Frylite, which supplies vegetable-based cooking oils to over 7,000 Irish customers and collects waste oil which has been used in food preparation, is to build a waste oil processing plant at its headquarters in Strabane.

Frylite marketing manager Jonathan McLaughlin said the facility would be used to process some 26,000 litres of waste oil that the company collects every week and convert it into biofuel.

The waste oil is currently being sent to processing plants in Europe, chiefly in the Netherlands. McLaughlin said Frylite had decided to invest over £1m ( 1.5m) to build its own facility because it was conscious of the environmental impact of transporting the oil to be processed. The company also believes the demand for biofuels is growing to the point where a processing plant makes economic sense both because of the volume of oil Frylite is collecting and what McLaughlin said was a "growing market in Ireland for these fuels".

Founded in 1988 by local businessman Eamon McClay, McLaughlin said Frylite is now the largest supplier of vegetable oils such as rapeseed and soyabean oil to the catering industry in Ireland.

Hotels, restaurants and fastfood chains including Abrakebabra use its oils for cooking.

The company is well placed to benefit from demand for healthier oils and cooking products that do not produce harmful trans fats, according to McLaughlin.

Trans fats, harmful fats found in food cooked with hydrogenated oil, have become something of a cause celebre in the food industry of late. New York City Health Board's decision, due to be voted on next month, to introduce regulations banning the city's restaurants from serving food containing trans fats has sparked an all-out trans fat war.

Other US and European cities such as Chicago and Paris are set to folow the NY example and Disney recently announced a ban on trans fats at its theme parks across the globe.

"For those hydrogenated oils, particularly with the health concerns, there is not much of a future, " said McLaughlin. Frylite stands to benefit from the trans fat fall-out as caterers look to healthier, natural oils to replace the processed, hydrogenated alternatives. "Certainly at the moment it's in vogue, " McLaughlin said.

Frylite recently opened its eighth Irish depot, in Cork, providing it with its first distribution site in Munster. The Cork site joins a network including Strabane, Coleraine Dublin and Galway. McLaughlin reckons the company's nationwide delivery fleet is now no more than an hour and a half 's drive away from any business in the country.

Growth in Frylite's business has been fuelled during the 1990s and early part of this decade by the explosion in the number of hotels and restaurants in the country.

"We've been lucky enough to benefit from the growth in the catering industry, " McLaughlin said.

The next wave of growth, however, is likely to come from Britain which he described as "a natural expansion" for Frylite. It will open its first distribution centre in Britain within the next year, McLaughlin said.