Gen Z Entrepreneur Shen Ming Lee Transforms Agricultural Waste into High-Value Oils, Challenging Palm Oil Dominance

In a departure from the usual rebellious paths chosen by their peers, Singapore-based entrepreneur Shen Ming Lee opted for a different route – founding a company. Having grown up in a family business that is one of the leading palm oil producers, Lee found herself initially disassociating with her family’s profession due to environmental concerns associated with the industry.

Palm oil has become a dominant force in the vegetable oils market, finding its way into various consumer goods such as snack foods, cosmetics, pharmaceuticals, and biofuels. However, this rise has led to significant deforestation, particularly in Southeast Asia.

In 2022, Lee crossed paths with co-founder Boon Uranukul, a doctoral candidate at MIT, who had developed microbes capable of producing plastic building blocks using agricultural waste. This encounter marked the genesis of their startup, Terra Oleo.

Lee expressed her desire to create something that would build upon her family’s legacy while aligning with her sustainable values as a Gen Z individual. The duo envisioned leveraging Uranukul’s expertise and Lee’s network to develop microbes capable of transforming agricultural waste into a variety of oils.

Terra Oleo has been in stealth mode for almost two years, focusing on developing microbes that can convert agricultural waste into multiple oil types. The startup recently announced raising $3.1 million from investors including ADB Ventures, Better Bite Ventures, Elev8.vc, The Radical Fund, a strategic corporate investor from the palm oil industry, and other backers.

The founders mapped various palm oil derivatives to identify high-value targets while considering their technological feasibility for production. “What are the most valuable ones? But also, what’s easier for us to tackle and presents lower barriers?” Lee explained.

Lee acknowledged that crude palm oil often carries low profit margins. In an effort to bypass this limitation, Terra Oleo intends to focus on higher-value products such as cocoa butter and specialty oils used in the cosmetic and pharmaceutical industries.

The company selected three yeast species based on their ability to produce specific oils using organic waste, including agricultural and biodiesel byproducts. Genetic and metabolic engineering was then employed to enhance and fine-tune their fat and triglyceride production capabilities.

Currently, Terra Oleo operates primarily in a lab setting, producing grams of oil at a time. The company aims to utilize the funding to produce kilograms worth of these oils.

Already, Terra Oleo has demonstrated the capability to produce cosmetic and pharmaceutical industry-grade oils at prices significantly lower than their market value, primarily due to the elimination of costly refining processes.

Lee estimated that Terra Oleo could achieve upwards of 80% margins for certain specialty oleochemicals, given their high production costs conventionally. Scaling up to replace substantial amounts of palm oil will be a challenge; however, Lee sees it as an opportunity to demonstrate alternative paths to existing palm oil producers.

“We’re not going to switch from palm oil to other sources overnight,” Lee said. “It’s such a versatile ingredient that I think it’s going to be a gradual transition where we work with the industry to achieve the diversified production mix we desire.”