4/26/2005 - Supplies of vegetable oils to European food makers willincrease as US ingredients behemoth Cargill expands palm and coconut oiloperations in Europe, reports Lindsey Partos.

The largest private firm in the US said this week it will boost productioncapacity of coconut and palm kernel oil at its Netherlands plant by over200,000 MT year, and palm oil by 300,000 MT a year.

As a result, capacity at the Botlek (Netherlands) facility will hit overone million MT a year.

"Our investment plans will allow us to meet our growing customer needs byfurther enhancing our base product portfolio," said Jos de Loor, head ofCargill’s refined oils business in Europe.

Food manufacturers’ demand for vegetable oils, such as palm and soybean,is growing as the increasingly health-conscious consumer turns away fromanimal fats, and opts for vegetable alternatives.

Today, soybean and palm oil account for over half of all oil consumed inthe world.

Due to be completed by the third quarter of 2006, Cargill said it willalso expand the refining capacity of sunflower and corn oil at its Izegem,Belgium facility by 75,000 MT, without disclosing the total output figure.

This latest investment from Cargill is a further demonstration of the USfirm’s ambitions to improve supplies to, and market share in, the Europeanfood industry.

Earlier this year Cargill broke ground on its first refinery in Russia.Sunflower, rapeseed and corn oil, as well as palm and coconut oil, willall pass through the new €46.1 million facility expected to be up andrunning by February next year.

The investment followed Cargill’s announcement in December that it willincrease its stake in the Romanian edible oils market, the third largestin the CEE region after Russia and Ukraine, with the acquisition of thelocal company Olpo Podari.

Cargill already controls around 10 per cent of Romania’s silo capacityafter the acquisition of Comcereal in 2004 gave it a comprehensive networkof grain storage facilities in the Romanian grain belt in the Teleorman,Giurgiu, Ialomita and Galati regions. The acquisition of Olpo Podariallows it to move into the local market for oilseed crushing and refining.