Issue Iss2 2008
Fortifying the industry
CP Kelco is meeting the demands set by the food industry through its innovative range of products and solutions
CP Kelco manufactures a range of hydrocolloids, such as Pectin, Carrageenan, CMC and Xanthan gum, which can be used in a number of industrial applications. For example, the company’s products have been applied in the food, pharmaceutical, oral and personal care, household, and oil and gas industries. Now part of the J.M. Huber Group, C.P. Kelco spends a large amount of resources on a global scale into researching the latest hydrocolloid products and solutions.
The J.M. Huber Group acquired the business in 2004, but the roots of CP Kelco date back to the 1930s. Director of marketing innovations Steve Bodicoat outlines the history of the organisation: “CP Kelco was formed through the merger of three separate companies: Copenhagen Pectin, primarily a producer of Pectin and Carrageenan for the food industry; Kelco, a manufacturer of biogums such as Xanthan for the food, oil, and personal care industries; and Noviant, a manufacturer of cellulose gum used in the paper, oilfield, and detergent industries.
“Kelco’s origins are mainly in the US, with CP being Danish and Noviant being Finnish and Dutch, so all these factors contribute to the global reach of CPKelco, as we sell to more than 100 nations across the world,” Steve comments. “We primarily operate in four main product areas – Pectin, Carrageenan, Carboxymethyl cellulose (CMC), and Xanthan. Pectin and Carrageenan are marketed under the brand name Genu, biogums are sold under the name Keltrol, and CMC is distributed to the food industry under the name Cekol.”
Steve continues by elaborating on how developments within the food industry have influenced the direction of the company: “Issues like weight management and the reduction of sugar content in food are general consumer concerns, and they are providing us with the opportunity to experiment with our products as a potential supplement to basic ingredients used in food. If the sugar is removed from a processed food, it can lack texture or mouth-feel – a number of our ingredients can be added to rebuild this texture in a consumer product. Similarly, the health and wellness trend is being increasingly delivered through the medium of liquids and beverages, like dairy, soy, or water based drinks. Our products help to incorporate those functional, physiologically active ingredients, and make them more palatable and processable within the drink itself – there are huge opportunities within the beverage industry in the future.
“For example, CP Kelco launched a product at the Food Ingredients Show in London at the end of 2007,” Steve states. “It is a dual-function product used in acidified milk drinks, and it offers the ability to protect the milk protein, while at the same time suspending particles in the actual drink. Beverage companies are trying to fortify products with minerals such as calcium to appeal to this consumer move towards health and wellness products. The company has approached several of its customers with the new product, and they are experimenting with its uses. Feedback so far has been very encouraging, and we must now wait for the launch of products on the consumer market.”
Understanding CP Kelco’s potential scope within the food market requires knowledge of some of the global factors driving the industry. Steve explains the situation: “The food industry is highly fragmented in terms of its customer base, but we mainly sell our products to the processed food market. In regards to the type of ingredients we provide, population and GDP rates are key drivers behind what is required. Essentially, a country with a high population and GDP is a location where we would see higher sales of our products. For instance, we have significant sales positions in the US, Japan, UK, Germany, France, Italy and Spain – these are the areas where processed food is primarily located.”
Considering these factors, Steve outlines the company’s scope over the coming years: “Within Western Europe, there are good incremental growth opportunities for CP Kelco to develop into new exciting products that are targeted for the top ten per cent in income of the population. In the food industry, there is a shift to lower blood pressure and cholesterol, and we will be involved in these developments. Equally, increasing GDP means we must also focus on the rising bottom ten per cent in income of the population that normally eats staples such as rice, grain, and potatoes. These areas are located further East, as they industrialise, and they are experiencing higher rates of growth than other markets.
“We also have plans to invest in China, and we are currently upgrading our biogums plant, as well as starting a greenfield site operation to build a CMC plant,” says Steve. “The market demand within China has influenced this move, and the GDP increase has made this location an attractive area for expansion within the processed food industry. Equally, there has been significant investment within the paper industry in China, and it appears that virtually of the world’s new paper mills are being built there. Our presence in China by the end of 2009 will be significantly larger.”
With an emphasis on constantly developing new products, and an internal benchmark of ensuring that 25 per cent of its sales are product/application combinations that are less than four years old, CPKelco is more than prepared for the future. Steve concludes by describing the features that have ensured the company’s success over the years: “I think the quality of the relationships we have forged with our customers is vital to our success, as is the ability to provide a consistent premium quality product. We also pride ourselves on our track record of delivery.”