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Investing in Malaysia
Oleon Testimonial
Agenda
1. Oleon NV
2. Oleon’s activities in Malaysia
3. Why Malaysia?
June 4th 2014
2
I. Oleon NV – Natural Chemicals
Fats and oils
Triglycerides
Base oleochemicals
Fatty acids
Oleochemical derivatives
Glycerine
Esters Derivatives
Vegetable Oils & Animal Fats
June 4th 2014
3
I. Oleon NV – Business segments
Beauty, Health & Home care
Oilfield Chemicals
Nutrition : Food & Feed Additives
Agrochemicals
Coatings, Inks, Solvents & Green
plasticizers
Lubricants & specialty additives
June 4th 2014
4
I. Oleon NV – History
1835
Candle factory Oelegem
2009
1958
Take-over by Sofiprotéol of 100 % of
the shares
Start of oleochemical plants
Ertvelde & Oelegem
2006
2012
Closure of Sandefjord fatty acids
Acquisition of Akzo Nobel Oleochemicals plant
Construction of the first dedicated biodiesel plant in
Belgium
Start up of PG-plant in Ertvelde
Start up of new reactor line in Port Klang
Start up of glycerine plant in Porto Corsini
2008
Ester plant in Malaysia
OLEON History
2007
Construction of new FA3
plant in Ertvelde after fire
1970-1980
2011
Start up of
UniOleon new
food emulsifier
plant
New distillation
unit in Oelegem
2000-2003
New investments in Acquisition of Sandefjord
Ertvelde & Oelegem New glycerine refinery in Ertvelde
towards surfactant Dimer plant in Oelegem
oleochemicals under
Oleofina/PetroFina
2014
2010
2013
Doubled capacity
in Port Klang
New distillation
unit in Oelegem
June 4th 2014
5
I. Oleon NV – Our Shareholder
Our shareholder SOFIPROTEOL was founded in 1983 with a
unique mission to develop and promote oilseed crops in France.
June 4th 2014
6
I. Oleon NV – Our Shareholder
Oleon is integrated in the agro-alimentary chain of Sofiproteol
June 4th 2014
:
7
I. Oleon NV – Facts & figures
600.000
tons
of
54 R&D Scientists based
Oleochemicals in 2013
in 3 R&D centres
8 production
No. 1 in Europe
plants
with estimated
market share 23%
Ertvelde (+ HQ) – Belgium
Oelegem – Belgium
849
employees
Compiègne – France
Sandefjord – Norway
Emmerich – Germany
2x Port Klang – Malaysia
11 sales affiliatres in
Europe, USA and Asia
Porto Corsini – Italy
725 mio €/y turnover in 2013
June 4th 2014
8
Agenda
1. Oleon NV
2. Oleon’s activities in Malaysia
3. Why Malaysia?
June 4th 2014
9
II. Malaysia – Our history
Jul 2014
Plant in P. Indah – UniOleon
Jun 2012
Plant in P. Indah – Phase II
Jun 2009
Plant in P. Indah – Phase I
Jan 2008
Office in Klang
Jan 2001
Office in JB
Before 2000
June 4th 2014
Office in Fina
Singapore
10
II. Malaysia – Current Setup
100% Owned
50% Owned
50% UP
100% Owned
Oleon Sdn Bhd
• Manufacturing (Ester for Food, F&F, Lubricant, P. Care, Polymer)
Unioleon Sdn Bhd (Joint Venture)
• Manufacturing (Emulsifiers for Food, Personal Care, Polymer)
Oleon (Asia-Pacific) Sdn Bhd
• Trading (marketing products from all plants globally to AP & ME)
Oleon NV
• OHQ (rendering services to Oleon NV, Oleon China and Oleon Americas)
1.
2.
Purchasing
Marketing Services
Raw material sourcing
3.
SAP Support
Support Americas and Asia SAP
projects and rollout
4.
5.
6.
Application Support
Advisory (Consulting)
Finance Services
Application research
June 4th 2014
Marketing communication
and market research
Oleon China
Provide Finance Services to affiliates
in AP & ME
11
II. Malaysia – Investment I :
Oleon Sdn Bhd
The factory is located 50km west of Kuala-Lumpur on Pulau Indah or “Beautiful
Island” of the coast near Port Klang.
Close to Westport (5km) and Northport (25km), which is the 13th busiest container
port in the world (mainly GP box). As a comparison, Antwerp ranks 14th.
June 4th 2014
12
II. Malaysia – Investment I :
Oleon Sdn Bhd
Goal :
Support our growing presence in North America, and support
our future growth in AP
Why Malaysia?
• Asia-Pac vs USA : Produce where raw materials are & future growth market
• In Asia : China vs Malaysia vs Singapore
Start up
May 2009 (I) & Aug 2012 (II)
Total Investment
17 Mio € (I) + 12 Mio € (II)
Annual turnover
65 Mio €
NWC Requirement
27%
Employees
75
June 4th 2014
13
II. Malaysia – Investment II : OHQ
•
Established 1sty of January 2013
•
Sales Turnover 2014 : 230 Million MYR
• Trading
:
95%
• OHQ Services :
5%
•
Human assets :
Moved from 2 people to 24 people at the
end of 2013.
 Growing to 35 people.
•
Oleon China :
Also overseeing and managing Oleon China
which was established in Feb 2012
All figures are shown in MYR (Millions)
Sales Turnover(MYR)
Profit After Tax (MYR)
2001
2002
2003
2004
2005
2006 2007 2008 2009 2010 2011
2012 2013
Trading ● OHQ Services
June 4th 2014
14
II. Malaysia – Investment II : OHQ
Central
TaiwanANZOthers
India Sub.
3% 1% 1%
Japan
2%
5%
Asia
East Asia
Middle East
SEA
36%
S Korea
15%
South
Asia
Southeast Asia
China
14%
M. East
23%
2013 Turnover:
MYR 230 Million
Oceania
June 4th 2014
15
II. Malaysia – Investment II : OHQ
MARKETING SERVICES
1
> Promote all products from Oleon factories to Asia
Pacific and Middle East Countries.
2
3
4
RAW MATERIALS SOURCING
> From Asia Pacific region for all Oleon plants &
Trading.
APPLICATION SERVICES &
COMPETENCY DEVELOPMENT CENTRE
> Regional customer support center
> Training/Technical Knowledge center for both
internal as external sales organization.
SERVICES & SUPPORT
> SAP Competence center & Helpdesk
> PS&RA support
> Management & Finance Services
June 4th 2014
16
II. Malaysia – Investment III :
UniOleon
50/50 Joint Venture between United Plantations Bhd and Oleon nv through
the company UniOleon Sdn. Bhd.
UNITED PLANTATIONS BHD
UniOleon Sdn. Bhd.
MISSION :
United plantations & Oleon NV the perfect match to produce food emulsifiers
with the highest possible technical performance, and this by using raw materials
and production processes complying with the most severe quality &
sustainability standards.
June 4th 2014
17
II. Malaysia – Investment III :
UniOleon
KEY Facts & figures :
•
•
•
•
Total investment :
Capacity :
Employees :
Star up date :
16 Mio € (I) + 10 Mio € (II)
25.000MT
50
Q3 2014 (I) + S1 2016 (II)
June 4th 2014
18
II. Malaysia – Investment IV :
Global Innovation Hub
Key Facts :
Total Investment :
Scientists :
4,5 – 5 Mio €
20
June 4th 2014
19
II. Malaysia – Investment IV :
Global Innovation Hub
The weight of R&D and Analytical services
The weight of Food services
Growth
Learning
Infant
Growth
Learning
Infant
0%
20%
40%
60%
80%
0%
100%
20%
60%
80%
Formulation guidance
Performance Data
New / modify molecule
Sample creation
New formulated product
New molecule generation
Troubleshooting
Competitor sample analysis
The weight of Lubricant services
The weight of Personal Care services
Growth
Mature
Learning
Growth
Infant
Beginning
20%
40%
100%
Collaboration
Competitor benchmarking
0%
40%
60%
80%
100%
0%
20%
40%
60%
80%
Formulation guidance
Performance Data
Formulation guidance
Performance Data
New formulated product
New molecule generation
New formulated product
New molecule generation
Competitor benchmarking
Competitor benchmarking
June 4th 2014
20
100%
II. Malaysia – Investment IV :
Global Innovation Hub
Business Model
June 4th 2014
21
Agenda
1. Oleon NV
2. Oleon’s activities in Malaysia
3. Why Malaysia?
June 4th 2014
22
III. Why Malaysia?
KEY Drivers to invest in Malaysia :
• Access to raw materials
• Lower investment costs (especially for land)
• Centrally located in the region
• Good export infrastructure
• Good incentive package & support offered by MIDA which
resulted in pioneer status (10 years) + R&D grant.
• SSIC support when constructing plant to get
permits/certificates & utilities  Fast track approvals
June 4th 2014
23
III. Why Malaysia? – Challenges
Economic
•
•
Energy
•
•
Employment
•
Infrastructure •
Image
•
Slow-down in the China’s economy is putting pressure on
inter-Asian trade which could impact Malaysia’s exports.
Loss of GST Status
Energy cost (natural gas and electricity) is increasing and
moving towards the Asian level.
Energy cost in the US, due to larger availability of natural gas
at low prices (around 4USD/mmBTU) is turning Asia
uncompetitive for energy dependent activities.
Increments of salaries outpaces the rest of the world with a
small base to find good talents and competition for talents can
further erode bottom line (talent turn over & retention)
Congestion, typical to growing economy, actions are being
undertaken.
The image of some of Malaysias largest natural resources is
under pressure by the European public opinion (forestry and
palm oil).
June 4th 2014
24
III. Some Tips
•
South-East Asian mentality is fairly close to the Flemish:
Pragmatic, a can-do mentality & a fair amount of business is done
(after the working hours) through personal network
•
Do not rely on local consultants :
Opt for using your own Flemish/Belgian/European presence (that you can
rely upon)
•
For export oriented activities, be aware of fast increasing CPI
which could turn business uncompetitive.
Make your business plan realistic considering real prices and costs and
not the ones consultants tend to provide.
Do not consider South-East Asia as a low-cost region (with the exception
of some labor intensive activities where a few countries are still attractive
e.g. Cambodia, Myanmar, Indonesia, …), but not Singapore, Malaysia or
even Thailand.
•
For regional markets activities, consider your logistics and supply
chain very well
The region is huge with sometimes fairly poor infrastructure.
June 4th 2014
25
Thank you
June 4th 2014
26
Back up
June 4th 2014
27
III. Energy prices
June 4th 2014
28
Oleon’s Employment in Malaysia
– Currently Oleon Sdn. Bhd. employs approximately 70 people.
Oleon (Asia-Pacific) Sdn. Bhd. Employs approximately 30
people in Sales & Marketing, Finance, SAP, application
specialists and QA.
– For phase III and IV, the total employment will further
increase with 35 and 45 people respectively as a minimum.
– Of all staff at Oleon Sdn. Bhd. nearly 50% is having a
certificate or diploma (bachelor or master). All staff have
completed secondary education levels.
– Minimum wages are MYR32,700 gross per year (excluding
bonuses potentially adding up to 4 months pay).
– We are hiring in-house specialists to provide global services to
Oleon Group (e.g. SAP consultancy, procurement,...)
June 4th 2014
29
Oleon’s Contribution to Malaysian Economy
Investment
•
•
•
Construction
•
•
Added Value
•
•
Total investment of Phase I, II and UniOleon Phase I and II
amounts to RM210 million
Total Working capital commitment (inventory,
receivables,...) another RM160 million
This brings total investment in the Malaysian economy to
RM370 million
Construction mainly carried out by Malaysian companies.
Even core equipment such as reactor is designed and built in
Malaysia
UniOleon phase I and II will provide work for 450-500
temporary workers
80% of our Raw materials are sourced in Malaysia
Oleon produces high value added derivatives that provide a
downstream valorization of palm oil
June 4th 2014
30