Prepared Foods November 15, 2004 enewsletter

Bunge Limited announced the formation of an alliance with Procter & Gamble and Peter Cremer North America to produce and market cholesterol-reducing phytosterol ingredients for pharmaceuticals and foods. The alliance creates an integrated supply chain based on Bunge's raw material supply, P&G's marketing and sales expertise, and Peter Cremer's manufacturing capabilities.

Phytosterols are found naturally in plants, fruits and vegetables. Demand for the products has increased in response to the approval of health claims concerning sterol-enhanced food products by the U.S. Food and Drug Administration (FDA) and other regulatory bodies. The companies estimate that by 2008, global demand for phytosterols will top 10,000 tons, a figure that represents a potential market value of between $200 million and $250 million. In 1999, demand was around 4,000 tons.

"Partnering with Procter & Gamble and Peter Cremer enables Bunge to participate in a high-growth market and capture additional value from its core oilseed processing business," stated Marc Samson, director of Business Development & Technology, Bunge Limited. "The alliance builds a stronger connection to food processors and creates a channel to new markets."

Phytosterols are most commonly derived from deodorizer distillate, a byproduct of vegetable oil refining. As one of the world's largest oilseed processors, Bunge is one of the largest suppliers of this material. The company will make available to the alliance the deodorizer distillate created by its global oilseed processing operations, which handle soybeans, rapeseed, sunflower and other seeds.

Manufacturing will be overseen by Peter Cremer North America. P&G Food Ingredients will serve as primary marketer of the product line, which will include sterol esters, free sterols and spray-dried esters. Bunge has a 50% stake in the alliance.

The continued introduction of sterol-enhanced food products is expected to drive further growth in the phytosterol market. Today, the use of sterols in vegetable oils, margarines and spreads, yogurt, snack bars, salad dressings and health drinks has received GRAS (Generally Recognized as Safe) status from the FDA. In the U.S., food products that contain at least 0.65g of sterol esters or 0.40g of free sterols per serving can include on their packaging an FDA health claim stating that the consumption of phytosterols may reduce the risk of coronary heart disease.