 "Southeast Asia can emerge as hub for bio-based chemicals: Report")
Leveraging on their palm oil production prowess, Southeast Asian countries are leading the race of bio-based chemicals such as oleochemicals & bioplastics in the world. Driven by large and widespread feedstocks and government incentives, Southeast Asia is positioned to be a hub for bio-based materials and chemicals, according to Lux Research.
Indonesia, Malaysia, and Thailand - the three largest producers of palm oil - are parlaying their natural strengths into the emerging bio-based materials and chemicals space. Malaysia is focusing on new oleochemicals while Thailand is focusing on bioplastics; Indonesia has ample feedstock but presents more challenges due to a lack of government support for bio-based chemicals.
“Historically, most of the venture capital investment in bio-based materials and chemicals has gone to start-ups based in North America and Europe. Firms such as Altranex, for example, could develop supply chains in this region to tap into locally available feedstocks, like fat-rich waste effluents,” said Julia Allen, Lux Research analyst and an author of the report titled, ‘Assessing the bio-based chemicals landscape in Southeast Asia’.
Malaysia, the world’s second largest producer of palm oil, is best suited to produce new oleochemicals. Foreign companies such as Verdezyne and Biosynthetic Technologies have received investments from local conglomerate Sime Darby.
Thailand, which aims to be an ideal site for bioplastics, enjoys numerous advantages in bioplastic manufacturing. It has ample sugarcane - 100 million MT in 2013 - and enjoys supportive policies. Foreign players such as NatureWorks and Corbion Purac are already active in the country.
Indonesia’s lack of government support and suboptimal infrastructure make the world’s largest producer of palm oil - 33 million MT in 2014 - a less attractive geography. Elevance is the sole commercial bio-based chemical player in Indonesia. Elevance has a 180,000 MT oleochemical facility and has the potential to double capacity; but has delayed scale-up plans.
Indonesia, Malaysia, and Thailand - the three largest producers of palm oil - are parlaying their natural strengths into the emerging bio-based materials and chemicals space. Malaysia is focusing on new oleochemicals while Thailand is focusing on bioplastics; Indonesia has ample feedstock but presents more challenges due to a lack of government support for bio-based chemicals.
“Historically, most of the venture capital investment in bio-based materials and chemicals has gone to start-ups based in North America and Europe. Firms such as Altranex, for example, could develop supply chains in this region to tap into locally available feedstocks, like fat-rich waste effluents,” said Julia Allen, Lux Research analyst and an author of the report titled, ‘Assessing the bio-based chemicals landscape in Southeast Asia’.
Malaysia, the world’s second largest producer of palm oil, is best suited to produce new oleochemicals. Foreign companies such as Verdezyne and Biosynthetic Technologies have received investments from local conglomerate Sime Darby.
Thailand, which aims to be an ideal site for bioplastics, enjoys numerous advantages in bioplastic manufacturing. It has ample sugarcane - 100 million MT in 2013 - and enjoys supportive policies. Foreign players such as NatureWorks and Corbion Purac are already active in the country.
Indonesia’s lack of government support and suboptimal infrastructure make the world’s largest producer of palm oil - 33 million MT in 2014 - a less attractive geography. Elevance is the sole commercial bio-based chemical player in Indonesia. Elevance has a 180,000 MT oleochemical facility and has the potential to double capacity; but has delayed scale-up plans.
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