Sweeteners China News 1608

From www.prnewswire.com

NEW YORK, Oct. 10, 2016 /PRNewswire/ -- On 20 July, 2016, the CFDA released the Notice to Further Enhance Supervision on Food Additive Production, a move intended to enhance the supervision on food additive business and establish a traceability system. The notice also pertains to the segmented sweetener business. Improving market transparency and guaranteeing product quality and safety is paramount, however this will cause increases in production costs for manufacturers and a slight rise in prices.
In late July 2016, Wanglong Group, a manufacturer of DK for ace-K, suffered a pipeline leakage which forced it to suspend production for repairs, causing tight supply of DK. The domestic ace-K market is expected to be monopolised which is also predicted to increase the price of ace-K in the future.

On 28 July, 2016, the EU announced the final ruling regarding the review of China made aspartame anti-dumping suit, showing results consistent with primary determination: to continue levying anti-dumping duties on Chinese aspartame exporters. It is expected that structure of shares seized by the exporters in the EU will change and that exporters will vigorously develop overseas market.
Now Chinese oligosaccharide manufacturers are carrying out "Big Health" business activities, in a move to strengthen their competitiveness in this segment. Thanks to the strong demand for "health" and the bright prospect of "Big Health" business, the production capacity of oligosaccharides will increase and the price will decrease.
On 5 Aug., 2016, Baolingbao announced the pass of Kosher certification on its resistant dextrin. It is hoped that the company will vigorously develop and produce functional sugars and enhance its profitability in the future.

In Aug. 2016, Sanyuan Biotechnology released the H1 financial report, which showed a turnaround. This is mainly because the company expanded its main erythritol business and optimised its production process. It is hoped that the company will continue improving its performance.
On 18 Aug., 2016, Anhui Jinhe released its H1 financial report, saying that both sales and profit increased, mainly thanks to the rises in production and sales of ace-K. CCM predicts that the company would improve its performance stably.
In H1 2016, Shandong Longlive recorded fall in sales and rise in profit, mainly because of declines in sales of main businesses and receipts of government subsidy.
Since July 2015, China's sorbitol price showed a downturn, mainly because of the continuously decreasing corn price and the weakening demand. It is expected that the demand and price will increase to certain extents, since its application range is expanded.
In June 2016, China's exports of xylitol were down by 22.87% MoM. However it maintained growths in H1. Given already low price, it is expected that the figure will not decrease largely in the future.

Baolingbao passes Kosher certification on resistant dextrin

On 5 Aug., 2016, Baolingbao Biology Co., Ltd. (Baolingbao) announced that it passed the Kosher certification on its resistant dextrin, which enables its sales in countries having large Jewish populations such as Israel, Russia, the US and Canada. Specifically in the US, Kosher certified foods appeared increasingly, at a rate of 10% per year.

"The rapidly growing Kosher food business provides an opportunity for us to expand the market," stated Baolingbao. Early on 18 July, the company officially launched resistant dextrin onto the market.

Resistant dextrin is a dietary fibre based on starch, which is dextrinised under acidic condition. It has features such as high tolerance regarding digestion (certain intake of sugar alcohol will cause poor digestion and diarrhea, whilst resistant dextrin will not have such problems unless it is taken in in large quantities), low GI (= glycemic index), low insulin index, low calorie, prevention of dental caries and strong solubility, and plays an important role in food nutrition and clinical medical science.

Baolingbao is one of the few manufacturers able to produce resistant dextrin in the world. As a new functional sugar, it is expected to build new sources of profit growth to the company.

Baolingbao is now mainly running the business of starch sugar, especially high fructose corn syrup (HFCS, 170,000 t/a). According to its full-year 2015 financial report, its sales of starch sugar accounted for 50% of the sales mix. In 2016, the sales are hoped to increase further, since HFCS is increasingly substituting sugar (due to constantly growing sugar price) and price of its raw material corn is decreasing continuously.

Meanwhile, Baolingbao has been strategically developing functional sugar business. In 2015, its sales from oligosaccharides rose by 5.27% YoY, and sugar alcohol by 80.88%. In regard to production, its 50,000 t/a fructose (solid), 5,000 t/a galactooligosaccharide (GOS) and dextrin drying projects were put into operation in late 2015, and its 5,000 t/a crystalline trehalose project is to start up in H2 this year.

Functional sugars are highlighted for their not being broken down by human body, nearly zero content of calorie, and being drive for the proliferations of probiotics in intestinal tract. Their market prospect is bright. For instance, resistant dextrin is of great significance to food nutrition and clinical medical science; erythritol shows strong advantages in baked food and chocolate thanks to its not absorbing moisture and good thermal stability; trehalose is a good protective agent in pharmaceuticals and bioproducts.

However, the production processes for functional sugars are comparatively complicated, and the development of some products including resistant dextrin and trehalose is at a primary stage in China. Enterprises with an intention to develop the business should input large quantities of capitals, which in the short run, will exert heavy pressure on them. For instance, Baolingbao ever predicted that its expenses will increase in H1, since the projects are just put into operation and are not working at full capacity.

However, this strategic business certainly will bring new profits to Baolingbao in the long run.
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