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Industrial Biotechnologies China News


                                         Vol.2 Issue 9, 2009




Biotechnologies
      Copyright © CCM International Limited
Industrial Biotechnologies China News
                                                                                                           Vol.1 Issue 9, Sep. 8, 2009


                      Industrial Biotechnologies China News 0909


      BIO-FUELS ...................................................................... 1                    Ready reports related to
Lianhai Biotech to expand butanol with new technology...................... 1                               industrial biotechnology:
SFB expands xanthoceras sorbifolia capacity........................................ 2                       - Future of White Biotechnology in China
Guizhou launches 10,000t/a biodiesel production line .......................... 4                           Edition (2)
                                                                                                            - Biofuels Market in China – Edition (1)
      BIO-PRODUCTS .............................................................. 6
                                                                                                            - Production and Market of Monosodium
Donta Group enlarging yeast production ................................................ 6
                                                                                                            Glutamate (MSG) in China Edition (1)
Continent Biotech expanding enzyme preparation ................................ 9
                                                                                                            - Future of Red Biotechnology in China
CAS building largest lactase production base in China ...................... 10
                                                                                                            - Future of Enzyme in China to 2020
Novozymes expands enzyme production.............................................. 12
                                                                                                            - Future of Green Biotechnology in China
Hunan Yuyuan expands in microbial fertilizer ...................................... 14
SK sells SCR enzyme technology to China........................................... 15

      BIO-BASED CHEMICALS ............................................. 16                                  CCM related newsletter:
China’s citric acid export volume up but price down........................... 16                           - Corn Products China News
VC export price rises ............................................................................... 18
Jianding Biotechnology established...................................................... 20                 Contact us for more information
Baolingbao to develop FOS and dietary fiber ....................................... 22                      about CCM.

      BIO-MATERIALS ........................................................... 24
Shenzhen Ecomann launches 5,000t/a PHA.......................................... 24
Tiancheng Corn to carry out PLA project.............................................. 25

      NEWS IN BRIEF............................................................. 26
China holds 2009 summit forum on microbial fertilizer ....................... 26
Green Energy Group invests in biodiesel.............................................. 26
Laibin Tianren launches160,000t/a biofertilizer plant........................... 26
China to cultivate large-scale energy forests........................................ 27
Ministry of Health approves 26 food additives...................................... 27
Beijing founds biogas technology strategic alliance ........................... 27
Guangzhou establishes biotechnology service alliance ..................... 27
Nanyang Tianrong builds 6,000t/a PPC catalyst ................................... 27
Sichuan Guanghe to build 100,000t/a sweet potatoes ethanol ........... 27




        www.cnchemicals.com Copyright CCM International Ltd.                                          Email: econtact@cnchemicals.com
CCM Newsletter                                                                            Industrial Biotechnologies China News

                                        Headlines of Industrial Biotechnologies China News 0909


■   Lianhai Biotech will expand butanol production                                            Editor’s Word
    based on its new technology.
                                                                  Welcome to September Issue of Industrial Biotechnologies China News
■   Guizhou      launched      a    10,000t/a        bio-diesel
                                                                  published by CCM International, a professional consulting company who has
    production line on Aug. 6th 2009.
                                                                  been intently focusing on dynamics of China’s industrial biotechnologies industry.
■   Shuangfeng Forestry Bureau is expanding XS
    production capacity in Yichun City.
                                                                  Growing concerns on environmental protection and energy security have
■   Donta Group is to launch its yeast expansion
                                                                  become key drivers for China’s fast growing industrial biotechnology. Successive
    project by the end of Sep. 2009.
                                                                  supporting policies are clear indicators showing China’s determination to develop
■   Continent Biotech is building a 15,000t/a enzyme
                                                                  this industry----On June 2nd, 2009, China's State Council announced a policy
    preparation plant.
                                                                  package to accelerate bio-industry development; ---during Aug. 2009, some local
■   Novozymes will construct an enzyme production
                                                                  governments like Shandong and Shenzhen issued their own plans; ----Also, in
    base in Tianjin.
                                                                  the 11th Five-Year Plan (2006-2010), Chinese government has proclaimed to
■   CAS is building a lactase production base in
                                                                  promote biodegradable materials.
    Jiangxi, aiming to capture China’s huge lactase
    market.
                                                                  Attracted by its huge potential, enterprises both domestic and overseas have
■   Hunan      Yuyuan    signed     a      capital    increase
                                                                  displayed strong interests in bio-industry. For example, Shenzhen Ecomann’s
    agreement with Shenzhen Fortune Venture in order
                                                                  investment in PHA and Tiancheng Corn’s in PLA, the two promising materials
    to expand.
                                                                  from renewable resources, covered in this issue are both evidences
■   SK Holding sold SCR enzyme technology to China
                                                                  demonstrating the trend. Besides, Novozymes’ global strategy on enzymes
    Power in late July 2009.
                                                                  expansion covered indicates a global trend for second-generation bio-ethanol.
■   In the first seven months of 2009, VC export price

    has climbed and may keep growing.
                                                                  Besides, under recovering global economy and growing environmental protection
■   Jianding     Biotechnology     plans     to   launch    its
                                                                  awareness worldwide, more players domestic and overseas are expected to
    first-phase glucosamine and activated carbon
                                                                  increase investment in China’s biotechnology sector.
    production lines by the end of this year.
■   Baolingbao plans to enter FOS and dietary fiber
                                                                   Main companies and institutes mentioned in this issue
    market through getting listed on Shenzhen Stock
    Exchange.
■   China’s citric acid export volume has climbed up
    with price fall in the first seven months of 2009.

■   Shenzhen Ecomann launched a 5,000t/a PHA
    production line in Shandong.
■   Tiancheng Corn is planning to construct 10,000t/a
    PLA with several production lines.




               www.cnchemicals.com Copyright CCM International Ltd.                                Email: econtact@cnchemicals.com
CCM Newsletter                                                                                 Industrial Biotechnologies China News



     BIO-FUELS

                                Lianhai Biotech to expand butanol with new technology


Jiangsu Lianhai Biological Technology            from flour deep-processing as raw                this expansion project is divided into
Co., Ltd. (Lianhai Biotech) will produce         material.                                        three phases (TABLE 1).
butanol on a large scale by adopting
fermentation method using wastewater             With total investment of USD400 million,


                                                    TABLE 1: Information of the project

                     Item                  Investment (USD)             Capacity (t/a)                    Launch time

           First phase                        60 million                    35,000                         Sep. 2008

           Second phase                          N/A                       100,000                          Oct. 2009

           Third phase                           N/A                       200,000                         Mar. 2011
        Source: CCM International


The core technology adopted in this                    industry                                   domestic market.
expansion project uses the patented                    To achieve energy conservation
strain technology from Shanghai                        and consumption reduction;                 At present, there are eight domestic
Institute for Biological Science (SIBS) of             To achieve recycling and clean             enterprises producing butanol by
Chinese Academy of Sciences (CAS),                     production;                                fermentation, among which Jilin Ji’an
and is jointly developed b y Lianhai                   To promote Lianhai Biotech to be           Biochemical Co., Ltd. (Jilin Ji’an) is the
Biotech and Jiangnan University.                       the largest butanol producer at            biggest one with the capacity of
According to CAS and experts from                      home.                                      50,000t/a, and another three, namely
China's fermentation industry, the                                                                Jiangsu Jinmaoyuan Biochemical Co.,
technology has reached international             The project has been declared as a               Ltd. (Jiangsu Jinmaoyuan), Guangxi
advanced level.                                  major provincial project of transferring         Guiping Jinyuan Alcohol Co., Ltd.
                                                 scientific & technological achievements.         (Guiping Jinyuan) and Jilin Cathay
By adopting this new technology, this            And in early Aug., it has passed the             Industrial Biotechnology Co., Ltd. (Jilin
project will make the following major            online assessment by the experts from            Cathay) (FIGURE1), has capacity of
breakthroughs:                                   Provincial Science and Technology                30,000t/a for each.
     To achieve recovery of wastewater           Department. Upon completion, butanol
     from flour deep-processing                  supply will become relatively sufficient in




                                                                                                                                               1


       www.cnchemicals.com Copyright CCM International Ltd.                                    Email: econtact@cnchemicals.com
CCM Newsletter                                                                                   Industrial Biotechnologies China News


                                             FIGURE 1:Capacity of domestic butanol enterprises in 2008


                  60,000
                            50,000
                  50,000


                  40,000
    (Unit: t/a)




                                           30,000       30,000        30,000
                  30,000

                  20,000

                  10,000                                                              5,000          5,000          5,000         5,000

                       0
                           Jilin Ji'an     Jiangsu     Guiping      Jilin Cathay   Jilin Zhonghai Heilongjiang     Tangshan     Tongliao
                                         Jinmaoyuan    Jinyuan                                     Haocheng          Jidong     Zhongke
                                                                                                                                Tianyuan



 Source: CCM International
Note: Jilin Zhongha: Jilin Zhonghai Chemical Co., Ltd.
       Heilongjiang Haocheng: Heilongjiang Haocheng Chemical Co., Ltd.
       Tangshan Jidong: Tangshan Jidong Solvent Co., Ltd.
       Tongliao Zhongke Tianyuan: Tongliao Zhongke Tianyuan Starch Chemical Co., Ltd.


Domestic butanol supply has been                      enterprises plan to expand their                producers. However, butanol application
falling short of demand, with the output              production capacity. And annual                 is expected to become an irreversible
50% less than the consumption. From                   increased capacity of the butanol               trend, given the potential pressing
2000 to 2006, domestic butanol                        projects will reach 730,000 tonnes.             situation of oil resources depletion and
consumption had increased year by                     Through continuous project expansion,           the expected price rise of oil, so butanol
year, and in 2006, the consumption                    China will be able to reverse the               fermentation industry is sure to become
reached 7,400,000 tonnes at home.                     dependence on imports.                          promising.
Meanwhile, the butanol prices have
risen from about USD1,318/t in Jan. in                Although crude oil prices has dropped to
2006 to USD2,342/t at present.                        below USD50/barrel caused by financial
                                                      crisis since H2 2008, which had led to
Currently, some domestic butanol                      production suspension of many butanol


                                             SFB expands xanthoceras sorbifolia capacity


Shuangfeng Forestry Bureau (SFB,                      biggest bio-energy production base in           initiated since 2008, which is expected
located in Yichun City, Heilongjiang                  Heilongjiang upon completion.                   to be launched by the end of 2010. The
Province) is building a xanthoceras                                                                   second phase with 266 hectares XS is
sorbifolia (XS) base in Yichun City,                  This XS base construction is divided            being built at present and will be
which is expected to become the                       into two phases. The first-phase                launched by the end of 2012. In fact,
                                                      construction with 133 hectares XS has           SFB has planned to expand its XS
                                                                                                                                                 2


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CCM Newsletter                                                                                Industrial Biotechnologies China News


capacity to 1,000 hectares in the next           XS (PICTURE) is an ideal raw material           no environmental pollution parameter
five years.                                      for biodiesel and bioethanol production         like sulfur and nitrogen, etc, which
                                                 with its high oil content, with seed oil        conforms to the quality indexes of
Insider reveals that after the launch of         content of about 30%-36% and kernel             biodiesel. Since 2005, China has
this XS base, it will supply XS for China        oil content of 50%-70%. Besides, it has         successfully developed the technology
Nature Petroleum Company (CNPC) as               high output of about 1,500-2,000kg/h.           to produce biodiesel with XS as raw
the raw material for biodiesel or                Moreover, it is said that biodiesel             material.
bioethanol production.                           produced from XS has about 93.4%
                                                 hydrocarbons with 18 carbons and has


                                                      PICTURE: Cross-section of XS




                                            Source: www.Yxsfz.cn


At present, there are about 5,300                for carbon content in biodiesel. Those          However, raw material cost is too much
hectares XS in China, mainly distributed         biodiesel producers using waste animal          for producers using high oil content
in four provinces – Shanxi, Inner                oil and vegetable oil as raw material           plant to produce biodiesel (TABLE 2),
Mongolia, Liaoning and Shaanxi. And              were seriously affected by this standard        which is a bottleneck for their
some other provinces like Gansu are              and some even went bankrupt. The                development. For example, Sichuan
also trying to cultivate this plant, and         quality of biodiesel produced from waste        Gushan Oil Chemical Co. Ltd. (Sichuan
Chinese Academy of Forestry has                  animal oil and vegetable oil varies a lot,      Gushan) produces biodiesel by using
provided great support to these areas            which can do harm to machines.                  soybean or colza with capacity of
by popularizing the XS planting                                                                  240,000t/a, and the cost on raw material
technology, aiming to provide ample raw          This standard has driven biodiesel              has seen continuous increase, thus
material for biodiesel production in the         producers to actively search for some           hindering the development of biodiesel,
future. Currently, most of XS are used in        high oil content plants as raw materials.       according to Mr. Zhao, president of
edible oil, medicine, etc, in China.             Guizhou, for instance, had launched a           Sichuan Gushan.
                                                 10,000t/a biodiesel production line with
Chinese government enacted a                     jatropha as raw material this month.
‘National standards for biodiesel ‘in
2008, which requires a higher demand




                                                                                                                                         3


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CCM Newsletter                                                                                 Industrial Biotechnologies China News



                                       TABLE 2: Main biodiesel producers in China and their raw materials
                                              Company                                          Raw material
                       Sichuan Gushan                                            Soybean or colza.
                       Liuzhou Minghui Biofuels Co., Ltd.                        Jatropha, tung, tea plant
                       Longyan Zhuoyue New Energy Development Co. Ltd            Waste animal oil and vegetable oil
                     Source: CCM International


XS can be planted in a barren land,                                                                  production capacity has reached
which is easy for mass production. As              As estimated, the demand for biodiesel            3,000,000 tonnes in 2008, while actual
non-staple food, XS price is expected              in China will increase a lot in the near          output was only 300,000 tonnes,
be less influenced by price fluctuation of         future due to global energy shortage.             indicating a huge development
other products like agricultural products,         The prices of petroleum products have             potential.
industrial products, etc, which will               increased for 24 times in 2009, driving
contribute to development of XS-based              the government to make more efforts to
biodiesel.                                         seek new energies. Besides, biodiesel


                                    Guizhou launches 10,000t/a biodiesel production line


Guizhou has launched the first-phase               Academy of Sciences, and all indexes              biodiesel project takes Jatropha as raw
10,000t/a biodiesel production line in             of the samples have reached the                   material and is divided into three phases.
New Material Industrial Park (Guiyang              National Biodiesel BD100 standards.               Upon completion of the three phases
                                       th
City, Guizhou Province) on Aug. 6                                                                    (TABLE 3), the total capacity will reach
2009.                                              Invested by the No.061 Base of China              160,000t/a.
                                                   Aerospace Science & Industry
Currently, the first biodiesel samples of          Corporation (located in Guizhou), a
this project have been sent for test by            large scientific research and production
Guangzhou Energy Institute of Chinese              center for aerospace products, this


                                                 TABLE 3:    Information of the biodiesel project

                                 Phase               Investment (USD)        Planned capacity (t/a)      Launch time

                         First phase                     4,390,000                   10,000                   2009

                         Second phase                    7,320,000                   50,000                   2010

                         Third phase                        N/A                      100,000                  2012

                      Source: CCM International


The successful launch of Guizhou’s                 Jatropha resources in Bouyei-Miao                 What’s more, there are many barren
10,000t/a biodiesel line is based on the           Autonomous Prefecture of Qianxinan in             mountains suitable for Jatropha
following advantages.                              southwest Guizhou, as well as the                 cultivation, and through scientific
                                                   valleys of Nanpan River, Beipan River,            cultivation, the average per- hectare
First of all, Guizhou is rich in biological        Red River and Duliu River.                        yield of fruit can reach 4,500 kilograms,
resources. There are abundant wild                                                                   which can produce about 100 to 200
                                                                                                                                              4


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CCM Newsletter                                                                             Industrial Biotechnologies China News


kilograms biodiesel. Using Jatropha as         Guizhou and diesel is greatly needed in        to invest in Jatropha production base in
the main raw material for biodiesel            mining operation.                              Yunnan, and China National Offshore
production can not only reduce                                                                Oil Corporation (CNOOC) will invest in
production cost, but also increase the         At present, some domestic and foreign          Hainan and Sichuan, and British
local peasants’ income and prevent land        energy companies also concern about            Sunshine Technology Group, a
desertification.                               the potential development of Jatropha in       commercial forestry plantation company,
                                               China, and have invested in Jatropha           cooperates with the Honghe Prefecture
Besides, local market prospect of              cultivation. For example, PetroChina           Forestry Bureau of Yunnan Province to
biodiesel is expected to be bright, as         Limited (Petrol China), the biggest            jointly develop Jatropha base.
there are many mining companies in             controlled subsidiary of China National
                                               Petroleum Corporation(CNPC), plans


                                               PICTURE: Distribution of Jatropha bases




                            Main Jatropha planting regions
                            Minor Jatropha planting regions
                        Source: CCM International


At present, there are dozens of                biodiesel capacity has reached                 demand is estimated to reach
biodiesel enterprises including private,       3,000,000t/a in 2008, the actual annual        20,000,000 tonnes by 2010 in China. In
join stock and state-owned enterprises.        output is only 300,000 tonnes, indicating      view of the huge gap between the
Hebei Zhenghe Co., Ltd., Sichuan               a huge development potential.                  supply and the demand, related
Gushan Group Co., Ltd. and Fujian                                                             enterprises are expected to seize the
Zhuoyue Co., Ltd. are relatively larger        By 2010, China’s annual biodiesel              market opportunity and speed up the
enterprises with annual output of above        output will reach 1,000,000 tonnes, and        biodiesel investment (FIGURE 2).
10,000 tonnes. Although China’s                9,000,000 tonnes by 2020. And the
                                                                                                                                       5


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CCM Newsletter                                                                                    Industrial Biotechnologies China News



                                             FIGURE 2: Capacity of major biodiesel producers in 2008


                              250,000
                                              240,000

                              200,000


                              150,000

                                                  100,000
                (Unit: t/a)




                              100,000

                                                             50,000    50,000
                               50,000
                                                                                  30,000
                                                                                             12,000         10,000    10,000       6,000
                                   0
                                        Sichuan    Liuzhou   Longyan Xiamen   Hebei             Heibei     Jiangsu    Guizhou Shanxi
                                        Gushan     Minghui   Zhuoyue Zhuoyue Zhenghe            Fukuan     Keyuan     Jiangnan Huashuo
                                                                                                                      Hangtian


               Source: CCM International


As an emerging industry in China,                    to promote its development. National                Taxation Supporting Policy for
biodiesel is characterized by both great             People's Congress has implemented                   Bioenergy and Biochemical Industry’
development potential and various                    the ‘Renewable Energy Law’ since 2006,              and so on. These policies are expected
restrictions in the early stage. Chinese             and the Ministry of Finance, National               to provide a strong support for domestic
government has attached great                        Development and Reform Commission                   biodiesel development.
importance to the development of                     and other departments jointly issued
biofuels and released relevant policies              ‘Advices on Implementing Fiscal and



     BIO-PRODUCTS

                                                  Donta Group enlarging yeast production


Dongguan Donta Group Co., Ltd.                       Biochemical Science & Technology Co.,               yeast producer), with investment of
(Donta Group, headquartered in                       Ltd. (Guangxi Yipinxian) in Laibin City,            USD102 million.
Dongguan City, Guangdong Province) is                Guangxi Province for its yeast capacity
expanding yeast production and is                    expansion.                                          Donta Group’s yeast expansion project
expected to launch its 48,000t/a dried                                                                   is based on the following advantages.
yeast and 10,000t/a yeast extract                    Actually, these two subsidiaries were
facilities by the end of Sep. 2009.                  jointly invested by Donta Group,                    Firstly, this project can take the
                                                     Guangxi Laibin Donta group Co., Ltd.                advantage of adequate raw material
Early in May 2006, Donta Group had                   (Laibin, a local subsidiary of Donta                supply in local areas. As the biggest
established two subsidiaries, Guangxi                Group, established in 2003) and                     sugar cane production region in China,
Danbaoli Yeast Co., Ltd. (Guangxi                    Lesaffre Group (the world’s biggest                 Guangxi has taken up more than 70% of
Danbaoli) and Guangxi Yipinxian                                                                          China’s total sugar cane output these
                                                                                                                                                  6


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CCM Newsletter                                                                                     Industrial Biotechnologies China News


years. And Laibin took up 18% of                       which has strong sales network
Guangxi’s total with 8.3 million tonnes in             throughout China and extensively                  With fast growth of some local
2008. Besides, Donta Group has 7                       exports its products to Southeast Asia,           companies, China’s yeast market has
sugar processing bases supplying                       Middle East, South America, Africa, etc.,         seen intense competitions in recent
treacle as common raw materials of                     which will provide mature sales                   years, thus Lesaffre Group prefer to
yeast for the new project. Besides, local              networks for these two new companies.             seek some cooperators to enlarge its
government has been paying much                                                                          market share in China. As the biggest
attention to developing yeast industry by              In addition, there are few yeast                  yeast producer in the world, Lesaffre
releasing tax preferential policies for                producers in Guangxi, but the                     Group launched a yeast production
yeast companies.                                       consumption volume is estimated at                base with capacity of 3,000t/a in Anhui
                                                       50,000 tonnes per year, indicating a big          Province of China in 1999, and then it
Secondly, this project is equipped with                market opportunity.                               built a sales company in Shanghai in
advanced production technology and                                                                       2002.
equipments sourced from Lesaffre                       This cooperation can achieve a win-win
Group, who has been producing yeast                    situation. Donta Group wants to bring in          In 2008, China’s total yeast production
for 150 years. With the strong technical               new advanced technology for deeper                capacity reached 190,000t/a,
support from Lesaffre Group, the new                   development in yeast field, and Lesaffre          accounting for nearly 20% of the world’s
facilities are expected to make the best               Group intends to expand its market                total capacity, and the actual total output
use of the advanced equipments.                        share in China and cut down the                   reached 100,000 tonnes. It is expected
                                                       production cost with local rich raw               that, as some producers are expanding
Besides, Donta Group has a subsidiary                  material supply and large sales network           production, the total yeast capacity will
named as Guangdong Danbaoli Group                      of Donta Group, according to Mr. Guo,             reach 210,000t/a in 2009 (FIGURE 3).
Co., Ltd. (Guangdong Danbaoli) with                    technical engineer of Guangdong
current dried yeast capacity of 16,000t/a,             Danbaoli.




                                               FIGURE 3: China’s total yeast capacity, 2005 ~ 2009est.



                                     250,000

                                                                                                                 210,000

                                     200,000                                                     190,000
                                                                               170,000
                                                               150,000
                                     150,000
                       (Unit: t/a)




                                               120,000

                                     100,000



                                      50,000



                                          0
                                                2005               2006         2007              2008           2009est.



                   Source: CCM International
                                                                                                                                                     7


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CCM Newsletter                                                                                Industrial Biotechnologies China News



Besides, yeast industry is becoming              accounting for over 70% of China total          put great efforts to expand their
more and more concentrated in China              capacity. In recent years, the top 2 have       capacity.
with the top 3 players (TABLE 4)


                                              TABLE 4: Major yeast producers in China, 2009

                  Manufacturer                                                      Location                                 Capacity ’08

Hubei Angel Yeast Co., Ltd.                             Xinjiang, Shandong, Inner Mongolia, Henan, Guangxi and Hubei           91,000
Mauri Yeast                                                    Heilongjiang, Hebei, Shandong, Guangdong, Xinjiang              30,000
Guangdong Danbaoli Yeast Co., Ltd.                                                Guangdong                                    16,000
Guangdong Zhuhai Aoli Yeast Co., Ltd.                                             Guangdong                                     2,000
Anhui Lesaffre (Mingguang)                                                           Anhui                                      3,000
Shandong Yantai Hongde Food Industry Co., Ltd.                                     Shandong                                     2,000
Guangdong Jiangmen Center for Biotech. Co., Ltd.                                  Guangdong                                     4,000
Shandong Xiwang Leavening Co., Ltd.                                                Shandong                                     1,500
Qiqiha’er Longtai Food Co., Ltd.                                                  Heilongjiang                                  1,500
Source: CCM International


                                      PICTURE: Distribution of major yeast production regions in China




                                   Source: CCM International


In addition, in recent years, China’s            like feedstuff and flour products, etc. As      except sour dough do not apply active
demand for yeast and yeast extract has           estimated, the major potential market           dry yeasts, showing a huge market
been increasing year by year attributed          for yeast in China is rural areas, where        potential.
to the development of related industries         about 90% of homemade flour products

                                                                                                                                         8


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CCM Newsletter                                                                            Industrial Biotechnologies China News


Donta Group is a state-owned                  companies located in 4 provinces -
enterprise established in 1935, and has       Guangdong, Guangxi, Shanxi, Yunnan,
a raw sugar processing base with              Donta Group is mainly engaged in four
processing capacity of 700,000t/a,            series of products, namely sugar,
which provides part of molasses for           biological engineering, thermal-electric
Guangdong Danbaoli. As a                      power and paper-making.
conglomerate with 21 factories and


                                      Continent Biotech expanding enzyme preparation


Continent Biotech Group Co., Ltd.             industrial enzyme etc. But feed                has spread throughout China, even to
(Continent Biotech, headquartered in          enzymes like phytase, alkaline pectase,        some other countries in Asia like Japan,
Qingdao City, Shandong Province) is           liquid complex enzyme and alkaline             Philippines, etc. , and its sales value
now constructing a 7,000t/a solid             xylanase will remain the company’s key         reached about USD44 million.
enzyme preparation production line, the       products.
second phase of its 15,000t/a enzyme                                                         Continent Biotech has been paying
preparation plant, in Weifang City,           Actually, Continent Biotech is the first       great attention to after-sales service for
Shandong Province.                            enzyme producer at home to                     clients both at home and abroad. It built
                                              industrialize liquid enzyme spraying           a biotech research institute in Shandong
Continent Biotech’s 15,000t/a enzyme          uniformity technology which is                 in 2005, for the sake of developing
preparation plant consists of the             developed independently in 2001. By            market-target and high-quality feed
first-phase 8,000t/a for liquid enzyme        applying this technology in its enzyme         enzyme and supply technology support
preparation, which was completed on           preparation production, reaction               for various clients in clients.
Jul. 20th 2009 with investment of             temperature can keep below 60℃ thus
USD12 million, and the second-phase           maintaining high enzyme activity, as in        In 2008, there were over one hundred
7,000t/a for solid enzyme preparation         normal reaction temperature would              feed enzyme producers in China with
with investment of USD22 million. Upon        surpass 60℃ with enzyme activity               relatively small production capacity and
completion of this plant, Continent           losing largely.                                low-quality products, except
Biotech will expand its total enzyme                                                         Novozymes (China) Biotechnology Co.,
preparation capacity to 20,000t/a, and is     Besides, with this technology, Continent       Ltd, the largest enzyme producer in the
expected to become the largest enzyme         Biotech has built another two liquid feed      world. Owing to lack of strong market
preparation producer in Shandong.             enzyme production bases respectively           competitiveness, in terms of technology
                                              in Binzhou City with 3,000t/a complex          and capitals, many domestic
Early in Aug. 2008, Continent Biotech         enzyme and Linyi City with 1,000t/a            small-scale feed enzyme producers
has begun to construct this 15,000t/a         phytase and 1,000t/a xylanase in recent        choose to stop or suspend expansion,
enzyme preparation plant in Weifang. At       years.                                         except Continent Biotech and
present, the company has constructed                                                         Guangdong VTR Bio-tech Co., Ltd.,
one major workshop with 240 m3                According to Mr. Duan, technical               both of which continue capacity
fermentation capacity, one distilling         engineer of Continent Biotech, enzyme          expansion. The latter in July launched a
workshop and two power workshops. In          products produced by this technology           20,000t/a feed enzyme base in Inner
this plant, Continent Biotech will            have been accepted by users because            Mongolia.
produce various enzyme preparations           of its high quality and short supply. In
like feed enzyme, edible enzyme and           2008, Continent Biotech’s sales network
                                                                                                                                       9


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The demand for feed enzyme will                                       realize that feed enzyme can greatly              production cost. Given this trend, feed
continue to rise in the future in China, as                           enhance utilization rate of nutrition in          enzyme is expected to be widely used in
more and more feedstuff producers                                     feed, which can efficiently decrease              animal feedstuff. Moreover, increasing
feedstuff output in China year on year is
another key driver for increasing use of
feed enzyme preparation (FIGURE 4).


                                                                  FIGURE 4: Feedstuff output in China, 2005~2009



                                                    160
                                                    140
                           (Unit: million tonnes)




                                                    120
                                                    100
                                                    80
                                                    60
                                                    40
                                                    20
                                                     0
                                                               2005           2006            2007               2008       2009 est

                        Source: CCM International


Meanwhile, increasing numbers of feed                                 enterprises. Actually, feed enzyme                enzyme, probiotics, protein, bio-fertilizer,
enterprises expect to cooperate with                                  producers should develop new                      allicin and so forth. The company is
feed enzyme producers, based on                                       technology to improve the quality of              equipped with the most advanced liquid
high-quality feed enzyme and good                                     products, thus increasing                         and solid-state fermentation facilities in
after-sales service. In this situation, feed                          competitiveness in the future.                    the world and ascends into the leading
enzyme producers taking advantage of                                                                                    large-scale biological preparation and
high-quality products and good                                        Established in 2001, Continent Biotech            manufacturing enterprises.
after-sales performance can resolve                                   is composed of six manufacturing
various production difficulties for feed                              enterprises and mainly engaged in


                                                          CAS building largest lactase production base in China


Chinese Academy of Science (CAS)                                      Jiangxi Province, aiming to capture               stages, consisting of seven production
established a subsidiary Chinese                                      China’s huge lactase market.                      lines. Upon completion, CASL will
Academy of Science Lactase Co., Ltd.                                                                                    achieve 3,000t/a lactase capacity
                   th
(CASL) on Aug.18 , 2009, and started                                  With total investment of USD19.02                 (TABLE 5).
to construct China’s biggest lactase                                  million, the construction of this
production base in Dean County,                                       production base is divided into two


                                                                      TABLE 5: Information of CASL’s new project
                                     Item                                            First phase                            Second phase


                                                                                                                                                                 10


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           Capacity                                                       1,500t/a                                1,500t/a
           Investment                                               USD11.7 million                            USD7.32 million
           Start time                                                     Aug. 2009                               Oct. 2010
           Launch time                                                      2010                                    2011
         Source: CCM International


Lactase, also named as                                  lactase, which can rapidly and efficiently       and inefficient technology, thus leading
beta-galactosidase (β-galactosidase),                   hydrolyze lactose to glucose and                 to small profit, given the adverse
normally exists in human body in                        galactose with 6,000u/g, compared with           situation of economic downturn at that
intestinal epithelial cells, thereby                    3,000u/g or 5,000u/g for existing                time. Owing to domestic insufficient
contributing to digestion of lactose                    products.                                        supply but huge demand, 98% of
present in dairy foods. However, large                                                                   China’s lactase is imported from other
numbers of people in Asia and Africa,                   At present, China has few lactase                countries like US and Japan, etc., as
accounting for 70% of Asia and Africa’s                 producers, and most of them have small           estimated.
total as estimated, have a genetic                      capacity. As reported, the total lactase
deficiency of this enzyme and are                       production capacity in China was only            Thanks to increasing demand for low
unable to digest lactose.                               20t/a in 2008. For example, Harbin               lactose milk products, the demand for
                                                        Meihua Biotechnology Co., Ltd. (Meihua           lactase in China has been increasing in
The new base will adopt the technology                  Biotechnology), the only active producer         recent years. It was estimated that
of using thalli Mutated Aspergillus Niger               in China currently, has lactase capacity         Chinese demand for lactase was about
to produce lactase developed by CAS in                  of only 8t/a.                                    2,700 tonnes in 2008, most of which
2006, which can enhance lactose                                                                          was imported from overseas at price of
hydrolysis efficiency and cut down the                  According to Mr. Zhang, salesman of              about USD59,000/t, higher than that of
production cost compared to using the                   Meihua Biotechnology, some                       USD43,000/t in domestic market
other thalli under the same condition.                  companies stopped lactase production             (FIGURE 5).
Besides, it will mainly produce a new                   in 2008 due to its high production cost


                                   FIGURE 5: Output of lactose milk products and demand for lactase in China, 2005~2008



                             3,500,000                                                                                           3,000
                                                                                                           2700     3,000,000
                             3,000,000                                                   2300                                    2,500
                             2,500,000                             2000                            2,500,000
                                              1800                                                                               2,000
               Unit: tonne




                                                                             2,000,000
                             2,000,000                 1,850,000
                                                                                                                                 1,500
                             1,500,000
                                                                                                                                 1,000
                             1,000,000

                              500,000                                                                                            500

                                    0                                                                                            0
                                               2005                  2006                 2007                  2008

                                                           Lactose milk products                   Lactase




              Source: CCM International


                                                                                                                                                 11


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For the sake of better lactose absorption       Yang, Deputy Secretary General of                 92%, implying promising market for low
when consuming dairy products, many             Chinese Nutrition Society, the                    lactose milk, as well as a huge demand
countries add lactase to dairy foods or         proportion of Chinese adults suffering            for lactase to decompose lactose for
other dairy meals. According to Ms.             from lactose intolerance is as high as            reasonable nutrition absorption.


                                            Novozymes expands enzyme production


Novozymes, the world’s biggest                  Area and expects to launch it by 2010.            After the launch of this new base, with
industrial enzymes producer,                    Through this expansion, Tianjin                   total investment of about USD53 million
announced on Aug. 3rd 2009 that it will         Novozymes will become Novozymes’                  and coverage area of 5,599m2,
construct an enzyme preparation                 third global enzyme production base.              Novozymes is predicted to double its
production base in Tianjin                                                                        enzyme preparation capacity in China
Economic-Technological Development                                                                (FIGURE 6).


                                      FIGURE 6: Main enzyme producers’ market share in the world

                                                        22%




                                                                                47%
                                                   6%




                                                        21%
                                                                 4%

                                                  Novozymes   BASF    Danisco   DSM   Others


                                              Source: Novozymes’ annual report, 2007


According to Mr. Ren, senior manager            agro-forestry wastes as a large                   fields since 1998 (FIGURE 7). And after
from Asia Bioenergy Department of               agricultural country. Also, Novozymes             nearly 10 years’ research and
Novozymes, the company is very                  predicts that the second generation               development, it has solved some major
optimistic about China’s future                 bioethanol consumption will explosively           technical obstacles in
development of the second generation            grow in 2012.                                     second-generation bioethanol
bioethanol, namely using crop wastes                                                              production process, and is expected to
as raw materials, as China highly               Novozymes has been producing various              produce second bioethanol enzymes on
concerns about energy supply and                enzymes that are widely used in food,             a large scale in 2010.
security and has abundant supply of             brewing, washing and other industrial


                                          FIGURE 7: Novozymes enzyme annual sales, 2004~2008




                                                                                                                                         12


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                                                           1,600



                                                           1,200




                                     (Unit: million USD)
                                                            800



                                                            400



                                                              0
                                                                     2004        2005       2006        2007       2008

                                   Source: CCM International


Enzymes production cost is an                                      crop wastes to produce fuel ethanol on         more and more attention to
important factor influencing the                                   a large scale.                                 second-generation bioethanol. On July
development of second-generation                                                                                  9th 2009, the enzyme preparation
bioethanol production. At present,                                 The second-generation bioethanol has           branch of China Fermentation Industry
enzyme preparation cost accounts for                               a long value chain, including raw              Association held a discussion in
35% of total production cost for                                   material collection, transport and             Qingdao. Over twenty domestic large
second-generation bioethanol                                       storage, as well as cellulosic ethanol         biotechnology enterprises and research
production, and after large-scale                                  production, sales and so on, among             institutes attended the meeting
industrialization, the cost proportion will                        which the cellulose technology can             (FIGURE 8). The branch president
be reduced to 20-25%. According to                                 reduce production cost largely. And the        announced the development plan of the
Novozymes’ estimation, the                                         breakthrough of this technology needs          enzyme preparation industry. Although
second-generation bioethanol                                       multilateral collaboration to achieve a        domestic biotechnology enterprises
production cost in China will be                                   mutual development. Novozymes and              have made rapid progress in recent
USD2.59 per gallon in 2010, and can be                             COFCO in early 2009 reached a new              years, their enzyme annual output is still
reduced to USD1.5 per gallon by 2015,                              cooperation agreement with Sinopec to          much less than multinational
which will be very competitive compared                            initiate large-scale commercial                enterprises’.
with gasoline price (USD2 per gallon).                             production by using crop wastes as raw
                                                                   materials to produce second-generation
According to Mr. Steen Riisgaard, CEO                              bioethanol.
of Novozymes, there is only one step
away for the company to make use of                                Chinese government has been paying


                                                             FIGURE 8: Major enzyme producers’ capacity in 2008




                                                                                                                                                         13


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                                     10,000

                                                                                                 8,000
                                      8,000
                                                                           6,500
                                                     6,000
                                      6,000
                       (Unit: t/a)



                                                                                                                      4,000
                                      4,000


                                      2,000


                                            0
                                                  Hunan Jinshi         Zhengzhou               Jiangyin      Henan Yangshao
                                                                        Fuyuan               Baishenglong


                  Source: CCM International
                  Note: Hunan Jinshi Group Co., Ltd.
                             Zhengzhou Fuyuan Biotechnology Co., Ltd.
                             Jiangyin Baishenglong Bioengineering Co., Ltd.
                             Henan Yangshao living to turn the engineering Co., Ltd.
                                                  Hunan Yuyuan expands in microbial fertilizer


Hunan Yuyuan Bio-technological Co.,                                                                         microbial fertilizer has advantages in
Ltd. (Hunan Yuyuan, located in Hunan                      Hunan Yuyuan’s expansion of microbial             ecological protection, crop quality
national bio-industry base Changsha                       fertilizer is attributed to at least four         improvement and fertilizer efficiency
City, Hunan Province), a leading                          reasons.                                          enhancement, as microbial fertilizer can
enterprise of microbial fertilizer industry,                                                                increase beneficial bacteria in soil to
signed an agreement with Shenzhen                         Firstly, Chinese government has                   help crops use nutrients. According to
Fortune Venture Capital Co., Ltd.                         formulated some policies to promote the           Fertilizer Testing Center of Ministry of
(Shenzhen Fortune Venture) to obtain                      extensive use of microbial fertilizer. For        Agriculture, farm products output can
capital for capacity expansion and R&D                    example, the first document release by            increase 12% ~20% by using microbial
                                     st
strengthening on Aug. 21                  2009.           Chinese government this year stipulate            fertilizer. So in vegetable growing
                                                          to strengthen the protection and                  regions like Shouguang, farms use
Actually, after establishment, Hunan                      improvement of soil, and to promote and           microbial fertilizer more and more
Yuyuan had invested about USD15                           the use of microbial fertilizer in the            widely.
million to build a 10,000 t/a.microbial                   whole country.
fertilizer production line. This production                                                                 Furthermore, the average utilization rate
line has the largest investment and                       Secondly, some farmers have begun to              of common fertilizer is only 20%~30%,
largest production capacity, and its                      accept and use microbial fertilizer,              while that of microbial fertilizer is more
technical level and equipment are the                     which has brought tremendous                      higher , for example, the nitrogen fixed
most advanced in China. And currently,                    opportunities for microbial fertilizer            in rhizobia can almost all be absorbed
it has putt high concentrations of                        manufacturers.                                    by plants.
bacteria powder into commercial mass
production.                                               Compared with common fertilizer,                  More and more farmers realize
                                                                                                                                                       14


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important role of microbial fertilizer in
practical production, so microbial                   Fourthly, microbial fertilizer has a large      Currently, there are more 500 microbial
fertilizers have become more and more                profit margin, compared with common             fertilizer companies in China (TABLE 6),
popular than common fertilizers with                 fertilizer. And currently, only a few have      annual output is about 5 million tonnes,
farmers.                                             been engaged in microbial fertilizer            and the application areas are nearly 6
                                                     production, and thus they have huge             million hectares. Microbial fertilizer
Thirdly, the current status of the soil              development potential to capture market         product categories continue to increase,
gives business opportunities to                      share amid this less intense market             so far, the products registered in the
microbial fertilizer manufacturers. The              competition. The large formal                   Ministry of Agriculture are divided into
soil compaction and salinization have                manufacturers, in particular, like Hunan        two major categories of antimicrobial
become widespread, as farmers have                   Yuyuan, are expected to work hard and           and microbial fertilizer including 11
been using nitrogen fertilizer for a long            make great progress on this field,              varieties. In the next five years, China's
time. Compared with common fertilizer,               depending on their sufficient funds and         microbial fertilizer annual output is
microbial fertilizer not only can break              strong scientific and technological             expected to reach 8 million ~ 10 million
potassium and phosphate and fix                      background. As for other small                  tones. And it is expected that microbial
nitrogen, but also can greatly increase              companies, like family workshops, they          fertilizer industries will play a more
fertilizer utilization rate, so it is                are running on a small scale and weak           important role in agricultural production.
increasingly favored by farmers.                     in competitiveness.


                                          TABLE 6: Some domestic microbial fertilizer companies in 2008
                                           Company                                           Capacity (t/a) in            Location
    Hebei Fuhua Kangtute Environmental Co., Ltd.                                                  100,000            Shijiazhuang, Hebei
    Hebei Juwei Biological Engineering Co., Ltd.                                                  100,000              Baoding, Hebei
    Dezhou Sunshine Biotechnology Co., Ltd.                                                       100,000            Dezhou, Shandong
    Dalian Shibeide Biotechnology Co., Ltd.                                                       100,000              Dalian, Liaoning
    Shenyang Shennongren Biochemical Engineering Co., Ltd.                                        30,000             Shenyang, Liaoning
    Liaoning Yuanheng Biotechnology Co., Ltd.                                                     30,000             Chaoyang, Liaoning
    Beijing Wlong Technology Co., Ltd.                                                            30,000               Beijing, Beijing
    Heilongjiang Suihua Nongken Chenhuan Biology Science & Technology Co., Ltd.                   20,000            Suihua, Heilongjiang
    Shanxi Yi’an Biological Engineering Co., Ltd.                                                  5,000             Yuncheng, Shanxi
    Beijing First Biological Engineering Co., Ltd.                                                 5,000                    Beijing
 Source: CCM International


Although, due to the financial crisis in             economy see rapid development and               will increase the demand for microbial
2008, market demand for microbial                    increase in per capita income, Chinese          fertilizer. Meanwhile, the new industry
fertilizer production has experienced                government will increase the                    system will also prompt domestic
weak growth. In the long run, with the               investments in microbial fertilizer, which      microbial fertilizer industry to reshuffle.


                                             SK sells SCR enzyme technology to China


SK Holding Co., Ltd. (SK Holding,                    (SCR) enzyme technology to Qingdao              Company (China Power) in late July
headquartered in Seoul, South Korea)                 Huatuo Technology Co., Ltd., a                  2009, which will enable China Power to
sold its Selective Catalytic Reduction               subsidiary of China Power Investment            be the first Chinese company to apply
                                                                                                                                                15


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enzyme technology into industrial                power plants and chemical plants and            and sulphur dioxide, etc, SCR enzyme
exhaust emissions treatment at home.             enhance its application in China in the         technology has higher catalysis
                                                 near future.                                    efficiency and lower temperature, and
SCR enzyme technology can be used to                                                             can reclaim more kinds of exhaust
clean up the exhaust emissions like              Based on varieties of Bacillus, SCR             emissions, even solid waste.
carbon dioxide, sulfur dioxide, carbon           enzyme technology uses enzyme as
monoxide, etc. Researched by SK                  catalysts, which enjoys higher                  At present, there are several kinds of
Holding since 1996, this technology has          purification efficiency, simpler operation      exhaust emissions treatment
been successfully used in South                  and lower cost compared with the other          technologies in China, (TABLE 7), such
Korea’s power plants after 2003,                 exhaust emission treatment                      as carbon dioxide reclaiming technology,
accounting for 20% of the country’s total        technologies in China, thus it’s expected       which has played a growingly important
market share currently. Besides, SK              to be applied in a variety of recycling         role in recent years due to the
Holding signed a cooperation                     and waste treatment enterprises.                greenhouse effect caused by rising
agreement with Germany-based EnBW                                                                carbon dioxide emission. But it can only
Group in July 2007 and began to                  For instance, compared with SCR                 treat one or two kinds of waste gases,
explore the overseas markets.                    chemistry catalysts technology                  thus restricting its wider application.
                                                 commonly adopted in China, which
Insider reveals that SK Holding will             uses chemicals like vanadium pentoxide
cooperate with more companies to                 and titanium dioxide as raw materials to
promote this enzyme technology in                deal with pollutants of nitrogen oxide
                                         TABLE 7: Major exhaust emission technologies in China

                      Technology                                                   Main adopters                             Launch time

ZH active carbon adsorbing organic exhaust gases            Hangzhou South Environment Protective Coating Equipment
                                                                                                                                   1993
purifying & recycling treatment technology                  Co., Ltd.
                                                            Jiangsu Zhongke Energy-Saving Environmental Protection
SCR chemistry catalysts technology                                                                                                 2006
                                                            Technology Co., Ltd.

Carbon dioxide reclaiming technology                        Chengdu Demei Engineering Technology Co., Ltd.                         2001

High-voltage electrostatic trapping technology              Gansu Kejin Environmental Technology Co., Ltd.                         2002

Phosphorus emission reclaiming technology                   Yunnan Nanlin Group Co., Ltd.                                          2008

         Source: CCM International


With the rising awareness of                     standard of ‘Absorption Gas Cleaner for         which satisfies China’s demand for
environmental protection, more and               Industrial Emission’, which clearly             environmental technologies, is expected
more Chinese countries intend to seek            stipulates the technical standards for          to be accepted by more enterprises.
new technologies to reduce pollution. In         popular waste treatment devices.
2008, Chinese government issued a                Therefore, SCR enzyme technology,



     BIO-BASED CHEMICALS

                                   China’s citric acid export volume up but price down



                                                                                                                                           16


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Despite US and EU’s anti-dumping                          year to 393,616 tonnes in the first seven        the same period of 2008 since early
duties on Chinese citric acid in 2009,                    months of 2009 (FIGURE 9). Except to             2009.
China’s citric acid export volume has                     EU and US, export price of citric acid to
still kept increasing, up 1.2% year on                    other countries has slipped largely over


                                                 FIGURE 9: China’s citric acid export volume, Jan. ~Jul. 2009


                                        80,000
                                                                                68,707
                                        70,000
                                                                      62,089               60,624      62,905
                                        60,000
                                                                                                                 53,910
                                                           48,181
                                        50,000
                        (Unit: tonne)




                                                 37,200
                                        40,000

                                        30,000

                                        20,000

                                        10,000

                                            0
                                                 Jan-09    Feb-09     Mar-09    Apr-09     May-09      Jun-09      Jul-09


                    Source: China Customs


Respectively since Jun. 2008 and Sep.                     have been endeavoring to develop                 Although Ministry of Commerce
2008, EU and US have begun to levy                        other new and large markets like India,          Administration has executed Export
high anti-dumping duties on China’s key                   Mexico, Thailand and Indonesia etc.              License Administration on domestic
citric acid producers like Anhui BBCA                     after the anti-dumping duties had been           citric acid exporters since early 2009,
Biochemical Co., Ltd. and Shandong                        implemented. Actually, India has totally         this Export License Administration with
TTCA etc., which erodes Chinese                           imported 32,424 tonnes citric acid from          relatively low requirements for domestic
players’ price advantage in these                         China during the first seven months in           citric acid producers couldn’t efficiently
markets.                                                  2009, up 39% over the same period of             restrain pernicious price competition
                                                          2008, which makes it the largest                 among them. In order to enlarge market
As an export-oriented product,                            importer of Chinese citric acid currently.       share in oversea markets with no
homemade citric acid’s encountering                                                                        anti-dumping duties, domestic citric acid
anti-dumping sanction from EU and                         Prices of homemade citric acid exported          exporters choose to cut down the price.
USA has seriously impacted domestic                       to EU and US have stayed at relatively
citric acid export, because nearly 40%                    high level of around USD1,000/t, due to          Besides, decreasing raw material price
of China’s citric acid export was to EU                   anti-dumping duties during this period,          also resulted in price fall of domestic
and US before. According to statistics                    but export prices to other countries like        citric acid. Corn and sulphuric acid are
from China Customs, in the first seven                    Southeast Asia, Africa and South                 key raw materials for citric acid
months of 2009, US citric acid import                     America saw a big drop, ranging from             production. In H1 2009, corn price
volume from China has decreased by                        USD680/t and USD820/t,                           remained similar to that in H1 2008, but
87.6% and EU import down 28%.                             USD100~200/t lower than that in the              sulphuric acid price has plummeted to
                                                          first seven months of 2008.                      around USD30/t from USD245/t since
However, domestic citric acid producers                                                                    the breakout of global financial crisis. At
                                                                                                                                                     17


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present, sulphuric acid price is still at           in China. Once both sulphuric acid and            and has exported around 80% of its total
low level of USD36/t and corn price                 corn price rise in the following months,          output on average in recent years.
keeps stable at around USD234/t in                  citric acid price may also be pushed up           However, its production has been
Northeast China.                                    slightly in the market.                           restrained by the government due to
                                                                                                      high pollution during citric acid
Citric acid export price has kept stable            China has been the largest citric acid            production.
currently, and it is hard to raise the price        producer with total output of around
due to current citric acid surplus supply           750,000 tonnes per year in the world,


                                                           VC export price rises


Average export price of Vitamin C (VC)              Customs (TABLE 8), in the first seven             downtrend. The impacts of weak
has climbed up in the first seven months            months of 2009, VC average export                 domestic demand have been partly
of 2009, continuing an uptrend                      price has reached USD10,297/t, up                 offset by the high VC export price.
compared to the same period last year.              29.6% compared to the same period
                                                    last year, while most of the other vitamin
According to statistics from China                  export prices have experienced




                                               TABLE 8: China’s VC export situation, Jan~ Jul, 2009
                           Item                   Jan - Jul, 2008             Jan - Jul, 2009            Growth rates (%)
                  Export (tonne)                      51,632                       47,905                        -7.2
                  Value (USD)                      410,165,661                 493,274,479                      20.3
                  Average (USD/t)                     7,944                        10,297                       29.6
                Source: China Customs


The main reasons for VC export price                low production cost.
rise are as follows:                                                                                  The four biggest domestic VC
                                                    In recent years, with strong                      enterprises include (FIGURE 10)
Firstly, China has become the world’s               competitiveness of China’s VC, some               Northeast Pharmaceutical Group Co.,
VC production base, thus enabling                   multinational corporations have                   Ltd (NPC), North China Pharmaceutical
domestic VC enterprises to price the                gradually stopped VC production. As a             Group Co., Ltd (NCPC), China
products.                                           result, global dependence on Chinese              Shijiazhuang Pharmaceutical Group Co.,
                                                    VC has gradually increased. For                   Ltd (CSPC) and Aland (Jiangsu)
As an important exporter of VC, China               example, China VC export volume was               Nutraceutical Co., Ltd. (Aland). The VC
has strong competitiveness in global VC             less than 80,000 tonnes in 2007, but it           export prices of these four enterprises
market. China produces VC by using                  increased to 85,239 tonnes in 2008. By            all stayed at a relatively high level of
two-step fermentation process, which                the end of 2008, China VC sales value             about USD1,000/t, a big upthrust
has reached the world-advanced level                had accounted for 86% of total VC sales           compared with the same period last
and thus being prohibited for export.               value in US market. At present, about             year, signifying their strong pricing
Based on the technology edge, China’s               80% of the world’s VC products are                power.
VC has good product quality and enjoys              sourced from China.
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                                               FIGURE 10:   Capacity of major domestic VC enterprises in 2008



                                      40,000
                                                   35,000


                                      30,000
                                                                     25,000
                        (Unit: t/a)




                                                                                        20,000
                                      20,000                                                               18,000



                                      10,000



                                          0
                                                    CSPC              NPC               Aland              NCPC

                      Source: CCM International


Secondly, VC is mainly used in                          excellent sales performance after the          VC enterprises had been in full
industries of pharmaceuticals, health                   outbreak of H1N1 influenza around the          operation in the first five months this
food, and food additives, etc. that                     world, as VC preparation can effectively       year. With sufficient VC supply in the
provide necessary daily products, thus                  prevent influenza. Besides, many new           domestic markets, its price only
less being affected by economic                         kinds of VC composite preparations can         fluctuated slightly in early June.
downturn. And VC only constitutes a                     also effectively enhance immunity and          However, to curb the slight price decline
very small proportion of its downstream                 prevent influenza, so they had sold well       this June, the four biggest VC
products’ cost, so downstream clients                   from last winter to this spring, thus          enterprises decided to stop production
are not sensitive to the price change of                promoting the soaring demand of VC.            from July to September. As a result, VC
VC.                                                                                                    price has risen in July, and is expected
                                                        In light of huge VC demand and its high        to maintain uptrend in the near future
Thirdly, VC products have seen                          prices currently (FIGURE 11), the four         with reduced supply.


                                                  FIGURE 11: Domestic VC export prices, Jan. – Jul. 2009




                                                                                                                                                 19


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                                      10,800


                                      10,600                             10,551
                                                                                        10,558

                                      10,400                                                          10,415
                                                                10,409
                                                                                                                         10,202
                      (Unit: USD/t)


                                      10,200

                                      10,000                                                                      10,033
                                                   9,903
                                       9,800


                                       9,600


                                       9,400
                                               Jan-09      Feb-09     Mar-09      Apr-09        May-09     Jun-09        Jul-09

                    Source: CCM International


In the long run, VC export price may                       autumn and winter this year. Secondly,              small and medium-sized companies
maintain relatively high level, attributed                 the price of corn, one of VC’s raw                  plan to produce VC, their products only
to the following factors. Firstly, H1N1                    materials, may keep at high level                   sell in domestic market, so their
influenza may continue its prevalence                      because of current severe drought in                expansions can not affect VC export
for a long time and may break out in the                   China. Thirdly, although some domestic              price.


                                                        Jianding Biotechnology established


Jiangsu Jianding Biotechnology Co., Ltd.                   benefits by reutilizing waste from                  crab shell as raw materials, which leads
(Jianding Biotechnology), a company                        production.                                         to heavy metal residues and large
newly established on Aug. 10th 2009,                                                                           amounts of ash contained in
has initiated the construction of                          For one thing, glucosamine, as an                   glucosamine products. With
first-phase production lines of 3,000t/a                   important health product, is widely used            vegetarianism spreading over Europe
glucosamine and 12,000t/a activated                        as nutritional supplements for articular            and US, enabling citric acid-based
carbon, which will be launched by the                      cartilage treatment, and is the only                glucosamine products to become
end of 2009.                                               health product approved by the medical              greatly popular among consumers,
                                                           community and nutrition research                    glucosamine products produced by
Jianding Biotechnology has                                 institutions in US and Europe, for its              Jianding Biotechnology using this
independent technology for                                 therapeutical effect on bone and joint              technology is predicted to have a highly
co-production of glucosamine and                           diseases. The market value of                       competitive position in health products
activated carbon. Adopting this                            glucosamine and its downstream                      market as this technology is developed
technology, glucosamine can be                             products like health products and                   independently at home, and the
extracted from citric acid waste, and                      pharmaceuticals is estimated to reach               overseas market has not obtained the
then the waste is further processed to                     USD7 billion.                                       technology up to now.
produce high-quality activated carbon.                                                                         For another, co-production of
This technology is believed to create                      Currently, domestic glucosamine                     glucosamine and activated carbon can
huge economic and environmental                            production mainly use shrimp shell and              reduce environmental pollution. With its
                                                                                                                                                     20


       www.cnchemicals.com Copyright CCM International Ltd.                                              Email: econtact@cnchemicals.com
CCM Newsletter                                                                                          Industrial Biotechnologies China News


activated carbon capacity accounting for                   pollution. Therefore, using this                  With entry into health products industry
more than 1/3 of global total, China is                    technology can greatly relieve the                in the 1980s, China has rapidly
the world’s largest producer of activated                  environmental pressure.                           developed in this field in the past
carbon, a major chemical material with                                                                       decade. By the end of 2007, China has
annual consumption volume of more                          It is thus expected that Jianding                 approved more than 8,900 varieties of
than one million tonnes in the world. But                  Biotechnology will have a very important          health products. And more than 1,640
currently, large quantities of high-quality                position in China’s health product                health product manufacturers have
timber and bamboo are consumed at                          industry, and will promote China’s                achieved total production value of over
home to produce activated production                       overall health product industry to                USD17 billion annually (FIGURE 12).
every year, leading to high energy                         develop more eco-friendly.
consumption and severe environmental


                                                    FIGURE 12: Glucosamine output in China, 2002~2007


                                           10,000
                                            9,000
                                            8,000
                                            7,000
                           (Unit: tonne)




                                            6,000
                                            5,000
                                            4,000
                                            3,000
                                            2,000
                                            1,000
                                               0
                                                    2002         2003       2004        2005       2006        2007


                          Source: CCM International


Some enterprises from other industries                     China Health Care Association, said               integration in health product industry,
are very optimistic on the future                          that some Japanese automobile                     which will change glucosamine
development of China health product                        companies with sufficient funds are               manufacturers’ competitive landscape in
industry. In the end of 2008, , Wuliangye                  waiting for an opportunity to enter health        China (TABLE 9).
Group Co., Ltd., a well-known liquid                       product industry in China.
brand, cooperated with Giant
Corporation to enter health care market.                   ‘Food Safety Law’ and ‘Rules of
                                                           Supervision and Administration on
Mr. Wang Dahong, Secretary General of                      Health Food Products’ will also promote


                                             TABLE 9:Information of glucosamine manufacturers in China, 2008
                        Number of                                                                 Number of
    Locations                                         Capacity '08, t/a     Output '07, t                             Capacity '08      Output '07
                    manufacturers, ‘08                                                         manufacturers ‘08

  Zhejiang                            9                      7,150              3,430               33.30%              36.80%           38.00%

  Jiangsu                             9                      4,960              2,645               33.30%              25.50%           29.30%


                                                                                                                                                       21


       www.cnchemicals.com Copyright CCM International Ltd.                                             Email: econtact@cnchemicals.com
Industrial Biotechnology China News-2010-Sample Issue
Industrial Biotechnology China News-2010-Sample Issue
Industrial Biotechnology China News-2010-Sample Issue
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Industrial Biotechnology China News-2010-Sample Issue

  • 1. Industrial Biotechnologies China News Vol.2 Issue 9, 2009 Biotechnologies Copyright © CCM International Limited
  • 2. Industrial Biotechnologies China News Vol.1 Issue 9, Sep. 8, 2009 Industrial Biotechnologies China News 0909 BIO-FUELS ...................................................................... 1 Ready reports related to Lianhai Biotech to expand butanol with new technology...................... 1 industrial biotechnology: SFB expands xanthoceras sorbifolia capacity........................................ 2 - Future of White Biotechnology in China Guizhou launches 10,000t/a biodiesel production line .......................... 4 Edition (2) - Biofuels Market in China – Edition (1) BIO-PRODUCTS .............................................................. 6 - Production and Market of Monosodium Donta Group enlarging yeast production ................................................ 6 Glutamate (MSG) in China Edition (1) Continent Biotech expanding enzyme preparation ................................ 9 - Future of Red Biotechnology in China CAS building largest lactase production base in China ...................... 10 - Future of Enzyme in China to 2020 Novozymes expands enzyme production.............................................. 12 - Future of Green Biotechnology in China Hunan Yuyuan expands in microbial fertilizer ...................................... 14 SK sells SCR enzyme technology to China........................................... 15 BIO-BASED CHEMICALS ............................................. 16 CCM related newsletter: China’s citric acid export volume up but price down........................... 16 - Corn Products China News VC export price rises ............................................................................... 18 Jianding Biotechnology established...................................................... 20 Contact us for more information Baolingbao to develop FOS and dietary fiber ....................................... 22 about CCM. BIO-MATERIALS ........................................................... 24 Shenzhen Ecomann launches 5,000t/a PHA.......................................... 24 Tiancheng Corn to carry out PLA project.............................................. 25 NEWS IN BRIEF............................................................. 26 China holds 2009 summit forum on microbial fertilizer ....................... 26 Green Energy Group invests in biodiesel.............................................. 26 Laibin Tianren launches160,000t/a biofertilizer plant........................... 26 China to cultivate large-scale energy forests........................................ 27 Ministry of Health approves 26 food additives...................................... 27 Beijing founds biogas technology strategic alliance ........................... 27 Guangzhou establishes biotechnology service alliance ..................... 27 Nanyang Tianrong builds 6,000t/a PPC catalyst ................................... 27 Sichuan Guanghe to build 100,000t/a sweet potatoes ethanol ........... 27 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 3. CCM Newsletter Industrial Biotechnologies China News Headlines of Industrial Biotechnologies China News 0909 ■ Lianhai Biotech will expand butanol production Editor’s Word based on its new technology. Welcome to September Issue of Industrial Biotechnologies China News ■ Guizhou launched a 10,000t/a bio-diesel published by CCM International, a professional consulting company who has production line on Aug. 6th 2009. been intently focusing on dynamics of China’s industrial biotechnologies industry. ■ Shuangfeng Forestry Bureau is expanding XS production capacity in Yichun City. Growing concerns on environmental protection and energy security have ■ Donta Group is to launch its yeast expansion become key drivers for China’s fast growing industrial biotechnology. Successive project by the end of Sep. 2009. supporting policies are clear indicators showing China’s determination to develop ■ Continent Biotech is building a 15,000t/a enzyme this industry----On June 2nd, 2009, China's State Council announced a policy preparation plant. package to accelerate bio-industry development; ---during Aug. 2009, some local ■ Novozymes will construct an enzyme production governments like Shandong and Shenzhen issued their own plans; ----Also, in base in Tianjin. the 11th Five-Year Plan (2006-2010), Chinese government has proclaimed to ■ CAS is building a lactase production base in promote biodegradable materials. Jiangxi, aiming to capture China’s huge lactase market. Attracted by its huge potential, enterprises both domestic and overseas have ■ Hunan Yuyuan signed a capital increase displayed strong interests in bio-industry. For example, Shenzhen Ecomann’s agreement with Shenzhen Fortune Venture in order investment in PHA and Tiancheng Corn’s in PLA, the two promising materials to expand. from renewable resources, covered in this issue are both evidences ■ SK Holding sold SCR enzyme technology to China demonstrating the trend. Besides, Novozymes’ global strategy on enzymes Power in late July 2009. expansion covered indicates a global trend for second-generation bio-ethanol. ■ In the first seven months of 2009, VC export price has climbed and may keep growing. Besides, under recovering global economy and growing environmental protection ■ Jianding Biotechnology plans to launch its awareness worldwide, more players domestic and overseas are expected to first-phase glucosamine and activated carbon increase investment in China’s biotechnology sector. production lines by the end of this year. ■ Baolingbao plans to enter FOS and dietary fiber Main companies and institutes mentioned in this issue market through getting listed on Shenzhen Stock Exchange. ■ China’s citric acid export volume has climbed up with price fall in the first seven months of 2009. ■ Shenzhen Ecomann launched a 5,000t/a PHA production line in Shandong. ■ Tiancheng Corn is planning to construct 10,000t/a PLA with several production lines. www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 4. CCM Newsletter Industrial Biotechnologies China News BIO-FUELS Lianhai Biotech to expand butanol with new technology Jiangsu Lianhai Biological Technology from flour deep-processing as raw this expansion project is divided into Co., Ltd. (Lianhai Biotech) will produce material. three phases (TABLE 1). butanol on a large scale by adopting fermentation method using wastewater With total investment of USD400 million, TABLE 1: Information of the project Item Investment (USD) Capacity (t/a) Launch time First phase 60 million 35,000 Sep. 2008 Second phase N/A 100,000 Oct. 2009 Third phase N/A 200,000 Mar. 2011 Source: CCM International The core technology adopted in this industry domestic market. expansion project uses the patented To achieve energy conservation strain technology from Shanghai and consumption reduction; At present, there are eight domestic Institute for Biological Science (SIBS) of To achieve recycling and clean enterprises producing butanol by Chinese Academy of Sciences (CAS), production; fermentation, among which Jilin Ji’an and is jointly developed b y Lianhai To promote Lianhai Biotech to be Biochemical Co., Ltd. (Jilin Ji’an) is the Biotech and Jiangnan University. the largest butanol producer at biggest one with the capacity of According to CAS and experts from home. 50,000t/a, and another three, namely China's fermentation industry, the Jiangsu Jinmaoyuan Biochemical Co., technology has reached international The project has been declared as a Ltd. (Jiangsu Jinmaoyuan), Guangxi advanced level. major provincial project of transferring Guiping Jinyuan Alcohol Co., Ltd. scientific & technological achievements. (Guiping Jinyuan) and Jilin Cathay By adopting this new technology, this And in early Aug., it has passed the Industrial Biotechnology Co., Ltd. (Jilin project will make the following major online assessment by the experts from Cathay) (FIGURE1), has capacity of breakthroughs: Provincial Science and Technology 30,000t/a for each. To achieve recovery of wastewater Department. Upon completion, butanol from flour deep-processing supply will become relatively sufficient in 1 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 5. CCM Newsletter Industrial Biotechnologies China News FIGURE 1:Capacity of domestic butanol enterprises in 2008 60,000 50,000 50,000 40,000 (Unit: t/a) 30,000 30,000 30,000 30,000 20,000 10,000 5,000 5,000 5,000 5,000 0 Jilin Ji'an Jiangsu Guiping Jilin Cathay Jilin Zhonghai Heilongjiang Tangshan Tongliao Jinmaoyuan Jinyuan Haocheng Jidong Zhongke Tianyuan Source: CCM International Note: Jilin Zhongha: Jilin Zhonghai Chemical Co., Ltd. Heilongjiang Haocheng: Heilongjiang Haocheng Chemical Co., Ltd. Tangshan Jidong: Tangshan Jidong Solvent Co., Ltd. Tongliao Zhongke Tianyuan: Tongliao Zhongke Tianyuan Starch Chemical Co., Ltd. Domestic butanol supply has been enterprises plan to expand their producers. However, butanol application falling short of demand, with the output production capacity. And annual is expected to become an irreversible 50% less than the consumption. From increased capacity of the butanol trend, given the potential pressing 2000 to 2006, domestic butanol projects will reach 730,000 tonnes. situation of oil resources depletion and consumption had increased year by Through continuous project expansion, the expected price rise of oil, so butanol year, and in 2006, the consumption China will be able to reverse the fermentation industry is sure to become reached 7,400,000 tonnes at home. dependence on imports. promising. Meanwhile, the butanol prices have risen from about USD1,318/t in Jan. in Although crude oil prices has dropped to 2006 to USD2,342/t at present. below USD50/barrel caused by financial crisis since H2 2008, which had led to Currently, some domestic butanol production suspension of many butanol SFB expands xanthoceras sorbifolia capacity Shuangfeng Forestry Bureau (SFB, biggest bio-energy production base in initiated since 2008, which is expected located in Yichun City, Heilongjiang Heilongjiang upon completion. to be launched by the end of 2010. The Province) is building a xanthoceras second phase with 266 hectares XS is sorbifolia (XS) base in Yichun City, This XS base construction is divided being built at present and will be which is expected to become the into two phases. The first-phase launched by the end of 2012. In fact, construction with 133 hectares XS has SFB has planned to expand its XS 2 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 6. CCM Newsletter Industrial Biotechnologies China News capacity to 1,000 hectares in the next XS (PICTURE) is an ideal raw material no environmental pollution parameter five years. for biodiesel and bioethanol production like sulfur and nitrogen, etc, which with its high oil content, with seed oil conforms to the quality indexes of Insider reveals that after the launch of content of about 30%-36% and kernel biodiesel. Since 2005, China has this XS base, it will supply XS for China oil content of 50%-70%. Besides, it has successfully developed the technology Nature Petroleum Company (CNPC) as high output of about 1,500-2,000kg/h. to produce biodiesel with XS as raw the raw material for biodiesel or Moreover, it is said that biodiesel material. bioethanol production. produced from XS has about 93.4% hydrocarbons with 18 carbons and has PICTURE: Cross-section of XS Source: www.Yxsfz.cn At present, there are about 5,300 for carbon content in biodiesel. Those However, raw material cost is too much hectares XS in China, mainly distributed biodiesel producers using waste animal for producers using high oil content in four provinces – Shanxi, Inner oil and vegetable oil as raw material plant to produce biodiesel (TABLE 2), Mongolia, Liaoning and Shaanxi. And were seriously affected by this standard which is a bottleneck for their some other provinces like Gansu are and some even went bankrupt. The development. For example, Sichuan also trying to cultivate this plant, and quality of biodiesel produced from waste Gushan Oil Chemical Co. Ltd. (Sichuan Chinese Academy of Forestry has animal oil and vegetable oil varies a lot, Gushan) produces biodiesel by using provided great support to these areas which can do harm to machines. soybean or colza with capacity of by popularizing the XS planting 240,000t/a, and the cost on raw material technology, aiming to provide ample raw This standard has driven biodiesel has seen continuous increase, thus material for biodiesel production in the producers to actively search for some hindering the development of biodiesel, future. Currently, most of XS are used in high oil content plants as raw materials. according to Mr. Zhao, president of edible oil, medicine, etc, in China. Guizhou, for instance, had launched a Sichuan Gushan. 10,000t/a biodiesel production line with Chinese government enacted a jatropha as raw material this month. ‘National standards for biodiesel ‘in 2008, which requires a higher demand 3 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 7. CCM Newsletter Industrial Biotechnologies China News TABLE 2: Main biodiesel producers in China and their raw materials Company Raw material Sichuan Gushan Soybean or colza. Liuzhou Minghui Biofuels Co., Ltd. Jatropha, tung, tea plant Longyan Zhuoyue New Energy Development Co. Ltd Waste animal oil and vegetable oil Source: CCM International XS can be planted in a barren land, production capacity has reached which is easy for mass production. As As estimated, the demand for biodiesel 3,000,000 tonnes in 2008, while actual non-staple food, XS price is expected in China will increase a lot in the near output was only 300,000 tonnes, be less influenced by price fluctuation of future due to global energy shortage. indicating a huge development other products like agricultural products, The prices of petroleum products have potential. industrial products, etc, which will increased for 24 times in 2009, driving contribute to development of XS-based the government to make more efforts to biodiesel. seek new energies. Besides, biodiesel Guizhou launches 10,000t/a biodiesel production line Guizhou has launched the first-phase Academy of Sciences, and all indexes biodiesel project takes Jatropha as raw 10,000t/a biodiesel production line in of the samples have reached the material and is divided into three phases. New Material Industrial Park (Guiyang National Biodiesel BD100 standards. Upon completion of the three phases th City, Guizhou Province) on Aug. 6 (TABLE 3), the total capacity will reach 2009. Invested by the No.061 Base of China 160,000t/a. Aerospace Science & Industry Currently, the first biodiesel samples of Corporation (located in Guizhou), a this project have been sent for test by large scientific research and production Guangzhou Energy Institute of Chinese center for aerospace products, this TABLE 3: Information of the biodiesel project Phase Investment (USD) Planned capacity (t/a) Launch time First phase 4,390,000 10,000 2009 Second phase 7,320,000 50,000 2010 Third phase N/A 100,000 2012 Source: CCM International The successful launch of Guizhou’s Jatropha resources in Bouyei-Miao What’s more, there are many barren 10,000t/a biodiesel line is based on the Autonomous Prefecture of Qianxinan in mountains suitable for Jatropha following advantages. southwest Guizhou, as well as the cultivation, and through scientific valleys of Nanpan River, Beipan River, cultivation, the average per- hectare First of all, Guizhou is rich in biological Red River and Duliu River. yield of fruit can reach 4,500 kilograms, resources. There are abundant wild which can produce about 100 to 200 4 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 8. CCM Newsletter Industrial Biotechnologies China News kilograms biodiesel. Using Jatropha as Guizhou and diesel is greatly needed in to invest in Jatropha production base in the main raw material for biodiesel mining operation. Yunnan, and China National Offshore production can not only reduce Oil Corporation (CNOOC) will invest in production cost, but also increase the At present, some domestic and foreign Hainan and Sichuan, and British local peasants’ income and prevent land energy companies also concern about Sunshine Technology Group, a desertification. the potential development of Jatropha in commercial forestry plantation company, China, and have invested in Jatropha cooperates with the Honghe Prefecture Besides, local market prospect of cultivation. For example, PetroChina Forestry Bureau of Yunnan Province to biodiesel is expected to be bright, as Limited (Petrol China), the biggest jointly develop Jatropha base. there are many mining companies in controlled subsidiary of China National Petroleum Corporation(CNPC), plans PICTURE: Distribution of Jatropha bases Main Jatropha planting regions Minor Jatropha planting regions Source: CCM International At present, there are dozens of biodiesel capacity has reached demand is estimated to reach biodiesel enterprises including private, 3,000,000t/a in 2008, the actual annual 20,000,000 tonnes by 2010 in China. In join stock and state-owned enterprises. output is only 300,000 tonnes, indicating view of the huge gap between the Hebei Zhenghe Co., Ltd., Sichuan a huge development potential. supply and the demand, related Gushan Group Co., Ltd. and Fujian enterprises are expected to seize the Zhuoyue Co., Ltd. are relatively larger By 2010, China’s annual biodiesel market opportunity and speed up the enterprises with annual output of above output will reach 1,000,000 tonnes, and biodiesel investment (FIGURE 2). 10,000 tonnes. Although China’s 9,000,000 tonnes by 2020. And the 5 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 9. CCM Newsletter Industrial Biotechnologies China News FIGURE 2: Capacity of major biodiesel producers in 2008 250,000 240,000 200,000 150,000 100,000 (Unit: t/a) 100,000 50,000 50,000 50,000 30,000 12,000 10,000 10,000 6,000 0 Sichuan Liuzhou Longyan Xiamen Hebei Heibei Jiangsu Guizhou Shanxi Gushan Minghui Zhuoyue Zhuoyue Zhenghe Fukuan Keyuan Jiangnan Huashuo Hangtian Source: CCM International As an emerging industry in China, to promote its development. National Taxation Supporting Policy for biodiesel is characterized by both great People's Congress has implemented Bioenergy and Biochemical Industry’ development potential and various the ‘Renewable Energy Law’ since 2006, and so on. These policies are expected restrictions in the early stage. Chinese and the Ministry of Finance, National to provide a strong support for domestic government has attached great Development and Reform Commission biodiesel development. importance to the development of and other departments jointly issued biofuels and released relevant policies ‘Advices on Implementing Fiscal and BIO-PRODUCTS Donta Group enlarging yeast production Dongguan Donta Group Co., Ltd. Biochemical Science & Technology Co., yeast producer), with investment of (Donta Group, headquartered in Ltd. (Guangxi Yipinxian) in Laibin City, USD102 million. Dongguan City, Guangdong Province) is Guangxi Province for its yeast capacity expanding yeast production and is expansion. Donta Group’s yeast expansion project expected to launch its 48,000t/a dried is based on the following advantages. yeast and 10,000t/a yeast extract Actually, these two subsidiaries were facilities by the end of Sep. 2009. jointly invested by Donta Group, Firstly, this project can take the Guangxi Laibin Donta group Co., Ltd. advantage of adequate raw material Early in May 2006, Donta Group had (Laibin, a local subsidiary of Donta supply in local areas. As the biggest established two subsidiaries, Guangxi Group, established in 2003) and sugar cane production region in China, Danbaoli Yeast Co., Ltd. (Guangxi Lesaffre Group (the world’s biggest Guangxi has taken up more than 70% of Danbaoli) and Guangxi Yipinxian China’s total sugar cane output these 6 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 10. CCM Newsletter Industrial Biotechnologies China News years. And Laibin took up 18% of which has strong sales network Guangxi’s total with 8.3 million tonnes in throughout China and extensively With fast growth of some local 2008. Besides, Donta Group has 7 exports its products to Southeast Asia, companies, China’s yeast market has sugar processing bases supplying Middle East, South America, Africa, etc., seen intense competitions in recent treacle as common raw materials of which will provide mature sales years, thus Lesaffre Group prefer to yeast for the new project. Besides, local networks for these two new companies. seek some cooperators to enlarge its government has been paying much market share in China. As the biggest attention to developing yeast industry by In addition, there are few yeast yeast producer in the world, Lesaffre releasing tax preferential policies for producers in Guangxi, but the Group launched a yeast production yeast companies. consumption volume is estimated at base with capacity of 3,000t/a in Anhui 50,000 tonnes per year, indicating a big Province of China in 1999, and then it Secondly, this project is equipped with market opportunity. built a sales company in Shanghai in advanced production technology and 2002. equipments sourced from Lesaffre This cooperation can achieve a win-win Group, who has been producing yeast situation. Donta Group wants to bring in In 2008, China’s total yeast production for 150 years. With the strong technical new advanced technology for deeper capacity reached 190,000t/a, support from Lesaffre Group, the new development in yeast field, and Lesaffre accounting for nearly 20% of the world’s facilities are expected to make the best Group intends to expand its market total capacity, and the actual total output use of the advanced equipments. share in China and cut down the reached 100,000 tonnes. It is expected production cost with local rich raw that, as some producers are expanding Besides, Donta Group has a subsidiary material supply and large sales network production, the total yeast capacity will named as Guangdong Danbaoli Group of Donta Group, according to Mr. Guo, reach 210,000t/a in 2009 (FIGURE 3). Co., Ltd. (Guangdong Danbaoli) with technical engineer of Guangdong current dried yeast capacity of 16,000t/a, Danbaoli. FIGURE 3: China’s total yeast capacity, 2005 ~ 2009est. 250,000 210,000 200,000 190,000 170,000 150,000 150,000 (Unit: t/a) 120,000 100,000 50,000 0 2005 2006 2007 2008 2009est. Source: CCM International 7 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 11. CCM Newsletter Industrial Biotechnologies China News Besides, yeast industry is becoming accounting for over 70% of China total put great efforts to expand their more and more concentrated in China capacity. In recent years, the top 2 have capacity. with the top 3 players (TABLE 4) TABLE 4: Major yeast producers in China, 2009 Manufacturer Location Capacity ’08 Hubei Angel Yeast Co., Ltd. Xinjiang, Shandong, Inner Mongolia, Henan, Guangxi and Hubei 91,000 Mauri Yeast Heilongjiang, Hebei, Shandong, Guangdong, Xinjiang 30,000 Guangdong Danbaoli Yeast Co., Ltd. Guangdong 16,000 Guangdong Zhuhai Aoli Yeast Co., Ltd. Guangdong 2,000 Anhui Lesaffre (Mingguang) Anhui 3,000 Shandong Yantai Hongde Food Industry Co., Ltd. Shandong 2,000 Guangdong Jiangmen Center for Biotech. Co., Ltd. Guangdong 4,000 Shandong Xiwang Leavening Co., Ltd. Shandong 1,500 Qiqiha’er Longtai Food Co., Ltd. Heilongjiang 1,500 Source: CCM International PICTURE: Distribution of major yeast production regions in China Source: CCM International In addition, in recent years, China’s like feedstuff and flour products, etc. As except sour dough do not apply active demand for yeast and yeast extract has estimated, the major potential market dry yeasts, showing a huge market been increasing year by year attributed for yeast in China is rural areas, where potential. to the development of related industries about 90% of homemade flour products 8 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 12. CCM Newsletter Industrial Biotechnologies China News Donta Group is a state-owned companies located in 4 provinces - enterprise established in 1935, and has Guangdong, Guangxi, Shanxi, Yunnan, a raw sugar processing base with Donta Group is mainly engaged in four processing capacity of 700,000t/a, series of products, namely sugar, which provides part of molasses for biological engineering, thermal-electric Guangdong Danbaoli. As a power and paper-making. conglomerate with 21 factories and Continent Biotech expanding enzyme preparation Continent Biotech Group Co., Ltd. industrial enzyme etc. But feed has spread throughout China, even to (Continent Biotech, headquartered in enzymes like phytase, alkaline pectase, some other countries in Asia like Japan, Qingdao City, Shandong Province) is liquid complex enzyme and alkaline Philippines, etc. , and its sales value now constructing a 7,000t/a solid xylanase will remain the company’s key reached about USD44 million. enzyme preparation production line, the products. second phase of its 15,000t/a enzyme Continent Biotech has been paying preparation plant, in Weifang City, Actually, Continent Biotech is the first great attention to after-sales service for Shandong Province. enzyme producer at home to clients both at home and abroad. It built industrialize liquid enzyme spraying a biotech research institute in Shandong Continent Biotech’s 15,000t/a enzyme uniformity technology which is in 2005, for the sake of developing preparation plant consists of the developed independently in 2001. By market-target and high-quality feed first-phase 8,000t/a for liquid enzyme applying this technology in its enzyme enzyme and supply technology support preparation, which was completed on preparation production, reaction for various clients in clients. Jul. 20th 2009 with investment of temperature can keep below 60℃ thus USD12 million, and the second-phase maintaining high enzyme activity, as in In 2008, there were over one hundred 7,000t/a for solid enzyme preparation normal reaction temperature would feed enzyme producers in China with with investment of USD22 million. Upon surpass 60℃ with enzyme activity relatively small production capacity and completion of this plant, Continent losing largely. low-quality products, except Biotech will expand its total enzyme Novozymes (China) Biotechnology Co., preparation capacity to 20,000t/a, and is Besides, with this technology, Continent Ltd, the largest enzyme producer in the expected to become the largest enzyme Biotech has built another two liquid feed world. Owing to lack of strong market preparation producer in Shandong. enzyme production bases respectively competitiveness, in terms of technology in Binzhou City with 3,000t/a complex and capitals, many domestic Early in Aug. 2008, Continent Biotech enzyme and Linyi City with 1,000t/a small-scale feed enzyme producers has begun to construct this 15,000t/a phytase and 1,000t/a xylanase in recent choose to stop or suspend expansion, enzyme preparation plant in Weifang. At years. except Continent Biotech and present, the company has constructed Guangdong VTR Bio-tech Co., Ltd., one major workshop with 240 m3 According to Mr. Duan, technical both of which continue capacity fermentation capacity, one distilling engineer of Continent Biotech, enzyme expansion. The latter in July launched a workshop and two power workshops. In products produced by this technology 20,000t/a feed enzyme base in Inner this plant, Continent Biotech will have been accepted by users because Mongolia. produce various enzyme preparations of its high quality and short supply. In like feed enzyme, edible enzyme and 2008, Continent Biotech’s sales network 9 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 13. CCM Newsletter Industrial Biotechnologies China News The demand for feed enzyme will realize that feed enzyme can greatly production cost. Given this trend, feed continue to rise in the future in China, as enhance utilization rate of nutrition in enzyme is expected to be widely used in more and more feedstuff producers feed, which can efficiently decrease animal feedstuff. Moreover, increasing feedstuff output in China year on year is another key driver for increasing use of feed enzyme preparation (FIGURE 4). FIGURE 4: Feedstuff output in China, 2005~2009 160 140 (Unit: million tonnes) 120 100 80 60 40 20 0 2005 2006 2007 2008 2009 est Source: CCM International Meanwhile, increasing numbers of feed enterprises. Actually, feed enzyme enzyme, probiotics, protein, bio-fertilizer, enterprises expect to cooperate with producers should develop new allicin and so forth. The company is feed enzyme producers, based on technology to improve the quality of equipped with the most advanced liquid high-quality feed enzyme and good products, thus increasing and solid-state fermentation facilities in after-sales service. In this situation, feed competitiveness in the future. the world and ascends into the leading enzyme producers taking advantage of large-scale biological preparation and high-quality products and good Established in 2001, Continent Biotech manufacturing enterprises. after-sales performance can resolve is composed of six manufacturing various production difficulties for feed enterprises and mainly engaged in CAS building largest lactase production base in China Chinese Academy of Science (CAS) Jiangxi Province, aiming to capture stages, consisting of seven production established a subsidiary Chinese China’s huge lactase market. lines. Upon completion, CASL will Academy of Science Lactase Co., Ltd. achieve 3,000t/a lactase capacity th (CASL) on Aug.18 , 2009, and started With total investment of USD19.02 (TABLE 5). to construct China’s biggest lactase million, the construction of this production base in Dean County, production base is divided into two TABLE 5: Information of CASL’s new project Item First phase Second phase 10 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 14. CCM Newsletter Industrial Biotechnologies China News Capacity 1,500t/a 1,500t/a Investment USD11.7 million USD7.32 million Start time Aug. 2009 Oct. 2010 Launch time 2010 2011 Source: CCM International Lactase, also named as lactase, which can rapidly and efficiently and inefficient technology, thus leading beta-galactosidase (β-galactosidase), hydrolyze lactose to glucose and to small profit, given the adverse normally exists in human body in galactose with 6,000u/g, compared with situation of economic downturn at that intestinal epithelial cells, thereby 3,000u/g or 5,000u/g for existing time. Owing to domestic insufficient contributing to digestion of lactose products. supply but huge demand, 98% of present in dairy foods. However, large China’s lactase is imported from other numbers of people in Asia and Africa, At present, China has few lactase countries like US and Japan, etc., as accounting for 70% of Asia and Africa’s producers, and most of them have small estimated. total as estimated, have a genetic capacity. As reported, the total lactase deficiency of this enzyme and are production capacity in China was only Thanks to increasing demand for low unable to digest lactose. 20t/a in 2008. For example, Harbin lactose milk products, the demand for Meihua Biotechnology Co., Ltd. (Meihua lactase in China has been increasing in The new base will adopt the technology Biotechnology), the only active producer recent years. It was estimated that of using thalli Mutated Aspergillus Niger in China currently, has lactase capacity Chinese demand for lactase was about to produce lactase developed by CAS in of only 8t/a. 2,700 tonnes in 2008, most of which 2006, which can enhance lactose was imported from overseas at price of hydrolysis efficiency and cut down the According to Mr. Zhang, salesman of about USD59,000/t, higher than that of production cost compared to using the Meihua Biotechnology, some USD43,000/t in domestic market other thalli under the same condition. companies stopped lactase production (FIGURE 5). Besides, it will mainly produce a new in 2008 due to its high production cost FIGURE 5: Output of lactose milk products and demand for lactase in China, 2005~2008 3,500,000 3,000 2700 3,000,000 3,000,000 2300 2,500 2,500,000 2000 2,500,000 1800 2,000 Unit: tonne 2,000,000 2,000,000 1,850,000 1,500 1,500,000 1,000 1,000,000 500,000 500 0 0 2005 2006 2007 2008 Lactose milk products Lactase Source: CCM International 11 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 15. CCM Newsletter Industrial Biotechnologies China News For the sake of better lactose absorption Yang, Deputy Secretary General of 92%, implying promising market for low when consuming dairy products, many Chinese Nutrition Society, the lactose milk, as well as a huge demand countries add lactase to dairy foods or proportion of Chinese adults suffering for lactase to decompose lactose for other dairy meals. According to Ms. from lactose intolerance is as high as reasonable nutrition absorption. Novozymes expands enzyme production Novozymes, the world’s biggest Area and expects to launch it by 2010. After the launch of this new base, with industrial enzymes producer, Through this expansion, Tianjin total investment of about USD53 million announced on Aug. 3rd 2009 that it will Novozymes will become Novozymes’ and coverage area of 5,599m2, construct an enzyme preparation third global enzyme production base. Novozymes is predicted to double its production base in Tianjin enzyme preparation capacity in China Economic-Technological Development (FIGURE 6). FIGURE 6: Main enzyme producers’ market share in the world 22% 47% 6% 21% 4% Novozymes BASF Danisco DSM Others Source: Novozymes’ annual report, 2007 According to Mr. Ren, senior manager agro-forestry wastes as a large fields since 1998 (FIGURE 7). And after from Asia Bioenergy Department of agricultural country. Also, Novozymes nearly 10 years’ research and Novozymes, the company is very predicts that the second generation development, it has solved some major optimistic about China’s future bioethanol consumption will explosively technical obstacles in development of the second generation grow in 2012. second-generation bioethanol bioethanol, namely using crop wastes production process, and is expected to as raw materials, as China highly Novozymes has been producing various produce second bioethanol enzymes on concerns about energy supply and enzymes that are widely used in food, a large scale in 2010. security and has abundant supply of brewing, washing and other industrial FIGURE 7: Novozymes enzyme annual sales, 2004~2008 12 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 16. CCM Newsletter Industrial Biotechnologies China News 1,600 1,200 (Unit: million USD) 800 400 0 2004 2005 2006 2007 2008 Source: CCM International Enzymes production cost is an crop wastes to produce fuel ethanol on more and more attention to important factor influencing the a large scale. second-generation bioethanol. On July development of second-generation 9th 2009, the enzyme preparation bioethanol production. At present, The second-generation bioethanol has branch of China Fermentation Industry enzyme preparation cost accounts for a long value chain, including raw Association held a discussion in 35% of total production cost for material collection, transport and Qingdao. Over twenty domestic large second-generation bioethanol storage, as well as cellulosic ethanol biotechnology enterprises and research production, and after large-scale production, sales and so on, among institutes attended the meeting industrialization, the cost proportion will which the cellulose technology can (FIGURE 8). The branch president be reduced to 20-25%. According to reduce production cost largely. And the announced the development plan of the Novozymes’ estimation, the breakthrough of this technology needs enzyme preparation industry. Although second-generation bioethanol multilateral collaboration to achieve a domestic biotechnology enterprises production cost in China will be mutual development. Novozymes and have made rapid progress in recent USD2.59 per gallon in 2010, and can be COFCO in early 2009 reached a new years, their enzyme annual output is still reduced to USD1.5 per gallon by 2015, cooperation agreement with Sinopec to much less than multinational which will be very competitive compared initiate large-scale commercial enterprises’. with gasoline price (USD2 per gallon). production by using crop wastes as raw materials to produce second-generation According to Mr. Steen Riisgaard, CEO bioethanol. of Novozymes, there is only one step away for the company to make use of Chinese government has been paying FIGURE 8: Major enzyme producers’ capacity in 2008 13 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 17. CCM Newsletter Industrial Biotechnologies China News 10,000 8,000 8,000 6,500 6,000 6,000 (Unit: t/a) 4,000 4,000 2,000 0 Hunan Jinshi Zhengzhou Jiangyin Henan Yangshao Fuyuan Baishenglong Source: CCM International Note: Hunan Jinshi Group Co., Ltd. Zhengzhou Fuyuan Biotechnology Co., Ltd. Jiangyin Baishenglong Bioengineering Co., Ltd. Henan Yangshao living to turn the engineering Co., Ltd. Hunan Yuyuan expands in microbial fertilizer Hunan Yuyuan Bio-technological Co., microbial fertilizer has advantages in Ltd. (Hunan Yuyuan, located in Hunan Hunan Yuyuan’s expansion of microbial ecological protection, crop quality national bio-industry base Changsha fertilizer is attributed to at least four improvement and fertilizer efficiency City, Hunan Province), a leading reasons. enhancement, as microbial fertilizer can enterprise of microbial fertilizer industry, increase beneficial bacteria in soil to signed an agreement with Shenzhen Firstly, Chinese government has help crops use nutrients. According to Fortune Venture Capital Co., Ltd. formulated some policies to promote the Fertilizer Testing Center of Ministry of (Shenzhen Fortune Venture) to obtain extensive use of microbial fertilizer. For Agriculture, farm products output can capital for capacity expansion and R&D example, the first document release by increase 12% ~20% by using microbial st strengthening on Aug. 21 2009. Chinese government this year stipulate fertilizer. So in vegetable growing to strengthen the protection and regions like Shouguang, farms use Actually, after establishment, Hunan improvement of soil, and to promote and microbial fertilizer more and more Yuyuan had invested about USD15 the use of microbial fertilizer in the widely. million to build a 10,000 t/a.microbial whole country. fertilizer production line. This production Furthermore, the average utilization rate line has the largest investment and Secondly, some farmers have begun to of common fertilizer is only 20%~30%, largest production capacity, and its accept and use microbial fertilizer, while that of microbial fertilizer is more technical level and equipment are the which has brought tremendous higher , for example, the nitrogen fixed most advanced in China. And currently, opportunities for microbial fertilizer in rhizobia can almost all be absorbed it has putt high concentrations of manufacturers. by plants. bacteria powder into commercial mass production. Compared with common fertilizer, More and more farmers realize 14 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 18. CCM Newsletter Industrial Biotechnologies China News important role of microbial fertilizer in practical production, so microbial Fourthly, microbial fertilizer has a large Currently, there are more 500 microbial fertilizers have become more and more profit margin, compared with common fertilizer companies in China (TABLE 6), popular than common fertilizers with fertilizer. And currently, only a few have annual output is about 5 million tonnes, farmers. been engaged in microbial fertilizer and the application areas are nearly 6 production, and thus they have huge million hectares. Microbial fertilizer Thirdly, the current status of the soil development potential to capture market product categories continue to increase, gives business opportunities to share amid this less intense market so far, the products registered in the microbial fertilizer manufacturers. The competition. The large formal Ministry of Agriculture are divided into soil compaction and salinization have manufacturers, in particular, like Hunan two major categories of antimicrobial become widespread, as farmers have Yuyuan, are expected to work hard and and microbial fertilizer including 11 been using nitrogen fertilizer for a long make great progress on this field, varieties. In the next five years, China's time. Compared with common fertilizer, depending on their sufficient funds and microbial fertilizer annual output is microbial fertilizer not only can break strong scientific and technological expected to reach 8 million ~ 10 million potassium and phosphate and fix background. As for other small tones. And it is expected that microbial nitrogen, but also can greatly increase companies, like family workshops, they fertilizer industries will play a more fertilizer utilization rate, so it is are running on a small scale and weak important role in agricultural production. increasingly favored by farmers. in competitiveness. TABLE 6: Some domestic microbial fertilizer companies in 2008 Company Capacity (t/a) in Location Hebei Fuhua Kangtute Environmental Co., Ltd. 100,000 Shijiazhuang, Hebei Hebei Juwei Biological Engineering Co., Ltd. 100,000 Baoding, Hebei Dezhou Sunshine Biotechnology Co., Ltd. 100,000 Dezhou, Shandong Dalian Shibeide Biotechnology Co., Ltd. 100,000 Dalian, Liaoning Shenyang Shennongren Biochemical Engineering Co., Ltd. 30,000 Shenyang, Liaoning Liaoning Yuanheng Biotechnology Co., Ltd. 30,000 Chaoyang, Liaoning Beijing Wlong Technology Co., Ltd. 30,000 Beijing, Beijing Heilongjiang Suihua Nongken Chenhuan Biology Science & Technology Co., Ltd. 20,000 Suihua, Heilongjiang Shanxi Yi’an Biological Engineering Co., Ltd. 5,000 Yuncheng, Shanxi Beijing First Biological Engineering Co., Ltd. 5,000 Beijing Source: CCM International Although, due to the financial crisis in economy see rapid development and will increase the demand for microbial 2008, market demand for microbial increase in per capita income, Chinese fertilizer. Meanwhile, the new industry fertilizer production has experienced government will increase the system will also prompt domestic weak growth. In the long run, with the investments in microbial fertilizer, which microbial fertilizer industry to reshuffle. SK sells SCR enzyme technology to China SK Holding Co., Ltd. (SK Holding, (SCR) enzyme technology to Qingdao Company (China Power) in late July headquartered in Seoul, South Korea) Huatuo Technology Co., Ltd., a 2009, which will enable China Power to sold its Selective Catalytic Reduction subsidiary of China Power Investment be the first Chinese company to apply 15 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 19. CCM Newsletter Industrial Biotechnologies China News enzyme technology into industrial power plants and chemical plants and and sulphur dioxide, etc, SCR enzyme exhaust emissions treatment at home. enhance its application in China in the technology has higher catalysis near future. efficiency and lower temperature, and SCR enzyme technology can be used to can reclaim more kinds of exhaust clean up the exhaust emissions like Based on varieties of Bacillus, SCR emissions, even solid waste. carbon dioxide, sulfur dioxide, carbon enzyme technology uses enzyme as monoxide, etc. Researched by SK catalysts, which enjoys higher At present, there are several kinds of Holding since 1996, this technology has purification efficiency, simpler operation exhaust emissions treatment been successfully used in South and lower cost compared with the other technologies in China, (TABLE 7), such Korea’s power plants after 2003, exhaust emission treatment as carbon dioxide reclaiming technology, accounting for 20% of the country’s total technologies in China, thus it’s expected which has played a growingly important market share currently. Besides, SK to be applied in a variety of recycling role in recent years due to the Holding signed a cooperation and waste treatment enterprises. greenhouse effect caused by rising agreement with Germany-based EnBW carbon dioxide emission. But it can only Group in July 2007 and began to For instance, compared with SCR treat one or two kinds of waste gases, explore the overseas markets. chemistry catalysts technology thus restricting its wider application. commonly adopted in China, which Insider reveals that SK Holding will uses chemicals like vanadium pentoxide cooperate with more companies to and titanium dioxide as raw materials to promote this enzyme technology in deal with pollutants of nitrogen oxide TABLE 7: Major exhaust emission technologies in China Technology Main adopters Launch time ZH active carbon adsorbing organic exhaust gases Hangzhou South Environment Protective Coating Equipment 1993 purifying & recycling treatment technology Co., Ltd. Jiangsu Zhongke Energy-Saving Environmental Protection SCR chemistry catalysts technology 2006 Technology Co., Ltd. Carbon dioxide reclaiming technology Chengdu Demei Engineering Technology Co., Ltd. 2001 High-voltage electrostatic trapping technology Gansu Kejin Environmental Technology Co., Ltd. 2002 Phosphorus emission reclaiming technology Yunnan Nanlin Group Co., Ltd. 2008 Source: CCM International With the rising awareness of standard of ‘Absorption Gas Cleaner for which satisfies China’s demand for environmental protection, more and Industrial Emission’, which clearly environmental technologies, is expected more Chinese countries intend to seek stipulates the technical standards for to be accepted by more enterprises. new technologies to reduce pollution. In popular waste treatment devices. 2008, Chinese government issued a Therefore, SCR enzyme technology, BIO-BASED CHEMICALS China’s citric acid export volume up but price down 16 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 20. CCM Newsletter Industrial Biotechnologies China News Despite US and EU’s anti-dumping year to 393,616 tonnes in the first seven the same period of 2008 since early duties on Chinese citric acid in 2009, months of 2009 (FIGURE 9). Except to 2009. China’s citric acid export volume has EU and US, export price of citric acid to still kept increasing, up 1.2% year on other countries has slipped largely over FIGURE 9: China’s citric acid export volume, Jan. ~Jul. 2009 80,000 68,707 70,000 62,089 60,624 62,905 60,000 53,910 48,181 50,000 (Unit: tonne) 37,200 40,000 30,000 20,000 10,000 0 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Source: China Customs Respectively since Jun. 2008 and Sep. have been endeavoring to develop Although Ministry of Commerce 2008, EU and US have begun to levy other new and large markets like India, Administration has executed Export high anti-dumping duties on China’s key Mexico, Thailand and Indonesia etc. License Administration on domestic citric acid producers like Anhui BBCA after the anti-dumping duties had been citric acid exporters since early 2009, Biochemical Co., Ltd. and Shandong implemented. Actually, India has totally this Export License Administration with TTCA etc., which erodes Chinese imported 32,424 tonnes citric acid from relatively low requirements for domestic players’ price advantage in these China during the first seven months in citric acid producers couldn’t efficiently markets. 2009, up 39% over the same period of restrain pernicious price competition 2008, which makes it the largest among them. In order to enlarge market As an export-oriented product, importer of Chinese citric acid currently. share in oversea markets with no homemade citric acid’s encountering anti-dumping duties, domestic citric acid anti-dumping sanction from EU and Prices of homemade citric acid exported exporters choose to cut down the price. USA has seriously impacted domestic to EU and US have stayed at relatively citric acid export, because nearly 40% high level of around USD1,000/t, due to Besides, decreasing raw material price of China’s citric acid export was to EU anti-dumping duties during this period, also resulted in price fall of domestic and US before. According to statistics but export prices to other countries like citric acid. Corn and sulphuric acid are from China Customs, in the first seven Southeast Asia, Africa and South key raw materials for citric acid months of 2009, US citric acid import America saw a big drop, ranging from production. In H1 2009, corn price volume from China has decreased by USD680/t and USD820/t, remained similar to that in H1 2008, but 87.6% and EU import down 28%. USD100~200/t lower than that in the sulphuric acid price has plummeted to first seven months of 2008. around USD30/t from USD245/t since However, domestic citric acid producers the breakout of global financial crisis. At 17 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 21. CCM Newsletter Industrial Biotechnologies China News present, sulphuric acid price is still at in China. Once both sulphuric acid and and has exported around 80% of its total low level of USD36/t and corn price corn price rise in the following months, output on average in recent years. keeps stable at around USD234/t in citric acid price may also be pushed up However, its production has been Northeast China. slightly in the market. restrained by the government due to high pollution during citric acid Citric acid export price has kept stable China has been the largest citric acid production. currently, and it is hard to raise the price producer with total output of around due to current citric acid surplus supply 750,000 tonnes per year in the world, VC export price rises Average export price of Vitamin C (VC) Customs (TABLE 8), in the first seven downtrend. The impacts of weak has climbed up in the first seven months months of 2009, VC average export domestic demand have been partly of 2009, continuing an uptrend price has reached USD10,297/t, up offset by the high VC export price. compared to the same period last year. 29.6% compared to the same period last year, while most of the other vitamin According to statistics from China export prices have experienced TABLE 8: China’s VC export situation, Jan~ Jul, 2009 Item Jan - Jul, 2008 Jan - Jul, 2009 Growth rates (%) Export (tonne) 51,632 47,905 -7.2 Value (USD) 410,165,661 493,274,479 20.3 Average (USD/t) 7,944 10,297 29.6 Source: China Customs The main reasons for VC export price low production cost. rise are as follows: The four biggest domestic VC In recent years, with strong enterprises include (FIGURE 10) Firstly, China has become the world’s competitiveness of China’s VC, some Northeast Pharmaceutical Group Co., VC production base, thus enabling multinational corporations have Ltd (NPC), North China Pharmaceutical domestic VC enterprises to price the gradually stopped VC production. As a Group Co., Ltd (NCPC), China products. result, global dependence on Chinese Shijiazhuang Pharmaceutical Group Co., VC has gradually increased. For Ltd (CSPC) and Aland (Jiangsu) As an important exporter of VC, China example, China VC export volume was Nutraceutical Co., Ltd. (Aland). The VC has strong competitiveness in global VC less than 80,000 tonnes in 2007, but it export prices of these four enterprises market. China produces VC by using increased to 85,239 tonnes in 2008. By all stayed at a relatively high level of two-step fermentation process, which the end of 2008, China VC sales value about USD1,000/t, a big upthrust has reached the world-advanced level had accounted for 86% of total VC sales compared with the same period last and thus being prohibited for export. value in US market. At present, about year, signifying their strong pricing Based on the technology edge, China’s 80% of the world’s VC products are power. VC has good product quality and enjoys sourced from China. 18 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 22. CCM Newsletter Industrial Biotechnologies China News FIGURE 10: Capacity of major domestic VC enterprises in 2008 40,000 35,000 30,000 25,000 (Unit: t/a) 20,000 20,000 18,000 10,000 0 CSPC NPC Aland NCPC Source: CCM International Secondly, VC is mainly used in excellent sales performance after the VC enterprises had been in full industries of pharmaceuticals, health outbreak of H1N1 influenza around the operation in the first five months this food, and food additives, etc. that world, as VC preparation can effectively year. With sufficient VC supply in the provide necessary daily products, thus prevent influenza. Besides, many new domestic markets, its price only less being affected by economic kinds of VC composite preparations can fluctuated slightly in early June. downturn. And VC only constitutes a also effectively enhance immunity and However, to curb the slight price decline very small proportion of its downstream prevent influenza, so they had sold well this June, the four biggest VC products’ cost, so downstream clients from last winter to this spring, thus enterprises decided to stop production are not sensitive to the price change of promoting the soaring demand of VC. from July to September. As a result, VC VC. price has risen in July, and is expected In light of huge VC demand and its high to maintain uptrend in the near future Thirdly, VC products have seen prices currently (FIGURE 11), the four with reduced supply. FIGURE 11: Domestic VC export prices, Jan. – Jul. 2009 19 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 23. CCM Newsletter Industrial Biotechnologies China News 10,800 10,600 10,551 10,558 10,400 10,415 10,409 10,202 (Unit: USD/t) 10,200 10,000 10,033 9,903 9,800 9,600 9,400 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Source: CCM International In the long run, VC export price may autumn and winter this year. Secondly, small and medium-sized companies maintain relatively high level, attributed the price of corn, one of VC’s raw plan to produce VC, their products only to the following factors. Firstly, H1N1 materials, may keep at high level sell in domestic market, so their influenza may continue its prevalence because of current severe drought in expansions can not affect VC export for a long time and may break out in the China. Thirdly, although some domestic price. Jianding Biotechnology established Jiangsu Jianding Biotechnology Co., Ltd. benefits by reutilizing waste from crab shell as raw materials, which leads (Jianding Biotechnology), a company production. to heavy metal residues and large newly established on Aug. 10th 2009, amounts of ash contained in has initiated the construction of For one thing, glucosamine, as an glucosamine products. With first-phase production lines of 3,000t/a important health product, is widely used vegetarianism spreading over Europe glucosamine and 12,000t/a activated as nutritional supplements for articular and US, enabling citric acid-based carbon, which will be launched by the cartilage treatment, and is the only glucosamine products to become end of 2009. health product approved by the medical greatly popular among consumers, community and nutrition research glucosamine products produced by Jianding Biotechnology has institutions in US and Europe, for its Jianding Biotechnology using this independent technology for therapeutical effect on bone and joint technology is predicted to have a highly co-production of glucosamine and diseases. The market value of competitive position in health products activated carbon. Adopting this glucosamine and its downstream market as this technology is developed technology, glucosamine can be products like health products and independently at home, and the extracted from citric acid waste, and pharmaceuticals is estimated to reach overseas market has not obtained the then the waste is further processed to USD7 billion. technology up to now. produce high-quality activated carbon. For another, co-production of This technology is believed to create Currently, domestic glucosamine glucosamine and activated carbon can huge economic and environmental production mainly use shrimp shell and reduce environmental pollution. With its 20 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 24. CCM Newsletter Industrial Biotechnologies China News activated carbon capacity accounting for pollution. Therefore, using this With entry into health products industry more than 1/3 of global total, China is technology can greatly relieve the in the 1980s, China has rapidly the world’s largest producer of activated environmental pressure. developed in this field in the past carbon, a major chemical material with decade. By the end of 2007, China has annual consumption volume of more It is thus expected that Jianding approved more than 8,900 varieties of than one million tonnes in the world. But Biotechnology will have a very important health products. And more than 1,640 currently, large quantities of high-quality position in China’s health product health product manufacturers have timber and bamboo are consumed at industry, and will promote China’s achieved total production value of over home to produce activated production overall health product industry to USD17 billion annually (FIGURE 12). every year, leading to high energy develop more eco-friendly. consumption and severe environmental FIGURE 12: Glucosamine output in China, 2002~2007 10,000 9,000 8,000 7,000 (Unit: tonne) 6,000 5,000 4,000 3,000 2,000 1,000 0 2002 2003 2004 2005 2006 2007 Source: CCM International Some enterprises from other industries China Health Care Association, said integration in health product industry, are very optimistic on the future that some Japanese automobile which will change glucosamine development of China health product companies with sufficient funds are manufacturers’ competitive landscape in industry. In the end of 2008, , Wuliangye waiting for an opportunity to enter health China (TABLE 9). Group Co., Ltd., a well-known liquid product industry in China. brand, cooperated with Giant Corporation to enter health care market. ‘Food Safety Law’ and ‘Rules of Supervision and Administration on Mr. Wang Dahong, Secretary General of Health Food Products’ will also promote TABLE 9:Information of glucosamine manufacturers in China, 2008 Number of Number of Locations Capacity '08, t/a Output '07, t Capacity '08 Output '07 manufacturers, ‘08 manufacturers ‘08 Zhejiang 9 7,150 3,430 33.30% 36.80% 38.00% Jiangsu 9 4,960 2,645 33.30% 25.50% 29.30% 21 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com