Purac Nederland, a subsidiary of €2.8 billion Dutch food ingredients firm CSM, is considering investing some six billion baht (€0.119 billion) in Thailand.
The funds will be poured into the construction of its first production facility, the agricultural acid plant that will use sugar as a raw material.
According to reports in the Bangkok Post and the Thai Press yesterday, Ratanaporn Chuengsanguansit, the secretary-general of the Office of the Cane and Sugar Board, said Purac Nederland had told the office it wanted to build a plant (in Rayong) to make sodium lactate and lactic acid as raw materials for both food and cosmetics ingredients, as well as the production of packaging materials.
Maximising on ample raw material sugar supplies in Thailand (47.8 million tonnes last year, making it the third largest producer in the world), the Bangkok Post report claims that under the project plan, Purac needs 170,000 tonnes of sugar per year to produce 15,000 tonnes of sodium lactate and 140,000 tonnes of lactic acid.
Purac declined to confirm reports about the Thai plant proposal.
Lactic acid is used extensively by the cosmetics industry as a standard ingredients for applications such as moisturising agents in skin and hair care products. Likewise, it is also used as an active ingredients for applications such as skin lightening and rejuvination.
Sodium lactate acts as humecant and a moisturiser in a variety of skin and hair care applications.
As lactic acid and its by-products are actually produced in the human body, the fact that it is a natural ingredient has done much to boost its popularity in recent years. This follows in line with the growing demand for cosmetic formulations that use natural ingredients.
The Bangkok Post report cites Ratanaporn as saying the Purac proposal is in line with the sugar industry's aim to encourage the development of value-added products from sugar.
In June Purac passed price rises onto the market, due to a hike in price for its chemical raw material sources, including caustic soda and a range of smaller chemicals.
Increases ranged between five and ten per cent across its portfolio of lactic acid and lactate products.
Rising costs for energy and packaging materials have also made an impact, and spurred the move to hike up European prices from 15 June.
The range, from €0.70 to €3 a kilo, spans cosmetics, pharma grade food and feed grade ingredients.