February 1, 2005
A Trans-Fat Solution, In The Palm of …:
By Andy Hanacek
With consumers becoming more and more aware of the detrimental effects of trans fat, they are clamoring for healthier alternatives. For anything from cookies, crackers and cakes to bakery mixes to frying oils, palm oil has become widely used across Europe and is making its way to the United States in lieu of trans fat-labeling mandates set to take hold of the industry in January of 2006.
Loders Croklaan, a worldwide palm oil producer, has been processing and importing the highest quality palm oil to Europe for almost 100 years, and now they’re bringing it to America.
Natural palm oil, which is pressed from fruitlets that grow on a specific type of palm tree, offers bakeries excellent functionality without hydrogenation, and thus without the trans fat. It also offers high stability and long shelf-life.
Gerald McNeill, director of R&D and marketing for Loders Croklaan, explains that fractionation gives the flexibility needed to promote the product.
“It’s not just one product with a set of applications, but with the fractionation and blending, we get an infinite number, so to speak, of products that fit almost everywhere that hydrogenated soy was before,” McNeill says.
Palm oil certainly has made its presence known around the world. According to McNeill, globally, palm oil is No. 2 to soybean oil among edible oils. It has about 25% of total world volume of edible oils, and soy has about 30%.
Palm oil hasn’t hit the big-time in the U.S. yet, but Loders Croklaan is preparing for a boost in the popularity there, based on the current trends away from trans fat.
“We’re making modifications to our plant that will be finished in a couple of months, to triple our capacity, because we see a big upsurge in the use of palm oil in the next six months,” McNeill says. “As we’re expanding our plant, we also have storage facilities in New Orleans. So we have an existing supply chain that goes from Malaysia to Europe right now. [And] we have the knowledge and expertise from our headquarters to expand and divert toward the United States.”
On top of that, the company is building a state-of-the-art, 2 billion-lb. palm oil refinery in the Port of Rotterdam near its headquarters in Amsterdam, to meet the new demand.
Even if demand skyrockets, McNeill says palm oil is readily available, even though it can be grown only in a geographic band about 10 degrees north and south of the Equator.
One reason is that the oil isn’t really used by consumers in the tropical regions it’s grown in. Almost all the palm oil that is developed in the world is traded, McNeill explains. Another reason the supply is consistent is that the palm oil growing season differs.
“The supply is really very consistent, because the tropics have a year-round growing season,” he says. “The trees sit there and make more and more fruit bunches all year long, and they snip them off and squeeze the oil out of them. The yield of oil from an acre of palm plantation is nearly 10 times higher than from a soybean field. There’s an ocean of oil out there, and it’s pretty cheap.”
For Loders Croklaan, palm oil is its lifeblood. Fortunately for the company, it is vertically integrated through parent company IOI Group, which is the largest privately held palm plantation in Malaysia. Loders Croklaan can control its supply and ensure a quality product reaches customers around the world.