Emulsifier expansion for Palsgaard

Related tags Palm oil Soybean

Faced with capacity problems due to growing business over recent
years Danish emulsifier supplier Palsgaard has poured €10 million
into expanding its emulsifier facilities in Denmark.

Marking the first step in a three phase plan, the Juelsminde-based maker of stabilisers and hydrocolloids has added 5000m2 to its emulsifier factory to improve and automise the packaging and warehouse facilities, as well as mounting a new spray cooling tower.

"The main issue is the cooling tower, which had been a real bottleneck for us, so now we will have a much better capacity,"​ Birger Brix, managing director of Palsgaard​ explained to FoodNavigator.com​.

Emulsifiers - substances which reduce the surface tension between two immiscible (non-mixing) phases - are used extensively by the food industry as a whole, in areas such as bakery products, salad dressings, coffee whitener.

According to Brix, the market for emulsifiers is growing well and enjoying growth from increased industrialisation in geographical zones undergoing a change in economic dynamics.

China is the notable example, where growth in the Gross Domestic Product (GDP) in July 2004 grew 8.4 per cent year over year, compared to the UK for instance that saw GDP grow by just 3.2 per cent year, or France by 2.4 per cent, shows a recent report from investment bank Goldman Sachs.

With such growth comes an increase in consumer buying power and consumer demand for processed, 'western-style' foods. Targetting the Asia Pacific market, at the end of last year Palsgaard opened a new application centre in Singapore 'to assist customers with development work using our ingredients,' said Brix. The centre is equipped with dairy, ice cream and bakery laboratories, in addition to a range of analytical and measuring apparatus for food applications.

The emulsifier expansion in Denmark is slated for completion by the end of September 2004 and will continue to use non-GMO vegetable oils as the raw material source to produce emulsifiers. In recent years Palgaard has moved away from using soya oils in response to manufacturer's demands. "We used to use a lot of soya oil, but customers now prefer us to produce our ingredients from non-GMO (genetically modified organisms) sources,"​ commented Brix.

This move may well have been a blessing for the firm, able to avoid recently soaring prices for soy oil hit by a global drawdown in soy crops. Although increasing global prices in other vegetable oils - palm oil and rape seed oil for example - will have impacted the bottom line.

" There have been some fluctuations in the price for vegetable oils, with a number of raw materials rising in price, but because most of the oils are in dollar trading, as the dollar went down to a certain extent this counter-balanced the impact, although not totally,"​ said Brix.

Second only to soybean oil in world demand, palm oil is witnessing a growing share of the global oilseed market, reaping 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, and as demand for palm oil from China and India sets to rise, supplies will be spread thinly. The price of the oil has risen sharply in the past two years on the back of growing demand.

"In early 2002 palm oil reached $300 per metric tonne, but over the last few weeks this figure has tipped $500,"​ an analyst at the US Department of Agriculture Foreign Agriculture Service recently told FoodNavigator.com.

"If a manufacturer is going to avoid soy over potential GM issues and consumer concerns then the only real alternative is palm oil,"​ added the analyst.

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