Household products maker Kao opens fatty acid plant in Indonesia

Major Japanese consumer and chemical products maker Kao Corp. started operating a fatty acid factory on Indonesia’s Sumatra Island on Monday.

JAKARTA, NNA - Major Japanese consumer and chemical products maker Kao Corp. has started operating a fatty acid factory on Indonesia’s Sumatra Island in a bid to expand its chemical business.

Kao said Monday that PT. Apical Kao Chemicals, a joint venture with Apical Group Ltd., is making fatty acids for stable supply to its downstream production bases and clients overseas.

The two partners invested about $80 million to open the new plant with an annual output capacity of about 100,000 tons on the premises of an Apical Group factory in Dumai, Riau Province.

Apical Group supplies materials for fatty acids, Kao spokesman Ryota Ogawa told NNA.

The joint venture, established in 2017 with an initial capital of $25 million, is owned 65 percent by Apical Group, an oil, fats and derivatives producer headquartered in Singapore, and the remaining 35 percent by Kao.

Kao also operates factories in Malaysia, the Philippines, Thailand and other Asian countries to produce household products like shampoos and detergents.

By establishing the fatty acid production base in Indonesia, the Japanese company can boost its self-sufficiency ratio from less than 50 percent at present to 60 percent, Ogawa said.

Up until now, Kao has had a fatty acid plant only in Wakayama Prefecture, western Japan.

“We aim to enhance a vertical supply chain from materials to finished products,” the spokesman added. (NNA/Kyodo)

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