28/09/05 PETALING JAYA, (Bernama) -- The global food emulsifier industry,which is currently fragmented with more than 40 players, is likely toconsolidate and become stronger when negotiating with major foodproducers.

Secondly, bigger and more consolidated food producers would also prefer todeal with major or global suppliers, said an expert from Denmark, MartinK. Nielson, at the International Palm Oil Congress 2005 which ended hereWednesday.

This is because one of the key drivers of the emulsifier industry is thegrowth of the food industry, he said.

Emulsifiers are based on raw materials made from edible and refined oilsand fats, which have to comply with narrow raw material specifications inorder to meet the specifications for the final emulsifier.

The global emulsifier market (comprising fat-based emulsifiers) has avolume of between 300,000 and 400,000 metric tonnes with the markets inNorth America and Europe being the biggest and equal in size.

However, the emulsifier industry is driven not only by the output of thefood industry, but also the type of food product produced, Nielson said.

Also the level of processing of food is important -- the more processed orindustrialised a food product becomes, the emulsifier will be used toproduce it, he said.

He added that major food producers do not spend a lot of money on researchand development themselves, but tend to outsource these activities tosuppliers, such as the emulsifier producers.

If emulsifier producers are to able to lift major innovation projects,size is important, according to Nielson.

"It is therefore likely that the global food emulsifier industry willconsolidate," he said.

-- BERNAMA