A new operator on the tall oil market

Forchem Oy starts production in Rauma

Forchem Oy, the largest modern crude tall oil distillation plant in the world, has started up in Rauma. The historic moment was celebrated on Thursday, November 21, in an inauguration ceremony where the State was represented by Minister of Transport and Communications Kimmo Sasi. In addition, numerous experts, customers and personnel of Forchem Oy’s stakeholders attended the ceremony.

”The Board of Directors of Forchem Oy is very pleased with the progress of the investment project, which has proceeded better than expected in terms of schedule and cost estimates. In addition, the pre-marketing of our products has strengthened our conviction of Forchem’s future development” says Mr Jaakko Rislakki, Chairman of Forchem Oy’s Board of Directors. Forchem Oy’s President and CEO is Mr Martti Fredrikson.

Forchem’s plant in Rauma is the world’s largest dry distillation unit processing crude tall oil. The plant’s design exploits the latest technology and know-how in the industry. When it reaches full production speed, the plant will produce 150,000 tonnes of distilled tall oil products per annum. This capacity accounts for some 10 per cent of the processing of crude tall oil in the world.

Forchem Oy’s investments total almost EUR 70 million, and this project is the biggest one in the Finnish chemical industry this year.

A plant using renewable natural resources

Using only renewable natural resources, tall oil and all its distillation processes embody chemistry that complies with the principles of sustainable development. It is a process in which a by-product of the pulp industry is used to make further more value added products. It is also very important from the environmental point of view that no additives are needed in the distillation of crude tall oil. Another important advantage is that most of the energy needed in production is generated by using the bio-fuels produced in the plant’s processes.

The construction of the plant was preceded by a thorough evaluation of its environmental impacts, the results of which can be seen in great detail in the production process.

Odours and potential emissions relating to failures in the production process are monitored with the help of new technological solutions and modern process automation. Noise pollution can be reduced to meet the strictest current requirements or even lower.
Forchem Oy was granted an environmental permit in July 2002.

Rintekno Oy, Espoo, Finland – a top designer of crude oil plants in the world – was in charge of the design and construction of the plant. The supply and construction management agreement between Forchem Oy and Rintekno included the technology, overall services and supply of equipment and systems. Rintekno and its subsidiary Systecon Oy were entrusted with all design work, paperwork involved in applications for permits etc., and the procurement and supervision of the construction and installation contracts. The production-oriented process automation and monitoring technology solution supplied by Systecon is one of the first chemical industry applications in the Nordic region.

Domestic suppliers account for about 80% of the investment.

Logistics benefits reduce costs

In terms of logistics, the town of Rauma in Western Finland proved to be the optimal solution for the company. The local forest cluster offers Forchem almost all the infrastructure it needs for its operations. The Rauma pulp mill, which is part of the Metsä-Botnia Group, operates next to Forchem, and the raw materials required can be obtained from other pulp mills within a reasonable distance of the plant. For transport, the plant has the services of one of Finland’s busiest ports near at hand. In addition, with the help of the town of Rauma an excellent plot was found for the project, which also allows for future expansions.

Forchem offers direct employment for about 40 persons, and the indirect employment effect comprises about 100 persons. Most of the personnel come from the Rauma area. Training of personnel was started in May 2002.

Forchem’s products are important raw materials for further processing

Applying the latest production technology, the new Forchem plant will process crude tall oil into tall oil rosin (TOR) and tall oil fatty acids (TOFA), and also produce tall oil pitch as a by-product.

Tall oil rosin is a basic raw material for the chemical industry. Its most extensive area of application is in various adhesive solutions, such as hot-melt adhesives, hydrophobic sizes for papermaking and ink-binders for printing inks. Natural rosins are also used in the rubber industry and the manufacture of chewing gums. The rosin accounts for about 20 to 26% of Forchem’s overall production.

Tall oil fatty acids are used in the paints industry as a binder for oil-based paints, as a raw material for surface coatings, metalworking fluids, lubrication and hydraulic oils, in the manufacture of detergents, as collector chemicals in mining processes, and as fuel additives. Fatty acids account for about 30 to 36% of the production.

Tall oil pitch is mainly used as a bio-fuel in energy production. This is an excellent use for tall oil pitch, which is a low-sulphur, renewable raw material. Small amounts of tall oil pitch are also used as binders for printing inks and as raw material in the manufacture of asphalt, as well as in the processes of the rubber and mining industries. Pitch also includes a significant amount of the cholesterol-lowering sterols required in the food and pharmaceutical industries.

Main markets in Central Europe

Forchem Oy sells its products mainly to Europe, with central markets in Sweden, Great Britain, Germany, France and the Benelux countries. Exports account for some 90% of production. The main markets will be handled by the company’s own sales organisation and other areas by a network of agents. The present distillation capacity will give Forchem a 30 per cent share of the European market. At the moment the largest operator in the field is in the USA, with a more than 80 per cent share of the market.

The new company’s Board of Directors is formed by Timo Petäjä, Bio Fund Management Oy, Jouko Helomaa, Merita Capital Oy, Reijo Grönholm, OKO-Venture Capital Oy, Hannu Näsi and Jaakko Rislakki, who is the Chairman of the Board.

Forchem Oy’s main owners are the Finnish capital investors Bio Fund Management Oy, Nordea Capital Oy and OKO-Venture Capital Oy and their funds and Finnish Industry Investment Ltd.