Tuesday, August 9, 2011

Jiangxi Beiyang Expands Capacity of Stevioside and RA

Guangzhou China, August 8, 2011 - Jiangxi Beiyang Food Additive Co., Ltd. (Jiangxi Beiyang), the fifth largest acesulfame-K producer in China, expanded the capacity of stevioside and rebaudioside A (RA), two major components of steviol glycosides, in Nanchang on 28 June 2011, which indicates that it intends to greatly explore the market of stevioside and RA, according to CCM’s latest issue of Sweeteners China News.
Jiangxi Beiyang has invested about USD9.74 million in the expansion project. By implementing this project,  the capacity of both stevioside and RA will be increased by 1,000t/a. The project was started on 28 June 2011 at Nanchang Economic Development Zone and is estimated to be finished in April 2012. Most RA will be sold to oversea countries, according to Mr. Xiong, the board secretary of Jiangxi Beiyang. After launching production, Jiangxi Beiyang will use stevia leaves as raw materials to produce stevioside which will be concentrated RA afterwards.

Actually, Jiangxi Beiyang has a subsidiary located in Songjiang District of Shanghai City which uses stevioside to produce RA97 with a capacity of 50t/a and with 97% purity of RA species. Before that Jiangxi Beiyang didn't produce stevioside. All of the stevioside needed is bought from other stevioside producers in China.
Mr. Xiong said that the main reasons for launching the new expansion project are the increasing demand and the safety of food additives. According to Mr. Xiong, oversea demand for RA is big and the RA market has gradually been expanded in recent years. Despite the fact that the demand for RA is less than that for stevioside in China, some of the world's top 500 enterprises prefer to using RA. What's more, both Chinese and oversea governments pay more attention to the safety of food additives. RA is a natural sweetener produced by modern extracting technology with high safety in application, and it is accepted by more and more countries all over the world. Thus, Jiangxi Beiyang decided to expand its capacity of RA. Finally, it is estimated that producing RA can help Jiangxi Beiyang obtain more profits. Because RA is a high value-added product whose gross margin  is more than that of stevioside, Jiangxi Beiyang pays much attention to high purity stevia sweetener such as RA 80%, RA 90% and RA 97% to obtain higher profits.
Jiangxi Beiyang is expected to enjoy a good development in the future. Mr. Xiong claimed that Jiangxi Beiyang is the only producer of high purity RA (RA80, RA90 and RA97) with capacity of more than 10t/a in China in 2011. That's because other high purity RA producers usually send stevioside to foreign countries for further processing after production in China, and most of the concentrated product (high purity RA) will be consumed by foreign countries and only a small amount will be sold back to China. Besides, it is estimated that Jiangxi Beiyang's capacity of high purity RA will reach 1,050t/a after finishing expansion in 2012 and it will become the largest high purity RA producer in China at that time. Therefore, other domestic producers are not the rivals of Jiangxi Beiyang, which can be taken as an advantage for Jiangxi Beiyang to make more profits.

Besides, Jiangxi Beiyang has three raw material supply areas in China, which ensures its stable stevia supply. And stevia is the basic raw material of stevioside and RA. Currently, the major raw material supply bases of Jiangxi Beiyang are Anhui, Jiangsu and Heilongjiang which are the stevia planting provinces in China. Most stevia as raw material is supplied by its own supply bases, and the remaining will be filled by the stevia bought from market.

Moreover, Jiangxi Beiyang cooperates with Mr. Hu, the secretary-general of China Food Additives & Ingredients Association in charge of sweeteners and a famous professor of Shanghai Normal University focusing on this area. In the field of high purity RA study, Mr. Hu is also a famous expert in China. Jiangxi Beiyang benefits greatly from the cooperation on the application and promotion of high purity RA with him.
However, Jiangxi Beiyang will face competition from multinational corporations in high purity RA market. At present, PureCircle (Jiangxi
Co., Ltd. (PureCircle) and GLG Life Tech Corporation (GLG), two leading stevia sweetener multinational corporations in the world, still take up most high purity RA market shares in China. And Jiangxi Beiyang may be weaker in terms of brand and market channel compared with them both in China and abroad. Meantime, there are some local stevia sweetener producers that have entered high purity RA market with small capacity in order to get more profits. That means Jiangxi Beiyang needs to compete with them to get more market share of high purity RA.
Apart from the above, Jiangxi Beiyang is planning to build a sucralose production line, of which capacity will be 1,500t/a after finishing the expansion of stevioside and RA capacity. It is estimated that the establishment of sucralose production line will be started from 2012 and finished before 2014. All in all, Jiangxi Beiyang aims to become a producer who makes acesulfame-K, RA and sucralose in three years in order to satisfy demand for sweeteners at all levels.

Content of Sweeteners China News 1108:
Import and export of Chinese sugar in H1 2011
Zhongjing Sugar plans to build five production lines of fructose
Nestlé intends to acquire 60% of Hsu Fu Chi
4,147 tonnes of Chinese erythritol exported in 2010
Domestic companies target sucralose market
Jiangxi Beiyang expands capacity of stevioside and RA
Shandong Mifutang aims to explore retail market of xylitol
Ex-factory prices of Chinese sweeteners in July 2011
Import & export analysis of Chinese xylitol in Jan.-June 2011
Import & export analysis of Chinese mannitol in Jan.-June 2011
Sorbitol expected to witness great development in food and daily chemicals
industries in future
Increase of sucrose's price benefits other sweeteners

Sweeteners China News is a monthly newsletter published by CCM International Limited. Based on China market, CCM offers timely update and close follow up of China’s various kind of sweeteners market dynamics, analyze the market data and trends, Major columns include market dynamic, company dynamic, raw material supply, price update, import & export analysis, Consumption Trend & Competitiveness.

If you are interested in June issue of Sweeteners China News, please do not hesitate to contact us by +86-20-37616606, or email us at econtact@cnchemicals.com.

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