Changzhou
Niutang Chemical Plant Co., Ltd. (Changzhou Niutang), a main sucralose and
aspartame producer in China, experienced conflicting performance on its export
business of aspartame and sucralose in Jan. -May of 2013. According to China
Customs, the export volume of aspartame of the company increased by 8% YoY to
about 1,900 tonnes in the first five months of 2013, while its export volume of
sucralose decreased by 9% YoY to 105 tonnes in the same period, according to CCM’s latest issue, Sweeteners China News
1308.
However,
the export of both aspartame and sucralose was healthy in the first five months
of 2013, especially sucralose. The export volume of China's aspartame was over
5,800 tonnes in Jan. May of 2013, with a YoY up of 2.5%. And the export volume
of China's sucralose was over 710 tonnes in the same period, increasing by 27%
YoY. It is estimated that the difference in demand between China's aspartame
and China's sucralose is the most important reason for different performance of
export business of aspartame and sucralose of Changzhou Niutang in the first
five months of 2013.
China's
aspartame industry has begun to enter a relatively stable period of
development, which provides an opportunity for Changzhou Niutang to experience
a stable development. After several years of development, two leading aspartame
producers in China, named Jiangsu Sinosweet Co., Ltd. (Jiangsu Sinosweet)
and Changzhou Niutang, has high market shares not only in
the domestic market but also in overseas markets. For example, the aspartame
output of these two producers accounted for over 60% of the total domestic
output in 2012 and their export volume of aspartame accounted for as high as
68% in the first five months of 2013. Meanwhile, because of the stable
development of China's aspartame industry, investment enthusiasm on this
industry was not high in the last two years. Thus, there was only a few new
entrants in the last two years, which means Changzhou Niutang faced lesser
pressure from new entrants. Based on these, though the demand of aspartame from
overseas markets didn't increase sharply in Jan. May of 2013, Changzhou Niutang
experienced a good performance on its aspartame export business.
Unfortunately,
unlike in domestic aspartame industry, Changzhou Niutang has faced intenser
competition in the domestic sucralose industry. Due to the good prospect and
high gross margin profit of sucralose, many enterprises are still trying to get
a share of the domestic sucralose industry even though the industry is facing
overcapacity issues (Please refer to Sweeteners China News Vol.3 July Issue,
p4, Overheating investment in domestic sucralose industry should be noticed).
As a result, the competition on China's sucralose export grows intenser than
China's aspartame export. According to China Customs there are 14 sucralose
producers that export their products, while the number was just 7 in
China's aspartame export. It is believed that the development of new sucralose
entrants in China impacted on export business of Changzhou Niutang. For
example, the export volume of Jiangsu Jubang Pharmaceutical Co., Ltd. (Jiangsu
Jubang) and Jiangxi Bentian Food Technology Co., Ltd. (Jiangxi Bentian) and
Hubei Yitai Pharmaceutical Co., Ltd. (Hubei Yitai), the three new sucralose
entrants in China that appeared in recent two years, increased sharply to over
65,000 tonnes, over 27,000 tonnes and over 26,000 tonnes, with a YoY up of
466%, 308% and 436% respectively.
In
addition, it is also estimated that the sucralose of Changzhou Niutang is less
popular in overseas markets compared with the one of JK Sucralose Inc.'s (Note:
JK Sucralose, the export volume of sucralose of JK Sucralose and Changzhou
Niutang ranked top two in China's sucralose industry), which may be another
important reason for the poor performance of sucralose export of Changzhou
Niutang in the first five months of 2013. Despite the same challenge from new
sucralose entrants in China, the export volume of sucralose of JK Sucralose
continued to show an uptrend, from 207 tonnes in Jan. -May of 2012 to over 270
tonnes in the same period of 2013.
In
2012, Changzhou Niutang enjoyed good performance thanks to the excellent
performance of its aspartame and sucralose (Please refer to Sweeteners China
News Vol.3 January Issue, p9, Changzhou Niutang enjoys good performance in
2012). However, the poor performance of sucralose in the first five months of
2013 should draw the company's attention. It is necessary for the domestic
sucralose industry to take advantage of the growing overseas demand to develop
and survive in the future. As a leading sucralose and aspartame producers in
China, Changzhou Niutang has the ability to enjoy more market shares of
sucralose and aspartame in the world.
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Sweeteners China News, issued
by CCM on 5th every month, offers timely update and close follow-up
of market and company dynamics based on 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
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