Baolingbao
Biology Co., Ltd. (Baolingbao), one of the few large-scale corn deep-processing
enterprises that may have seen both revenue and profit increase in China in
2012, may see continuous increase in 2013 due to the large potential increase
in the sales of its products, according to CCM’s February Issue of Corn Products China News 1302.
Domestic HFCS
underwent decreasing performance in 2012 because of the declining market price
of sugar, competitor of HFCS. However, Baolingbao's HFCS experienced a 10.27%
year-on-year growth in revenue and merely a 0.92% year-on-year decrease in
gross profit margin in H1 2012 despite the increasing cost from corn because a
large part of Baolingbao's HFCS was sold to Coca-Cola, who had made a price
commitment with Baolingbao. On Dec. 28, 2012, Baolingbao announced that the
company had earned the pride of "Annual Platinum Supplier Award", the
first honor that domestic HFCS suppliers of Coca-Cola have ever got, which
would enhance the cooperation between Baolingbao and Coca-Cola. Miss Lv, Board Secretary
of Baolingbao, predicted that the sales volume of the company's HFCS to
Coca-Cola would increase by about 20% in 2013 compared with that in 2012. In
2011, Baolingbao's sales value to Coca-Cola was USD42.7 million, accounting for
50.8% of the sales value of the company's HFCS according to its 2011 annual
report. Accordingly, Baolingbao's HFCS will perform better than others' under
the expectation of unsatisfactory performance of HFCS caused by excessive
supply of sugar in 2013. But the sales quantity of Baolingbao's HFCS will not
see considerable increase because its HFCS production line has already reached
full production.
In Aug. 2012,
Baolingbao was approved to be the unique feed-grade IMO producer in China in
the next five years. And feed-grade IMO, a substitute for antibiotics, enjoys a
promising market because Chinese government is cutting down the application
quantity of the latter in feed. In Dec. 2012, China Central Television exposed
"Fast-growing Chickens Event"–chicken raisers still used antibiotics
to keep chickens healthy a week before being sold for meat, which enabled the
public to know more inside stories about chicken cultivation and stimulate the
consumption of feed-grade IMO in the future. Actually, as of middle Jan. 2013,
Baolingbao had built cooperation relationship with more than ten feed producers
such as Qilu Animal Health Products Co., Ltd. and the company's sales volume of
feed-grade IMO had exceeded 2,000 tonnes, according to Baolingbao's official
website. And Miss Lv predicts that the sales quantity of the company's
feed-grade IMO will exceed 10,000 tonnes in 2013 and that of IMO (including
food-grade and feed-grade ones) would reach about 40,000 tonnes this year, up
50% year-on-year.
Miss Lv predicts
that the sales volume of Baolingbao's FOS will reach 4,000-5,000 tonnes in 2013
while it was less than 1,000 tonnes in 2011 thanks to increasing demand for it.
In April 2012, Chinese government approved FOS with sucrose as feedstock
(content≥95%) to be added in infant and baby formulae, which will maintain
increasing demand for FOS in 2013 in China.
Miss Lv estimates
that the sales volume of Baolingbao's erythritol will see rapid growth in 2013
thanks to the increasing awareness of the product in downstream industries.
Recently, Guangzhou Wanglaoji Pharmaceutical Company Limited, a leading herbal
tea producer in China, indicated that it had invested USD578 million to build a
new production line for herbal tea with no sugar and low content sugar in
Yucheng, Shandong. The herbal tea will use erythritol as sweetener, which will
increase demand for Baolingbao's erythritol which Is located in Yucheng as
well. Moreover, Baolingbao plans to launch a new end-product containing
erythritol and oligosaccharides, which may be put into the market in H1 2013.
Actually, erythritol of Baolingbao has seen rapid growth in recent years. The
176.11% year-on-year growth in the revenue of sugar alcohol of Baolingbao in H1
2012 was mainly attributed to the surging sales volume of erythritol.
However, there
are some risks in the growth of sales volume of Baolingbao's products. On one
hand, Coca-Cola has not guaranteed the purchase quantity of HFCS from
Baolingbao, so Baolingbao still has to compete against other HFCS suppliers of
Coca-Cola even though its product has been highly praised by Coca-Cola. On the
other hand, feed-grade IMO, herbal tea with no sugar or low content sugar and
Baolingbao's new end product are new to consumers, which require a great deal
of promotion, and the growth of these products will be lower than expected if
their market promotion is unsuccessful.
Table contents of
Corn Products China News 1302:
USDC preliminarily finds dumping of imports of xanthan gum from China
Chinese corn products Imp. & Exp. analysis in Dec. 2012
2012 review of Chinese corn products Imp. & Exp.
Domestic market price of HFCS remains downtrend in Feb. 2013
Market prices of corn products as feed keep steady in China in Feb. 2013
Baolingbao enjoys large development potential in 2013
Market price of corn oil fluctuates in China in 2012
BCAAs develop slowly in China in recent years
2012 review of corn market in China
Corn Products China News, a monthly publication
issued by CCM on 20th, features “Supply and Demand”, “Import and
Export Analysis”, “Price Update”, “Market & Company Dynamics”, “Policy”,
“Corn Supply” and other more information researched and reported by CCM’s
professional journalists. It is a reliable intermediate for you to know more
about the corn industry in China
CCM is dedicated to market research in
China
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606
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