VarTech International Co. proposes to cooperate in establishing a plant in Estonia in order to produce bio-active products from wastes of Siberian larch in the frames of above mentioned project.

Analytic Notice for Investment Project

«Production of Dihydroquercetin (DHQ) from Larch Timber»

Supplemental to factors otherwise crucial for physical health of man (habitat, nutrition, immune system), active antioxidants hold a prominent place. A complete cycle of research into therapeutic value of antioxidants was elaborated and approved as early as in 1950. Thereafter DHQ (taxifolin) was acknowledged as the most important Š-vitamin, providing for life activity of man.

It has been established with certainty that Š-vitamins are responsible for the capacity to resist pathologies and viral diseases of various living organisms. Introduction of DHQ into the food ration of animals, fowl, and fish significantly reduces the rate of contagious diseases, afflicting them. But what is even more important – it contributes to supply of ecologically clean and harmless food, in the form of animal protein, fats, and vitamins. Absence of P-vitamins in the food allowance of cattle for instance may bring about disasters (mad cow disease etc.).

In view of outstanding performance of DHQ it has been assigned, as a mandatory component to the menu of people lodged in emergency situations, those engaged in top priority missions, when subjected to high doses of electromagnetic radiation, nuclear radiation, viral infection, physical overload.

DHQ may also be used in wine making industry, for artificial wine and cognac senescence, and as natural preservative in food and pharmacological industry, e.g. for increasing the antioxidant, anti-mould, anti?yeast effect of layered shrink wrapper plastic, designed for packaging the foodstuffs.

In 2000, scientists synthesised, from mono-crystalline product and tested the active forms, suppressing the cancer cells. DHQ does not affect the normal development of living cell, thereby contributing to the development of a range of antibacterial preparations, enabling to protect the living cell of man and animals against different pathologies and viruses, and also free radicals, at the upper limit of regulated norms.

DHQ is one of natural Š-vitamins, which cannot be manufactured synthetically. Whereas DHQ is a standard against which the other antioxidants, including synthetic ones, can be measured. Its anti-radical effect is manifested at concentration ca. 10-4 – 10-5% with absolutely no mutagenic impact on man, i.e. with the absence of cytotoxic effect in any concentrations.

Still, wider application of DHQ is now impeded by its prohibitive price – 170-450 US dollars per gram! This is so due to rare or costly raw material where DHQ is derived (wood of abies balsamea/tsuga canadensis and Boulogne pine, rose petals, flowers of Japanese cherry, flowers of grapes), having low antioxidant content and demanding sophisticated technology for extraction of highly purified preparation.

We have at our disposal a highly efficient technology of extraction of DHQ from astoundingly cheap raw material, namely Siberian larch (Russia).

The larch reserves here amount to ca. 60 billion cubic metres.Annual procurement of larch timber is 30 million cubic metres.Waste of raw material of larch (from base of the tree trunk and roots) for further production of DHQ amounts to 3 million cubic metres. Given the minimum DHQ content 2% in the waste of larch, the realistically estimated level of extraction of DHQ from the overall mass of raw material constitutes 1%. This will enable to annually produce 30 thousand tons of DHQ.

Research efforts and developments in the area of industrial production of DHQ from larch are protected with patents. Finalised have been bench tests of the pilot-production line for output of 0.3 tons per year.

The high commercial efficiency of the suggested technology of production of DHQ is secured by the following. Please do note that the world market will be ready to absorb infinite amounts of DHQ and is currently stalled by short supply, due to inadequate reserves of raw material and absence of efficient technologies of production.

  • adequate reserves of renewable resources of raw material – Siberian (Daurian) larch of high content of DHQ;
  • availability of pilot-production technology, research;
  • intensive and approved in bench testing, for output of DHQ 0.3 tons per year, and the module production, elaborated on the basis of above, with output of 3 tons per year;
  • use of low-waste processing of Siberian larch, including the processing of solid products of hydrolysis, containing fluorinated lignin, by carbonising, yielding technical timber carbon, resins and water-organic condensate;
  • wide opportunities to win different customers, thanks to the possibility to offer a wide price range, in view of low production cost;

The stability of business after the production of DHQ is launched, will be guaranteed by the following:

  • the literally limitless market, with administered prices, due to low outlays on production, science intensive and high-tech production;
  • balanced management team (researchers, experts on finance management and strategic planning and qualified managers of realisation of project etc.);
  • comprehensive low-waste processing of the timber bio-mass, by implementing measures for establishment of sustainable price for a forest resource;
  • further development of science intensive energy saving technologies of deep processing of larch timber, by securing innovative predetermined characteristics of the products which will erode the position of competitors, forcing them to run into significant expenditures for putting out new production, to catch up with us the market leader