Japan’s Mitsui has agreed to participate in Kuala Lumpur Kepong’s (KLK) oleochemical business in China by investing USD44 million acquiring 20% of the shares in KLK Premier Capital (KLKPCL) from KLK. KLKPCL is an investment holding company, which owns 100% of the shares in Taiko Palm-Oleo Zhangjiagang (TPOZ), a manufacturer and supplier of oleochemicals based in Zhangjiagang City.
Oleochemicals, which are manufactured mainly from palm oil and other natural oils, are used as raw materials in the production of detergents and lubricants. The current world market for oleochemicals is worth around JPY7 trillion (USD58.7 billion) and is expected to grow by more than 4% each year, the company says.
Following completion of its expansion project, TPOZ will improve the cost-efficiency of its production operations and will become more cost-competitive by introducing new high-added-value derivative products.
Mitsui and KLK have been jointly operating an oleochemical manufacturing and supply business in Malaysia since 1991, but this will be their first joint business project in China. The new project will further strengthen the partnership between the two companies, as well as improve their access to expanding markets.