Cognis completes oleochemicals joint venture

By Simon Pitman

- Last updated on GMT

Related tags: Fatty acid, Palm oil

German chemical player Cognis has completed an investment in Golden
Hope Plantations Berhad that will see the companies combine their
resources on oleochemicals, an ingredient that is proving
increasingly popular in a variety of personal care and packaging
products.

The 50:50 join venture with the Malaysia-based company capitalises on its position as one of the biggest palm oil producers in the world, from which oleochemicals are derived.

Palm-oil derived olechemicals are currently used in a broad spectrum of personal care products, ranging from toothpaste to soap, skin and hair care products. The growth in demand for such ingredients is also being fuelled by the trend towards formulations derived from natural and plant-based ingredients.

Basic olechemicals include fatty acids, fatty alcohols and fatty esters and derivatives include soap noodles, stereates, oleates, amides and sulphates.

A memorandum to form the joint venture was first signed in July 2005, with subsequent contract negotiations, agreements relating to the transfer of the businesses to the joint venture confirmed in November 2005.

Further to that, approvals obtained from the relevant authorities in Europe and Malaysia mean that the transaction has now been formally concluded.

The new business will supply the Cognis Care Chemicals division a variety of oleochemicals for the personal care industry together with pelargonic acid for plastics technology. It will employ around 750 people, mostly in Germany and North America, and is forecast to generate annual revenues of around €570m.

The two company say that they will continue to hold equal stakes in the expanded joint venture and that the expansion of the joint venture makes Cognis Oleochemicals one of the world's largest oleochemical companies, with total annual revenues of around €690m and a workforce of around 1,100 employees.

To date production of oleochemicals in Malaysia has captured approximately 17 per cent of the global market, making it one of the world's leading suppliers.

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