Malaysia's Lime Business
Interviews with Schaefer Kalk and with CAO Industries & Vasari
Paul Ellis, Managing Director, Schaefer Kalk (Malaysia)
Could you give us an overview of your integrated product portfolio and the main applications of lime and Precipitated Calcium Carbonates (PCC)?
Schaefer started lime production in Malaysia in 1997. Our plant sits in Kedah in the north of Malaysia. The uses of lime and PCC are ubiquitous. These Products are used in the production of steel, water treatments, additives for plastics, lubricating oils, and foods, as well as other chemicals, and the PCC for rubbers, pipes, and many other products surrounding us. By burning limestone, the CO2 is unfixed, and different forms of calcium oxide and hydrated calcium oxide (hydrated lime) are obtained. We both sell these materials directly to our customers in different industries, or we process them further downstream.
How do you mitigate environmental concerns?
Inherently, lime production is freeing up CO2, but Schaefer is looking into building one of the first eco-ready kilns in the world.The lime industry produces a significant amount of CO2 which is emitted to the atmosphere while the cement industry accounts for about 10 times as much, which tells us we must work together across the value chain and with the support of governments, to bring CO2 emissions to net zero.
Where do you see the most opportunities for growth for Schaefer Kalk?
Our high-quality materials and accreditations like ISO and GMP enable us to supply into the more sophisticated and higher-margin markets like chemicals, paints, food, and pharmaceuticals. We also see good opportunities in additives for the PVC market: in the past, these additives used to be heavy metals like cadmium and lead compounds, which are notorious for their toxicity, but they are now being replaced by palm oil derivatives like fatty acids. PVC used in electricity cables requires high purity calcium products to make calcium stearate additive. Today, to sell into the PVC additives market in China, where our product is seen as the Industry Standard. We currently export about 80% of everything we make, to China, India, Indonesia, as well as other Southeast Asian countries. Some of our higher-quality products go to Japan, Korea and even to Europe.
Jack Lee Choon Keat, General Manager, CAO Industries & Vasari
Could you introduce CAO Industries to our audience?
We are a third-generation family business, started 25 years ago as a lime company. We currently mostly produce putty lime (known also as plaster lime or hydrated lime) used predominantly in the construction industry, but also with a wider application base in agriculture, aquaculture, and food processing.
How has the slowdown in the construction market impacted demand for putty lime?
Inflation has put many construction projects on hold. The prices for construction materials have somewhat stabilized after a period of vicious volatility, but they are still sitting at a high point. The price of lime increased by about 40%, driven by higher fuel and electricity costs. However, while construction projects have become fewer, renovation projects are increasingly more popular. The home improvement market has been very stable.
Can you tell us about your diversification through Vasari?
Over the past five to eight years, the direction of the company has been to tap into the coatings markets. Vasari is our latest venture. This is a Californian brand that we have formed a JV with. Seeing the potential of the Asian market, Vasari wanted to invest in local production (otherwise, the shipping distances were too long and expensive). We are present in Malaysia, Thailand, Indonesia, Singapore, Vietnam, Philippines, and Cambodia. Vasari also gave us an opportunity to complete our supply chain with lime-based wall finishes and paints. Lime-based finishes are quite new to most of these countries in SEA, but the reception has been great.
What’s your vision for both Vasari and CAO Industries moving forward?
For CAO, we strive to be the number one lime-based wall coatings expert, complete the value chain of our offerings so that, when a house is built, we can supply everything required. For Vasari, our vision is to have at least one Vasari wall in every home in Southeast Asia because we see the benefits of lime-based finishes and believe we can make a true impact in every household.