Sweeteners China News                                          Vol.1 Issue 1 2011  Copyright © CCM International Limited
Sweeteners China News                                                              Vol.1 Issue 01 2011            Publicat...
Sweeteners China News           Vol.1 Issue 01 2011      Sweeteners China News at a glance                                ...
Sweeteners China News      Vol.1 Issue 01 2011Market Dynamic                          Overview of production and market of...
Sweeteners China News     Vol.1 Issue 01 2011     investigation which hit Chinas sucralose market from                 cap...
Sweeteners China NewsVol.1 Issue 01 2011                 Gansu Puhua to launch stevioside production linesG   ansu Puhua S...
Sweeteners China NewsVol.1 Issue 01 2011                               Guilin Layn to turn loss into gain G     uilin Layn...
Sweeteners China NewsVol.1 Issue 01 2011have been gradually washed out of the market in recent             Based on the ab...
Sweeteners China News      Vol.1 Issue 01 2011                          FIGURE 3: Distribution of erythritol production by...
Sweeteners China News      Vol.1 Issue 01 2011                                                                       FIGUR...
Sweeteners China News      Vol.1 Issue 01 2011Import & Export Analysis          Import & export analysis of Chinese saccha...
Sweeteners China NewsVol.1 Issue 01 2011   TABLE 8: Import volume, value and price of Chinas                Major import o...
Sweeteners China News     Vol.1 Issue 01 2011                                  TABLE 13: Major export destinations of Chin...
Sweeteners China NewsVol.1 Issue 01 2011  FIGURE 5: Industry’s opinions about the growth rate of          demand for HIS w...
Sweeteners China News Choose Type of Subscription:   Single user license:         1 year CNY16,275/USD2,325/EURO1,500/GBP1...
Journalist: Xingqiang Zhang, Yuwei LingEditor:       Emily ChenChief Editor: Norman Lai, Hongxiang DuPublisher: CCM Intern...
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  1. 1. Sweeteners China News Vol.1 Issue 1 2011 Copyright © CCM International Limited
  2. 2. Sweeteners China News Vol.1 Issue 01 2011 Publication date: 20 June, 2011 CONTENTS Welcome to the June issue of Sweeteners China News, specially published by CCM International.News in Brief1 Public notice on export quota bidding issued The average cane sugar price in China on 15 June 2011 was1 Meilun Medical obtains government subsidy USD1,114/t (RMB7,217/t), down 4% over the average price1 CFIA holds a meeting of starch sugar in Beijing on 10 November 2010—when the price is the highest in1 Haizhina to build an organic maltose syrup project in Jiangxi the past several years, according to the China Sugar Index1 Problems hinder domestic HFCS development from www.yntw.com—a famous sugar website in China.1 Prices of corn starch and syrup may increase again in H2 2011 However, the current price still stays at a high level, and itMarket Dynamic is estimated that the sugar price will remain at a high level2 Overview of production and market of sucralose this year, higher than USD1,080/t (RMB7,000/t).Company Dynamic3 Anhui Jinhe passes IPO examination and approval Certainly, such market situation provides an opportunity4 Gansu Puhua to launch stevioside production lines for sweeteners—the sugar substitutes and most of them5 Guilin Layn to turn loss into gain have lower unit sweetness price over sucrose. And the5 Mengzhou Huaxing launches trial production of aspartame production lines players in the industry are optimistic about the future6 Baolingbao smoothly expands erythritol capacity development of sweeteners, especially high intensityRaw Material Supply sweeteners (HIS, which is one main focus in this issue):7 GLG builds a breeding and cultivation centre of stevia according to a survey from CCM which is also referred in the article below in this issue, most respondents believePrice Update8 Ex-factory prices of Chinese sweeteners, June 2011 that HIS will perform well in China and Asia Pacific in the next 3-5 years. Meanwhile, the recent dynamics of manyImport & Export Analysis processors, such as Anhui Jinhe, Mengzhou Huaxing and9 Import & export analysis of Chinese saccharin in Jan.-Apr. 2011 Gansu Puhua, also prove that they are optimistic about the10 Import & export analysis of Chinese cyclamate in Jan.-Apr. 2011 HIS segment, which is an apparent signal for the industry.Consumption Trend & Competitiveness11 HIS believed to enjoy good development in the future If there are any specific topics you would like us to cover or investigate any of the subjects covered in more details, please contact us by +86-20-37616606, or econtact@ cnchemicals.com. Future of Functional Oligosaccharide Market CCM’s Market Reports in China Announcement Production and Market of Inulin in China For more details, please contact CCM at Production and Market of Sucralose in China econtact@cnchemicals.com CCM’s Market Reports The Survey of Sorbitol in Asia Pacific Announcement Production and Market of Xylitol in China For more details, please contact CCM at Production and market of Stevia Sweetener econtact@cnchemicals.com in China
  3. 3. Sweeteners China News Vol.1 Issue 01 2011 Sweeteners China News at a glance CFIA holds a meeting of starch sugar Chinas sucralose industry will continue to develop in the next few years. in Beijing Anhui Jinhe has successfully passed the IPO examination and approval on May 20th 2011. 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 Guilin Layn may turn loss into gain in H2 2011, thanks to its the starch sugar industry. Most delegates believed that though rapidly increasing sales of momordica glycosides. the National Policy Adjustment of Corn Industry will bring some Mengzhou Huaxing is putting its aspartame production lines into unfavourable factors to the starch sugar industry, the government trial production. will strongly support the new industries including the starch sugar Gansu Puhua may launch its stevioside production lines in H2 industry in the future. That is to say, the starch sugar industry will 2011. face new challenges while enjoy new opportunities for development at the same time. Baolingbao has been expanding its erythritol capacity, which will reach 4,000t/a by Aug. 2011. GLG has built a breeding and cultivation centre of stevia in Anhui Haizhina to build an organic maltose in June 2011. The result of a survey by CCM shows that most respondents view syrup project in Jiangxi 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 News in brief development D omestic High Fructose Corn Syrup (HFCS) Forum of Market and Development was held in Beijing on 19 May 2011. It is Public notice on export quota bidding reported that there are four problems that hinder the development of HFCS in the domestic market. issued Firstly, HFCS capacity is growing too fast.Secondly, raw materials 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 2011s export quota of licorice 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 and licorice products; those processors who meet the requirements requirements of environmental protection and energy saving. 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 Meilun Medical obtains government increase again in H2 2011 subsidy M r. Kong, President of Global Sweeteners Holdings Limited (Global Sweeteners), predicts that prices of corn starch and 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 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 million (RMB5 million) from the local government, because the with the capacity of 100,000t/a in Q1 2012 and expand its crystalline company invested a lot and successfully launched a new production glucose capacity by 100,000t/a in the future. 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. www.cnchemicals.com CCM 1 econtact@cnchemicals.com 1
  4. 4. Sweeteners China News Vol.1 Issue 01 2011Market Dynamic Overview of production and market of sucralose C urrently, with the increasing overseas sucralose demand, Chinese producers have been actively operating FIGURE 1: Export volume of sucralose in China, 2006-2010 2,000 their sucralose production lines or expanding their sucralose capacity since domestic sucralose producers effectively 1,600 won the No.337-TA-604 investigation launched by Tate & Lyle in the US on 6 Unit:tonne 1,200 April 2009. And the export volume of sucralose has a rapid growth after 2009. 800 JK Sucralose Inc. (JK Sucralose), the largest professional sucralose 400 manufacturer in China and the second largest in the world, has finished the second phase project in June 2010 and 0 has successfully achieved the expected 2006 2007 2008 2009 2010 capacity in May 2011. Meanwhile, in Capacity: t/a Output : tonne order to meet the increasing market demand for sucralose, JK Sucralose has Source: CCM International started the third phase project which includes three production lines. It is estimated that the sucralose capacity will FIGURE 2: Sucralose production in China, 2006-2010 get 800t/a by the end of 2011, then to 1,000t/a by the end of 2012 and finally 500 reach 4,000t/a by the end of 2018. 400 Changzhou Niutang Chemical Plant Co., Ltd. (Changzhou Nituang), one of the Unit:tonne 300 major domestic sucralose producers, has a subsidiary engaged in sucralose 200 production, namely Nantong Changhai Food Additive Co., Ltd. (Nantong 100 Changhai). In 2010, the sucralose capacity and output of Changzhou 0 Niutang are 100t/a and 60 tonnes, 2006 2007 2008 2009 2010 while those of Nantong Changhai are 100t/a and 50 tonnes, respectively. Whats more, it is reported that Source: CCM International Changzhou Niutang planned to expand its sucralose capacity by 1,000t/a. Then, sucralose capacity and output are sucralose is more than 600 tonnes, it is estimated that the total capacity of 300t/a and 60 tonnes, respectively, increasing by about 50% over 2009 Changzhou Niutang will reach 1,100t/a and it has planned to further expand its thanks to the recovered demand from when the expansion is finished. sucralose capacity in the future, based overseas market. on the currently increasing demand for Techno (Fujian) Biotechnology Co., sucralose. Currently, China has witnessed booming Ltd. (Fujian Techno), also one of the sucralose export. From 2006 to 2010, major domestic sucralose producers, The chart (FIGURE 1) shows that both the export volume (FIGURE 2) showed is a subsidiary of Techno (Guangzhou) the output and capacity of sucralose a general trend of escalation, though Biotechnology Co., Ltd. (Guangzhou in China have increased from 2006 in 2009 it decreased a little than that Techno). In 2010, Fujian Technos to 2010. And in 2010, the output of in 2008. Because of the 337 patent www.cnchemicals.com CCM 2 econtact@cnchemicals.com
  5. 5. Sweeteners China News Vol.1 Issue 01 2011 investigation which hit Chinas sucralose market from capacity utilization is raised, the total capacity of sucralose 2008 to 2009, producers in China exported less sucralose. will increase a lot. Because the price of sugar in China After Chinese producers won the investigation on 6 April still stays at a high level even though the government has 2009, domestic export has gradually recovered and a new already taken action to stabilize it, more and more food export record is set in 2010. Since sucralose is widely producers will prefer to choose high intensity sweeteners used, the export is promoted with its increasing overseas (HIS), which can significantly decrease the production demand. cost compared with that of using sugar. Therefore, this situation is favorable to the consumption of HIS. With Generally, it is estimated that Chinas sucralose industry the development of sugar-free foods and the extensive will develop gradually in the future. When the processing application of HIS, the demand for sucralose both at home construction projects of sucralose is finished and the 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) acesulfam-Ks quality in recent years, which strengthens its competitiveness in the acesulfame-K market. Meanwhile, Anhui Jinhe had increased its acesulfame-K capacity from examination and approval on May 20th 2011. 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 plans to raise about USD111 million through Anhui Jinhe expects to expand the acesulfam-K capacity as IPO to expand its acesulfame-K capacity from 4,000t/a soon as possible. to 9,000t/a and to construct a new workshop of calcium ammonium nitrate with the capacity of 200,000t/a. Anhui From 2006 to 2010, the capacity of acesulfame-K has Jinhe may formally issue its stocks at Shenzhen Stock increased from 13,620t/a to 20,520t/a with a CAGR of Exchange before the end of 2011 thanks to the following 10.79%, while the output has decreased from 7,325 tonnes advantages: steadily increasing assets, sufficient circulating to 4,185 tonnes with a CAGR of -13.06%. Before 2008, funds, strong debt paying ability and excellent profitability seeing the price increasing year by year, some producers forecast on the core businesses, especially acesulfame-K. poured in acesulfame-K production or excessively enlarged their production capacity. At that time, intense competition Major reasons for Anhui Jinhes expansion in acesulfame-K between producers and the impact from overseas rivals capacity are as follows. have led to the oversupply in the acesulfame-K industry, resulting in low operating rate and shrunken output. Demand for acesulfame-K has been increasing because Whats worse, the global financial crisis since 2008 has of the fast growth of Chinas food industry especially the impacted the development of Chinese acesulfame-K beverage industry in recent years. industry; demand both at home and overseas is not as brisk as it was in previous years. As a safe sugar substitute, demand for acesulfame-K from above 100 million of domestic diabetics has also been However, Anhui Jinhe will face some risks, such as increasing. 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. Company name Abbreviation Location Capacity 11 1 Suzhou Hope Technology Co., Ltd. Suzhou Hope Jiangsu 10,000 2 Anhui Jinhe Industrial Co., Ltd. Anhui Jinhe Anhui 4,000 3 Shandong Minghui Food Co., Ltd. Shandong Minghui Shandong 2,500 4 Zhejiang Hangzhou Sanhe Food Co., Ltd. Hangzhou Sanhe Zhejiang 2,000 5 Beijing VitaSweet Co., Ltd. Beijing VitaSweet Beijing 1,200 6 Jiangsu Suzhou Peacock Food Additive Co., Ltd. Suzhou Peacock Jiangsu 1,500 7 Jiangxi Beiyang Food Addiitive Co., Ltd. Jiangxi Beiyang Jiangxi 1,000 8 Shandong Zibo Golden Science Industry & Trade Co., Ltd. Zibo Golden Shandong 200 9 Guangdong L&P Food Ingredient Co., Ltd. Guangdong L&P Guangdong 120 Total 22,520 Source: CCM International www.cnchemicals.com CCM 3 econtact@cnchemicals.com
  6. 6. Sweeteners China NewsVol.1 Issue 01 2011 Gansu Puhua to launch stevioside production linesG ansu Puhua Stevioside Development Co., Ltd. (Gansu Puhua), engaged in stevioside production, maylaunch its stevioside production lines in H2 2011. 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 steviaGansu Puhua with the total investment of about USD19 sweetener producers in China by now. PureCirclemillion was set up in July 2010 and its five investors (Jiangxi) Co., Ltd. is the biggest one, whose capacityinclude: Gansu Pharmaceutical Alkali Factory (Gansu and output reached 4,000t/a and 1,400 tonnes in 2010,Pharmaceutical Alkali), Gansu Agricultural Reclamation accounting for 29.68% and 35.80% of the total domesticGroup Co., Ltd. (Gansu Agricultural Reclamation Group), capacity and output of stevia sweetener, respectively.Chengdu Wagott Pharmaceutical Co., Ltd.(Chengdu Moreover, Chinas stevia sweetener production is mainlyWagott), Gansu Yasheng Industrial (Group) Co., Ltd. concentrated in Jiangxi Province and Shandong Province.(Gansu Yasheng) and Gansu Puli Health Products Co.,Ltd. (Gansu Puli). Gansu Agricultural Reclamation As a natural kind of high intensity sweetener (HIS),Group is the controlling shareholder of both Gansu stevia sweeteners usage has been approved by morePharmaceutical Alkali and Gansu Yasheng, and these and more countries and it has been becoming more andthree companies together hold 70% of Gansu Puhuas more popular in overseas market. Currently, China istotal shares. Moreover, Chengdu Wagott, engaged in the largest stevia sweetener supplier in the world, andproduction of plant extracts, holds 20% of Gansu Puhuas around 80% of its total output of stevia sweetener is soldtotal shares and it is also a stevioside producer with a to overseas market. From 2006 to 2010, the capacitycapacity of 200t/a. of stevia sweetener has increased from 5,160t/a to 13,475t/a with a CAGR of 27.12%. The booming domesticGansu Puhua started the construction of stevioside production is mainly driven by the rising demand fromproduction lines with total capacity of 1,000t/a at the foreign countries; nowadays, foreigners prefer naturalend of July 2010. Currently, The company has completed food additives to artificial ones. The US, Japan and Souththe construction of stevioside production lines and may Korea are the most important stevia sweetener marketslaunch them in H2 2011. Meanwhile, Gansu Puhua has in the world. Chinas stevia sweetener is mainly exportedbuilt a stevia planting base with the total building area to neighboring countries and North America in the pastof about 667 hectares, in order to provide steady and three years. Malaysia, the US, Mexico, South Korea andsufficient raw materials to its own stevioside production Japan are the most important export destinations ofin the future. Chinas stevia sweetener. TABLE 2: Basic information about major stevioside producers in China, 2011 No. Company name Capacity 11 Location 1 PureCircle (Jiangxi ) Co., Ltd. 4,000 Jiangxi 2 Dongtai Runyang Stevia High Tech Co., Ltd. 2,000 Jiangsu 3 Shandong Huaxian Stevia Co., Ltd. 1,000 Shandong 4 Qingdao Runde Biotechnology Co., Ltd. 1,000 Shandong 5 Shandong Haigen Stevia Products Co., Ltd. 1,000 Shandong 6 Gansu Puhua Stevioside Development Co., Ltd. 1,000 Gansu Total 10,000 /Source: CCM International Stevia Export Analysis CCM’s Trade Analysis Announcement: Neotame Export Report Sucralose Export Analysis For more details, please contact CCM at econtact@cnchemicals.com Aspartame Export Analysiswww.cnchemicals.com CCM 4 econtact@cnchemicals.com
  7. 7. Sweeteners China NewsVol.1 Issue 01 2011 Guilin Layn to turn loss into gain G 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 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, sales of momordica glycosides (a natural sweetener). General Manager of Guilin Layn. Meanwhile, Guilin Layn has been preparing for the construction of a new branch Although it is estimated that Guilin Layns amount of loss named Layn USA Inc. located in the US since Oct. 2010, may reach about USD1-1.5 million in H1 2011 according in order to efficiently promote the momordica glycosides to its financial report of the first quarter of 2011, Guilin in North America. It is predictable that Guilin Layns Layn may successfully make a profit in light of the sales value of momordica glycosides may obviously soar following factors. in H2 2011. Natural sweeteners, such as momordica glycosides and Moreover, Guilin Layn has completed the construction stevia sweetener, have become more and more popular and started the trial running of new production lines among consumers in some developed countries in recent in June 2010. Its processing capacity of raw materials years, such as the US, Japan and South Korea. will increase from 3,000t/a to 7,000t/a after the new production lines are formally launched in H2 2011. Compared with artificial high intensity sweeteners, natural sweeteners are safer to be used as food additives. Currently, Guilin Layn owns the extraction processes With the enhancement of consumers health awareness of about 200 kinds of plant extracts and 18 national in the world, more and more foods and health products invention patents. Especially, Guilin Layn has got a will use natural sweeteners as additives. national invention patent of momordica glycosides extraction as early as 2004, which has laid the root for Guilin Layn successfully got the GRAS (Generally its currently leading position in Chinese momordica Recognized as Safe) certification of momordica glycosides glycosides market. Moreover, Guilin is the major from FDA (Food and Drug Administration of the US) in production area of grosvener siraitia and can provide April 2011, which is very helpful for Guilin Layn to enter Guilin Layn with sufficient raw materials to produce the sweetener market in North America. Guilin Layns 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 (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 trial production. 32% of domestic total capacity. Moreover, Chinese aspartame production was mainly concentrated in Mengzhou Huaxing began to construct the aspartame Jiangsu Province. production lines with capacity of 6,000t/a and investment of about USD54 million at the end of Feb. From 2006 to 2010, domestic capacity of aspartame 2010 and it completed the construction at the end had increased from 10,250t/a to 14,545t/a. As the of June 2011. Mengzhou Huaxing may become the most popular HIS variety in the world, the demand for largest aspartame producer in China after it launches aspartame is increasing year by year, thus stimulating the production lines in H2 2011. The company is domestic aspartame production. Since its approved by very optimistic about the prospect of aspartame and the FDA to be used in food and beverage in 1981 and it expects to gain annual revenue of about USD107 1983 respectively, aspartame has been approved in million from the aspartame production lines in the over 100 nations and used widely in candies, beverages future. and dairy products, etc. About 40% of aspartame is consumed in sugar-free candies and gum candies, In China, the research on aspartame started in the 35% in beverages in the world. The US is the biggest early 1980s, but the industrial production had always aspartame production and consumption country in the been restricted by the shortage of raw material, i.e. world. L-phenylalanine (L-Phe), which is not relieved until the Twenty-First Century when the hydantoinase method Moreover, the production of aspartame in China seems for the synthesis of L-Phe became mature in China. to be more concentrated in some big producers such as Jiangsu SinoSweet Co., Ltd., Jiangsu Changzhou There were mainly seven active aspartame producers Niutang Chemical Plant Co., Ltd., etc. Some small oneswww.cnchemicals.com CCM 5 econtact@cnchemicals.com
  8. 8. Sweeteners China NewsVol.1 Issue 01 2011have been gradually washed out of the market in recent Based on the above facts, it can be predicted that theyears caused by the insufficient raw material supply and competitiveness among domestic aspartame producersglobal financial crisis. may become more intense with Mengzhou Huaxing launching its aspartame production lines in the future. TABLE 3: Basic information about major aspartame producers in China, 2010, t/a No. Company name Capacity10 Location (Province/City) 1 Jiangsu SinoSweet Co., Ltd. 5,000 Jiangsu 2 Jiangsu Changzhou Niutang Chemical Plant Co., Ltd. 3,000 Jiangsu 3 Changzhou Yabang Kelong Co., Ltd. 2,500 Jiangsu 4 Changmao Biochemical Engineering Co., Ltd. 2,000 Jiangsu 5 Shaoxing Yamei Biochemistry Co., Ltd. 1,000 Zhejiang 6 Beijing VitaSweet Co., Ltd. 1,000 Beijing 7 Wujiang Dechang Food Additives Co., Ltd. 45 Jiangsu Total 14,545 /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, (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 and the total capacity will reach 4,000t/a by the end is 25.84%, about 11% less than that of 2009. From 2006 of August 2011, according to Mr. Fan, Manager of to 2010, the capacity of erythritol had grown rapidly, Baolingbao. while the growth of output had fallen behind. Besides, there were four producers, namely Zibo Zhongshi Green Baolingbao decided to invest about USD13.28 million Biotech Co., Ltd., Shandong Futaste Pharmaceutical to expand its erythritol capacity to 4,000t/a at an Co., Ltd., Shandong Binzhou Sanyuan Biotechnology extraordinary shareholders meeting in Feb. 2010. Then Co., Ltd., OLaughlin Industries Co., Ltd., use glucose to part of the erythritol expansion was finished in May 2010 produce erythritol in order to improve the production and put into production in Aug. 2010. By the end of Dec. efficiency, while Baolingbao uses corn starch in its 2010, the construction of erythritol capacity expansion erythritol production, which is with lower cost compared has been finished completely. It is estimated that the with that of using glucose. total erythritol capacity will reach 4,000t/a in Aug. 2011, which is four times of that in 2009. Moreover, in 2010, among the five main active erythritol producers (FIGURE 3), four are concentrated in Baolingbao believes that the erythritol industry will Shandong Province; only one is located in Tianjin City. develop well in the future and the demand for erythritol Because erythritol is a kind of sugar alcohol and the sugar will also increase. Moreover, since the overseas alcohol industry develops well in Shandong, most of the consumption is more than the domestic one now, with erythritol producers choose to be located in Shandong. the increasing overseas demand for erythritol, the domestic erythritol industry will keep on developing. All in all, it can be predicted that the erythritol industry in China will keep on developing in the future based on There were mainly five active erythritol producers the facts above. TABLE 4: Basic information about major erythritol producers in China, 2011 No. Company name Abbreviation Location Status, 11 Raw material 1 Zibo Zhongshi Green Biotech Co., Ltd. Zibo Green Biotech Shandong Active Glucose 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 OLaughlin Industries Co., Ltd. Tianjin OLaughlin Tianjin Active Glucose Source: CCM Internationalwww.cnchemicals.com CCM 6 econtact@cnchemicals.com
  9. 9. 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 InternationalRaw 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. 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 And this centre is a unique provincial engineering research the consumption volume of stevia sweetener will continue centre which is focused on breeding, cultivation and the to increase along with the development of sugar-free foods breed improvement of stevia. and beverages. GLG is a world leader in the production of high-quality GLG builds the breeding and cultivation centre of stevia stevia, a zero-calorie and natural sweetener. Its vertically for the following two goals. integrated operations include stevia seed breeding, propagation, growth and harvest, extraction, refining First, the centre will improve the breeding to get new and formulation; its main business in China is breeding, stevia species which have higher steviol glycosides content propagation of stevia and production of high quality stevia in the leaves. And the major components in steviol sweetener. In light of the following two reasons, GLG glycosides are stevioside and rebaudioside A (RA). Those believes that the stevia planting will develop well and the new species can help stevia sweetener processors produce demand for stevia may keep increasing in the next several high RA purity products. Moreover, the prices of high RA years, thus it has finally built this breeding and cultivation purity products such as RA 80%, RA 90% and RA 95% are centre in Anhui. much higher than that of stevioside, that is to say, the new species can bring GLG higher profits. First, the export volume (FIGURE 4) of stevia sweetener has increased thanks to the growing overseas demand for Second, the output of stevia will increase with the it in recent years. Currently, China has already become improving stevia planting level through education and the largest stevia sweetener supplier in the world, and training. Whats more, the centre will help farmers learn around 80% of its total output of stevia sweetener is sold new culture technique of stevia and prevent plant diseases to overseas market. Therefore, it reveals that the output and insect damage. of stevia is also increasing since stevia sweetener is made from stevia, and that the stevia sweetener producers will It is estimated that the planting industry of stevia will need more stevia as raw material. develop sustainably, then the output of stevia will also increase to ensure the supply. In fact, stevia is planted Moreover, the consumption volume of stevia sweetener in by native farmers and then sold as a raw material to the China has also gradually increased for the development domestic stevia sweetener producers. On one hand, the of sugar-free foods and beverages in recent years. Take increasing demand from stevia sweetener drives the Zero Calorie as an example, which is a new brand of GLG, producers to buy more stevia from farmers. On the other it has been launched in Chinese market in May 2011 and hand, local governments also try their best to promote www.cnchemicals.com CCM 7 econtact@cnchemicals.com
  10. 10. Sweeteners China News Vol.1 Issue 01 2011 FIGURE 4: Export volume of stevia sweetener in China, 2008- 2010 the planting industry of stevia, because it can increase the income of farmers. For example, 4,000 Government of Anhui Mingguang held a purchasing meeting of stevia on 4 May 2010 3,000 Unit:tonne which aims to help farmers sell their stevia at a reasonable price and also to help stevia 2,000 sweetener producers buy high quality stevia in the harvest season. That is to say, both the 1,000 sweetener producers and the government are promoting the planting industry of stevia. 0 2008 2009 2010 Source: CCM InternationalPrice Update Ex-factory prices of Chinese sweeteners, June 2011 Sweetness Price of unit No. Products Price in June 2011 compared with sweetness sucrose (USD/t) (RMB/t) (USD/t) 1 Sucrose 1,115 7,225 1 1,115 2 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 www.cnchemicals.com CCM 8 econtact@cnchemicals.com
  11. 11. Sweeteners China News Vol.1 Issue 01 2011Import & Export Analysis Import & export analysis of Chinese saccharin in Jan.-Apr. 2011 Export analysis Major export destinations (TABLE 7) About 38% of Chinas saccharin for export was exported Export volume to Germany, South Korea, Brazil, the US and India during Jan.-April 2011. Among these five countries, Germany C hinas 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 imported about 14% of the total Chinas exported saccharin during the same period. rate of domestic saccharin export volume reached about 19%. With domestic saccharin quality improving and the TABLE 7: Major export destinations of Chinas saccharin, global economy recovering, it can be predicted that Chinas Jan.-Apr. 2011 saccharin export may keep growing in the next several months in 2011. No. Destination Quantity, tonne Value, USD 1 Germany 672 4,082,297 Export price (TABLE 5) 2 South Korea 385 2,212,497 3 Brazil 314 1,740,088 China is an important saccharin producer and its average 4 US 250 2,358,388 export price of saccharin reached about USD5,833 during 5 India 226 1,210,968 Jan.-April 2011, which only increased by 4% year on year. 6 France 200 993,913 It may keep increasing in a narrow range in H2 2011 due to 7 Indonesia 195 1,031,562 the more and more serious inflation in China. 8 Netherlands 185 1,013,328 9 Japan 184 1,084,449 TABLE 5: Export volume, value and price of Chinas 10 Thailand 174 1,009,322 saccharin,Jan.-Apr. 2011 11 UK 172 1,058,905 Month Quantity, tonne Value, USD Price, USD/t 12 Spain 136 777,720 Jan-11 1,242 7,253,751 5,840 13 Mexico 131 779,420 Feb-11 857 5,118,027 5,972 14 Pakistan 122 627,460 Mar-11 1,503 8,751,436 5,823 15 South Africa 121 690,860 Apr-11 1,242 7,129,551 5,740 Others 1,377 7,581,588 Total 4,844 28,252,765 5,833 Total 4,844 28,252,765 Source: CCM International Source: CCM International Major export provinces (TABLE 6) Import analysis About 90% of the exported saccharin was exported from Import volume Tianjin City, Henan Province and Shanghai City during Jan.-April 2011. Chinas 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 Import price (TABLE 8) No. Province/City Quantity, tonne Value, USD 1 Tianjin 1,918 10,615,254 Compared with last year, Chinas average saccharin import 2 Henan 1,519 8,443,119 price sharply declined from about USD11,752/t to about 3 Shanghai 920 6,468,802 USD8,280/t in Jan.-April 2011, because of the recovery of 4 Jiangsu 191 1,018,764 domestic saccharin producers 5 Shandong 98 630,079 6 Guangxi 71 366,363 Others 127 710,384 Total 4,844 28,252,765 Source: CCM International www.cnchemicals.com CCM 9 econtact@cnchemicals.com
  12. 12. Sweeteners China NewsVol.1 Issue 01 2011 TABLE 8: Import volume, value and price of Chinas Major import origins (TABLE 10) saccharin, Jan.-Apr. 2011 Month Quantity, tonne Value, USD Price, USD/t About 89% of Chinas imported saccharin was from South Jan-11 34 276,911 8,144 Korea during Jan.-April 2011. Feb-11 2 19,215 9,608 Mar-11 43 312,572 7,269 TABLE 10: Major origins of Chinas imported saccharin, Apr-11 4 78,580 19,645 Jan.-Apr. 2011 Total 83 687,278 8,280 No. Province Quantity, tonne Value, USDSource: CCM International 1 Jiangsu 73 531,103 2 Guangdong 4 20,378 Major import destinations (TABLE 9) 3 Shandong 4 69,028 Others 2 66,769About 90% of Chinas imported saccharin was imported by Total 83 687,278Jiangsu Province during Jan.-April 2011. Source: CCM International TABLE 9: Import volume of saccharin by main provinces in China, Jan.-Apr. 2011 No. Country Quantity, tonne Value, USD 1 South Korea 75 587,932 2 Germany 4 37,068 3 Singapore 2 6,845 Others 2 55,433 Total 83 687,278Source: CCM International Import & export analysis of Chinese cyclamate in Jan.-Apr. 2011Export analysis Major export provinces (TABLE 12) Export volume About 90% of Chinas cyclamate for export was exported by Jiangsu Province, Shanxi Province and GuangdongC hinas 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 Province during Jan.-April 2011, among which the cyclamate export volume of Jiangsu Province accounted for about 50% of the nations total.321 tonnes over the same period of last year, it may slowlyincrease in H2 2011 thanks to the increasing demand forcyclamate in the global market. TABLE 12: Export volume of major cyclamate export provinces in China, Jan.-April 2011 Export price (TABLE 11) No. Province/City Quantity, tonne Value, USD 1 Jiangsu 4,416 8,019,698The average export price of Chinas cyclamate has been 2 Shanxi 2,169 3,798,320fluctuating in a narrow range since 2010, and it reached 3 Guangdong 1,404 3,019,061about USD1,860/t during Jan.-April 2011. 4 Shandong 497 927,098 5 Tianjin 239 440,048 Others 128 258,003 TABLE 11: Export volume, value and price of Chinas Total 8,853 16,462,228 Source: CCM International cyclamate, Jan.-April 2011 Month Quantity, tonne Value, USD Price, USD/t Major export destinations (TABLE 13) Jan-11 2,747 4,952,046 1,803 Feb-11 1,611 2,964,567 1,840 Mar-11 2,454 4,542,836 1,851 South Africa imported about 1,186 tonnes of cyclamate Apr-11 2,041 4,002,779 1,961 from China during Jan.-April 2011, which accounted for Total 8,853 16,462,228 1,860 about 13% of Chinas total cyclamate export volume.Source: CCM Internationalwww.cnchemicals.com CCM 10 econtact@cnchemicals.com
  13. 13. Sweeteners China News Vol.1 Issue 01 2011 TABLE 13: Major export destinations of Chinas cyclamate, Jan.-April 2011 No. Destination Quantity, tonne Value, USD 1 South Africa 1,186 2,188,790 2 Brazil 905 1,701,830 3 Argentina 765 1,390,667 4 Pakistan 752 1,288,490 5 Germany 676 1,347,116 6 Turkey 602 1,060,517 7 Myanmar 572 993,505 8 Russia 342 608,300 9 Netherlands 341 707,508 10 Vietnam 260 465,884 11 Indonesia 244 421,298 12 Taiwan Province 217 371,389 13 Malaysia 215 401,297 14 Bangladesh 187 332,179 15 Bolivia 183 379,520 Others 1,406 2,803,938 Total 8,853 16,462,228 Source: CCM International Import analysis Chinas 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 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 3-5 years in China and Asia Pacific Area (AP) as most the production in 2010 and 62.56% of the consumption respondents believed. in 2009 in terms of volume respectively: amongst all the respondents, 70.83% of them believed that the demand HIS is an important class of sugar substitutes, and there for HIS will grow in the next 3-5 years, while only 29.17% are nine kinds of commonly-used HIS in AP (an important believed that the demand will remain stable, and no HIS production area in the world, whose total output respondent preferred the choice of "the demand will accounts for over 50% of the global total as estimated), decrease". including saccharin, cyclamate, acesulfame-K (Ace-K), stevia sweetener, aspartame, sucralose, glycyrrhizin, With regard to the growth rate (FIGURE 5), 29.41% alitame and neotame. of respondents deemed that the rate will exceed 10%, followed by 47.06% for growth rate of 5-10%, 23.53% CCM conducted a survey in its report Survey of High for 3-5%. The wider application field of HIS, domestic Intensity Sweeteners in Asia Pacific launched in February consumers more attention to health food with low calorie 2011, which is based on opinions of respondents from HIS and cost reduction for downstream clients are the three industry around the country, including HIS processors main drivers (FIGURE 6) for the increasing HIS demand (taking up 70.83% of the total number of respondents), in the future, taking up 27.08%, 27.08% and 16.67% of the distributors (12.50%), downstream consumers (4.20%) total respectively, followed by 12.5% for the choice "aided and other insiders (12.47%, such as experts and media, by rapid development of Chinas economy", 8.33% for etc.). production cost decrease and 8.33% for consumers better awareness about HIS. According to the survey, most respondents were optimistic www.cnchemicals.com CCM 11 econtact@cnchemicals.com
  14. 14. Sweeteners China NewsVol.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%, The main drivers (FIGURE 8) for the increasing demand 23.53% Grow th rate of 10%+, for HIS in AP were cited as the higher cost performance 29.41% compared with cane sugar (29.09%), the diet habit of low- calorie 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%, HIS development in Asia Pacific in the next 3-5 years 47.06%Note: HIS means high intensify sweeteners, and the survey was Grow th rate of Grow th rate ofconducted in 2011. 1 - 3%, 21.05% 10%+, 21.05%Source: CCM International FIGURE 6:Industry’s opinion about the drivers of HIS development in China in the next 3-5 years Consum ers Production better expansion and aw areness Wider Grow th rate of cost reduction, 3 - 5%, 31.58% Grow th rate of about HIS, 8.33% application field 8.33% 5 - 10%, 26.32% of HIS, 27.08%Aided by Chinas rapid econom y developm ent, Note: HIS means high intensify sweeteners, and the survey was 12.50% conducted in 2011. Source: CCM International Cost reduction Dom estic for dow nstream consum ers clients, 16.67% m ore attention FIGURE 8: Industry’s opinions about the drivers of HIS to health food w ith low calorie, development in Asia Pacific in the next 3-5 years 27.08%Note: HIS means high intensify sweeteners, and the survey Foreign Higher cost was conducted in 2011. consum ers diet Others, 1.82% perform anceSource: CCM International habit for sw eet com pared w ith food, 12.73% cane sugar, Aided by rapid 29.09%Export of high intensity sweeteners (HIS) is one main recovery ofbusiness of the respondents (mostly producers): 87.5% of econom y in AP,them revealed that they exported HIS to foreign countries. 12.73%And they are optimistic about the future development ofHIS in Asia Pacific Area (AP): 79.19% of the respondents Prom otion by ASEAN Free Diet habit of low -believed that the demand for HIS will grow in the next 3-5 calorie food, Trade Area,years, while 20.83% for stable development and 0% for 29.09% 14.55%decreased demand.For the export growth rate (FIGURE 7), 21.05% of Note: HIS means high intensify sweetener, and the survey wasrespondents believed that the rate will exceed 10%, conducted in 2011.while 26.32% for 5-10%, 31.58% for 3-5% and 21.05% Source: CCM Internationalfor 1-3%. Indonesia, India and Japan, as the three mainconsumption countries in AP besides China, are deemedto 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 Malaysiaswww.cnchemicals.com CCM 12 econtact@cnchemicals.com
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  16. 16. Journalist: Xingqiang Zhang, Yuwei LingEditor: Emily ChenChief Editor: Norman Lai, Hongxiang DuPublisher: CCM International LimitedDisclaimer:1. CCM guarantees that the information contained in the report is accurate and reliable tothe best of its knowledge and its experience. CCM defines the report as a consulting productto provide information and does not guarantee its content 100% equals the reality. CCMshall not have any obligations to assume any possible damages or consequences that causedby subscribers any corporate decisions that related to subscribers own understanding andutilization of the report.2. Single User License means that there shall be only ONE person for subscribers to receive,access and utilize the report. Subscribers can present the findings of the report that marked thesource from CCM to their internal colleagues for their internal communication and usage, butcannot share the whole report to the same audience. Any distribution, re-sell and disclosureof the report as well as its partial content to any third party are prohibited for subscribers,including but not limited to their parent companies or subsidiaries.3. Corporate License means that subscribers shall not distribute, re-sell or disclose the report toany third party without CCMs prior written consent, except to subscribers affiliates controlledby the subscribers with ownership of more than 50% of shares.If you have ANY questions on the report, please feel free to contact us through the ways listedbelow. Any comments from you is well appreciated.CCM International LimitedAddress: 17th Floor, Huihua Commercial & Trade Building, No.80 Xianlie ZhongRoad Guangzhou, 510070, P.R.ChinaTel: +86-20-37616606Fax: +86-20-37616968Email: econtact@cnchemicals.com

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