THE country’s largest oleochemical facility, FPG Oleochemical Sdn Bhd, is expanding to a new line of business once its additional building, a RM60mil glycerine refinery, starts operating by December next year.
According to its chairman Datuk Aladdin Hashim, the sophisticated refinery will produce 35,000 tonnes of refined glycerine, a pharmaceutical grade product that requires stringent manufacturing practices and standards.
“The refinery will be operational by the third quarter of 2004 and the finished product will be exported,” he said at the signing ceremony to award the construction of the refinery to Toyo Engineering and Construction Sdn Bhd in Kuantan on Tuesday.
Among those present were State Local Government, Environment and Town De- velopment Committee chairman Datuk Kan Tong Leong, Felda group chairman Tan Sri Dr Yusof Noor, managing director Alan Brunskill and Toyo Engineering managing director Horuo Nagamatsu.
FPG is a 50:50 joint-venture project between Felda Palm Industries Sdn Bhd and Procter and Gamble Company (P&G), producing fatty alcohols, methyl esters and glycerine from palm kernel oil.
Crude glycerine, a co-product of FPG’s esterification process, is currently exported to P&G refining facilities in the United States and Britain.
With the construction of the refinery at the Kuantan Port industrial area , FPG will be able to cater to the increased demand for the product and reduce the overall operating costs as well.
Yusof said the refinery would further boost and entrench FPG's position as the premier oleochemical producer.
“It is also a very tangible evidence of the close cooperation between Felda and P&G,” he said.
Yusof told reporters later that the project was part of Felda’s long-term measures to develop more downstream activities so the agency would be financially strong and it would not have to rely its income on oil prices only.
Earnings generated from the activities would help cushion the impact caused by a drop in the oil prices or competition from other countries, he added.
Brunskill said the company would send some of the existing staff to the US and Britain for training to operate the new facility as well as to recruit between five and 10 new employees.
“The biggest difference in this plant is that it involves pharmaceutical products which require stringent supervision in its manufacturing processes. We must be able to meet the standards of pharmaceutical companies in Japan and Europe. That’s why we want our products to be of high quality,” he said.
He also anticipated a profit of RM15mil from this new activity on top of FPG’s baseline profits of some RM100mil in the past four years.
Refined glycerine has a wide range of applications in cosmetics, toiletries, health and personal care products, drugs, food and it is also used as an ingredient in making dynamite.
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