Russia's Orgkhim Biochemical invest US$50m to build facility in Johor.
Norman Process Oils Malaysia Plant Sdn Bhd, a subsidiary of Orgkhim Biochemical Holding from Russia, is building a US$50 million (RM197.84 million) facility at Tanjung Langsat, Pasir Gudang to manufacture petroleum-based extender oils used in tires, synthetic rubbers and rubber compounds.
Malaysian Investment Development Authority (MIDA) said the Malaysian facility will supply markets in the Asia Pacific region with a particular focus on China as well as other established markets including Malaysia and Singapore.
MIDA chief executive officer Datuk Azman Mahmud said the investment did not only demonstrate Orgkhim’s confidence in Malaysia’s long-term investment propositions, but also the thriving state of the chemical industry in the country.
“We are excited that upon completion of this project, Orgkhim will be the first company to produce carcinogen-free RPOs in Malaysia. It will strategically put Malaysia on the map as one of the few places in the world producing this premium specialty and eco-friendly chemical. Malaysia will certainly benefit from the sizeable patented technology transfer into the country,” he said in a statement.
Azman added the direct users of this specialty material, especially companies in the tire and rubber industry, will benefit much from the presence of Orgkhim here.
“They will be able to source for more cost-competitive raw materials and improve the quality of their output, resulting in safer and more EU compliant products that are fit for export purposes.
“When fully implemented, a total of 69 Malaysians will have the opportunity to work with this international company. Local vendors can also leverage on business opportunities arising from the many services required by the plant operation,” Azman said.
Orgkhim is the top Russian and second worldwide producer of safe petroleum-based extender oils for “green” tires production around the world.
It said the 70,000 tons per annum unit will produce the Orgkhim’s TDAE (treated distillate aromatic extract), TRAE (treated residual aromatic extract) and S-RAE (safe RAE, green analogue of traditional RAE) products.
“Today, we supply China and Korea and other Asian countries directly from Russia. Our volumes are growing so we will easily move production of these volumes to Malaysia,” said Orgkhim’s head of marketing.
According to MIDA’s record, as at September 2017, a total of 2,073 manufacturing projects in the chemical industry have been approved with investment worth RM96.5 billion.
Out of the total, 59.5 per cent (RM57.4 billion) was from foreign sources while the balance of 40.5 per cent (RM39.1 billion) was from local sources.
MIDA said those projects have created a total more than 97,000 jobs in the country.