AS A renewable natural resource, vegetable oils and fats are ecologically safer than petroleum products. With their special molecular structure, edible oils and fats can produce, among other things, fatty acids, fatty methyl ester, fatty alcohol and fatty amine through various chemical reactions. They can also produce many kinds of surfactants and oleochemicals. Generally, oils and fats can directly produce surfactants through chemical reactions such as saponification, amidation, sulfonation and ethoxylation.

The mineral oil price will remain high as it is a non-renewable resource and always in demand. Further, the limited resources have brought pressure on the production of petroleum-based surfactants. Over the past few decades, the global output of oils and fats has been rising quite rapidly, especially in the production of vegetable oils such as soybean oil and palm oil, which provide sufficient, qualified and affordable resources for the development of the oleochemical industry.

Oleochemical products such as fatty acids, fatty alcohol, fatty amine, fatty methyl ester, glycerine and their derivatives have been widely developed and applied, including in the surfactants segment, and built a reputation for industrial flavouring. The function and ecologically-friendly advantages of surfactant-based oils and fats have been attracting great attention. More and more money is being invested in the research and development of surfactants from edible oils and fats, and this has already produced sound achievements. Currently, in China and abroad, the production of surfactants based on edible

oils and fats accounts for more than 50 per cent of the total output of surfactants, and is expected to grow further.

THE PRODUCTION AND MARKET STATUS OF OLEOCHEMICALS

Fatty AcidsChina’s production of fatty acids has gradually met the internationally advanced standard, both in terms of technology and scale. The most widely produced and used fatty acids are stearic acid, oleic acid, lauric acid and palmitic acid. The domestic production capacity of fatty acids has reached 1.55 million tonnes a year, which has far exceeded the market demand. This is going to make competition in the domestic fatty acid market extremely fierce in the coming years.

The categories of fatty acid and their derivatives exceed 3,000 and are applied in almost every industrial sector. In China, more than 70 per cent of the total output of fatty acids and their derivatives are used in plastic additives, rubber, surfactants and textile additives. Various surfactants are produced from fatty acids, including anionic surfactants such as soap, cationic and amphoteric surfactants, as well as nonionic surfactants like fatty acid amide and fatty acid ester.

Fatty AlcoholsFatty alcohols are divided into synthetic alcohol and natural alcohol, the latter of which is more popular in China. Synthetic alcohol manufacturing facilities are at Fushun Chemical Detergent Plant for OXO alcohol, with a capacity of 50,000 tonnes, and Jilin Chemical for Ziegler alcohol with a capacity of 100,000 tonnes.

Major natural alcohol manufacturers in China include Liaoning Huaxing, Lianyungang Sasol, Rugao Deyuan and Shangqui Longyu, each with a capacity of 500,000 tonnes a year. As domestic market demand for natural alcohol stands at 300,000 tonnes/year, it is therefore in oversupply. The future market competition will be more intense and the price will inevitably come down. Companies producing less than 20,000 tonnes/year will be at a disadvantage and be greatly affected by the price slump. However, this situation lays sound foundation for the downstream products of alcohol-based surfactants.

Natural fatty alcohol is one of the fastest growing oleochemicals. It is the pivotal resource for surfactants and can be used to produce fatty alcohol ether, fatty alcohol (ether) sulfate, fatty alcohol (ether) phosphate, fatty alcohol (ether) sulfosuccinate, fatty alcohol (ether) carboxylate, alkyl glucoside (APG) and fatty amine. Fatty amine can further produce cationic and amphoteric surfactants.

TM

MALAYSIAN PALM OIL COUNCIL KKDN PP 14669/05/2010 (024659) VOL: 7 2009

MPOC FORTUNE

Continued on page 6

PART 1

MARKETING & MARKET DEVELOPMENT DIVISION

For more information, please contact Tel : 603 - 7806 4097 Fax: 603 - 7806 2272

DIRECTOR

Wira Adam wira@mpoc.org.my

MANAGER

Muhammad Kharibi Zainal Ariffin kharibi@mpoc.org.my

MARKET ANALYSTS

Asia Pacific Desmond Ng Kok Hooi desmond@mpoc.org.my

Lim Teck Chai lim@mpoc.org.my

South Asia Fatimah Zaharah Md Nan fatimah@mpoc.org.my

Middle-East Mohamad Suhaili Hambali msuhaili@mpoc.org.my

Africa Nor Iskahar Nordin iskahar@mpoc.org.my

Europe Azriyah Azian azriyah@mpoc.org.my

Americas Ahmad Fadzli Abdul Aziz fadzli@mpoc.org.my

Oils andFats-based SurfactantsChina Offers EnormousMarket Opportunities

The price of FCPO (Crude Palm Oil Futures on Bursa Malaysia) continues to fall as I have expected in the past one month but fell lower than expected. There is a technical support level between the price range of between RM2,100 and RM2,200 per metric ton but the FCPO went as low as RM1,990 from RM 2,400. The price rebounded and is now at RM2,020. However, the market did rebound temporarily from RM2,150 to RM2,340 from 22nd to 26th June before making its way down again.

Tree replanting efforts is being continued by the government may caused production to fall further in the coming months and cut more supply to the already shortage in current palm oil supply to the market. Plantation Industries and Commodities Minister Bernard Dompok is confident optimistic about higher oil price in the months ahead. Cargo surveyors SGS Malaysia and Intertek Agri Services estimated a 15% and 18% on-month increase in the July 1 to 15 period. Fundamentally, price of FCPO should increase as the cut in supply and increasing demand may push prices higher.

The market has provided a good trading range for traders. The 14-day average

true range (ATR) which measures volatility is 75 points or 3.6%. However, average trading volume has been declining but the average open interest is increasing. This simply means more traders are sitting on open positions for a longer term rather than trading them short term in the market. The 30-day average volume was 9,200 contracts, 15.6% lower than the previous month’s average. The average volume has been declining for two consecutive months.

The price of FCPO was still in an up trend last month when it is above RM2,300 (which is the 90-day moving average). At current price, the trend is now down. The 30- and 60- day moving averages have just started to decline. However, the current down trend seems week because momentum indicators are in divergence with the trend. The Relative Strength Index (RSI) indicator pivot lows are higher despite lower FCPO pivot lows. The Average Directional Index (ADX) which was increasing since mid-June has started to decline as well, indicating a weak down trend momentum.

The long-term average is currently between RM2,100 to RM2,300 and therefore price is currently slightly below this long term average range. With the

current bullish momentum and positive fundamentals, the price of FCPO has a high chance to move higher and probably test the upper level of the trading range which is RM2,300 if the price is able to break above the immediate resistance of RM2,150. So, expect price to be trading sideways with a bullish bias. Current support level is RM1,950 and if this level is broken, the next support level is at RM1,800.

MARKETWatch

FCPO daily chart as at 16 July 2009. Charted by Benny Lee using NextView Advisor Professional

Mr. Benny Lee is a private trader, trainer and sought-after speaker in the financial market. He is the Chief Market Strategist for NextView Group. NextView Group is a group of companies in the Asian region that provides a leading real-time investment tool for both professional and retail investors. NextView is also a leading Investor Education training provider. For more information, log on to www.nextview.com.

The above analysis and commentary is based on the writer’s personal opinion towards the price of crude palm oil using technical analysis and should not be construed as any form of investment advice. The writer will not be responsible for any decision made from using the above article.

W

MPOC FORTUNE •  3

Price of FCPOexpectedto trade

sideways witha bullish bias

by Benny LeeChief Market Strategist

NextView Group

For more information, please contact :

ICB Global Management Sdn Bhd No. 3, Jalan Sri Hartamas 7, Taman Sri Hartamas, 50480 Kuala Lumpur, Malaysia. Tel: +603 6201 6051 Fax: +603 6201 6053

MPOC FORTUNE •  5MPOC FORTUNE •  5MPOC FORTUNE •  5

COMPANYUpdatesUp

FELDA Bridge Africa was started in 1996 and is a 50:50 joint venture between Felda Holdings Malaysia and the Bridge Group of South Africa. Felda Bridge Africa is one of the largest bulk distributors of palm oil products in Southern Africa.

The Bridge Group is a BEE-compliant, privately owned South African company that has been in operation for over 25 years. It has a staff complement of more than 150 employees and its 2007 turnover exceeded two billion rand. The head office, refinery and factory are situated in Johannesburg, with major branches in Cape Town and Durban and logistics offices throughout Southern Africa.

Felda Foods markets the “Supa” brand of palm oil products and has achieved phenomenal growth in the food manufacturing and preparation industries over the past 10 years. In fact the SupaCrisp brand is the fastest growing frying oil brand in the country and unit sales have increased ten-fold in the 10 years since the product was launched in 1998.

CURRENT OPERATIONSFelda Foods services the food manufacturing and preparation industries through the manufacturing, marketing and distribution of palm oil-based fats and oils.

While Felda Foods stocks a wide range of “off-the-shelf” frying oils, baking fats and margarines, it has also established

itself as the leading supplier in the niche market of customised blends. Felda Foods maintains that it can produce products that will suit the specific fat requirements of almost any food manufacturing process.

The company’s activities include:

• The import of palm oil products;

• Manufacture of finished palm oil products, packaging and branding;

• Warehousing, storage and forwarding;

• Bulk and wholesale distribution;

• R&D - customised product development;

• Field support and in-store training; and

• Environmentally-friendly used oil recovery

The industries that Felda Foods currently services:

Bulk Products:

• Snack food industry

• Frozen chip industry

• Ice-cream industry

• Coffee creamer industry

Baking Products:

• All baking manufacturers

• Confectionary manufacturers

Frying Products:

• Food service industry distributors

• Fast food and quick service restaurants – branding

• Hotel industry

• Catering industry

• Cash & carry wholesalers

Specialty Products:

• Customised blends for all food production requirements

NEW CORPORATE IMAGE AND BRANDING

In late 2007, Stephen Kromhout was appointed general manager and given the mandate of taking the company to the next level. He promptly assembled a dynamic new management team and recruited the services of an external branding consultancy to assist in the development of a new corporate image that would be more representative of the core business.

Thus Felda Foods was born with the aim of delivering the message to our customers, both existing and potential, that the revitalised company is committed to the food manufacturing, food preparation and food services industries in Southern Africa; hence the emphasis on Felda Foods.

The incorporation of an oil drop in the new corporate logo is easily recognisable as a symbol of the company’s area of expertise.

Expertise and specialisation is the new Felda Foods’ major point of difference, in an industry sector that has been traditionally mundane. The company has

Continued on page 9

Felda Foods A Continuing Success Story from Felda Bridge

6 •  MPOC FORTUNE

Fatty AmineFatty amine (C8-C22) is a major intermediate oleochemical from oils and fats and can be divided into primary amine, secondary amine and tertiary amine, all of which are key materials for surfactants. The fatty amine industry has been developing quickly in recent years, with manufacturing technology gaining good progress. According to statistics from China Association of Soap, Surfactant and Detergent Industries (CASSDI), China’s tertiary amine output in 2006 was 32,000 tonnes, of which that based on fatty alcohol made up more than 90 per cent. At present, total capacity for domestic fatty amine is 134,000 tonnes a year, of which primary amine makes up 71,000 tonnes and tertiary amine 63,000. The market for fatty amine is led by Zhangjiagang Feixiang and Boxing Huarun.

Fatty Acid Methyl EsterFatty acid methyl ester is one of the basic oleochemicals and an important intermediate oleochemical as well. Currently, only a few enterprises like Haiyan Fine Chemicals can produce commercialised fatty acid methyl ester. Others produce methyl ester only as an intermediate oleochemical in processing fatty alcohol, alkanolamide, fatty amine, methyl ester and sulphonate.

The most promising future for fatty acid methyl ester is biodiesel. The direct utilisation of methyl ester as a base for surfactants is also popular: fatty acid methyl ester can produce super alkanolamide through amidation; ethoxylated Fatty Acid Methyl Ester (MEE) though ethoxylation; Fatty Acid Methyl Ester Sulfonate (MES) through sulfonating; primary and tertiary amine through amination; as well as high quality soap through saponification.

GlycerinWhether it is to produce soap from saponification of oils and fats, to produce fatty acids through high pressure hydrolysis or to produce fatty acid methyl ester though transesterification, glycerine will be produced as a by-product. In recent years, many large-scale fatty acid facilities and fatty alcohol plants came

into production, especially with the completion and operation of biodiesel plants, resulting in a substantial growth in glycerine output.

The worldwide situation of oversupply in glycerine is noteworthy. In this regard, the development and utilisation of glycerine deep processing technology is economically and socially beneficial. Currently, refined glycerine is widely and directly used in pharmaceuticals, personal care, food and coating, as well as in synthetic resin, polyester and lipids and in a wide range of downstream industries.

The molecular structure of glycerine is propanetriol, with hydrophilicity, and can be used as a hydrophilic group among the molecular structure of surfactants, as similar as glycol. Currently, some surfactants have been developed based on glycerine, such as fatty acid monoglyceride, polyglycerol ester and fatty alcohol glycerine ether.

MARKET STATUS OF SURFACTANTS BASED ON OILS AND FATS IN CHINA

SoapsSoaps can be roughly divided into three categories:

• Alkali metal soaps, such as sodium soap and potassium soap, which are mainly used as perfumed soap, bath soap, household soap, soap flakes, soap powder, industrial soap, medicinal soap and soft soap;

• Monoethanol amine, diethanol amine, triethanol amine, and other organic-based soaps that are mainly used as dry-clean soap, textile soap, cosmetic soap, household detergent, emulsifier and polishing agent; and

• Metallic soaps made of aluminum, calcium, magnesium, zinc, barium and other metals, which are mainly used as plastic stabilisers and lubricants. However, metallic soaps have been gradually replaced because of the toxicity of heavy metal salts and concerns over environmental safety.

There are three ways to make soaps – through direct saponification of oils and fats, neutralisation with fatty acid and saponification of fatty acid methyl ester.

China’s production of laundry and perfumed soaps currently stands at 600,000 tonnes. There are some 10 major soap manufacturers in China, with a total capacity of 660,000 tonnes a year (see Table 1). Six of these manufacturers, with a capacity of 260,000 tonnes per year, rely directly on fatty acid neutralisation. Together with imported soap, the domestic demand for soap totals 700,000 tonnes a year.

Sulfonates and sulphatesFatty Acid Methyl Ester Sulfonate (MES)MES is an eco-friendly surfactant based on natural oils and fats and as a substitute for LAS is suitable for phosphate-free conditions. It is also hard water endurable, which is an ideal dispersing agent in lime soap and active agent in washing powder. It has good solubility, detergency, emulsifying properties and biological degradability, with broad potential for development and application.

MES has been attracting enormous attention as a new surfactant based on natural oils and fats. However, its commercial promotion has been restricted because of sub-standard manufacturing technology and formula application. The below par manufacturing technology persists in the areas of controlling and upgrading product quality, especially the colour, the disodium salt content, the drying process and the device for active matter. In terms of formula application, its thermal stability is poor under alkaline conditions, and the traditional spraying powder technology can hardly be applied.

Using several years of research and development testing at a sulfonating facility in Dalian, Zhejiang Zanyu Technology Co Ltd conducted several trial productions of MES and produced it with active content exceeding 85 per cent. This has been delivered to powder detergent manufacturers for formula

MARKETInsightsIns gContinued from page 1

Table 1: Major domestic soap manufacturers and their capacitiesNo. Enterprise Capacity Method (‘000 tonnes/year) 1 Taiko Palm-Oleo 60 Neutralisation2 Yihai (Lianyungang) 60 Neutralisation3 Yihai (Dongguan) 60 Neutralisation4 Kerry Oleochemical 40 Neutralisation5 Southeast Chemical 20 Neutralisation6 Yuncheng Nanfeng 20 Neutralisation7 Shanghai Soap 50 Neutralisation/Safonification8 Lanxi Jiabao 100 Neutralisation/Safonification9 Zhejiang Nice 100 Safonification10 Dongma Guangzhou 100 Safonification11 Huai’an Guanghua 50 Safonification

Oils and Fats-basedSurfactantsChina Offers

Enormous MarketOpportunities

MPOC FORTUNE •  7

application testing. The company is now building two MES facilities, each with a capacity of 30,000 tonnes a year, in Zhejiang Jiaxing to replace its 3.8 tonnes/hour sulfonating facility, which is equipped with aging, reesterification, bleaching, neutralisation and drying systems. Once facility is due to come into operation very soon. It is estimated that there are four domestic enterprises that could possibly produce MES with the next two years (see Table 2).

Sulfonated and sulfating oils and fatsNatural oils and fats can be used to directly produce various surfactants through sulfonation of sulfur trioxide, sulfation, or by oxi-sulphitation, which can be applied for leather polishing and textile and metal cleansing. Common products include sulfating castor oil, oxidising/sulphitating rapeseed oil and sulfonated oils and fats. The sulfonated oil SS manufactured by Zhejiang Zanyu is a new stuffing material based on sulfur trioxide gas phase film sulfonation of natural oils and fats, which can be stuffed individually or used in combination with other fatting agents. It can improve the softness of leather.

Fatty alcohol Sodium Sulfate (K12) K12 is obtained from direct sulfonation of C12-14 fatty alcohol and sulfur trioxide, which further go through neutralisation with alkali. The sodium salt is mainly applied as foam booster for toothpaste. It is also applied in various household cleaning formulae or for industrial use. This product is mainly sold as solid-like powder or in the form of noodles, but some of them are also sold as 30 per cent liquid product. Currently, major manufacturers in China include Changzhi

Anoinike, Shanghai Whitecat, Sichuan Yifeng and Shandong Jujin, with their outputs amounting to 5,000 to 7,000 tonnes a year in 2007 (100 per cent active matter). Beijing Rhodia, Guangzhou Lizhi, Sinolight Chemical and Zhejiang Zanyu have outputs of less than 2,000 tonnes a year each. Currently, China’s output of K12 stands at around 30,000 tonnes a year, and this can be further expanded.

It is noted that the process of using 30 per cent liquid K12 to produce powder through spray drying and produce it in noodle form as well is widely applied in China, though the production process needs to be further improved. The spray-drying process consumes a lot of energy and there is a lot of waste. If a paste with more than 70 per cent active content could be produced during neutralisation of K12, and the water can be further removed through knifing or vacuum drying, the process will meet the energy saving and eco-friendly requirements and also be cost-effective.

Fatty Alcohol Ether Sodium Sulfate (AES) Among the sulfur trioxide sulfonating products, AES is secondary to alkyl benzene sulphonate, and is the major active matter for dish-washing detergents and shampoos. According to statistics, the AES output totalled some 300,000 tonnes in 2007, or 210,000 tonnes of 100 per cent active matter. Among the 84 sulfonating facilities currently operating, 24 produce only AES, with total capacity of over 400,000 tonnes a year. According to CASSDI statistics, 11 enterprises reported AES output exceeding 10,000 tonnes in 2007 (calculated into 100 per

cent active matters, see Table 3). Total output of the 11 enterprises makes up 70 per cent of AES produced in China.

Fatty Alcohol (Ether) Ammonium SulphonateThe pH value of fatty alcohol (ether) ammonium sulphate is close to that of the human skin and is therefore suitable for preparing high quality shampoo, facial cream, bath foam and liquid soap. This category of products registered sustained growth between 2001 and 2004, and started to go downward after peaking in 2004. Major manufacturers include Hunan Lichen, Sinolight Chemicals, Zhejiang Zanyu, Shanghai Cognis, Shanghai Kao and Guangzhou Lizhi. Beijing Rhodia manufactures fatty alcohol (ether) ammonium sulphate for supply to P&G. According to the statistics, the annual output is estimated at not less than 50,000 tonnes.

Fatty Alcohol (Ether) SulfosuccinateSodium sulfosuccinate that features lower surface tension, excellent foaming power and foam stabilising capability and hypotoxicity is widely applied in daily-use chemicals, oil drilling, construction, coating, pesticides and polymers. China’s development of sulfosuccinate surfactants began in the 1960s and registered rapid growth in 1990s. Research and development in this area has been conducted in research institutes and universities in Taiyuan, Beijing, Dalian, Shanghai and Wuxi. Today, China’s fatty alcohol (ether) sulfosuccinate production is located mainly in Guangzhou, Shanghai, Liaoning, Sichuan and Jiangsu.

Other anionic surfactantsApart from these categories, anionic surfactants based on oils and fats include phosphate, borate, carboxylate and amino-acid salt. Though not manufactured or sold in large quantities, these surfactants have unique distinctions. For example, some derivatives of alkanolamide obtained from sulfonation, boration or phosphorylation of fatty acid alkanolamide have good stability, low irritability and biological degradability, and can be widely applied in cosmetics, detergents, textiles, leathers, paper making, pesticides and metal cleansing. N-acylaminoacid salt has good performance in sterilisation and since it is biodegradable, can be widely applied in cosmetics, toothpaste, food additives, metal cleansing and processing, ore floatation, silk dyeing and finishing and leather treatment.

(This article was presented by Mr. Fang Yinjun of Zhejiang Zanyu Technology Co., Ltd. at the 2009 Sino-Malaysia Oleochemicals Seminar, June 25-26, 2009 in Qingdao)

(Look out for Part 2 in the next issue!)

Table 2: Domestic enterprise producing MES and their capacityNo. Enterprise Capacity Remarks (‘000 tonnes/ year) 1 Zhejiang Zanyu 60 Self-developed technology and facility2 Guangzhou Langqi 36 Chemithon technology and facility3 Shandong Jinlun 60 Self-owned technology, domestic facility4 Shandong Fuhai 30 Designed by Jiangnan University,

domestic facility

Table 3: Major AES (sodium salt) manufacturers in China and their sales volumeNo Enterprise Total Output Total Sales Volume (tonnes) (tonnes)1 Zhejiang Zanyu 34,411 34,1392 Shanghai Cognis 26,035 25,3423 Hunan Lichen 22,408 22,4084 Sinolight Chemical 18,637 18,6025 Carbide Plant of Jilin Chemical 17,658 13,5986 Shanghai Kao 14,830 14,5807 Tianjin Angel 13,559 13,8058 Liaoning White Cat 13,064 11,6949 Guangzhou Lizhi 12,809 12,80910 Guangzhou Langqi 12,335 9,26611 Nanjing Sasol 11,200 12,700

MPOC FORTUNE •  9

COMPANYUpdatesUp

taken a quantum leap in differentiating from the competition in that each customer’s specific requirements are addressed individually, through highly trained support staff, customised R&D programmes and tailor-made contracts.

The re-branding of the highly successful SupaCrisp frying oil and the new “Professional Baking Series” of margarines and shortenings into packaging more representative of the food industry has also been a major development, which by all accounts has been well received by the market. This dynamic range has been specifically developed for frying, baking and confectionery professionals where consistent results, great taste and ease of use are paramount.

VISION AND MISSIONFelda Foods is confident of continued growth in the specialised oils and fats

sector of the food industry in Southern Africa. A true reflection of the company’s commitment is the multi-million rand expansion and upgrade that is currently undergoing at the Felda Bridge Industries refinery and finishing plant in Johannesburg.

This “Win-Win-Win” philosophy is carried through to the end user or consumer, not only through improved end-product quality, but also by way of Felda Foods’ Corporate Responsibility programmes. The main thrust of the company’s Corporate Social Investment programme is its alignment with SAFOI, the South African Fryer Oil Initiative and the universal implementation of the “Stewards Principle”. Felda Foods is committed to the practice of Good Oil Management. Its systematic removal of used oil from the food chain and turning it into biodiesel is coordinated on a national basis.

Felda Foods is committed to the practice of Continuous Quality Control and an important aspect of the upgrade agenda will be the achievement of HACCP accreditation before the end of this year.

As South Africa’s major importer, manufacturer and distributor of quality palm oil products, Felda Foods is focusing on the food market with a new range of class-leading products.

The company’s ethos of striving to meet all four basic procurement needs in terms of Quality, Value, Health and Service has resulted in the formation of highly effective “Supply Partnerships”.

The application of this philosophy in the day-to-day running of the business has undoubtedly been the catalyst for the phenomenal growth of Felda Bridge Africa over the past 10 years and a good indicator for the future. Uthaya Kumar

Continued from page 5

Felda Foods A Continuing Success Story from Felda Bridge

10 •  MPOC FORTUNE

Beginning August 2009, CDR will entrust PLT Scientific Sdn Bhd with exclusive distribution of FoodLab line of products in Malaysia.

August 2009, Florence – CDR S.r.l., a company active in the production of state-of-the-art analysis systems for foodstuff, has proudly announced that it has recently entered into an agreement with PLT Scientific Sdn Bhd for the exclusive distribution of its innovative line for food diagnostics, known as PalmOilTester, in the territory of Malaysia. The exclusive distribution agreement will form an integral part of the company’s strategy to be a leading provider of foodstuff analysis system. CDR is looking forward to an exciting future with this new relationship.

CDR’s FoodLab line of products is made up of a series of analyzers and reagents which able to perform chemical analysis on several types of foodstuff, such as vegetable and animal oils and fats, milk and dairy products, eggs, vegetable mashes, wine, etc. FoodLab systems enable to execute rapidly accurate analyses and do not require the presence of a specialized operator.

The FoodLab line of analyzers includes the following systems:• PalmOilTester To measure acidity (FFA), peroxide value (PV), DOBI &

Carotene Content, iodine value (IV) and p-anisidine value (AnV) in palm oil.

• OxiTester To measure acidity (FFA), peroxide value (PV) and polyphenols/stability index (OSI) in vegetable oils such as olive oil, avocado oil, etc.

• FoodLabFat To measure acidity (FFA), peroxide value (PV), soaps, p-anisidine (AnV) in oils and fats.

• FoodLab To analyze milk, eggs, tomatoes, vegetable mashes, cheese and fats.

• WineLab To analyze wine and must.• MiniFood Portable version of OxiTester and FoodLab. • MiniFoodLab Portable version of FoodLab analyzer.

About CDRCDR s.r.l. is an engineering company based in the neighborhood of Florence, Italy. CDR is active in several fields, such as: telematics, for which it produces automatic toll collection systems for motorways and parking places; medical diagnostics, for which it produces hematology and hemostasis systems; and food diagnostics, for which it produces systems for the prompt analysis of foodstuff. For more information, please visit www.cdr-mediared.com

About PLT Scientific PLT Scientific Sdn Bhd is a leading supplier of science equipment in Malaysia offering products ranging from state-of-art analytical instruments to basic laboratory glassware. PLT is registered with Ministry of Finance, Malaysia as a contract supplier of medical disposable ware, laboratory chemicals and laboratory equipment. The agreement is reflective of PLT’s active efforts to expand its product portfolio and broaden its overall product offerings to customers.

CDR Enters into Distribution Agreementwith PLT Scientific

MPOC FORTUNE •  11

IT was definitely good news for biodiesel producers. The Government of Brazil recently decided to raise the mandatory blending of biodiesel with mineral diesel from 3 per cent set for second half of 2009 to 4 per cent.

Since the implementation of Federal Law No: 11.097 (enacted on Jan 13, 2005), which authorises the use of 2 per cent blend of biodiesel until 2008 when B2 becomes compulsory nationwide, the production capacity of biodiesel has increased tremendously, from 40 million litres per annum in 2005 to 3.8 billion litres by the end of 2008. This has also been supported by various tax incentives given by the Brazilian government to both biodiesel producers and farmers in disadvantaged areas.

Nevertheless, this has caused a problem of overcapacity in the country, since the

two per cent mandatory rule only required around one billion litres of biodiesel in a year and this mandatory rate was supposed to stay until the end of 2012, after which the B5 plan would be implemented in 2013.

However, the National Council of Energy Policy (CNPE) in July issued Resolution No: 2, which increased the compulsory mixture to 3 per cent of biodiesel in mineral diesel from July 1, 2008. Calls from biodiesel producers to bring forward the mandatory blending level continued as higher capacity could result in lower biodiesel prices due to fierce competition, besides reduce the income of farmers supplying the raw materials.

Therefore, in May 2009, the Brazilian government raised the mandatory blending of biodiesel from 3 per cent to 4 per cent, effective July 1 this year. This is

estimated to help biodiesel producers to utilise higher capacity and produce up to 1.8 billion litres in 2009. Besides the biodiesel producers, the decision was also welcomed by soybean producers as this grain is the main feedstock for biodiesel in the country, accounting for 80 per cent of the biodiesel production, followed by tallow at 15 per cent.

However, this move was not without reaction from other stakeholders involved in the implementation of the new regulation. According to fuel distributors, the increase in blending rate has not been implemented at the right moment. The union of the biggest fuel distributors, Sindicom, said since the implementation of biodiesel blending began in 2008, distributors have complained about the quality of the biodiesel. Besides this, it will require about 15,800 lorry loads to distribute the additional 600 million litres of biodiesel now required, since there is no alternative distribution method. This may lead to a serious shortage of lorries available and delays in the delivery of biodiesel to some states of Brazil, Sindicom said.

Aside from this, biodiesel producers are still finding the blending of B4 insufficient to ease the problem of overcapacity in the country and want to pursue and bring forward the 5 per cent blending rate of biodiesel to 2010, three years earlier from the set target of 2013.

Should this be implemented, the country biodiesel requirement will reach 2.2 billion litres a year, based on the projection of 45.5 billion litres of diesel to be consumed in the country in 2010. This will utilise more than half of the biodiesel production capacity. Desmond Ng

MARKETInsightsIns g

2005 2006 2007 2008 2009F0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

mill

ion

litre

s

40 1

730

70

1,706

402

3,800

1,107

4,087

1,800

Production Capacity Production Volume

Source: USDA and ANP

Figure 1: Brazil’s Biodiesel Production Capacity and Volume (2005-2009F)

Brazil Brings Biodiesel Blend Rate ForwardIt starts with 4% from the second-halfof this year

MPOCOffices

WorldwideMalaysian Palm Oil Council (MPOC)2nd Floor Wisma Sawit Lot 6, SS 6, Jalan Perbandaran47301 Kelana Jaya, SelangorTel: 603-7806 4097Fax: 603-7806 2272www.mpoc.org.my

American Palm Oil Council Suite # 690, 21515 Hawthorne Blvd.Torrance CA 90503, USATel: +1 (310) 944 3910Fax: +1 (310) 944 3544www.americanpalmoil.comE-mail: kassim@americanpalmoil.comContact: Mohd Salleh Kassim

MPOC Africa Regional Office5 Nollsworth Crescent, Nollsworth ParkLa Lucia Ridge Office Estate,La Lucia 4051, KwaZulu-Natal, South AfricaTel: +27 (31) 5666 171Fax: +27 (31) 5666 170E-mail: kumar@mpoc.org.zaPostal Address:P.O.Box 1591M.E.C.C. 4301, South AfricaContact: Uthaya Kumar

MPOC Bangladesh62-63 Motijheel Commercial Area,7th Floor, Amin Court Building,Dhaka, BangladeshTel: +88 (02) 9571 216Fax: +88 (02) 9551 836E-mail: fakhrul@mpoc.org.bdContact: Fakhrul Alam

MPOC Shanghai, ChinaShanghai Westgate Mall Co. Ltd.Room 1610B, 1038 Nanjing Rd. (w)Shanghai 200041, P. R. ChinaTel: +86 (21) 6218 2085 / 6218 2086Fax: +86 (21) 6218 1125E-mail: teah@mpoc.org.cnContact: Teah Yau Kun

MPOC Pakistan11 – 3rd Floor, Leeds CentreMain Boulevard Gulberg, 111 Lahore, PakistanTel: +92 (42) 5716 600 / 5716 601Fax: +92 (42) 5716 602E-mail: faisal@mpoc.org.pkContact: Faisal Iqbal

MPOC India S-4, New Mahavir Building, Cumballa Hill Road Kemps Corner, Mumbai 400 036Tel: +91 (22) 6655 0755 / 6655 0756Fax: +91 (22) 6655 0757E-mail: bhavna@mpoc.org.inContact: Bhavna Shah

MPOC Europe Regional Office31 Avenue Emile Vendervelde1200 Brussels BelgiumTel: +32 (2) 7748 860Fax: +32 (2) 7794 371E-mail: zainuddin@skynet.beContact: Zainuddin Hassan

MPOC Cairo3 Gamal E1-Din Afify Street, Nasir CityZone No.6, 11371 Cairo, EgyptTel: +20 (2) 2273 8108Fax +20 (2) 2273 8106E-mail: kazmi@mpocegypt.comContact: Kamal Azmi

MPOC IstanbulGuzel Konutlar SitesiDilek Apartment Daire 3Balmumcu, Besiktas - Istanbul, TurkeyTel: +90 (212) 2668234Fax +90 (212) 2668236E-mail: haznita@mpoc.org.myContact: Norhaznita Husin

Advertising in the Malaysian Palm Oil FORTUNE is probably one of the most economical methods of advertising.

Discounts of 5%, 10% and 20% are available for placements of 3 months, 6 months and one year, respectively.

For enquiries, please e-mail: fortune@mpoc.org.myor contact: Tel: 603-7806 4097 (Mr. Muhammad Kharibi Zainal Ariffin)

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