Loders expands palm oil-based ingredients position

- Last updated on GMT

Related tags: Palm oil, Nutrition, Saturated fat

Dutch supplier of palm oil-sourced food products Loders Croklaan
has consolidated its position in the growing palm ingredients
market, agreeing this week to buy Malaysian palm oil specialities
company Soctek.

The maker of speciality oils and fats, and now part of palm oil producer Malaysian IOI group after its disposal by Unilever in 2002, said the purchase would help to build on its strategy to be a major supplier of palm oil-based food products by improving upstream operations.

"Soctek will bring us a competitive manufacturing site in Asia for palm oil and palm kernel oil-based speciality products,"​ said Loders CEO Etienne Selosse.

Investment by ingredient firms into palm oil-derived products has risen over recent months as food makers look for alternatives to artery-clogging trans fatty acids and the food industry as a whole turns to palm oil - currently bearing steady prices - as the other popular oilseed markets like soybean and rapeseed are hit by rising prices through a squeeze in crop supplies.

Consumed in a wide variety of food products from instant noodles and crisps to cake mixes and snacks, palm oil has reaped a 28 per cent share of the total global supply and demand oil market. Today, soybean oil and palm oil account for over half of all oil consumed in the world.

"The EU has seen a rise in demand for palm oil, possibly linked to the anti-GM issue as well as the debate about trans fatty acids,"​ an analyst at the US Department of Agriculture Foreign Agriculture Service recently told FoodNavigator.com​.

Linked to raised blood cholesterol levels and heart disease in animal fats, trans fats have come under fire from consumer organisations, in particular in the US, pressing the food industry to cut the ingredient out of foods.

As such, market demand for trans fatty acids is on the up, as food manufacturers call for alternatives, such as palm oil, to trans fats - created by a chemical process called hydrogenation in the production process for longer shelf life.

"It can be a major ingredient in most food formulations and in most cases you would not even have guessed the inclusion of palm oil in such products. Take different types of margarine, for example - palm oil provides the body or texture to these products in such a manner that no further modification of the oil is necessary,"​ Dr. Kalyana Sundarm, head of the food technology and nutrition unit at the Malaysian Palm oil board said to FoodNavigator.com.

While the rest of the globe gropes with the issue of hydrogenation and the ill effects of trans fatty acids, palm oil stands tall and alone in being able to provide a natural trans-free choice, he added.

Over 26 million tonnes of palm oil are produced worldwide in tropical countries, with the number one supplier being Malaysia - producing 13.3 million tonnes last year - followed by Indonesia and a raft of smaller producers.

The latest acquisition from Loders, in harmony with the company's 'Growing with Palm' strategy, will allow the firm to ramp up production of palm oil based ingredients, which already received a massive boost when the firm announced earlier this year it had broken ground on the biggest palm oil refinery in Europe.

The new factory in Rotterdam, the Netherlands, is due to open in mid-2005 and is earmarked to process some 2,500-3,000 million tons of palm a day, carving immediate entry for the Dutch firm into the large volume supply of palm oil based ingredients.

"Palm opens real market opportunities for Loders Croklaan, as well as for our client companies who are looking to eliminate trans fats from their food products,"​ Selosse said at the time.

The acquisition of Soctek, a specialist in the refining and fractionation of palm oil and palm kernel oil, will bring over 300,000 million tons of oil per year into the Loders stable.

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