Tuesday, December 10, 2013

Focus of Shandong Longlive's XOS sales may turn to overseas markets

According to the research results, XOS is not absorbed by human body, and it is also not a kind of human nutrition. The function of XOS for human body lies in its positive effect on human's intestinal flora—XOS stimulates the growth of bifidobacterium. The research results revealed that XOS has the potential treatment function on degeneracy autism. The experimental study of the School has proved that the quantity of bifidobacterium of children diagnosed with autism is less than that of normal children, which means XOS may perform a treatment function as it stimulates the growth of bifidobacterium. In addition, the research results also showed that XOS may have a positive effect on treatment for some diseases in which intestinal bacteria are involved, such as metabolic syndrome, schizophrenia and Alzheimer's disease. According to Shandong Longlive, it is estimated that 20%-30% of the population in developed countries are suffering from the diseases mentioned above. Therefore the unique function of XOS may stimulate those sufferers' consumption of the product.

Shandong Longlive expressed that the purpose for the research on XOS' function is to explore the overseas markets, especially the US market. And the positive research results provide such an opportunity. It is believed that the company will shift the focus of its XOS sales strategy from the domestic market to the overseas markets.
In fact, almost all of Shandong Longlive's XOS is sold domestically all the time. However, compared with other functional oligosaccharides, such as fructo-oligosaccharide (FOS) and galacto-oligosaccharide (GOS), the consumption of XOS in China increased quite slowly in recent years, due to its small serving size in downstream products and its low popularity among the Chinese public. For example, according to Shandong Longlive, the sales volume of its XOS increased from 3,108 tonnes in 2009 to 3,532 tonnes in 2012. However, increases in the sales volumes of FOS and GOS are way more significant. According to Quantum Hi-Tech (China) Biological Co., Ltd. (QHT), a leading FOS and GOS producer in China, its sales volume of FOS increased by over 1,300 tonnes to 10,259 tonnes in 2012 from 2009, and the sales volume of its GOS even increased to 1,234 tonnes from just 94 tonnes in 2009.
Although FOS is currently the main functional oligosaccharide consumed in developed countries, its efficacy is not as good as that of XOS according to Shandong Longlive. Besides, the public's health consciousness in developed countries, such as the US, are higher than in China, which hints that products with health care function will be more popular in these countries. The research results offer more detailed data and authoritative conclusion for the company to enhance the competitiveness of its XOS, as well as attract the public's consumption.
For Shandong Longlive, high health consciousness of citizens in developed countries means more sales opportunities. Its large investment in the research was aimed at the entrance in markets of developed countries. The research results are more favorable to the company's XOS sales to developed countries than to China. Under the current situation in China, including low health consciousness of the public and low consumption growth of XOS, it is easier to explore markets in developed countries than China's. Moreover, the new XOS production project of Shandong Longlive with a capacity of 6,000t/a is predicted to go into operation in Q1 2014, which indicates that the company should consider how to digest its huge production capacity of the product. Based on the reasons above, it is obviously wise for Shandong Longlive to focus more on overseas markets than to the domestic market.

Table of Contents of Sweeteners China News 1312
Gross profit for China's HFCS producers decreases sharply in Sept. -Oct. 2013
Layn awarded as Famous Export Brand in Guangxi
Ex-factory prices of sweeteners in China in November 2013
MOS officially approved to be new food material
Import volume of sucrose in China exceeds 700,000 tonnes in Oct. 2013
Shandong Longlive to invest in 200,000t/a straw utilization project
Export volume of China's maltitol decreases by 15% YoY in Jan. -Aug. 2013
2013/2014 minimum sugarcane purchase price in Guangxi decreased
China's acesulfame-K exports: volume up while price down in Q1-Q3 2013
Q1-Q3 import volume of L-phe sees continuous decrease in 2011-2013
Operating rate for China's corn starch industry decreases a little in Nov. 2013
Import volume of liquorice witnesses sharp increase in June-Sept. 2013
Focus of Shandong Longlive's XOS sales likely turn to overseas markets
NDRC approves BBCA building corn processing plant in Brazil
China loosening one-child policy may bring opportunity for domestic FOS and GOS industries
China's stevia sweetener industry in 2013-an overview
Export overview of some sweeteners and raw materials in China, October 2013
Baolingbao's project on functional biological ingredients engineering lab obtains approval from NDRC
Soybean product industry: next key field that China's functional oligosaccharide producers may enter

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’s sweeteners industry. It also releases the latest information on raw material supply, price update, import & export analysis as well as consumption trend & competitiveness.

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