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Corn Products continues to add value for growth

13-Apr-2004

Burgeoning ingredients firm Corn Products International will drive harder into the nutritional ingredients market signing on a deal to acquire a 75 per cent stake in prebiotic supplier GTC Nutrition.

The agreement gives the US maker of corn syrup sweeteners direct access to the technology to produce short-chain fructooligosaccharides (scFOS) through a technical licensing deal with Japanese firm Meiji Seika Kaisha.

Prebiotics, which are derived from insoluble fibres and oligosaccharides, can however be incorporated into a variety of end products including dairy, breads, supplements, cereals, snacks, beverages, chocolates, meat and confectionery.

"This is an opportunity to better serve the ingredient needs of both companies' customers, and supports our company's mission of becoming a premier ingredient provider," said Sam Scott, chairman, president and chief executive officer of Corn Products International.

Despite higher raw material prices across the board, the number-one worldwide producer of dextrose pulled in net sales of $2.1 billion in 2003, a rise of nearly 20 per cent on the year before. Diversifiying into the growing prebiotic ingredients segment will bear more fruits.

GTC supplies a range of dietary fibres to the supplement and soy food segments, among others, under the GRAS-status prebiotic brand NutraFlora. Although terms of the agreement were not disclosed, as part of the investment a new manufacturing channel - expected in 2005 - is earmarked to be installed at one of Corn Products International's Canadian facilities to produce scFOS.

Prebiotics are substances that promote the growth or activity of a limited number of bacterial species in the gut known as probiotics.

There are three major categories of prebiotic products that include short chain fructooligosaccharides, inulin and oligofructose, all largely promoted on the market for the purpose of supporting the growth of beneficial microflora in the gut.

Derived from the natural fermentation of sugar cane, scFOS is a specific, defined mixture of glucose-terminated fructose chains with a maximum chain length of 5 units, and 95 per cent pure active prebiotic.

The overall European prebiotics market is still at an embryonic stage, with the $87-million fructan (inulin and fructooligosaccharide) segment the most developed. The market for resistant starch products is still developmental with that for other prebiotics (galactooligosaccharides, lactosucrose, soy oligosaccharides and tagatose) even less advanced.

This is reflected in the small number of suppliers in the fructan segment - leaders include Beghin-Meiji, Cosucra, Orafti and Sensus. Competition is, however, set to intensify following the entrance of several new market participants attracted by the growth potential in this segment : it is set to grow to €179.7 million by 2010, according to Frost & Sullivan.

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