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TITLE:  Potatoes being transformed to medical protein factories
SOURCE: The New Zealand Herald, posted by
DATE:   Apr 21, 2003

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Potatoes being transformed to medical protein factories

Potatoes are being transformed into high-value medical protein factories in
a new joint venture between Singapore Polytechnic and New Zealand's Crop and
Food Research.

The 50-50 "biopharming" venture, Spanz (Singapore and NZ) Biotech, will use
potatoes to make proteins that will help the body repair itself after heart
or circulatory system surgery or nervous diseases.

Each gram of the protein, extracted from about seven potato plants, is worth
more than $1 million.

The new company is just one of 10 joint ventures Crop and Food is using to
shift New Zealand's primary sector into higher-valued products. Another
initiative involves extracting a substance from barley to produce fat-free ice

Other ventures are taking more traditional farm products to new markets -
including exporting a new variety of potato back to the country that was once
synonymous with spuds, Ireland.

"We see this organisation more than doubling in size in the next 10 to 15
years," says chief executive Paul Tocker, who was the Dairy Board's technical
manager in Singapore and then ran milk plants at Waitoa and Nelson before
joining Crop and Food as research manager in 1998. He has been chief executive
since January 2001.

The institute's state funding has shrunk in real terms, growing only 8 per
cent in total dollars over the decade from 1992, when the institute evolved
from the Department of Scientific and Industrial Research. Last year,
Government contracts increased by 0.2 per cent to $20.8 million.

But commercial revenue surged by 63 per cent in the decade, growing by 9.5
per cent last year to $11.5 million, including $2 million from overseas.

Tocker expects Crown funding to stay static, but sees "modest growth" in
consultancy in Australia and New Zealand and "major growth" in joint
public/private sector research, subsidiaries and associates.

"In New Zealand, Fonterra, meat companies and agricultural companies are
interested, but internationally there is no shortage of client organisations,"
he said.

"We have 10 subsidiaries and associate companies and are looking at three or
four new ones a year. We believe we can do that out of our current science
base, almost without exception with global companies."

The Singapore potato venture has its origins in the early 1990s, when
Singaporean student Oi Wah Liew did her doctorate at Lincoln University with Dr
Tony Conner, a Crop and Food scientist who is also a part-time Lincoln

After returning to lecture at Singapore Polytechnic, Liew continued to
collaborate with Conner on the potato project, spending part of each year at Crop
and Food's Lincoln headquarters. In 1999 she told a German news agency that
she was using the potatoes to produce a hormone called atrial natriuretic
factor, made naturally in the hearts of humans and other mammals. "Researchers
take a gene from a rat, the rodent from which it was first isolated, and insert
it into the potatoes, which will enable the hormone to be produced on a
large scale," the agency reported.

Conner said last week that the work was all done in containment in much the
same way as the genetically modified bacteria which are used to make insulin
for diabetics.

"We are using very complex proteins which could not be inserted in such
primitive systems as bacteria. You probably need a plant or organism to make
them," he said.

"They could be synthesised artificially, but at huge cost."

After a decade of collaboration, Conner and Liew have finally succeeded in
getting potatoes to produce the protein and are submitting it for tests at the
Christchurch Hospital laboratory in the next month.

"At this point we are not happy with the level of accumulation," Conner

"At the moment we are extracting enough protein to ask the question, 'does
the protein we make in the plants retain its full function'?"

In contrast, the barley project has already completed two clinical trials in
Auckland and Christchurch of a new product called glucagel, a barley extract
that acts like a fat but without the cholesterol in real fat. Further trials
are due to start in the United States with a US partner shortly.

Crop and Food communications manager Howard Bezar said the product could
replace fat in food dressings, sauces and other products with an eventual market
of $50 million a year.

Research showed it could be used in ice-cream and added to bread to reduce
blood cholesterol.

The project, a joint venture with Industrial Research Ltd, is called
Gracelinc, after the two research centres at Gracefield and Lincoln. Manufacturing
is due to start in the 2003-2004 financial year.

Three other patented products out of cereal grain extracts are at earlier
stages of development - an emulsifier called Emul-8, a new technology for
starch extraction and a new product from grain seeds that may replace some dairy

One of these may be the basis of a new business with a venture capital
company which has been set up to create a new cream or gel out of a cereal
product. An inaugural board meeting was held last week.

Tocker was cagey about details, but said the combined investment in the
company was $2.5 million. Crop and Food's $1 million contribution is mainly in
intellectual property.

"I'm optimistic to have revenue within two years in that company, and maybe
earlier," he said.

Two other joint ventures, both already earning revenue, have been built on
seafood research at Mt Albert and Nelson.

Aqui-S, a 50-50 venture with Lower Hutt-based Fish Transport Ltd, makes a
tranquilliser which allows live fish to be harvested and transported without
getting agitated. It is used for salmon, lobsters, eels and other fish, and is
now profitable.

Cfine, an unincorporated partnership with Sealord, uses an extract from fish
to remove unwanted particles from wine and beer. The product was released
last April.

Crop and Food has two staff in Australia. A grain research programme is
under way there and a $20 million transtasman research project on the health
benefits of vegetables is due to be announced in the next month.

The institute also sells its potato varieties such as Red Rascal and Golden
Delight through a three-way venture called Trimark with New South Wales
potato growers Rennie Family Potatoes and a Sydney marketing company, Moraitis

Through this company, Crop and Food potatoes are about to be tested for seed
production in Northern Ireland and then for marketing in Europe, North
Africa and the Mediterranean through Potato Breeders Northern Ireland.

"They were in Australia and liked what they were seeing, and for some
commercial reason the Irish had been shut out of Dutch varieties," Bezar said.

"So they were looking for an alternative place to get exclusive licences for
new varieties and stumbled across us through this Australian partner."



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