DJ Interview: Palm Oil By-products in Growing Healthcare Demand
author : Dow Jones Newswires
Date :03 June 2009
By Sameer Mohindru Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Crude palm oil, traditionally used in food, cosmetics and to some extent in biofuels, is finding new uses in the pharmaceutical sector due to some of the byproducts obtained during processing.
Of key value are forms of vitamin E known as tocotrienols and tocopherols, which can be obtained in the making of biodiesel and have a range of uses in treatments for conditions such as stroke and cancer. Tocotrienols in particular are potent anti-oxidants and are in demand in the healthcare industry.
Carotech Bhd. (0076.KU) is a Malaysia-based healthcare and biodiesel manufacturing company with close to an 80% share in global market for palm oil based tocotrienols. Speaking in an interview, Carotech Managing Director David Ho said the company had annual total sales of close to MYR200 million for various palm oil based products, but there is potential for significant further growth.
"Demand for use of palm oil based products in the healthcare sector is on the rise because of the unique properties and presence of vitamins that can go a long way in handling some of the world''s major diseases," Ho said.
Studies on animals have revealed that tocotrienols can help reduce the damage done to the brain from a stroke, Ho said.
"Human clinical trials are going on and if they are successful, they will open up a multi-billion dollar market," he said.
Tocotrienols can also be used as a supplement to tamoxifen, a drug used to treat breast-cancer, while tocotrienols obtained from palm oil are used in nutritional supplements, such as Carotech's Tocomin and Caromin.
Ho said that Europe, Japan, U.S. and Australia have emerged as the main markets for tocotrienol-based products.
Various isomers of tocotrienols are also found in oats, barley, coconut oil and rice bran oil. But Ho said palm oil is unique because it has all the four isomers of tocotrienols, which can be put to varied uses.
Helps Revenue Amid High CPO Prices Another important byproduct from crude palm oil is carotenes, which the human body can convert into vitamin A and helps eyesight.
Ho said demand for carotenes has increased as a natural coloring agent for food products such as margarine.
He said plant-based nutrients constitute less than 1% of the crude palm oil complex and command a large premium in the global market.
Tocotrienols can fetch up to $600/kilogram, Ho said, while crude palm oil is currently offered around $750/ton.
If the technology is in place, it doesn''t cost much to extract phytonutrients because they can be obtained as byproduct while making biodiesel. But in absence of the technological processes, they are mostly lost.
Ho said Carotech has the world''s largest plant to extract phytonutrients during biodiesel production and has obtained a U.S. patent for the technology.
Other companies producing palm-based phytonutrients include Malaysia''s Carotino Bhd.
Carotech has an annual biodiesel production capacity of 120,000 tons and production of phytonutrients provides the much needed revenue during times of high CPO prices.
Ho said that while phytonutrients have a market of their own, they help to subsidize biodiesel production.
CPO is the basic feedstock to make biodiesel. Prices have more than doubled since October last year, making production unviable for most companies.
One of the most important phytonutrients in edible oils is Vitamin E. Vitamin E is the generic name for the family of tocopherols and tocotrienols. In nature, eight compounds have been found to possess vitamin E activity.
