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Saskatchewan Business

The more consumers read about links between cancer and preservatives used in lotions and deodorants, the more discerning they become about what they use on their skin. Consumers are choosing to purchase products made from natural ingredients over synthetics and animal-based ingredients, and it is driving growth in a wide range of bioproducts from plant extracts.

In Saskatchewan, where 30 per cent of Canada's bioeconomy is generated, scientists are finding ways to use plants in detergents, paint, lubricants, fabrics, pharmaceuticals and cosmetics.

One Saskatoon-based company in particular has captured a slice of the billion-dollar cosmetics industry.

Fytokem Products Inc. is engaged in the discovery and commercialization of new plant-based substances for use primarily in, but not limited to, the cosmetics industry. The 10-year-old, publicly traded company is currently commercializing epilobium angustifolium more commonly known as fireweed. Fytokem's patented product is called Canadian Willowherb(TM).

Fireweed has a long history of being used by First Nations people as a remedy for cuts and burns. It helps reduce redness associated with skin irritation. The fact that this plant is so hardy on the Prairies increases its potency - a point not lost in Fytokem's marketing strategies.

Art Hesje, President and CEO, was working on an alternate energy and feed processing project in the United States when he was presented with the opportunity to move back to Saskatchewan and lead the Fytokem team. He was intrigued with the opportunity of helping market a Saskatchewan-based product globally and took up the challenge.

Hesje says there are two things required to market a cosmetics ingredient: a good product and a good story. Fytokem's products are definitely recognized as legitimate. They are based on the vision and strong research of the company's founders, including Dr. Warren Steck, who had retired from his role as Director General of the National Research Council's Plant Biotechnology Institute.

"The original team wanted to look at plant folklore on the Prairies and apply the best of modern scientific research processes that would either reinforce the old wives' tales label, or support the various claims of healing properties," said Hesje.

"In total, about 400 different plant products were looked at, resulting in a pipeline of product possibilities."

Fytokem's products are also backed by a good story that appeals to cosmetics marketing executives. When Fytokem's former distributor had the opportunity to meet with the retail giant, The Body Shop, a promotional video was made that featured a barren, frozen white landscape. The message was one of hearty plants grown in a clean, pure environment.

While Hesje groans about the narrow stereotyping, he says there is absolute truth in the northern vigour story. "Prairie-grown willowherb does have greater efficacy as an antioxidant," says Hesje. This makes the ingredient desirable in body lotions and sunscreens because antioxidants neutralize cancerous free radical molecules, thus protecting skin from sun damage.

Fytokem has found markets in Europe and Asia where one of its prairie plant actives is used in skin whitening creams. Skin whitening is the largest and fastest growing personal care market segment in the world. China's market alone for skin whitening products is worth more than $1 billion (US). Japan's market topped $5 billion (US) three years ago.

At ten years old, Fytokem is well on its way to establishing itself as a prominent player in the Saskatchewan natural health products industry. All indications are that the company will be around for a long time. Johnson & Johnson has introduced baby wipes in the European market that feature Canadian Willowherb(TM) prominently on the label.

"Home run opportunities exist all over the place. There is always a component of luck in making that home run happen. Fytokem has seen substantial growth and we are now gaining important traction," says Hesje. "At the same time, however, the cosmetics industry is so volatile that our planning horizon is actually never very far off in the distance."

The Prairies are home to an abundance of unique plants, like willowherb, that have been used for thousands of years for their medicinal properties. Fytokem products are based on these plants and are used as a more natural alternative in personal care products.

* Natural health products, nutraceuticals and functional foods are part of a S71-billion global industry.

* In 2002, Fytokem's sales growth reached 5546,570 while revenue growth realized in the same year was $632,002.

* In Saskatchewan, it is estimated the industry made about $40 million to $50 million in manufacturing sales in 1999.

* A survey carried out in 2002 by the Saskatchewan Nutraceutical Network (now part of Ag-West Bio Inc.) expects the value of the industry to grow to about $500 million by the year 2006.

* Soles in this industry in Saskatchewan ore expected to hit the $10 billion mark in another 10 years.

Copyright Sunrise Publishing Ltd. Mar/Apr 2005