On
June 6, 2013, Global Bio-chem Technology Group Co., Ltd. (Global Bio-chem) and
Global Sweeteners Holdings Limited (Global Sweeteners) announced that they will
cooperate with Archer Daniels Midland Company (ADM) for a year. After this
operation, ADM will be the sole distributor of Global Bio-chem's lysine and
Global Sweeteners' sweetener products in Asian and South American markets
respectively. Moreover, according to this cooperation, the Global group can
develop more effective technologies through the help of ADM.
In
detail, according to ADM's indication, it will be the exclusive sales channel
for several of Global Sweeteners' sweetener products. The marketing territory
of the company will include various Southeast Asian countries, the Far East,
Australia and New Zealand from June 2013. ADM maintains several regional sales
offices in Asia, including those in China, India, Singapore, Japan and
Australia.
Furthermore,
ADM will also use its expansive marketing and sales network to distribute a
variety of Global Bio-chem's lysine products to customers in South American
countries such as Brazil and Argentina. As is known, lysine is a kind of amino
acid commonly used by livestock producers to improve the nutritional value of
animal rations. Global Bio-chem is one the world's leading lysine
producers and ADM is a market leader of lysine in South America. As a result,
it's beneficial for these two companies' further development.
"ADM
is pleased to have the opportunity to provide many of the high-value products
in Global Bio-chem's portfolio to our extensive network of customers in Asia
and South America," said Ismael Roig, President of ADM Asia-Pacific.
"This collaboration leverages the strengths of both companies for the
benefit of customers, and we anticipate a positive response on both
continents."
According
to the 2012 annual report of Global Bio-chem, its revenue was USD1.53 billion
in 2012, which decreased by 17% compared with USD1.84 billion in 2011.
Moreover, its gross profit even decreased by 54% year on year, touching USD197
million in 2012 due to the increasing costs (mainly from corn) and lower sales
prices of products.
The
amino acid business is still the most important business of Global Bio-chem.
The revenue and gross profit of the sector accounted for 54% and 93% of the
company's total in 2012 respectively. However, due to the gloomy market in the
feed industry and the lower sales price of lysine, the average sales price of
the company's amino acids decreased by 19% compared with that in 2011 and the
gross profit of the business also decreased by 46% year on year. According to
the prediction by the company, it plans to expand its total capacity of lysine
to 800,000t/a in 2013. As stated in the 2012 annual report of the company, its
products faced intense competition from other players in the domestic market,
while in the overseas market, it succeeded in maintaining stability in the
sales volume and price of its products. As a result, the revenue from the
company's export business in 2012 increased by 10% year on year. Thus, through
the cooperation with ADM, it will facilitate Global Bio-chem's expansion of its
lysine business around the world.
In
addition, Global Sweeteners' revenue increased by 5.7% year on year in 2012,
reaching USD583 million, but its gross profit decreased by 35.6% in 2012 over
2011. In 2012, the domestic price of sugar decreased, reducing the
competitiveness of and demand for sweeteners. Furthermore, the increasing costs
from raw materials and gloomy sales prices of products adversely impacted the
gross profit of Global Sweeteners.
Entering
into 2013, the price of sugar in China may continue to decrease. However, the
new production lines of F55 HFCS in the Shanghai plant of Global Sweeteners
will be put into full operation in 2013. As a high value-added product, F55 is
expected to be a new profit growth source for the company since it is a popular
sweetener in the beverage industry in the international market.
ADM
is one of the world's leading agricultural product processors, with products
mainly covering food ingredients, animal feeds and feed ingredients, biofuels
and other products.
Table of Contents of Corn
Products China News 1306:
Planting
area of corn in China may keep on increasing in 2013
USDC
announces final determination on anti-dumping investigation into China-made
xanthan gum
China's
VB2 export volume increases by 37.4% year on year in April
Chinese
corn products Imp. & Exp. analysis in April 2013
Price
update of corn products in June
Ex-works
price of corn germ meal in China stays high in June 2013
Domestic
market price of DDGS rebounds in May 2013
Fufeng
Group's gross profit margin expected to rebound in 2013
Star
Lake Bioscience sees sharp decrease in net profit in 2012
Global
Bio-Chem and Global Sweeteners cooperate with ADM
NDRC
publishes a new notice about crop straw utilization
COFCO
to import 60,000 tonnes of corn from Argentina in 2013
China
launches the second batch reserve of sugar in 2012/2013
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
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