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Investing in Malaysia Oleon Testimonial

Investing in Malaysia Oleon Testimonial. Agenda. Oleon NV Oleon’s activities in Malaysia Why Malaysia?. I. Oleon NV – Natural Chemicals. Fats and oils. Base oleochemicals. Oleochemical derivatives. Fatty acids. Triglycerides. Glycerine. Esters Derivatives.

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Investing in Malaysia Oleon Testimonial

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  1. Investing in MalaysiaOleon Testimonial

  2. Agenda • Oleon NV • Oleon’s activities in Malaysia • Why Malaysia? June 4th 2014

  3. I. Oleon NV – Natural Chemicals Fats and oils Base oleochemicals Oleochemical derivatives Fatty acids Triglycerides Glycerine Esters Derivatives Vegetable Oils & Animal Fats June 4th 2014

  4. I. Oleon NV – Business segments Beauty, Health & Home care Oilfield Chemicals Nutrition : Food & Feed Additives Agrochemicals Coatings, Inks, Solvents & Green plasticizers Lubricants & specialty additives June 4th 2014

  5. I. Oleon NV – History 1835 Candle factory Oelegem 2009 Take-over by Sofiprotéol of 100 % of the shares 1958 Start of oleochemical plants Ertvelde & Oelegem 2006 Closure of Sandefjord fatty acids Acquisition of Akzo Nobel Oleochemicals plant Construction of the first dedicated biodiesel plant in Belgium 2012 Start up of PG-plant in Ertvelde Start up of new reactor line in Port Klang Start up of glycerine plant in Porto Corsini 2008 Ester plant in Malaysia OLEON History 2007 Construction of new FA3 plant in Ertvelde after fire 2014 Start up of UniOleon new food emulsifier plant 2011 New distillation unit in Oelegem 1970-1980 New investments in Ertvelde & Oelegemtowards surfactant oleochemicals under Oleofina/PetroFina 2000-2003 Acquisition of Sandefjord New glycerine refinery in Ertvelde Dimer plant in Oelegem 2010 Doubled capacity in Port Klang 2013 New distillation unit in Oelegem June 4th 2014

  6. I. Oleon NV – Our Shareholder Our shareholder SOFIPROTEOL was founded in 1983 with a unique mission to develop and promote oilseed crops in France. June 4th 2014

  7. I. Oleon NV – Our Shareholder Oleon is integrated in the agro-alimentary chain of Sofiproteol : June 4th 2014

  8. I. Oleon NV – Facts & figures 849 employees 600.000 tons of Oleochemicalsin 2013 54 R&D Scientists based in 3 R&D centres 8 production plants • Ertvelde (+ HQ) – Belgium • Oelegem – Belgium • Compiègne – France Sandefjord – Norway • Emmerich – Germany • 2x Port Klang – Malaysia • Porto Corsini – Italy No. 1 in Europe with estimated market share 23% 11 sales affiliatresin Europe, USA and Asia 725 mio €/y turnover in 2013 June 4th 2014

  9. Agenda • Oleon NV • Oleon’s activities in Malaysia • Why Malaysia? June 4th 2014

  10. II. Malaysia – Our history Jul 2014 Plant in P. Indah – UniOleon Jun 2012 Plant in P. Indah – Phase II Jun 2009 Plant in P. Indah – Phase I Jan 2008 Office in Klang Jan 2001 Office in JB Office in Fina Singapore Before 2000 June 4th 2014

  11. II. Malaysia – Current Setup Oleon Sdn Bhd 100% Owned • Manufacturing (Ester for Food, F&F, Lubricant, P. Care, Polymer) 50% Owned 50% UP Unioleon Sdn Bhd (Joint Venture) • Manufacturing (Emulsifiers for Food, Personal Care, Polymer) Oleon (Asia-Pacific) Sdn Bhd 100% Owned • Trading (marketing products from all plants globally to AP & ME) Oleon NV • OHQ (rendering services to Oleon NV, Oleon China and Oleon Americas) • Purchasing • Marketing Services • SAP Support • Application Support • Advisory (Consulting) • Finance Services Raw material sourcing Marketing communication and market research Support Americas and Asia SAP projects and rollout Application research Oleon China Provide Finance Services to affiliates in AP & ME June 4th 2014

  12. II. Malaysia – Investment I : OleonSdnBhd The factory is located 50km west of Kuala-Lumpur on Pulau Indah or “Beautiful Island” of the coast near Port Klang. Close to Westport (5km) and Northport (25km), which is the 13th busiest container port in the world (mainly GP box). As a comparison, Antwerp ranks 14th. June 4th 2014

  13. II. Malaysia – Investment I : OleonSdnBhd • Goal : Support our growing presence in North America, and support our future growth in AP • Why Malaysia? • Asia-Pac vs USA : Produce where raw materials are & future growth market • In Asia : China vs Malaysia vs Singapore • Start up May 2009 (I) & Aug 2012 (II) • Total Investment 17 Mio € (I) + 12 Mio € (II) • Annual turnover 65 Mio € • NWC Requirement 27% • Employees 75 June 4th 2014

  14. II. Malaysia – Investment II : OHQ All figures are shown in MYR (Millions) • Established 1sty of January 2013 • Sales Turnover 2014 : 230 Million MYR • Trading : 95% • OHQ Services : 5% • Human assets : Moved from 2 people to 24 people at the end of 2013.  Growing to 35 people. • Oleon China : Also overseeing and managing Oleon China which was established in Feb 2012 Sales Turnover(MYR) Profit After Tax (MYR) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Trading ● OHQ Services June 4th 2014

  15. II. Malaysia – Investment II : OHQ Central Asia East Asia Middle East South Asia Southeast Asia 2013 Turnover: MYR 230 Million Oceania June 4th 2014

  16. II. Malaysia – Investment II : OHQ • MARKETING SERVICES • > Promote all products from Oleon factories to Asia Pacific and Middle East Countries. 1 • RAW MATERIALS SOURCING > From Asia Pacific region for all Oleon plants & Trading. 2 • APPLICATION SERVICES & COMPETENCY DEVELOPMENT CENTRE • > Regional customer support center • > Training/Technical Knowledge center for both internal as external sales organization. 3 4 • SERVICES & SUPPORT • > SAP Competence center & Helpdesk • > PS&RA support • > Management & Finance Services June 4th 2014

  17. II. Malaysia – Investment III : UniOleon 50/50 Joint Venture between United Plantations Bhd and Oleon nvthrough the company UniOleon Sdn. Bhd. UniOleon Sdn. Bhd. MISSION : United plantations & Oleon NV the perfect match to produce food emulsifiers with the highest possible technical performance, and this by using raw materials and production processes complying with the most severe quality & sustainability standards. U N I T E D P L A N T A T I O N S B HD June 4th 2014

  18. II. Malaysia – Investment III : UniOleon • KEY Facts & figures : • Total investment : 16 Mio € (I) + 10 Mio € (II) • Capacity : 25.000MT • Employees : 50 • Star up date : Q3 2014 (I) + S1 2016 (II) June 4th 2014

  19. II. Malaysia – Investment IV : Global Innovation Hub Key Facts : Total Investment : 4,5 – 5 Mio € Scientists : 20 June 4th 2014

  20. II. Malaysia – Investment IV : Global Innovation Hub June 4th 2014

  21. II. Malaysia – Investment IV : Global Innovation Hub Business Model June 4th 2014

  22. Agenda • Oleon NV • Oleon’s activities in Malaysia • Why Malaysia? June 4th 2014

  23. III. Why Malaysia? • KEY Drivers to invest in Malaysia : • Access to raw materials • Lower investment costs (especially for land) • Centrally located in the region • Good export infrastructure • Good incentive package & support offered by MIDA which resulted in pioneer status (10 years) + R&D grant. • SSIC support when constructing plant to get permits/certificates & utilities Fast track approvals June 4th 2014

  24. III. Why Malaysia? – Challenges • Slow-down in the China’s economy is putting pressure on inter-Asian trade which could impact Malaysia’s exports. • Loss of GST Status • Energy cost (natural gas and electricity) is increasing and moving towards the Asian level. • Energy cost in the US, due to larger availability of natural gas at low prices (around 4USD/mmBTU) is turning Asia uncompetitive for energy dependent activities. • Increments of salaries outpaces the rest of the world with a small base to find good talents and competition for talents can further erode bottom line (talent turn over & retention) • Congestion, typical to growing economy, actions are being undertaken. • The image of some of Malaysias largest natural resources is under pressure by the European public opinion (forestry and palm oil). Economic Energy Employment Infrastructure Image June 4th 2014

  25. III. Some Tips South-East Asian mentality is fairly close to the Flemish: Pragmatic, a can-do mentality & a fair amount of business is done (after the working hours) through personal network Do not rely on local consultants : Opt for using your own Flemish/Belgian/European presence (that you can rely upon) For export oriented activities, be aware of fast increasing CPI which could turn business uncompetitive. Make your business plan realistic considering real prices and costs and not the ones consultants tend to provide. Do not consider South-East Asia as a low-cost region (with the exception of some labor intensive activities where a few countries are still attractive e.g. Cambodia, Myanmar, Indonesia, …), but not Singapore, Malaysia or even Thailand. For regional markets activities, consider your logistics and supply chain very well The region is huge with sometimes fairly poor infrastructure. June 4th 2014

  26. Thank you June 4th 2014

  27. Back up June 4th 2014

  28. III. Energy prices June 4th 2014

  29. Oleon’s Employment in Malaysia • Currently Oleon Sdn. Bhd. employs approximately 70 people. Oleon (Asia-Pacific) Sdn. Bhd. Employs approximately 30 people in Sales & Marketing, Finance, SAP, application specialists and QA. • For phase III and IV, the total employment will further increase with 35 and 45 people respectively as a minimum. • Of all staff at Oleon Sdn. Bhd. nearly 50% is having a certificate or diploma (bachelor or master). All staff have completed secondary education levels. • Minimum wages are MYR32,700 gross per year (excluding bonuses potentially adding up to 4 months pay). • We are hiring in-house specialists to provide global services to Oleon Group (e.g. SAP consultancy, procurement,...) June 4th 2014

  30. Oleon’s Contribution to Malaysian Economy Investment • Total investment of Phase I, II and UniOleon Phase I and II amounts to RM210 million • Total Working capital commitment (inventory, receivables,...) another RM160 million • This brings total investment in the Malaysian economy to RM370 million • Construction mainly carried out by Malaysian companies. Even core equipment such as reactor is designed and built in Malaysia • UniOleon phase I and II will provide work for 450-500 temporary workers • 80% of our Raw materials are sourced in Malaysia • Oleon produces high value added derivatives that provide a downstream valorization of palm oil Construction Added Value June 4th 2014

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