The new customer agreement is between Forbes' manufacturing joint venture, Phyto-Source LP, and a leading multinational ingredient company, but for contractual reasons, Forbes will not disclose further information.
"Our cholesterol-lowering ingredient business is growing substantially and our core group of customers continues to expand," said Charles Butt, president and CEO of Forbes Medi-Tech. "The addition of this supply agreement in combination with the pending EU approval will provide new opportunities to expand the company's phytosterol business and allow us to look at further increasing production capabilities."
Forbes expects that approximately 54 per cent of the company's total revenue over the next three years will come from these supply agreements.
The phytosterols will be manufactured in the US in Pasadena, Texas, as a joint venture between Forbes and Chusei. But, Forbes is pinning much of its hopes for future growth on the European market and last year it began work to increase the capacity of its manufacturing joint venture by 50 per cent, in anticipation of increased demand following a positive opinion from the continent.
A Frost & Sullivan report on plant sterols forecasts growth between now and 2010 at 15 per cent annually in Europe, partly boosted by faster regulatory approval. (New applications can be cleared faster based on their similarity to previous approvals).
In July, the company received a positive opinion from European authorities for the approval of its wood-derived cholesterol-lowering ingredient Reducol.
Following publication of the decision by the EU Standing Committee on the Food Chain and Animal Health, the plant sterol ingredient will be permitted for use in milk-based drinks.
The news followed the recent approval as novel foods of a series of new plant sterol ingredients and applications from US-based Archer Daniels Midland (ADM), food giant Unilever and the smaller Finnish firms Teriaka and Pharmaconsult.
The market for heart health foods is forecast for rapid growth and therefore has room for new ingredients, especially given the slow process for approval of phytosterols until recently.
"Clearance of this regulatory hurdle secures a significant milestone for the Company, leaving only the completion of administrative steps before pursuing Reducol sales in Europe," said Charles Butt, president and CEO of Forbes Medi-Tech. "Europe represents a bourgeoning market for our cholesterol-lowering food ingredients. With the inclusion of ten new member states into the European Union, there is a substantial opportunity to further build our revenue base."