"As a manufacturing service provider for multinationals we are privileged to have become an important business partner as they redraw their supply chain footprint and build local capacity."

Johnson Lai


May 17, 2024

How have a weaker demand and ongoing supply chain disruptions reverberated on CSL’s business? 

2023 was a challenging year for the chemical industry, which had somewhat impacted on the volumes of our customers serving the region. Instead of the big recovery that everyone was hoping for, recovery came in small pockets. While demand stayed flat, the crisis in Ukraine and major disruptions in the Red Sea added further pressure on supply reliability. The silver lining from CSL’s business perspective is that these global disruptions have further motivated companies to actively pursue a more resilient supply chain footprint. Rather than shipping from Europe through the Red Sea into Asia, they can work with a contract manufacturer like us to bypass these long lanes and secure their product manufacturing capability locally (within Asia). The more serious the issues in Europe and the Middle East, the more resolute the manufacturers’ decisions to reduce as much dependency on long supply chains to serve the region. Taking everything into account, CSL is in a sweet spot: As a manufacturing service provider for multinationals we are privileged to have these conversations with new customers and become an important business partner as they redraw their supply chain footprint and build local capacity.

CSL produces specialty chemicals for third parties. How is the structural surplus in the commodities space impacting the specialty side?

While CSL is a mid-volume, mid-range specialty chemicals toll manufacturer that does not deal with commodities directly, we are not immune to imbalances in the commodity markets. As some producers have shut down / scaled down production to curb overcapacities, specialty producers face raw material (commodity) shortages. It is a curious contradiction to see the price of raw materials for specialty chemicals escalating due to throughput cutdowns at a time when commodity basket prices are trending low. 

Based on the discussions I have with peers in the industry, it may take take until the second half of 2024 for excess inventory in some markets to digest itself and for supply to regain balance. 

As a toll manufacturer, how do you fit within your customers’ emissions cutting mechanisms?

Toll manufacturers have no influence in Scope 2 (upstream raw materials/ purchased utilities) or Scope 3 emissions (supply chain emissions), so we can only play a role within the Scope 1 emissions footprint, which are generated through the production process. As the middle part of that chain, CSL takes responsibility for the energy and water use, making sure the plant is run as energy efficient as possible, and striving to minimize waste generation. 

In terms of the products we make, there is always the opportunity to work with oleo-chemistries by making oxide based surfactants. While biodiesels and other natural feedstocks fall under the commodity range and are therefore outside of our focus, surfactant chemistries are compatible with our hardware, as specialty chemicals / esters used in personal care and cleaning chemicals. CSL is geared up to producing these green chemistries and we are looking out for opportunities in the esterification chemistry and surfactants space.

CSL is one of the only mid-to-large scale specialty chemical toll manufacturers in Singapore. Why is that and how does CSL differentiate?

Over the past 14 years, CSL has carved out a reputation as a large-scale contract manufacturer for specialty chemicals, exclusively serving third-party clients, setting ourselves apart right from the outset. We operate independently and with high integrity on customers’ IP rights, in a country that is recognized as one of the best in the world for advanced patent protection, which gives our customers peace of mind. Singapore's geographic, logistical, and trade advantages position it as an ideal regional hub. Moreover, we are tapping into the feedstock available on Jurong Island, being connected via pipeline to critical raw materials molecules. By capitalizing on these advantages, CSL offers our clients a low-risk entry point into the region, enabling substantial savings in CapEx and time investment, yet having a reliable, safe and knowledgeable operating team to make their products.

Do you have a final message?

CSL is right in the middle of the transformation from a global to a regional manufacturig footprint. 


"AFC will continue to provide institutional support to Indigenous companies looking to develop the core assets that have been left behind by the majors."
"In 2023, we executed our first international project, which involved providing 24-hour diving services to support the installation of the first FPSO in Côte d'Ivoire."
"As a manufacturing service provider for multinationals we are privileged to have become an important business partner as they redraw their supply chain footprint and build local capacity."
"Our customers can benefit from relying on a single supplier for multiple products, especially in an inflationary and disruptive supply environment."


Peru Mining 2024 Pre-Release II

As the second half of 2024 approaches, Peru stands at a crossroads. According to the latest figures, the Democratic Republic of Congo has surpassed Peru as the second-largest copper producer. Cabinet changes under Boluarte's administration and ongoing corruption cases have taken a toll on investor confidence, and illegal mining remains a pressing issue. However, not everything is lost for the Andean country, and the mining sector presents growth opportunities.



"We plan to double our copper production by the end of the decade. There remains significant upside potential in the gold industry, and the copper operations are strategic and additive to that."