On 24 Feb. 2012, the Ministry of Industry and Information Technology of China and the Ministry of Agriculture of China co-issued a Plan for Grain Processing Industry Development 2011-2020 (the Grain Plan), which points out the development direction for corn deep-processing industry in the future, according to CCM International’s March issue of Corn Products China News.
In accordance with the Grain Plan, China's grain processing industry achieved a great growth from 2005 to 2010: its total output value reached USD412.7 billion in 2010, surging by 70% over that in 2005. Besides, the number of large and powerful enterprises also enjoyed an increase: the number of producers with wheat processing volume over 400 tonnes per day reached 427 in 2010, 3.1 times of that in 2005. Besides, the proportion of top 10 corn deep-processing enterprises' sales revenue among total in the industry reached 38% in 2010. However, there were still problems in grain processing industry, such as unreasonable industrial structure: lots of small producers are with inferior production capacity; unsatisfactory quality guarantee system and poor capability of research and innovation.
In view of the current development situation in grain processing industry and the prediction of domestic and global economy in the next few years, the Grain Plan points out some specific goals for the industry's development by 2015 and 2020: the total output value shall reach USD619.0 billion and USD1,095.2 billion by 2015 and 2020 respectively; the supply of grain for edible use shall be no less than 257.5 million tonnes and 252.5 million tonnes by 2015 and 2020 separately; the supply of grain for feed use shall be no less than 200.0 million tonnes and 227.5 million tonnes by 2015 and 2020 respectively.
In order to achieve the goals mentioned above, the Grain Plan proposes some detailed development direction for grain processing industry, and the following will be the focuses of corn deep-processing industry.
Firstly, to eliminate inferior production capacities and encourage leading enterprises to develop further, increasing industry concentration. Moreover, the Grain Plan specifically pointed out that by 2020, 3 million t/a capacity of corn starch shall be eliminated, accounting for 10.6% in its total domestic capacity in 2010.
Secondly, to restrain the capacity expansion of some corn products, such as monosodium glutamate, citric acid, lysine, threonine, tryptophan and alcohol; to stably develop starch sugar and sugar alcohol industries; to encourage the development of some enzymic preparations, organic acids and functional starch sugar all with high added value. In addition, the Grain Plan definitely encourages using non-grain raw materials to replace corn for production of the above products.
Thirdly, corn's supply shall be preferentially guaranteed for edible use and feed use, instead of industrial use, and the proportion of corn's consumption in deep-processing industry among total shall be limited to a reasonable level, which is suggested to be less than 26%.
Finally, foreign investors shall be restrained to enter into corn deep-processing industry. In fact, in 2010, the proportion of corn processing volume of foreign-owned companies among total was 26%, while those of private-owned and state-owned companies was 66% and 8% respectively. And the proportion of foreign-owned companies shall be further reduced in the future, in order to better control corn's consumption volume in deep-processing industry.
What's more important, the Grain Plan proposes some specific measures to guarantee corn deep-processing industry to develop toward the above direction. For example, to strengthen supervision and increase the threshold for entrance, to intensify financial support for leading enterprises or small and medium-sized enterprises with advanced production technology or high added value products and promising prospect; to exempt the import tax of some equipment that can't be manufactured at home for governmentally encouraged grain processing industry. These measures will positively help corn deep-processing industry in the future, if they are implemented effectively.
As a whole, the Grain Plan does not provide new ideas for corn deep-processing industry, without obvious effect on the industry in the short term, but it will work better for a long term, just like other related policies did, such as the 2011 edition of Catalogue of Industries for Guiding Foreign Investment, and the 12th Five-Year Plan for Food Industry. Overall, these policies definitely pointed out the development direction for the industry, and future regulations will be in line with these policies, so as to guarantee corn deep-processing industry to head toward the direction ruled within them.
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Corn Products China News, a monthly publication issued by CCM International on 20th of every month, reveals the driving force of news stories and deeply analyzes the influence of trends and dynamics on domestic and international corn deep processing industry.
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