NutraCea to supply healthy edible oil from rice bran

By Lorraine Heller

- Last updated on GMT

Related tags: Rice

NutraCea is to enter the lucrative edible oil market, following the
completion of its purchase of South America's largest rice bran oil
processing facility.

The firm, which has so far focused its activities on stabilized rice bran, said it will now start selling the healthy rice bran oil on the global market as an alternative to other edible oils. NutraCea said the oil can be used in any applications where edible oils are used. Health benefits ​ According to the company, rice bran oil contains vitamin E complex, and other micronutrients It is also said to be a naturally occurring source of antioxidants such as tocopherols, tocotrienols, gamma oryzanol, phytosterols, polyphenols and squalene, which can help fight free radicals and combat the effects of aging. In addition, because of its balance of saturated, monounsaturated and polyunsaturated fats, rice bran oil is thought to contribute to the prevention of cardiovascular disease by improving serum cholesterol levels. Production capacity ​ The $14m purchase of Irgovel will allow NutraCea to produce an initial 70,000 tons of rice bran oil annually. The plant, located in Pelotas, Brazil, is currently operating at one-third of its capacity, but NutraCea said it would invest $4-$6m to refurbish, upgrade and install new equipment. The firm expects to have completed this project by the end of 2008. "When running at full capacity, we believe that the plant can generate approximately $30m in annual sales from the rice bran oil,"​ said Leo Gingras, Chief Operating Officer of NutraCea. But the firm has higher hopes still. The new technology it plans to introduce into the plant this year is expected to produce higher value-added derivative products by improving the dynamics of the traditional rice bran oil extraction business. NutraCea said these new derivative products could result in "meaningful additional revenue"​ as of 2009. More benefits ​According to NutraCea, its rice bran oil has a very light viscosity and a "delicate"​ flavor. The firm claims that foods cooked with rice oil absorb 20 percent less oil, which could mean less calorie count, as well as better flavor and palatability. Less oil absorbed also makes it more economical for manufacturers, claims Nutracea. Rice Bran Oil is also hypoallergenic, which compares it favorably to other cooking oils - such as soy oil - that are not suitable for people with allergies. The components of rice bran oil give it a good shelf life, and it also has a high smoke - or burn - point, said NutraCea. It can be used to replace hydrogenated oils and therefore eliminate artery-clogging trans fats. It is also said to create less polymers than other oils, meaning better flavor and easier clean-up. According to NutraCea, the cost of the oil is "not significantly different than other high-grade vegetable oils on the market." Global supply ​ As part of the new investment in South America, NutraCea will supply raw rice bran to several local mills, all of which will be used to produce rice bran oil. Products from the Brazilian plant will be sold in Brazil and neighboring South American countries, and will also be exported throughout the world. NutraCea also said it has entered into marketing arrangements, which it believes will allow it to sell the plant's current production capacity as well as all future expanded production. "We are extremely pleased to have completed this transaction, which is a significant next step in our strategic growth plan to establish facilities in leading rice bran producing regions of the world in order to further grow our market presence and increase shareholder value,"​ said Brad Edson, president and CEO of NutraCea. "We have spent a great deal of time in discussions with members of the Brazilian government on many levels over the past two years and are most appreciative of the positive reception that we have received and the co- operation we have obtained." "As we have stated in the past, the establishment of our facilities in the major, rice-growing regions around the world is essential to our long-term, strategic growth plan. We believe our Brazilian facility will provide NutraCea with the opportunity for increasing revenues going forward, not just for stabilized rice bran, but also for healthful edible oils and value-added products derived from the rice bran and oil,"​ said Edson earlier this month, when the firm first announced its intent to purchase the Brazilian facility. Other expansion ​ The move into the edible oils market comes at a time of general expansion for NutraCea. Last month, the company announced it was entering into an alliance to construct a new flour mill in Indonesia that will incorporate its new stabilized wheat bran technology. NutraCea said that the construction of the first full-scale wheat stabilization facility will be a move to validating the technology, and promote its widespread use to convert wheat bran into a food ingredient.

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