Biotechnology company that has achieved some measure of success and recognition as pioneer in the field, plans to invest over RM100mil in research and development (R&D) to produce more commercially viable biodiesel products.<\/b><\/p>\n
Carotech<\/a>, a 51%-owned subsidiary of Hovid Bhd<\/a>, specialises in the extraction of tocotrienol (found in most vitamin E), carotene complex (vitamin A) and phytosterols (sterols) from crude palm oil (CPO) used in dietary supplements for pharmaceutical products, beverage, food and cosmetics.<\/p>\n Carotech managing director David Ho Sue San said the company was in talks with several bankers on how much funds the company could raise. “Our immediate focus is to expand production capacity and increase R&D for future biodiesel products,\u201d he told StarBiz in an interview.<\/p>\n Currently, the company has a plant in Chemor, Perak, which was upgraded last year to process 40 tonnes of CPO per day, compared with 17 tonnes previously.<\/p>\n “We want to expand our production capacity significantly – maybe as much as eightfold – to meet the current demand, and will either expand our existing plant in Ipoh or build a second CPO processing plant to boost production levels of tocotrienols,\u201d he said.<\/p>\n Ho also plans to set up R&D facilities in China and India in the near future. “The objective of our foray into India and China is to set up drug manufacturing facilities, either on our own or via joint ventures, possibly even with the government,\u201d he said, adding that Carotech was looking at major cities like Mumbai, Hyderabad, New Delhi and Bangalore in India. According to Ho, Carotech now commands about 75% of the global tocotrienol market worth between US$13mil and US$15mil annually.<\/p>\n “There is still a lot of growth potential for tocotrienol, given that the market for traditional vitamin E in the United States was worth about US$400mil last year,\u201d he said.<\/p>\n Ho, who is also Hovid managing director, said Carotech had recorded double-digit growth for the past several years, and both Carotech and Hovid were expected to maintain their performance, going forward.<\/p>\n Carotech now exports to 30 countries and derives 95% of its sales from the US, Europe, Japan and Australia, with US leading the demand for tocotrienols worth about US$10mil annually. Ho said the company aimed to further expand its market presence in Europe and Japan to reduce dependency on the US market. “Our New Jersey-based unit Carotech Inc manages most of the group\u2019s sales and marketing activities worldwide,\u201d he said, adding that the company\u2019s products could be grouped into two divisions-phytonutrients and oleochemical\/bio-diesel.<\/p>\n Carotech\u2019s phytonutrients division produces tocotrienols, carotene and phytosterol, while its oleochemical division generates methyl ester (commonly known as biodiesel) and crude glycerine.<\/p>\n An analyst with TA Securities Holdings Bhd said the three main growth factors which could spur Carotech\u2019s earnings would be the supply-demand gap for methyl ester, improvement in efficiency, and rising demand for methyl ester and tocotrienol. “We believe demand for both products would continue to outpace supply,\u201d he said, adding that company was in a favourable position, being possibly the largest and most profitable biodiesel producer in Malaysia. The analyst said that while most other players barely broke even or incurred losses, 53.3% of Carotech\u2019s net profit for the financial year ended June 30, 2005 was derived from the sale of methyl ester.<\/p>\n “The distinguishing factor is Carotech\u2019s patented production process. Bio-diesel producers typically produce unprocessed methyl ester, which is later sold as bio-diesel or bleached, and then sold to the oleochemical industry. Carotech, on the other hand, has taken the process a step further, via a patented process called molecular distillation, to extract high-value phytonutrients from the unprocessed methyl ester, enabling it to make higher revenue per kg of CPO processed compared with ordinary bio-diesel producers,\u201d he noted.<\/p>\n In addition, the analyst said the European Union (EU), which was currently the largest consumer of biodiesel, had set ambitious targets of 2%, 5.75% and 20% for biodiesel conversion for transport purposes on energy content basis, by 2005, 2010, and 2020 respectively.<\/p>\n “To meet the projected demand, the EU is planning to aggressively increase the supply of rapeseed (the most widely used vegetable oil to produce biodiesel). But even then, we believe demand is likely to outpace supply,\u201d he said. He added that given the supply constraint, EU would continue to depend significantly on imports to meet rising demand.<\/p>\n The analyst said the high oil price was likely to stay and demand for alternative sources of energy would increase; hence biodiesel demand should increase further over time.<\/p>\n For financial year 2005, Carotech posted a pre-tax profit of RM7.9mil on the back of RM53.3mil revenue. The company has over 300 health products and churns out about 20 new products a year. It also invests about 3% of its revenue on R&D annually.<\/p>\n","protected":false},"excerpt":{"rendered":" Biotechnology company that has achieved some measure of success and recognition as pioneer in the field, plans to invest over RM100mil in research<\/b><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","nova_meta_subtitle":"","footnotes":""},"categories":[5572],"tags":[],"supplier":[],"class_list":["post-13903","post","type-post","status-publish","format-standard","hentry","category-bio-based"],"_links":{"self":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/13903","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/comments?post=13903"}],"version-history":[{"count":0,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/13903\/revisions"}],"wp:attachment":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/media?parent=13903"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/categories?post=13903"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/tags?post=13903"},{"taxonomy":"supplier","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/supplier?post=13903"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}