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Rapeseed new bets as food additives

9 April 2009 1,010 views No Comment

SASKATOON, Saskatchewan, April 8 (Reuters) – It dresses salads, fuels cars and fries foods, and now the canola plant is muscling in on soy with plans for the first commercial production of its protein as a food additive.

Two Canadian companies, Bio Extraction Inc (BXI.V). (BioExx) and Burcon Nutrascience Corp (BU.V), are aiming to become the first in the world to produce high-value proteins for food from the part of the canola crop that has the lowest value.

Canola seed is crushed mostly for its oil, for use as a cooking oil or a biofuel, while the meal byproduct is a cheap animal feed additive.

Protein isolates — the protein separated from plant meal in a highly pure state — command a price of C$6,000 to C$8,000 per tonne, more than six times the price of animal feed grade proteins, said BioExx Chief Financial Officer Chris Schnarr. The company announced last week it has produced pilot scale canola proteins for food that it plans to market commercially by 2011.

Vegetable protein isolates are a niche market currently dominated by soy and whey. Food processing companies use them to boost nutritional value in products such as baby formula, sports drinks and juices.

“What we’re all seeing here is demand over supply by quite a bit,” Schnarr said. “Globally, there’s a deficiency of proteins, particularly high-quality proteins.”

That demand is coming from both the need to feed a growing middle class in China, India and Brazil and the long-term demand for healthy food, said Jade Cheng, Burcon’s chief financial officer.

BioExx plans to produce protein as a food additive in early 2011 in annual volumes of about 2.4 million kilograms of protein isolate and 4.8 million kilograms of protein concentrate (a slightly lower purity form) from its Saskatoon plant. The company is seeking approval from food regulatory bodies in Canada, the United States and the European Union.

BioExx has a contract with German chemical marketing firm Helm AG to buy 70 percent of its canola protein isolates for distribution to food processing companies.

Burcon has a licensing and development agreement with Archer Daniels Midland Co (ADM.N) to build a plant at an undetermined location to produce and sell the protein isolates developed by Burcon. The next step for the companies is agreeing on royalties. Production will start one to three years after that, Cheng said.

With global production of canola meal totaling just 30 million tonnes annually, the production of protein isolates is not going to dramatically change the industry, said Dave Hickling, vice-president of canola utilization for the Canola Council of Canada. But it does add value to a crop that’s steadily claiming more acres.

Canadian farmers produced a record 12.6 million tonnes last year, approaching an industry goal of 15 million tonnes by 2015.

“It’s one more piece in the base that’s going to build it,” Hickling said. (Editing by Rob Wilson)

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