NETHERLANDS – Palsgaard, a food industry specialist in the manufacture of emulsifiers, stabilizers, and other specialized ingredients, has broken ground on the US$19.2 million (€18 million) expansion project at its specialist factory in the Netherlands, which will double the company’s global capacity to produce polyglycerol polyricinoleate (PGPR).

PGPR is a co-emulsifier primarily used in chocolate production to control flow, reduce viscosity, and optimize molding and enrobing. It also reduces fat content in margarine spreads and is a highly effective, plant-based color-dispersing aid that replaces petrol-based waxes in plastics.

The expansion, scheduled for completion in 2024, is being undertaken at the Zierikzee plant, which also makes specialty ingredients for margarine and bakery.

Palsgaard is moving to try to meet the growing demand for the PGPR ingredients that are projected to have an increased market value to US$2.8 billion in 2033 from US$1.7 billion in 2023, growing at a CAGR of 5.6%.

Kim Bøjstrup, Palsgaard CCO said: “This expansion will boost our PGPR capacity–almost doubling it to 11,500 metric tons annually–so it’s an essential element of our strategy at a time when demand is growing by 10% a year.”

“Additionally, it will give us a lot more storage capacity, which will help protect our customers against any future supply chain disruptions.”

The climate crisis and the war in Ukraine have heavily impacted supply chains, causing a sunflower lecithin shortage last summer, which disrupted Palsgaard’s production.

Palsgaard Netherlands Site Director Joris Dhont noted that by almost doubling the PGPR capacity to 11500 MT annually, this expansion will substantially increase storage capacity for raw materials and finished goods, which will secure business continuity in times of supply chain disruptions.

According to Bøjstrup, one of the big challenges for Palsgaard ­is that the production of emulsifiers is highly energy intensive, so the company is continually on a quest to improve its energy efficiency and use renewables.

With that in mind, he highlighted that the energy-saving design of the new extension includes an additional 1500m2 of solar panels and complete electrification of PGPR production, along with three new reactors and a new downstream processing line.

Bøjstrup stated that consumers are both trending toward and willing to pay more for products that are sustainably produced, citing eighty-two percent of consumers would be willing to pay more for food containing sustainably produced ingredients.

Palsgaard is also investing heavily in its main production site in Denmark and is currently installing a new 30,000 MT spray cooling tower. The construction of multiple new reactions, distillation, and esterification plants will support this facility. The €125 million (US$134.5m) investment will double its production capacity by 2024.

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