17/11/06 (Soyatech.com) - Thai Fatty Alcohol, a 50:50 joint venture between PTT Chemical and Cognis Thailand, is investing Bt820 million to build a fatty-alcohol plant on the Eastern Industrial Estate in Rayong province.

The plant will start operation at the end of next year.

Bt420 million of the investment budget will come from the company's capital and the remaining Bt400 million from financing by Siam City Bank, Manope Kerdlappol, director and acting managing director of Thai Ethoxylate, said yesterday.

Thai Ethoxylate is also a 50:50 joint venture between PTT Chemical Plc and Cognis Thailand.

Manope said the new plant's annual production capacity would be 50,000 tonnes of fatty alcohol, which is derived from natural sources such as palm kernel oil and coconut oil and is the key material for producing fatty-alcohol ethoxylate.

Fatty alcohol ethoxylate, made from fatty alcohol and ethylene oxide, is the main raw material in manufacturing a number of personal and home-care products: shampoos, shower creams, detergents, dish-washing liquids and cleaning agents.

He added that the plant would supply Thai Ethoxylate, a fatty alcohol ethoxylate producer, and would reduce that firm's cost of importing fatty alcohol from Malaysia by 10 per cent.

Thai Ethoxylate yesterday inaugurated Thailand's first plant for producing fatty alcohol ethoxylates, the facility having a production capacity of 50,000 tonnes per year.

Manope said Cognis provided the technology and marketing for the company, while the ethylene oxide is obtained from TOC Glycol, a subsidiary of PTT Chemical.

He said the plant would save Thailand Bt1 billion per year in imports of fatty alcohol ethoxylate. Moreover, it will boost the country's income by Bt1.2 billion through exports.

The company plans for 50 per cent of its production to supply the local market, with the remainder exported to Asian countries such as China, Japan and Vietnam next year.

He also predicted revenue of Bt2 billion in the coming year if the price of fatty alcohol ethoxylate in the global market stands at US$1,300 (Bt47,485) per tonne.

He expects this year's revenue will be Bt315 million from sales of 7,000 tonnes, the plant having started operations in the middle of last month.

This year's domestic demand for fatty alcohol ethoxylate is 40,000 tonnes. Manope said this was expected to grow by 7 per cent each year due to changing consumer behaviour.

Other Asia-Pacific markets for personal and home care products have grown by double digits this year, said Levent Yuksel, group vice president of Cognis's business unit for care surfactants and alcohol.

He said Thailand was currently positioned as the region's major manufacturer of personal-care and cleaning products. He is therefore confident that Thai Ethoxylate has excellent prospects thanks to its plant's location near the deep-sea port in Rayong and access to raw materials.