Calgene Inc. and Novamont on Wednesday said they haveentered into a joint product development and marketingagreement for oleochemical products derived from oleic anderucic acids.

Novamont, a wholly owned subsidiary of Ferruzzi Group ofMilan, Italy, also purchased $3 million of Calgene convertiblepreferred stock, giving Novamont a 3 percent equity stake.

The venture is the first step in a broader collaboration, saidAndrew Baum, vice president of operations at Calgene."Ultimately, we want to be a fully integrated producer ofoleochemical products," Baum said.

Calgene, based in Davis, Calif., will have exclusive NorthAmerican marketing rights, and Novamont will have exclusiveEuropean rights.

Calgene's program to genetically engineer rapeseed oil is notincluded in the deal.

Oleochemicals are used in hydraulic fluids, textile lubricantsand high-performance motor oil. Erucic acid is derived fromrapeseed oil and oleic acid from sunflower oil. -- KarenBernstein

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