Malaysian Oleo Firm Buys Germany’s Cremer

Malaysian oleochemicals company IOI Group agreed last week to purchase Germanys Cremer Oleo GmbH for 89.4 million (U.S. $101.3 million).

The acquisition, expected to be completed by the first quarter of 2016, involves two oleochemical factories in Germany with total processing capacity of about 39,200 metric tons per year.

One plant is in Witten and produces oleochemical specialty products for the lubricant industry, such as glycerol tricaprylate-caprate, a multi-purpose base oil, and oleyl erucate additives for cutting and lubricating oils, along with products for pharmaceutical, food and other industries.

The second plant is in Wittenberge and distills and fractionates fatty acids, esters and medium-chain triglycerides.

IOI has no other immediate plans for Cremer Oleo. At this stage, we intend to continue with Cremers existing products serving the lubricant industry, and our immediate priority is to optimize the two plants with technical expertise from Cremer, an IOI spokesman told Lube Report Asia.

Oleochemicals, manufactured from palm oil and other plant and animal oils, are used as feedstocks for biolubricants and metalworking fluids.

In addition to the transfer of technology into its Malaysian oleochemical plants, the purchase will allow IOI to mitigate the increased import tariff on Malaysian oleochemical products into the European Union, [allowing it to] establish new production sites in the center of the European Union and take advantage of close proximity to key markets in Western Europe and emerging ones in Eastern Europe, the company said in a statement.

IOI Group has two oleochemicals manufacturing facilities in Penang and Johor, Malaysia, with a total capacity of 720,000 t/y. The purchase will enable the groups oleochemicals division to expand into a new product range to serve the higher-margin- but difficult-to-penetrate- pharmaceutical, cosmetic, food and performance chemicals markets worldwide, it added

The proposed acquisition represents a timely and synergistic opportunity for [IOI] to move further up the value chain with an investment in the more specialized downstream oleochemical manufacturing business, which has two production plants and an established customer base comprising a number of multinational and large European companies, the company said.

IOI Group, with a total oil palm plantation area of 174,061 hectares, is a major player in the upstream and downstream palm oil industry. Cremer Oleo produces oleochemical-based lubricants and metalworking fluids under the brand Softenol.