Oleochemicals & Surfactants Industry

OLEOCHEMICALS INDUSTRY
The Philippines is the world’s leading coconut oil producer. Production of oleochemicals in the Philippines started in 1967 when a company, Cocochemical Plant, Inc. started producing methyl esters, fatty alcohols and butyl cocophtalate using a technology provided for by Kao Corporation of Japan. Since then, a number of oleochemical plants have been established. It is interesting to note, moreover, that the Philippines has a legislation requiring the use of up to 60% of detergent raw materials as surfactants derived from coconut fatty alcohols.
However, with the growing concern for environmental and consumer protection, further development of downstream processing of basic oleochemicals have been encouraged especially on various raw materials used in large scale applications, as in the case of detergents and related cleaning products.
CPAP works together with the Fertilizer and Pesticides Authority (FPA), a government regulatory and licensing body that oversees the distribution of crop protection products.
SURFACTANTS INDUSTRY
Current Developments
The Philippine Surfactant Industry has undergone a long history. Its growth has been given a directional push by the passage of Executive Order (EO) No. 259 in 1987. EO 259 mandates the use of indigenous coco-based surfactants, e.g. coconut fatty alcohol sulfates (CFAS). Presently, the soap and detergent industry is formulating its products with a minimum 60% local content primarily using CFAS. The same EO still allows the use of petroleum-based surfactants up to 40% maximum.
We can classify the players of this industry into merchant/commercial group and those which produce in-house for their own use. Companies belonging to the merchant/commercial group produce the surfactants as presented above and sell them to the soap and detergent makers. The other group belongs to the soap/ detergent makers. These companies have their own sulphation and/or sulphonation units to produce the surfactants that they need.
The Philippines’ sulphation/sulphonation capacity is estimated to be 104,000 MTPY. The Philippine total surfactants raw material capacity, therefore, including the AB production, is estimated to be about 130,000 MTPY.
Factors Affecting the Industry
In 1995, EO 259 was part of the notification submitted by the Philippine Government to the World Trade Organization (WTO) Council for Trade in Goods pursuant to Article 5.2 of the Trade-Related Investment Measures (TRIMs) Agreement, relating to the requirement for the soap and detergent manufacturers to use at least 60 % locally produced cocochemical surfactant. The Philippines, as a developing country, was allowed five (5) years from 01 January 1995 up to 31 December 1999 within which to eliminate the prohibited TRIM.
Another issue that concerns the sector is the continuing importation of “Blu” bars from Indonesia. The local detergents manufacturers are unduly disadvantaged since these imported detergent bars do not conform with the provisions of EO 259.
As a whole, the industry continues to face increasing competition from imports. Specifically, the polyphosphate industry and the alkylate industry are suffering from cheap imports from China, Taiwan and Korea, despite the 20% import duty imposed on these products.