Oleochemicals can be derived from natural oils or fats. Palm oil-based fatty acids and fatty alcohols are the most important oleochemicals. The aims of this study are to develop a competitiveness model of Indonesian palm oil-based fatty acid and fatty alcohol industry, and to analyze the gap between the current and ideal (future) conditions of the industry, using competitiveness framework being developed by the International Institute for Management Development (IMD). This study used literature review, in-depth interview, and questionnaire method to gather opinions from the experts and/or practitioners of the industry of the current and ideal (future) conditions. The non-parametric Mann-Whitney test is used to assess the differences between both conditions. The results of this study show that the biggest gap using IMD competitiveness framework is government efficiency while the smallest gap is business efficiency. The results of this study also show significant differences between the current and ideal (future) conditions of the industry at ?=5% for all factors and total IMD competitiveness. Only two sub-factors have no significant difference, namely employment and prices. The competitiveness improvement of the industry has to involve all stakeholders by resolving existing problems in systemic and systematic approaches.