Sinar Mas set to expand footprint in palm oil for cosmetics

By Simon Pitman

- Last updated on GMT

Sinar Mas set to expand footprint in palm oil for cosmetics

Related tags Palm oil

Indonesian conglomorate Sinar Mas has laid out plans to expand its presence in the market for palm oil derivatives used in cosmetics by announcing a $400m investment in production facilities.

The group says it is allocating $100m for a fatty acid production facilities and a further $300m for the construction of expanded fatty alcohol production facilities, the company’s managing director, Gandi Sulistiy told the Jakarta Globe newspaper.

While fatty alcohol can be used to make plastics that could constitute a part of plastics packaging for cosmetic and personal care products, fatty acid is an important ingredient for soaps and a variety of cosmetics and personal care products, as well as home care products.

Both facilities will be up and running with a year

The company says that both of the new facilities will be located in Riau Province, in Sumatra and the company will use it own funds to pay for the construction.

Work has already begun on the both of the facilities, with the fatty acids plant expected to be up and running by the third quarter of this year, while the fatty alcohol is scheduled for completion in 2015, the report stated.

The company anticipates that most of the ingredients will be exported to markets throughout the Asia-Pacific region, with China, Thailand and Japan likely to be the biggest markets.

Sustainability is vital for cosmetics palm oils

In recent years sustainable palm oil has become an important issue for the cosmetics and personal care industry, with many of the world’s producers, who are mostly located in Indonesia and Malaysia, having to make significant changes to their businesses in an effort to meet sustainability demands.

However, 2013 was a year of negative publicity for the palm oil industry, with a number of palm oil producers being accused of overstepping the bounds of regulations with the destruction of the habitat of endangered species such as the Sumatran orangutan.

As a result, certification firm Green Palm has reported that a record number of companies are ‘offsetting’ the production of palm kernel oil by purchasing certificates.

In turn, RSPO-certified palm oil and its by-products has become the benchmark for both the palm oil industry and the cosmetics and personal care industry alike.

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