growth relies heavily on the polyester

sector (fibre and PET resin) which, takes up around 93% from the total domestic

demand.

The PETRONAS Board of Directors has approved the Final Investment Decision (FID)

for the Pengerang Integrated Complex (PIC) which comprises of the world scale RAPID

Project, due for completion by 2019. EG is most likely to be one of the potential products

which may be produced by RAPID.

Page 42: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 42 of 52

Page 43: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 43 of 52

3.7 CHEMICALS COMMITTEE

Chemicals & Chemical Products

Industry Profile

Chemicals & chemical products is one of the leading industries in Malaysia, maintaining its

second position as the largest contributor to Malaysia’s total exports of manufactured goods. This

industry has a very strong linkage to almost every other sector of the economy. Chemicals are the

key components of other industries such as automotive, electrical and electronics, pharmaceutical

and construction. Chemical industry is a High-tech and capital intensive industry. It requires

highly trained and skillful human resources for its R&D, operating activities and continuous

development programme. It also evolves new production technology and new products. The

players in this industry are mostly dominated by the Multinational Companies (MNCs).

Trade Performance

Continuous Growth in Exports Of Chemicals In 2014

2013 2014

Change Change

Description

RM Mil Share % RM Mil Share %

(Value) %

TOTAL EXPORTS

OF CHEMICALS

47470.10 100.00 51509.20 100.00 4039.10 8.50

PETROCHEMICALS 20939.80 44.10 22456.90 43.60 1517.10 7.20

OLEO-CHEMICALS 9297.70 19.60 11286.70 21.90 13447.40 21.40

Exports of chemicals and chemical products grew by 8.5%, or RM4.039 billion from RM47.470

billion to RM51.509 billion. Major exports of chemicals in 2014 were the exports of

Page 44: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 44 of 52

Petrochemicals products which contributed RM22.457 billion or 43.6% of the total chemical

exports. Oleo-chemicals contributed RM11.287 billion or 21.9% of the total chemical exports.

Major Export Market

Table 1: Major Exports Of Petrochemicals

Exports of chemicals and chemical products grew by 8.5%, or RM4.039 billion from RM47.470

billion to RM51.509 billion. Higher exports of Polymers of ethylene (Polyethylene) contributed

very significantly to the growth of chemical exports as exports for this products increased by

RM1.593 billion or 1,019.7% to RM1.750 billion.

This is in line with the global demand for polyethylene resins, HDPE, LLDPE, and LDPE – which

is expected to rise 4 percent per year to 99.6 million metric tonnes (MMT) in 2018, valued at $164

billion from 81.78 MMT in 2013. The strong growth in demand for polyethylene by China which

Page 45: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 45 of 52

accounted for nearly one-quarter of global demand in 2013. Exports of Polyethylene to China in

2014 valued at RM574.0 million, an increase of 1,600.3% or RM540.3 million

Exports of Polyethylene to other market such as Indonesia and India also increased quite

significantly. Exports to Indonesia increased by 3,468.2% from RM9.7 million to RM345.5

million. While exports to India also grew by 115% from RM13.6 million to RM136.2 million.

Indonesia and India will also be among the world’s most rapidly expanding markets for the

chemicals. In Indonesia, the industry currently sources approximately 40 percent of the

petrochemicals it uses to make plastics from overseas every year. Most of the nation’s plastics

imports, comprising principally propylene and polyethylene, come from neighboring countries,

including Singapore, Malaysia and Thailand, as well as from Europe, the US and the Middle East.

Overall polyethylene demand in India is projected to climb to 8.2 million tonnes by 2023, up from

3.6 million tonnes in 2013.

Polyethylene, also called polythene, is the world’s most widely used plastic, primarily used to

make films used in packaging and plastic bags. Polyethylene consumes more than half of the

worlds’ supply of ethylene, derived from various petrochemical olefins. Demand for high density

polyethylene (HDPE), used in the manufacturing of product such as plastic sheeting for ducting

and appliance hoods, is expected to climb to more than 4 million mt by 2023, while demand for

linear- low density polyethylene (LLDPE), used in the making of industrial containers, is

projected to approach 3 million mt over the period. Demand for low density polyethylene (LDPE),

used in the making of home appliances and electrical appliances which expected to reach 1.2

million mt. It is projected that India will be the second largest importer of polyethylene by 2023,

behind China.

Polyethylene terephthalate (PET) is expected to be the fastest growing product segment over the

next six years, growing at a CAGR of 8.5% from 2014 to 2020. Growing PET demand for

Page 46: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 46 of 52

carbonated soft drink packaging industry is expected to drive the demand for PET over the next

several years.

In addition to Polyethylene, exports of Methanol and Saturated Polyesters (In Primary Forms

contributed to another RM148.1 million and RM55.4 million increase in exports value or 15.1%

and 10.7% respectively. Methanol was exported to ROC, Indonesia and Japan while Saturated

Polyesters, In Primary Forms was exported also to ROC, Korea and Japan.

Table 2: Major Exports Of Oleo-Chemicals

2013 2014 Commodity Description

RM Mil Share %

Change (Value)

Change %

RM Mil Share

%

Change (Value)

Change

%

TOTAL EXPORTS 47,470.10 100 1,166.00 2.5 51,509.2 100 4,039.10 8.5

TOTAL OLEO- CHEMICALS

9,297.70 19.6 -2,160.70 -18.9 11,286.7 21.9 13,447.4 21.4

INDUSTRIAL FATTY ALCOHOLS

1,416.40 3 -371.8 -20.8 1,644.20 3.2 227.8 16.1

PALM FATTY ACID DISTILLATES

1,176.40 2.5 1,176.40 0 1,334.80 2.6 158.4 13.5

STEARIC ACID 1,219.90 2.6 1,219.90 0 1,303.10 2.5 83.2 6.8

SOAP NOODLES 962.6 2 -20.5 -2.1 1,097.30 2.1 134.7 14

GLYCEROL 789.4 1.7 96.7 14 795.3 1.5 5.9 0.7

ACETIC ACID 484.2 1 -39 -7.5 740.2 1.4 256 52.9

PALMITIC ACID STEARIC ACID THEIR SALTS & ESTERS

479.5 1 26.3 5.8 700.3 1.4 220.8 46

INDUSTRIAL FATTY ALCOHOLS

1,416.40 3 -371.8 -20.8 1,644.20 3.2 227.8 16.1

PALM FATTY ACID DISTILLATES

1,176.40 2.5 1,176.40 0 1,334.80 2.6 158.4 13.5

STEARIC ACID 1,219.90 2.6 1,219.90 0 1,303.10 2.5 83.2 6.8

Page 47: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 47 of 52

SOAP NOODLES 962.6 2 -20.5 -2.1 1,097.30 2.1 134.7 14

GLYCEROL 789.4 1.7 96.7 14 795.3 1.5 5.9 0.7

ACETIC ACID 484.2 1 -39 -7.5 740.2 1.4 256 52.9

Exports of Oleo-chemicals grew by 21.9% from RM8.498billion to RM10.363 billion. The growth

of oleo-chemical exports contributed by higher exports of Industrial Fatty Alcohols, Palm Fatty

Acid, Stearic Acid, Soap Noodle and Acetic Acid.

The total exports of these item amounted at RM6.120 billion, an increase of 1211.4%, or

RM4.155 billion as compared to 2013. Major export destinations were including ROC, USA,

India, Netherland and Singapore.

Increasing demand for bio-based products from various end-use industries such as soaps &

detergents, pharmaceuticals and personal care remained as a key driving factor for the global oleo

chemicals market. The global oleo-chemicals market is expected to reach USD 30.03 billion by

2020 as industry has shifted its focus towards developing bio-based products on account of

Page 48: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 48 of 52

volatility in petrochemicals prices due to supply demand imbalances which is also expected to

have a positive influence on oleo-chemicals demand over the forecast period.

Oleo-chemicals products are used in various end-use industries including personal care, food

additives, surfactants, and pharmaceuticals. Polyamide and polyols are manufactured using oleo-

chemical advanced routes which are used in producing polyurethane, a major raw material for

fabric industry. Growth of these end-use industries particularly in emerging economies of India,

China and Brazil is also expected to drive the demand for oleo-chemicals.

Page 49: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 49 of 52

CHAPTER FOUR

4.0 Malaysian Petrochemicals Association (MPA)

4.1 BACKGROUND

The Malaysian Petrochemicals Association (MPA) is a formal association registered with

the Registrar of Societies in Malaysia. At present, members of MPA include companies

engaged in the manufacture and trading of petrochemicals and plastic resins, as well as

companies providing services required by the petrochemical industry. The MPA was

officially formed on March 19, 1997 with the following objectives:-.

- To provide a forum to discuss and resolve common problems of the petrochemical

industry

- To provide a focal point for the petrochemical industry to liaise with the public and

government and to make recommendations on relevant issues

- To advance the philosophy of Responsible Care, its implementation and compliance

throughout the industry

- To represent the petrochemical industry within Malaysia to interface with similar

groups on international basis

- To compile and disseminate information of common concerns and provide facilities

for consultation and exchange of views between members.

Page 50: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 50 of 52

4.2 MPA MEMBERS

1. Air Liquide Global E&C Solutions Malaysia Sdn Bhd 2. Ancom Kimia Sdn Bhd 3. BASF (M) Sdn Bhd 4. BASF-PETRONAS Chemicals Sdn Bhd 5. BP PETRONAS Acetyls Sdn Bhd 6. Chiyoda Malaysia Sdn Bhd 7. Dairen Chemical (M) Sdn Bhd 8. Dow Chemical (Malaysia) Sdn Bhd 9. DuPont Malaysia Sdn Bhd 10. Foster Wheeler E&C (Malaysia) Sdn Bhd 11. Idemitsu Chemicals (M) Sdn Bhd 12. Kemaman Bituman Company Sdn Bhd 13. Lotte Chemical Titan (M) Sdn Bhd 14. Petrochemicals (M) Sdn Bhd 15. PETRONAS Chemicals Derivatives Sdn Bhd 16. PETRONAS Chemicals Ethylene Sdn Bhd 17. PETRONAS Chemicals Group Berhad 18. PETRONAS Chemicals LDPE Sdn Bhd 19. PETRONAS Chemicals MTBE Sdn Bhd 20. Petrotechnical Inspection (M) Sdn Bhd 21. Recron Malaysia Sdn Bhd 22. Sinar Berlian Sdn Bhd 23. Technip Geoproduction (M) Sdn Bhd 24. Toray Plastics (M) Sdn Bhd 25. Toyo Engineering & Construction Sdn Bhd

Page 51: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 51 of 52

4.3 MPA COUNCIL 2014 / 2015

PRESIDENT

Mr Akbar Md Thayoob

PETRONAS Chemicals Group Berhad

VICE PRESIDENT

Mr Cheong Peng Khuan

Lotte Chemical Titan (M) Sdn Bhd

HONORARY SECRETARY

Mr Abdul Mazlan Abdul Razak

PETRONAS Chemicals LDPE Sdn Bhd

HONORARY TREASURER

Dr Stefan Beckmann

BASF PETRONAS Chemicals Sdn Bhd

COUNCIL MEMBERS

Mr Edmund Tan Teck Boon

BASF (M) Sdn Bhd

Mr Hideto Yoshimi

Idemitsu Chemicals (M) Sdn Bhd

Mr Sanjay Gover

Kemaman Bitumen Company Sdn Bhd

Mr Lim Boon Hoe

Petrochemicals (M) Sdn Bhd

Mr Takehiko Takayama

Toray Plastics (M) Sdn Bhd

Page 52: Malaysia Petrochemical Industry 2015

Malaysia Petrochemical Country Report 2014

Internal Page 52 of 52

CHAIRMAN

MPA Plastic Resins Producers' Group

Encik Abdul Mazlan Abdul Razak

PETRONAS Chemicals LDPE Sdn Bhd

ADVISORS

Dato' Tengku Muhamad Tengku Mahamut

Mr Tan Chai Puan

4.4 MPA SECRETARIAT

Malaysian Petrochemicals Association (MPA)

c/o Federation of Malaysian Manufacturers

Wisma FMM, No. 3, Persiaran Dagang,

PJU 9, Bandar Sri Damansara,

52200 Kuala Lumpur

MALAYSIA

Tel: 603-62867200

Fax: 603-62776714

E-mail: [email protected]

Website: www.mpa.org.my