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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