Carotech Bhd, a producer of biodiesel and phytonutrients through its integrated oleochemicals plant in Perak, is re-emphasising the phytonutrients side of the business due to the higher CPO price, which is hovering between RM2,800 and RM2,900 per tonne. 

This change in business direction was also due to the subsidy given by the US government to US-based producers, which according to Carotech managing director David Ho, has made producing biodiesel doubly unattractive for producers outside the country.  

He said the company was aggressively pushing sales of its phytonutrients products to North America, Europe and Japan, which accounted for over 90% of its exports. Ho said in tandem with the re-emphasis, the company was also ramping up its research and development efforts. 

An analyst with a local bank-backed research unit said it was better for Carotech to focus on phytonutrients, which was priced at US$800 to US$900 per kg rather than biodiesel for now due to the higher CPO price.  

“At that price if they can sell most of their stock, that will be good,” he said. 

However, he said the demand for both phytonutrients and biodiesel products was not as strong as Carotech would like to see it. “Palm-based products are not as well received as soybean or rapeseed products,” he pointed out, adding that the price for the phytonutrients products was a bit high.  

He said the high price of the phytonutrients products might be a deterrent to a larger market share in North America and Europe. “It really depends on market demand,” he said.  

“I don't know if the market is ready for any new output, especially when the company's new 120,000-tonne capacity plant in Lumut, Perak becomes operational early next year. 

“For biodiesel, the company is the largest producer in the country, it really depends on demand, on whatever the market can absorb,” he said.