Vegetable oil by-products: Unlocking additional revenue streams

As a vegetable oil trader, your primary focus is likely on the buying, selling and movement of the oils themselves. However, there is significant value to be captured from the by-products generated during vegetable oil processing and refining. Exploring these revenue streams can boost your profits and promote sustainability.

Common vegetable oil by-products include meals/cakes, lecithin, gums, waxes, and fatty acids. Rather than treating them as waste, they can be repurposed into valuable products across several industries:

• Meals/cakes are the protein-rich residues remaining after extracting the oil from seeds/beans. These can be sold as nutritious livestock feed ingredients or further processed into plant-based meat alternatives for human consumption.
• Lecithin is an emulsifier and lubricant extracted from crude vegetable oil during the degumming process. It finds widespread uses in the food industry as an additive, as well as applications in pharmaceuticals, cosmetics, paints and other sectors. Certified organic and non-GMO lecithin varieties can command significant premium pricing.
• Gums like gum arabic from acacia trees and tragacanth gum are extracted as by-products during the vegetable oil degumming and refining stages. These hydrocolloid gums act as stabilizers, thickening agents and emulsifiers across food, beverage, pharmaceutical and industrial products.
• Vegetable oil waxes such as sunflower wax, rice bran wax and others are extracted from the oil refining process. They have diverse industrial uses as components in cosmetics, polishes, candles, inks, lubricants and surface coating formulations.
• Fatty acids like stearic acid are produced by splitting and distilling vegetable oil triglycerides. These find major use as raw materials for making soaps, detergents, rubber products, lubricants and release agents among other applications.

By capturing and marketing these by-product streams, you can realize several benefits:

• Additional revenue without much extra processing
• Reduce waste and make your operations more eco-friendly
• Diversify your product portfolio to insulate against oil price volatility
• Build new customer relationships across industries like animal feed, cosmetics, etc.
• The key is investing in efficient processes to capture, refine and market these by-product streams effectively. You may also explore joint ventures or tolling arrangements with refiners.

In today’s competitive landscape, overlooking by-product value streams is leaving money on the table. An integrated approach can unlock new revenue while promoting sustainability.