Interview MR. RAMESH KANA, GROUP CHIEF EXECUTIVE OFFICER, EMERY OLEOCHEMICALS “Plastics additives and bio-lubricants are the seg- ments in which we have a competitive advantage and we will continue to do well” Malaysia’s Emery Oleochemicals has earned a name for itself as a leading manufacturer of high quality, natural-based chemicals commonly made from natural oils and fats such as palm kernel oil and tallow. With manufacturing facilities and sales & marketing offices located in Asia Pacific, Europe and North America, the company boasts of an extensive distribution network covering over 50 countries globally. Emery Oleochemicals is a 50:50 joint venture between Malaysia’s Sime Darby Plantation and Thai- land’s PTT Global Chemical. Sime Darby Plantation, the plantation and agri-business arm of Sime Darby Group, is the world’s largest oil palm plantation company, while PTT Glo- bal Chemical is the chemical flagship company of PTT Group, Thailand’s national energy and integrated gas company. Over the past few years, Emery Oleochemicals has looked to tran- sition from a pre-dominantly com- modity chemical player to a natural- based speciality chemical producer. This strategy has seen the company launch five speciality chemicals busi- ness platforms – Agro Green, Bio-Lu- bricants, Eco-Friendly Polyols, Green Polymer Additives, Home & Personal Wellness – in addition to its main- stay OleoBasics business. This transition has been led and managed by Mr. Ramesh Kana – first as Senior Vice President and Group Chief Financial Officer and then from January this year as the Group Chief Executive Officer (GCEO). July 2015 49 Interview Interview Chemical Weekly/HPIC India caught gions, and effectively leveraging the modity business and we do not And beyond the customer relation- to be successful we have to be focus (SLS), sodium lauryl ether sulphate up with Mr. Kana on his recent visit synergies. necessarily have the competitive ships we have very good product & on niche applications. (SLES) – are no longer businesses to India and quizzed him on his vi- advantage. So we decided to focus application development people in that make money on their own right; sion for Emery Oleochemicals and the Our growth strategy is based on our time and efforts on going down- this space and we have a pipeline The last one is our Home and Per- they have become outlets to help future investment & strategic initia- the premise that as a commodity stream. It is about staying ahead of of innovation that makes us very ex- sonal Wellness (HPW) business. That move your fatty alcohols. The same is tives on the anvil to make the com- chemicals player we really don’t have the curve by innovation and by giving cited about what we can offer in the is a more difficult one for us as we the case with ethoxylates. pany a leading sustainable speciality the scale in today’s market. We are customers what they want. coming years. have recently exited our ethoxylation chemical player. seeing big capacities being set up in plant in the Netherlands. The sulpho- It is difficult to envisage any fur- Indonesia and our competitors mull- Our transformation in the last five The third area will be our polyols nation unit in Malaysia is effectively ther investments in the commodity Excerpts from the interview: ing splitting capacities of a million years has been supported by an in- business. We will be commissioning a commodity business and apart from chemicals space especially in Asia tonnes and more. Today, our com- vestment programme involving dou- a new plant shortly in the US. What that we have a speciality esters plant at this point in time. We find it as How would you rate the performance modity portfolio consists of a 180,000- bling the capacity of our speciality is very exciting about the plant is using a Korean technology. So in effective to buy in the market today; of Emery Oleochemicals in recent tpa plant in Malaysia, and a 250,000- chemicals plant in north Germany, that it incorporates a technology we terms of the capacity to produce HPW the old theory of being backwards years? tpa plant in the US. building a new polyol plant in the US acquired in the US two years ago that products we are limited to one small integrated and having strong supply and two speciality ester plants in Ma- allows us to recycle foam. It is a real plant and on that basis it is unlikely sources is less relevant today. We The transformation of Emery Our commodity business in the US laysia and a sulphonation unit. Over breakthrough because we brought an to gain as much management focus see people shopping around to get Oleochemicals began in 2008 when is protected by virtue of distance as it the last three years we have invested early stage technology, developed it in the short term. We are still in the spot deals; in some cases people are PTT Global Chemical bought Cognis’ is unviable to move palm or finished close to around $500-mn. We now in-house, scaled it up and now we process of evaluating whether this is actually averse to doing off-take con- 50 percent share. This was during products to the US from Indonesia. have the infrastructure in place and are in a position to addresses some a business where we want stay in or tracts on a pricing formula. the global financial crisis. Notwith- But in Germany we could already see we know the market we are going to environmental issues, like landfill for maybe exit. standing the crisis, they honoured that it was going to become an issue target, so it is about making these as- example. We have had significant ex- The Indonesian government has the commitment, closed the transac- and we have just announced the sale sets work in the days to come. pressions of interest in this techno- How do you assess the current put a tax on exports of crude palm oil tion, and installed my predecessor, of plant there. logy from countries like Japan where developments and future trends to encourage a value-added industry Dr. Kongkrapan Intarajang as the In this transformation, are you bet- landfilling is such a big issue and in- in the conventional oleochemicals to develop. This tax situation has CEO to transform what was till then Unless you are integrated back- ting big on certain businesses to volves huge costs. business like fatty acids and alco- prompted a lot of capacity build-up in three regional businesses in Europe, wards to a palm plantation which en- deliver for you? hols? Indonesia. North America and Asia being run in- ables you to use the plant in a more Our other two businesses are bit dependently with its own CFO and efficient way it is not as valuable to The segments in which have smaller – in agrochemicals, we are In Asia we see significant over- The biggest disruption to the de- CEO – and merge it into one global us as to the other party. We do not a competitive advantage and con- refocusing and the US market will capacities. We estimate the fatty mand-supply equation is the fact that organisation. have integration to a palm producer, tinue to do well is in plastics addi- be our main focus to start going for- acid demand-supply balance not to a lot of new capacities, particularly notwithstanding the fact that we tives and bio-lubricants businesses. ward. The centre of gravity for that hit equilibrium for yet another 6 or 7 in Indonesia, are backward integra- In the past five years or so we have a shareholder which is a large These two businesses will necessa- business was Asia but now we have years. In fatty alcohols it looks a bit ted into small plantations where the have been trying to create an Emery plantation group. We don’t have real rily gain a disproportionate amount moved it to Cincinnati, US. We have longer – it could be up to 10 years level of competencies for what to do Oleochemicals global corporate cul- integration, so we cannot cope as of the management’s time and share- a new head of business and we have based on the current consumption with the split fatty acid is very low. ture, global systems & processes, a this is a low-margin business. holders’ attention. We have been a number of patented products to of- rates. This means that a lot of the So it ends up with traders that come global way of thinking without com- in these businesses for a very long fer. The agrochemicals market is very HPW businesses – particularly the into the market. There is always the peting with each other in different re- We realised that this is a com- time and we have a strong team. huge with many big players, so for us ones like sodium laureth sulphate issue of where to take the profits – at 50 July 2015 July 2015 51 Interview Interview Chemical Weekly/HPIC India caught gions, and effectively leveraging the modity business and we do not And beyond the customer relation- to be successful we have to be focus (SLS), sodium lauryl ether sulphate up with Mr. Kana on his recent visit synergies. necessarily have the competitive ships we have very good product & on niche applications. (SLES) – are no longer businesses to India and quizzed him on his vi- advantage. So we decided to focus application development people in that make money on their own right; sion for Emery Oleochemicals and the Our growth strategy is based on our time and efforts on going down- this space and we have a pipeline The last one is our Home and Per- they have become outlets to help future investment & strategic initia- the premise that as a commodity stream.