Sweeteners China News Vol.1 Issue 1 2011
Copyright Š CCM International Limited
Sweeteners China News Vol.1 Issue 01 2011
CONTENTS
Publication date: 20 June, 2011
Welcome to the June issue of Sweeteners China News, specially published by CCM International.
News in Brief 1 1 1 1 1
Public notice on export quota bidding issued Meilun Medical obtains government subsidy CFIA holds a meeting of starch sugar in Beijing Haizhina to build an organic maltose syrup project in Jiangxi Problems hinder domestic HFCS development
1 Prices of corn starch and syrup may increase again in H2 2011
Market Dynamic 2 Overview of production and market of sucralose
The average cane sugar price in China on 15 June 2011 was USD1,114/t (RMB7,217/t), down 4% over the average price on 10 November 2010—when the price is the highest in the past several years, according to the China Sugar Index from www.yntw.com—a famous sugar website in China. However, the current price still stays at a high level, and it is estimated that the sugar price will remain at a high level this year, higher than USD1,080/t (RMB7,000/t).
Company Dynamic 3 4 5 5 6
Anhui Jinhe passes IPO examination and approval Gansu Puhua to launch stevioside production lines Guilin Layn to turn loss into gain Mengzhou Huaxing launches trial production of aspartame production lines Baolingbao smoothly expands erythritol capacity
Raw Material Supply 7 GLG builds a breeding and cultivation centre of stevia
Price Update 8 Ex-factory prices of Chinese sweeteners, June 2011
Import & Export Analysis 9 Import & export analysis of Chinese saccharin in Jan.-Apr. 2011 10 Import & export analysis of Chinese cyclamate in Jan.-Apr. 2011
Certainly, such market situation provides an opportunity for sweeteners—the sugar substitutes and most of them have lower unit sweetness price over sucrose. And the players in the industry are optimistic about the future development of sweeteners, especially high intensity sweeteners (HIS, which is one main focus in this issue): according to a survey from CCM which is also referred in the article below in this issue, most respondents believe that HIS will perform well in China and Asia Pacific in the next 3-5 years. Meanwhile, the recent dynamics of many processors, such as Anhui Jinhe, Mengzhou Huaxing and Gansu Puhua, also prove that they are optimistic about the HIS segment, which is an apparent signal for the industry.
Consumption Trend & Competitiveness 11 HIS believed to enjoy good development in the future
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Future of Functional Oligosaccharide Market in China Production and Market of Inulin in China Production and Market of Sucralose in China
The Survey of Sorbitol in Asia Pacific Production and Market of Xylitol in China Production and market of Stevia Sweetener in China
Sweeteners China News Vol.1 Issue 01 2011
Sweeteners China News at a glance
CFIA holds a meeting of starch sugar in Beijing
China's sucralose industry will continue to develop in the next few years.
O
n 19 May 2011, China Fermentation Industry Association (CFIA) held a meeting of starch sugar in Beijing. The Secretary General of CFIA explained some national policies which are concerned with the starch sugar industry. Most delegates believed that though the National Policy Adjustment of Corn Industry will bring some unfavourable factors to the starch sugar industry, the government will strongly support the new industries including the starch sugar industry in the future. That is to say, the starch sugar industry will face new challenges while enjoy new opportunities for development at the same time.
Anhui Jinhe has successfully passed the IPO examination and approval on May 20th 2011. Guilin Layn may turn loss into gain in H2 2011, thanks to its rapidly increasing sales of momordica glycosides. Mengzhou Huaxing is putting its aspartame production lines into trial production. Gansu Puhua may launch its stevioside production lines in H2 2011. Baolingbao has been expanding its erythritol capacity, which will reach 4,000t/a by Aug. 2011.
Haizhina to build an organic maltose syrup project in Jiangxi
GLG has built a breeding and cultivation centre of stevia in Anhui in June 2011. The result of a survey by CCM shows that most respondents view the demand for high intensity sweeteners in China and Asia Pacific Area will enjoy a good development in the future.
I
n late May 2011, Yiwu Haizhina Bioengineering Co., Ltd. (Haizhina), a producer and seller of rice protein, has signed a preliminary agreement with Wanzai Government which is located in Jiangxi Province. According to the agreement, Haizhina plans to invest USD23.19 million to build the first organic maltose syrup project in China; the organic maltose syrup capacity of the company will reach 20,000t/a when the project is finished.
News in Brief
Problems hinder domestic HFCS development
News in brief
D
omestic High Fructose Corn Syrup (HFCS) Forum of Market and Development was held in Beijing on 19 May 2011. It is reported that there are four problems that hinder the development of HFCS in the domestic market.
Public notice on export quota bidding issued
Firstly, HFCS capacity is growing too fast.Secondly, raw materials of HFCS are lacking in supply.Thirdly, downstream application is limited.Finally, government toughens the policies on environmental protection, so producers need to make more efforts to meet the requirements of environmental protection and energy saving.
I
n late May 2011, the Ministry of Commerce (MOC) issued a public notice, according to which, from June 2011, the government would issue a bidding announcement about 2011's export quota of licorice and licorice products; those processors who meet the requirements in the notice can send their applications to the provincial office of MOC to bid for the export quota.
Prices of corn starch and syrup may increase again in H2 2011
Meilun Medical obtains government subsidy
M
r. Kong, President of Global Sweeteners Holdings Limited (Global Sweeteners), predicts that prices of corn starch and syrup will both increase again in H2 2011, since the purchase price of corn may increase by 15% in 2011. Besides, Global Sweeteners plans to build a new production line of 55% high fructose corn syrup with the capacity of 100,000t/a in Q1 2012 and expand its crystalline glucose capacity by 100,000t/a in the future.
I
n early June 2011, Tianjin Meilun Medical Co., Ltd. (Meilun Medical), a private pharmaceutical company based in Tianjin, revealed that the company obtained a subsidy of about USD0.77 million (RMB5 million) from the local government, because the company invested a lot and successfully launched a new production system which can produce premium stevioside. The company’s premium stevioside includes two types: one type is with glucoside content and stevioside A (Reb-A) content of 99%+ and 95%+ respectively, and the other is with glucoside content and Reb-A content of 95%+ and 90%+ respectively.
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Sweeteners China News Vol.1 Issue 01 2011
Market Dynamic Overview of production and market of sucralose
JK Sucralose Inc. (JK Sucralose), the largest professional sucralose manufacturer in China and the second largest in the world, has finished the second phase project in June 2010 and has successfully achieved the expected capacity in May 2011. Meanwhile, in order to meet the increasing market demand for sucralose, JK Sucralose has started the third phase project which includes three production lines. It is estimated that the sucralose capacity will get 800t/a by the end of 2011, then to 1,000t/a by the end of 2012 and finally reach 4,000t/a by the end of 2018. Changzhou Niutang Chemical Plant Co., Ltd. (Changzhou Nituang), one of the major domestic sucralose producers, has a subsidiary engaged in sucralose production, namely Nantong Changhai Food Additive Co., Ltd. (Nantong Changhai). In 2010, the sucralose capacity and output of Changzhou Niutang are 100t/a and 60 tonnes, while those of Nantong Changhai are 100t/a and 50 tonnes, respectively. What's more, it is reported that Changzhou Niutang planned to expand its sucralose capacity by 1,000t/a. Then, it is estimated that the total capacity of Changzhou Niutang will reach 1,100t/a when the expansion is finished. Techno (Fujian) Biotechnology Co., Ltd. (Fujian Techno), also one of the major domestic sucralose producers, is a subsidiary of Techno (Guangzhou) Biotechnology Co., Ltd. (Guangzhou Techno). In 2010, Fujian Techno's
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FIGURE 1: Export volume of sucralose in China, 2006-2010 2,000
1,600 Unit:tonne
urrently, with the increasing overseas sucralose demand, Chinese producers have been actively operating their sucralose production lines or expanding their sucralose capacity since domestic sucralose producers effectively won the No.337-TA-604 investigation launched by Tate & Lyle in the US on 6 April 2009. And the export volume of sucralose has a rapid growth after 2009.
1,200
800
400
0 2006
2007 Capacity: t/a
2008
2009
2010
Output : tonne
Source: CCM International
FIGURE 2: Sucralose production in China, 2006-2010
500 400 Unit:tonne
C
300 200 100 0 2006
2007
2008
2009
2010
Source: CCM International
sucralose capacity and output are 300t/a and 60 tonnes, respectively, and it has planned to further expand its sucralose capacity in the future, based on the currently increasing demand for sucralose. The chart (FIGURE 1) shows that both the output and capacity of sucralose in China have increased from 2006 to 2010. And in 2010, the output of
CCM 2
sucralose is more than 600 tonnes, increasing by about 50% over 2009 thanks to the recovered demand from overseas market. Currently, China has witnessed booming sucralose export. From 2006 to 2010, the export volume (FIGURE 2) showed a general trend of escalation, though in 2009 it decreased a little than that in 2008. Because of the 337 patent
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Sweeteners China News Vol.1 Issue 01 2011
investigation which hit China's sucralose market from 2008 to 2009, producers in China exported less sucralose. After Chinese producers won the investigation on 6 April 2009, domestic export has gradually recovered and a new export record is set in 2010. Since sucralose is widely used, the export is promoted with its increasing overseas demand. Generally, it is estimated that China's sucralose industry will develop gradually in the future. When the processing construction projects of sucralose is finished and the
capacity utilization is raised, the total capacity of sucralose will increase a lot. Because the price of sugar in China still stays at a high level even though the government has already taken action to stabilize it, more and more food producers will prefer to choose high intensity sweeteners (HIS), which can significantly decrease the production cost compared with that of using sugar. Therefore, this situation is favorable to the consumption of HIS. With the development of sugar-free foods and the extensive application of HIS, the demand for sucralose both at home and abroad will grow in the next few years.
Company Dynamic Anhui Jinhe passes IPO examination and approval
A
nhui Jinhe Industrial Co., Ltd. (Anhui Jinhe), engaged in producing acesulfame-K, maltol and ethyl maltol, has successfully passed IPO (Initial Public Offerings) examination and approval on May 20th 2011. Anhui Jinhe plans to raise about USD111 million through IPO to expand its acesulfame-K capacity from 4,000t/a to 9,000t/a and to construct a new workshop of calcium ammonium nitrate with the capacity of 200,000t/a. Anhui Jinhe may formally issue its stocks at Shenzhen Stock Exchange before the end of 2011 thanks to the following advantages: steadily increasing assets, sufficient circulating funds, strong debt paying ability and excellent profitability forecast on the core businesses, especially acesulfame-K. Major reasons for Anhui Jinhe's expansion in acesulfame-K capacity are as follows. Demand for acesulfame-K has been increasing because of the fast growth of China's food industry especially the beverage industry in recent years. As a safe sugar substitute, demand for acesulfame-K from above 100 million of domestic diabetics has also been increasing.
acesulfam-K's quality in recent years, which strengthens its competitiveness in the acesulfame-K market. Meanwhile, Anhui Jinhe had increased its acesulfame-K capacity from 1,800t/a in 2008 to 4,000t/a in 2009. In order to expand the market share of acesulfame-K in sweetener market, Anhui Jinhe expects to expand the acesulfam-K capacity as soon as possible. From 2006 to 2010, the capacity of acesulfame-K has increased from 13,620t/a to 20,520t/a with a CAGR of 10.79%, while the output has decreased from 7,325 tonnes to 4,185 tonnes with a CAGR of -13.06%. Before 2008, seeing the price increasing year by year, some producers poured in acesulfame-K production or excessively enlarged their production capacity. At that time, intense competition between producers and the impact from overseas rivals have led to the oversupply in the acesulfame-K industry, resulting in low operating rate and shrunken output. What's worse, the global financial crisis since 2008 has impacted the development of Chinese acesulfame-K industry; demand both at home and overseas is not as brisk as it was in previous years. However, Anhui Jinhe will face some risks, such as much stricter supervision on food additives, fluctuating cyclamate price and RMB exchange rate.
Anhui Jinhe has been investing in the improvement of TABLE 1: Basic information about major acesulfam-K producers in China, 2011 No. 1 2 3 4 5 6 7 8 9 Total
Company name Suzhou Hope Technology Co., Ltd. Anhui Jinhe Industrial Co., Ltd. Shandong Minghui Food Co., Ltd. Zhejiang Hangzhou Sanhe Food Co., Ltd. Beijing VitaSweet Co., Ltd. Jiangsu Suzhou Peacock Food Additive Co., Ltd. Jiangxi Beiyang Food Addiitive Co., Ltd. Shandong Zibo Golden Science Industry & Trade Co., Ltd. Guangdong L&P Food Ingredient Co., Ltd.
Abbreviation Suzhou Hope Anhui Jinhe Shandong Minghui Hangzhou Sanhe Beijing VitaSweet Suzhou Peacock Jiangxi Beiyang Zibo Golden Guangdong L&P
Location Jiangsu Anhui Shandong Zhejiang Beijing Jiangsu Jiangxi Shandong Guangdong
Capacity '11 10,000 4,000 2,500 2,000 1,200 1,500 1,000 200 120 22,520
Source: CCM International
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Sweeteners China News Vol.1 Issue 01 2011
Gansu Puhua to launch stevioside production lines
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ansu Puhua Stevioside Development Co., Ltd. (Gansu Puhua), engaged in stevioside production, may launch its stevioside production lines in H2 2011. Gansu Puhua with the total investment of about USD19 million was set up in July 2010 and its five investors include: Gansu Pharmaceutical Alkali Factory (Gansu Pharmaceutical Alkali), Gansu Agricultural Reclamation Group Co., Ltd. (Gansu Agricultural Reclamation Group), Chengdu Wagott Pharmaceutical Co., Ltd.(Chengdu Wagott), Gansu Yasheng Industrial (Group) Co., Ltd. (Gansu Yasheng) and Gansu Puli Health Products Co., Ltd. (Gansu Puli). Gansu Agricultural Reclamation Group is the controlling shareholder of both Gansu Pharmaceutical Alkali and Gansu Yasheng, and these three companies together hold 70% of Gansu Puhua's total shares. Moreover, Chengdu Wagott, engaged in production of plant extracts, holds 20% of Gansu Puhua's total shares and it is also a stevioside producer with a capacity of 200t/a. Gansu Puhua started the construction of stevioside production lines with total capacity of 1,000t/a at the end of July 2010. Currently, The company has completed the construction of stevioside production lines and may launch them in H2 2011. Meanwhile, Gansu Puhua has built a stevia planting base with the total building area of about 667 hectares, in order to provide steady and sufficient raw materials to its own stevioside production in the future.
Gansu Puhua will become one of the top six domestic stevioside producers (TABLE 2) each with the capacity of above 1,000t/a in China after it launches its production lines. There are mainly 25 active stevia sweetener producers in China by now. PureCircle (Jiangxi) Co., Ltd. is the biggest one, whose capacity and output reached 4,000t/a and 1,400 tonnes in 2010, accounting for 29.68% and 35.80% of the total domestic capacity and output of stevia sweetener, respectively. Moreover, China's stevia sweetener production is mainly concentrated in Jiangxi Province and Shandong Province. As a natural kind of high intensity sweetener (HIS), stevia sweetener's usage has been approved by more and more countries and it has been becoming more and more popular in overseas market. Currently, China is the largest stevia sweetener supplier in the world, and around 80% of its total output of stevia sweetener is sold to overseas market. From 2006 to 2010, the capacity of stevia sweetener has increased from 5,160t/a to 13,475t/a with a CAGR of 27.12%. The booming domestic production is mainly driven by the rising demand from foreign countries; nowadays, foreigners prefer natural food additives to artificial ones. The US, Japan and South Korea are the most important stevia sweetener markets in the world. China's stevia sweetener is mainly exported to neighboring countries and North America in the past three years. Malaysia, the US, Mexico, South Korea and Japan are the most important export destinations of China's stevia sweetener.
TABLE 2: Basic information about major stevioside producers in China, 2011 No. 1 2 3 4 5 6
Company name PureCircle (Jiangxi ) Co., Ltd. Dongtai Runyang Stevia High Tech Co., Ltd. Shandong Huaxian Stevia Co., Ltd. Qingdao Runde Biotechnology Co., Ltd. Shandong Haigen Stevia Products Co., Ltd. Gansu Puhua Stevioside Development Co., Ltd.
Capacity '11
Total
Location 4,000 2,000 1,000 1,000 1,000 1,000
Jiangxi Jiangsu Shandong Shandong Shandong Gansu
10,000
/
Source: CCM International
Stevia Export Analysis Neotame Export Report Sucralose Export Analysis Aspartame Export Analysis
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Sweeteners China News Vol.1 Issue 01 2011
Guilin Layn to turn loss into gain
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uilin Layn Natural Ingredients Corp. (Guilin Layn), engaged in production of plant extracts, may turn loss into gain in H2 2011, thanks to its rapidly increasing sales of momordica glycosides (a natural sweetener). Although it is estimated that Guilin Layn's amount of loss may reach about USD1-1.5 million in H1 2011 according to its financial report of the first quarter of 2011, Guilin Layn may successfully make a profit in light of the following factors. Natural sweeteners, such as momordica glycosides and stevia sweetener, have become more and more popular among consumers in some developed countries in recent years, such as the US, Japan and South Korea. Compared with artificial high intensity sweeteners, natural sweeteners are safer to be used as food additives. With the enhancement of consumers' health awareness in the world, more and more foods and health products will use natural sweeteners as additives. Guilin Layn successfully got the GRAS (Generally Recognized as Safe) certification of momordica glycosides from FDA (Food and Drug Administration of the US) in April 2011, which is very helpful for Guilin Layn to enter the sweetener market in North America. Guilin Layn's
total sales value of stevioside has reached about USD100 million in 2010 after FDA granted stevia sweetener the GRAS certification in 2009, according to Mr. Liao, General Manager of Guilin Layn. Meanwhile, Guilin Layn has been preparing for the construction of a new branch named Layn USA Inc. located in the US since Oct. 2010, in order to efficiently promote the momordica glycosides in North America. It is predictable that Guilin Layn's sales value of momordica glycosides may obviously soar in H2 2011. Moreover, Guilin Layn has completed the construction and started the trial running of new production lines in June 2010. Its processing capacity of raw materials will increase from 3,000t/a to 7,000t/a after the new production lines are formally launched in H2 2011. Currently, Guilin Layn owns the extraction processes of about 200 kinds of plant extracts and 18 national invention patents. Especially, Guilin Layn has got a national invention patent of momordica glycosides extraction as early as 2004, which has laid the root for its currently leading position in Chinese momordica glycosides market. Moreover, Guilin is the major production area of grosvener siraitia and can provide Guilin Layn with sufficient raw materials to produce momordica glycosides.
Mengzhou Huaxing launches trial production of aspartame production lines
M
engzhou Huaxing Co., Ltd. (Mengzhou Huaxing), a joint-stock enterprise engaged in the processing of grain, is putting its aspartame production lines into trial production. Mengzhou Huaxing began to construct the aspartame production lines with capacity of 6,000t/a and investment of about USD54 million at the end of Feb. 2010 and it completed the construction at the end of June 2011. Mengzhou Huaxing may become the largest aspartame producer in China after it launches the production lines in H2 2011. The company is very optimistic about the prospect of aspartame and it expects to gain annual revenue of about USD107 million from the aspartame production lines in the future. In China, the research on aspartame started in the early 1980s, but the industrial production had always been restricted by the shortage of raw material, i.e. L-phenylalanine (L-Phe), which is not relieved until the Twenty-First Century when the hydantoinase method for the synthesis of L-Phe became mature in China. There were mainly seven active aspartame producers
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(TABLE 3) in China by the end of 2010. Jiangsu SinoSweet Co., Ltd. (Jiangsu SinoSweet) was the biggest one with the capacity of 5,000t/a, accounting for about 32% of domestic total capacity. Moreover, Chinese aspartame production was mainly concentrated in Jiangsu Province. From 2006 to 2010, domestic capacity of aspartame had increased from 10,250t/a to 14,545t/a. As the most popular HIS variety in the world, the demand for aspartame is increasing year by year, thus stimulating domestic aspartame production. Since it's approved by the FDA to be used in food and beverage in 1981 and 1983 respectively, aspartame has been approved in over 100 nations and used widely in candies, beverages and dairy products, etc. About 40% of aspartame is consumed in sugar-free candies and gum candies, 35% in beverages in the world. The US is the biggest aspartame production and consumption country in the world. Moreover, the production of aspartame in China seems to be more concentrated in some big producers such as Jiangsu SinoSweet Co., Ltd., Jiangsu Changzhou Niutang Chemical Plant Co., Ltd., etc. Some small ones
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Based on the above facts, it can be predicted that the competitiveness among domestic aspartame producers may become more intense with Mengzhou Huaxing launching its aspartame production lines in the future.
have been gradually washed out of the market in recent years caused by the insufficient raw material supply and global financial crisis.
TABLE 3: Basic information about major aspartame producers in China, 2010, t/a No. 1 2 3 4 5 6 7 Total
Company name Jiangsu SinoSweet Co., Ltd. Jiangsu Changzhou Niutang Chemical Plant Co., Ltd. Changzhou Yabang Kelong Co., Ltd. Changmao Biochemical Engineering Co., Ltd. Shaoxing Yamei Biochemistry Co., Ltd. Beijing VitaSweet Co., Ltd. Wujiang Dechang Food Additives Co., Ltd.
Capacity'10 5,000 3,000 2,500 2,000 1,000 1,000 45 14,545
Location (Province/City) Jiangsu Jiangsu Jiangsu Jiangsu Zhejiang Beijing Jiangsu /
Source: CCM International
Baolingbao smoothly expands erythritol capacity
B
aolingbao Biology Co., Ltd. (Baolingbao), a leading Chinese producer of starch-based products and food ingredients, has been expanding its erythritol capacity, and the total capacity will reach 4,000t/a by the end of August 2011, according to Mr. Fan, Manager of Baolingbao. Baolingbao decided to invest about USD13.28 million to expand its erythritol capacity to 4,000t/a at an extraordinary shareholders meeting in Feb. 2010. Then part of the erythritol expansion was finished in May 2010 and put into production in Aug. 2010. By the end of Dec. 2010, the construction of erythritol capacity expansion has been finished completely. It is estimated that the total erythritol capacity will reach 4,000t/a in Aug. 2011, which is four times of that in 2009. Baolingbao believes that the erythritol industry will develop well in the future and the demand for erythritol will also increase. Moreover, since the overseas consumption is more than the domestic one now, with the increasing overseas demand for erythritol, the domestic erythritol industry will keep on developing. There were mainly five active erythritol producers
(TABLE 4) in China by the end of 2010, with total capacity and output of 18,500t/a and 4,780 tonnes in 2010, respectively. The average operating rate of them is 25.84%, about 11% less than that of 2009. From 2006 to 2010, the capacity of erythritol had grown rapidly, while the growth of output had fallen behind. Besides, there were four producers, namely Zibo Zhongshi Green Biotech Co., Ltd., Shandong Futaste Pharmaceutical Co., Ltd., Shandong Binzhou Sanyuan Biotechnology Co., Ltd., O'Laughlin Industries Co., Ltd., use glucose to produce erythritol in order to improve the production efficiency, while Baolingbao uses corn starch in its erythritol production, which is with lower cost compared with that of using glucose. Moreover, in 2010, among the five main active erythritol producers (FIGURE 3), four are concentrated in Shandong Province; only one is located in Tianjin City. Because erythritol is a kind of sugar alcohol and the sugar alcohol industry develops well in Shandong, most of the erythritol producers choose to be located in Shandong. All in all, it can be predicted that the erythritol industry in China will keep on developing in the future based on the facts above.
TABLE 4: Basic information about major erythritol producers in China, 2011 No. 1
Company name Zibo Zhongshi Green Biotech Co., Ltd.
Abbreviation Location Zibo Green Biotech Shandong
2
Baolingbao Biology Co., Ltd.
Baolingbao
Shandong
Active
Corn starch
3
Shandong Futaste Pharmaceutical Co., Ltd.
Shandong Futaste
Shandong
Active
Glucose
4
Shandong Binzhou Sanyuan Biotechnology Co., Ltd. Shandong Sanyuan Shandong
Active
Glucose
5
O'Laughlin Industries Co., Ltd.
Active
Glucose
Tianjin O'Laughlin
Tianjin
Status, '11 Active
Raw material Glucose
Source: CCM International
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Sweeteners China News Vol.1 Issue 01 2011 FIGURE 3: Distribution of erythritol production by output volume in China, 2010
Shandong 98.33%
Tianjin 1.67%
Source: CCM International
Raw Material Supply GLG builds a breeding and cultivation centre of stevia
G
LG Life Tech Corporation (GLG) has built a breeding and cultivation centre of stevia jointly with Anhui Science and Technology University in Anhui in June 2011. And this centre is a unique provincial engineering research centre which is focused on breeding, cultivation and the breed improvement of stevia.
it is the first product that uses stevia sweetener instead of cane sugar. In addition, the stevia sweetener used in Zero Calorie is also produced by GLG. So it is predictable that the consumption volume of stevia sweetener will continue to increase along with the development of sugar-free foods and beverages.
GLG is a world leader in the production of high-quality stevia, a zero-calorie and natural sweetener. Its vertically integrated operations include stevia seed breeding, propagation, growth and harvest, extraction, refining and formulation; its main business in China is breeding, propagation of stevia and production of high quality stevia sweetener. In light of the following two reasons, GLG believes that the stevia planting will develop well and the demand for stevia may keep increasing in the next several years, thus it has finally built this breeding and cultivation centre in Anhui.
GLG builds the breeding and cultivation centre of stevia for the following two goals.
First, the export volume (FIGURE 4) of stevia sweetener has increased thanks to the growing overseas demand for it in recent years. Currently, China has already become the largest stevia sweetener supplier in the world, and around 80% of its total output of stevia sweetener is sold to overseas market. Therefore, it reveals that the output of stevia is also increasing since stevia sweetener is made from stevia, and that the stevia sweetener producers will need more stevia as raw material.
First, the centre will improve the breeding to get new stevia species which have higher steviol glycosides content in the leaves. And the major components in steviol glycosides are stevioside and rebaudioside A (RA). Those new species can help stevia sweetener processors produce high RA purity products. Moreover, the prices of high RA purity products such as RA 80%, RA 90% and RA 95% are much higher than that of stevioside, that is to say, the new species can bring GLG higher profits. Second, the output of stevia will increase with the improving stevia planting level through education and training. What's more, the centre will help farmers learn new culture technique of stevia and prevent plant diseases and insect damage.
Moreover, the consumption volume of stevia sweetener in China has also gradually increased for the development of sugar-free foods and beverages in recent years. Take Zero Calorie as an example, which is a new brand of GLG, it has been launched in Chinese market in May 2011 and
It is estimated that the planting industry of stevia will develop sustainably, then the output of stevia will also increase to ensure the supply. In fact, stevia is planted by native farmers and then sold as a raw material to the domestic stevia sweetener producers. On one hand, the increasing demand from stevia sweetener drives the producers to buy more stevia from farmers. On the other hand, local governments also try their best to promote
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Sweeteners China News Vol.1 Issue 01 2011 FIGURE 4: Export volume of stevia sweetener in China, 20082010 4,000 3,000
Unit:tonne
the planting industry of stevia, because it can increase the income of farmers. For example, Government of Anhui Mingguang held a purchasing meeting of stevia on 4 May 2010 which aims to help farmers sell their stevia at a reasonable price and also to help stevia sweetener producers buy high quality stevia in the harvest season. That is to say, both the sweetener producers and the government are promoting the planting industry of stevia.
2,000 1,000 0 2008
2009
2010
Source: CCM International
Price Update Ex-factory prices of Chinese sweeteners, June 2011 No.
Products
(USD/t) 1
Sucrose
2
Sweetness compared with sucrose
Price in June 2011
Price of unit sweetness
(RMB/t)
(USD/t)
1,115
7,225
1
1,115
Steviol glycosides (RA95)
162,120
1,050,000
450
360
3
Sucralose
102,676
665,000
600
171
4
Acesulfame-K
8,183
53,000
200
41
5
Aspartame
15,600
101,038
200
78
6
Glycyrrhizin (Tripotassium Glycyrrhinate)
13,896
90,000
150
93
7
Saccharin
5,200
33,679
300
17
8
Cyclamate (NF13)
2,470
16,000
30
82
9
Neotame
100,230
650,000
8,000
13
10
Erythritol
5,188
33,600
0.70
7,411
11
Mannitol
3,011
19,500
0.60
5,018
12
Maltose syrup (80%)
478
3,100
0.90
531
13
Sorbitol (70%)
644
4,178
0.70
920
14
Xylitol (68%, Liquid)
918
5,953
0.90
1,019
15
HFCS (Fructose: 42%)
509
3,300
1
509
16
HFCS (Fructose: 55%)
647
4,200
1.10
588
17
Crystal Isomaltitol
4,639
30,100
0.55
8,435
18
Maltodextrin
647
4,200
0.90
719
19
Maltitol (75%, Liquid )
727
4,718
0.90
808
20
Anhydrous glucose (Food grade)
848
5,500
0.74
1,146
21
Glucose Monohydrate
632
4,100
0.74
854
Note: The data of price are collected on 13 June 2011, which are valid till 27 June 2011. Source: CCM International
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Sweeteners China News Vol.1 Issue 01 2011
Import & Export Analysis Import & export analysis of Chinese saccharin in Jan.-Apr. 2011 Export analysis
Major export destinations (TABLE 7)
Export volume
C
hina's total saccharin export volume reached about 4,844 tonnes in the first four months of 2011. Compared with the same period of last year, the growth rate of domestic saccharin export volume reached about 19%. With domestic saccharin quality improving and the global economy recovering, it can be predicted that China's saccharin export may keep growing in the next several months in 2011. Export price (TABLE 5) China is an important saccharin producer and its average export price of saccharin reached about USD5,833 during Jan.-April 2011, which only increased by 4% year on year. It may keep increasing in a narrow range in H2 2011 due to the more and more serious inflation in China. TABLE 5: Export volume, value and price of China's saccharin,Jan.-Apr. 2011 Month Jan-11 Feb-11 Mar-11 Apr-11 Total
Quantity, tonne 1,242 857 1,503 1,242 4,844
Value, USD Price, USD/t 7,253,751 5,840 5,118,027 5,972 8,751,436 5,823 7,129,551 5,740 28,252,765 5,833
About 38% of China's saccharin for export was exported to Germany, South Korea, Brazil, the US and India during Jan.-April 2011. Among these five countries, Germany imported about 14% of the total China's exported saccharin during the same period.
TABLE 7: Major export destinations of China's saccharin, Jan.-Apr. 2011 No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Destination Germany South Korea Brazil US India France Indonesia Netherlands Japan Thailand UK Spain Mexico Pakistan South Africa Others
Quantity, tonne 672 385 314 250 226 200 195 185 184 174 172 136 131 122 121 1,377
Value, USD 4,082,297 2,212,497 1,740,088 2,358,388 1,210,968 993,913 1,031,562 1,013,328 1,084,449 1,009,322 1,058,905 777,720 779,420 627,460 690,860 7,581,588
4,844
28,252,765
Total
Source: CCM International
Source: CCM International
Import analysis
Major export provinces (TABLE 6) About 90% of the exported saccharin was exported from Tianjin City, Henan Province and Shanghai City during Jan.-April 2011.
Import volume China's total saccharin import volume was only about 83 tonnes in the first four months of 2011.
TABLE 6: Export volume of major saccharin export provinces/cities in China, Jan.-Apr. 2011 No. 1 2 3 4 5 6 Others
Province/City Quantity, tonne Tianjin 1,918 Henan 1,519 Shanghai 920 Jiangsu 191 Shandong 98 Guangxi 71 127
Value, USD 10,615,254 8,443,119 6,468,802 1,018,764 630,079 366,363 710,384
4,844
28,252,765
Total
Import price (TABLE 8) Compared with last year, China's average saccharin import price sharply declined from about USD11,752/t to about USD8,280/t in Jan.-April 2011, because of the recovery of domestic saccharin producers
Source: CCM International
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Sweeteners China News Vol.1 Issue 01 2011 TABLE 8: Import volume, value and price of China's saccharin, Jan.-Apr. 2011 Month Jan-11 Feb-11 Mar-11 Apr-11 Total
Quantity, tonne 34 2 43 4 83
Value, USD Price, USD/t 276,911 8,144 19,215 9,608 312,572 7,269 78,580 19,645 687,278 8,280
Source: CCM International
Major import destinations (TABLE 9) About 90% of China's imported saccharin was imported by Jiangsu Province during Jan.-April 2011.
Major import origins (TABLE 10) About 89% of China's imported saccharin was from South Korea during Jan.-April 2011. TABLE 10: Major origins of China's imported saccharin, Jan.-Apr. 2011 No. Province 1 Jiangsu 2 Guangdong 3 Shandong Others
Quantity, tonne
Total
73 4 4 2
Value, USD 531,103 20,378 69,028 66,769
83
687,278
Source: CCM International
TABLE 9: Import volume of saccharin by main provinces in China, Jan.-Apr. 2011 No. Country 1 South Korea 2 Germany 3 Singapore Others
Quantity, tonne 75 4 2 2
Value, USD 587,932 37,068 6,845 55,433
83
687,278
Total
Source: CCM International
Import & export analysis of Chinese cyclamate in Jan.-Apr. 2011 Export analysis
Major export provinces (TABLE 12)
Export volume
C
hina's total cyclamate export volume reached about 8,853 tonnes in the first four months of 2011. Although the export volume of cyclamate reduced by about 321 tonnes over the same period of last year, it may slowly increase in H2 2011 thanks to the increasing demand for cyclamate in the global market.
The average export price of China's cyclamate has been fluctuating in a narrow range since 2010, and it reached about USD1,860/t during Jan.-April 2011.
TABLE 11: Export volume, value and price of China's cyclamate, Jan.-April 2011 Quantity, tonne 2,747 1,611 2,454 2,041 8,853
TABLE 12: Export volume of major cyclamate export provinces in China, Jan.-April 2011
Export price (TABLE 11)
Month Jan-11 Feb-11 Mar-11 Apr-11 Total
About 90% of China's cyclamate for export was exported by Jiangsu Province, Shanxi Province and Guangdong Province during Jan.-April 2011, among which the cyclamate export volume of Jiangsu Province accounted for about 50% of the nation's total.
Value, USD 4,952,046 2,964,567 4,542,836 4,002,779 16,462,228
Price, USD/t 1,803 1,840 1,851 1,961 1,860
No. 1 2 3 4 5 Others
Province/City Quantity, tonne Jiangsu 4,416 Shanxi 2,169 Guangdong 1,404 Shandong 497 Tianjin 239 128
Value, USD 8,019,698 3,798,320 3,019,061 927,098 440,048 258,003
8,853
16,462,228
Total
Source: CCM International
Major export destinations (TABLE 13) South Africa imported about 1,186 tonnes of cyclamate from China during Jan.-April 2011, which accounted for about 13% of China's total cyclamate export volume.
Source: CCM International
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Sweeteners China News Vol.1 Issue 01 2011 TABLE 13: Major export destinations of China's cyclamate, Jan.-April 2011 No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Others
Destination
Quantity, tonne
South Africa Brazil Argentina Pakistan Germany Turkey Myanmar Russia Netherlands Vietnam Indonesia Taiwan Province Malaysia Bangladesh Bolivia
Total
Value, USD 1,186 905 765 752 676 602 572 342 341 260 244 217 215 187 183 1,406
2,188,790 1,701,830 1,390,667 1,288,490 1,347,116 1,060,517 993,505 608,300 707,508 465,884 421,298 371,389 401,297 332,179 379,520 2,803,938
8,853
16,462,228
Source: CCM International
Import analysis China's total cyclamate import volume was less than one tonne during Jan.-April 2011, thanks to the sufficient cyclamate supply in the domestic market.
Consumption Trend & Competitiveness
HIS believed to enjoy good development in the future
H
igh intensity sweetener (HIS) industry has enjoyed a good development in the past years, and a survey by CCM highlights that the trend will continue in the next 3-5 years in China and Asia Pacific Area (AP) as most respondents believed. HIS is an important class of sugar substitutes, and there are nine kinds of commonly-used HIS in AP (an important HIS production area in the world, whose total output accounts for over 50% of the global total as estimated), including saccharin, cyclamate, acesulfame-K (Ace-K), stevia sweetener, aspartame, sucralose, glycyrrhizin, alitame and neotame. CCM conducted a survey in its report Survey of High Intensity Sweeteners in Asia Pacific launched in February 2011, which is based on opinions of respondents from HIS industry around the country, including HIS processors (taking up 70.83% of the total number of respondents), distributors (12.50%), downstream consumers (4.20%) and other insiders (12.47%, such as experts and media, etc.).
about the development of high intensity sweeteners (HIS) in China—the largest production and consumption country in Asia Pacific Area (AP), taking up 71.51% of the production in 2010 and 62.56% of the consumption in 2009 in terms of volume respectively: amongst all the respondents, 70.83% of them believed that the demand for HIS will grow in the next 3-5 years, while only 29.17% believed that the demand will remain stable, and no respondent preferred the choice of "the demand will decrease". With regard to the growth rate (FIGURE 5), 29.41% of respondents deemed that the rate will exceed 10%, followed by 47.06% for growth rate of 5-10%, 23.53% for 3-5%. The wider application field of HIS, domestic consumers' more attention to health food with low calorie and cost reduction for downstream clients are the three main drivers (FIGURE 6) for the increasing HIS demand in the future, taking up 27.08%, 27.08% and 16.67% of the total respectively, followed by 12.5% for the choice "aided by rapid development of China's economy", 8.33% for production cost decrease and 8.33% for consumers' better awareness about HIS.
According to the survey, most respondents were optimistic www.cnchemicals.com
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Sweeteners China News Vol.1 Issue 01 2011 FIGURE 5: Industry’s opinions about the growth rate of
demand for HIS will increase.
HIS development in China in the next 3-5 years Grow th rate of 3 -5%, 23.53%
Grow th rate of 10%+, 29.41%
The main drivers (FIGURE 8) for the increasing demand for HIS in AP were cited as the higher cost performance compared with cane sugar (29.09%), the diet habit of lowcalorie food (29.09%) and the promotion by ASEAN Free Trade Area (AFTA, 14.55%) , followed by the rapid recovery of economy in AP (12.73%) and the foreign consumers' diet habit of sweet food (12.73%).
FIGURE 7: Industry’s opinions about the growth rate of Grow th rate of 5 - 10%, 47.06%
HIS development in Asia Pacific in the next 3-5 years
Note: HIS means high intensify sweeteners, and the survey was conducted in 2011. Source: CCM International
Grow th rate of 1 - 3%, 21.05%
Grow th rate of 10%+, 21.05%
FIGURE 6:Industry’s opinion about the drivers of HIS development in China in the next 3-5 years Production expansion and cost reduction, 8.33% Aided by China's rapid econom y developm ent, 12.50%
Consum ers' better aw areness Wider about HIS, 8.33% application field of HIS, 27.08%
Cost reduction for dow nstream clients, 16.67%
Grow th rate of 3 - 5%, 31.58%
Grow th rate of 5 - 10%, 26.32%
Note: HIS means high intensify sweeteners, and the survey was conducted in 2011. Source: CCM International Dom estic consum ers' m ore attention to health food w ith low calorie, 27.08%
Note: HIS means high intensify sweeteners, and the survey was conducted in 2011. Source: CCM International
Export of high intensity sweeteners (HIS) is one main business of the respondents (mostly producers): 87.5% of them revealed that they exported HIS to foreign countries. And they are optimistic about the future development of HIS in Asia Pacific Area (AP): 79.19% of the respondents believed that the demand for HIS will grow in the next 3-5 years, while 20.83% for stable development and 0% for decreased demand.
FIGURE 8: Industry’s opinions about the drivers of HIS development in Asia Pacific in the next 3-5 years Foreign consum ers' diet Others, 1.82% habit for sw eet food, 12.73% Aided by rapid recovery of econom y in AP, 12.73% Prom otion by ASEAN Free Trade Area, 14.55%
Higher cost perform ance com pared w ith cane sugar, 29.09%
Diet habit of low calorie food, 29.09%
For the export growth rate (FIGURE 7), 21.05% of respondents believed that the rate will exceed 10%, while 26.32% for 5-10%, 31.58% for 3-5% and 21.05% for 1-3%. Indonesia, India and Japan, as the three main consumption countries in AP besides China, are deemed to consume more HIS in the future, taking up 12.75%, 14.71% and 10.78% of the total number of respondents, while 14.71% of respondents took the view that Malaysia's
Note: HIS means high intensify sweetener, and the survey was conducted in 2011. Source: CCM International
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Sweeteners China News
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