Two domestic erythritol producers have contradicting erythritol sales performance in H1 2013

According to CCM’s latest newsletter, Sweeteners China News 1310, Two Chinese erythritol producers, namely Baolingbao Biology Co., Ltd. (Baolingbao, whose production capacity of erythritol is 4,000t/a in China) and Shandong Binzhou Sanyuan Biotechnology Co., Ltd. (Binzhou Sanyuan, production capacity of erythritol is 5,000t/a in 2013), showed contradicting performance in erythritol sales in H1 2013. It is worth mentioning that Baolingbao is a leading functional sugar producer in China having several functional sugar products, while the erythritol business of Binzhou Sanyuan's contributed the total revenue for the company.

Data from the 2013 semi-annual report of Baolingbao revealed that its erythritol business performed poorly in H1 2013. The gross profit of Baolingbao's erythritol reached as high as USD0.81 million in H1 2012, but it decreased by 71% YoY to USD0.23 million in H1 2013. Baolingbao expressed that the poor performance of its erythritol was mainly attributed to the negative effect of the RMB appreciation and the demand decrease from several foreign countries. The appreciation of RMB caused the lower RMB export price (relative to the fixed dollar price for erythritol), reducing the gross profit margin. The gross profit margin of the company's sugar alcohol business decreased to 7.66% in H1 2013 from 15.87% in H1 2012. Besides, Baolingbao also indicated that some political factors caused decreases in its export volume. For example, the export volume to Japan and Philippines decreased in H1 2013 compared to H1 2012, due to the political disputes between China and these two countries.

Baolingbao could not explain well the poorer sales performance of its erythritol in comparison to that of Binzhou Sanyuan's. According to the 2013 semi-annual report of Binzhou Sanyuan, the revenue of the company's erythritol increased to USD1.37 million in H1 2013, with a YoY up of 36.10%. Binzhou Sanyuan was honest to express that the RMB appreciation also brought negative effects on its product's export price in H1 2013 but the company focused on cost reduction and product quality. For example, the company actively established a cooperation with the well known Chinese research institutions to improve its R&D ability and hence its revenue growth. The year-on-year increase rate of erythritol's cost of sales in H1 2013 was just 16.93%, far lower than the one of its revenue at the same time. And the gross profit margin of erythritol of Binzhou Sanyuan also increased to 17.89% in H1 2013.

It is crucial that Baolingbao invest in the R&D in line with Binzhou Sanyuan. As a producer exclusively engaging in the production of erythritol, Binzhou Sanyuan devotes its energy to the research and sales of its erythritol. On the contrary, due to its diverse product range, Baolingbao cannot focus entirely on erythritol's sales. As a result, under the adverse conditions such as the RMB appreciation in H1 2013, Binzhou Sanyuan could depend on product's high quality to attract more downstream customers from overseas market, enjoying more profit compared to the same period of 2012.

 

For domestic erythritol producers, the objective conditions are the same. Subjective factors, such as more investment in quality improvement and market exploration, will become the determinants to obtain good performance, especially under the bad objective conditions. As an export-oriented industry, the export volume of China's erythritol decreased sharply, from over 2,800 tonnes in the first five months of 2012 to just about 1,900 tonnes in the same period of 2013. Under the negative export conditions, domestic erythritol producers should have a positive attitude to solve their problems.

Table of Contents of Sweeteners China News 1310:

H1 2013 still tough for domestic crystalline glucose industry

Starch sugar producers selling more corn starch threatens domestic corn starch industry

Functional oligosaccharide business of three oligosaccharide giants: challenges hidden behind good performance

Two domestic erythritol producers have contradicting erythritol sales performance in H1 2013

Guilin Layn turns loss into gain in H1 2013

PureCircle: sales performance good while suffering continous losses in FY2013

Export overview of some sweeteners and raw materials in China, August 2013

YoY growth rate of export volume of China's sucralose drops sharply in H1 2013

China's aspartame export not as optimistic as it showed under independent HS code

China's mannitol export: both volume and price increase in Jan. -Aug. 2013

International and domestic factors together impact China's sucrose price in Q4 2013

Ex-factory prices of sweeteners in China in September 2013

Wanfu Biotechnology continues to suffer losses in H1 2013

Zhaoqing Coruscate's starch syrup project starts to build in Sept. 2013

Guangxi government introduces policies to promote health development of its sucrose industry

Sweeteners China News, issued by CCM on 5^th 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.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and Consultancy Service. 

For more information, please visit http://www.cnchemicals.com.

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China’s Carbon Black Market Enjoys Fast Development

The third edition report of The Future of Carbon Black in China will be released by CCM in May 2012. The report indicates a promising carbon black market in China.

China’s carbon black market is now in a period of fast development, which embodies in capacity, output, export and consumption. Meanwhile, the global carbon black industry tends to move to China.

Now China is one of most important players in global carbon black market as it is not only the largest producer but also the largest market. Since 2006, China has exceeded the US and become the largest producer of carbon black in the world. By the end of 2010, the capacity of domestic carbon black has exceeded 5 million t/a and the output is about 3.4 million tonnes. The CAGR of domestic capacity and output is 8.9% and 10.0% respectively in 2006 and 2010.

China’s carbon black has developed fast in recent years thanks to the fast development of domestic auto industry and rubber industry. In 2010, the growth rate of output and sales of auto in China is 32.44% and 32.37% respectively.

The fast increasing demand stimulates domestic capacity to enlarge fast as there is no barrier in raw materials and technology. And thanks to the difference of raw materials between domestic and overseas, domestic manufacturers are more competitive in the raw materials cost when the crude oil price is high. So, more and more MNC relocated to China or set production lines in China, meanwhile, they close their previous production lines in EU or the US.

With the enlarging domestic capacity, the export volume also increases year by year. Since 2006, China has become a net exporter of carbon black. The export volume increased a lot, about 40％ in 2010 compared with that in 2009, and it is estimated that the export volume may double in 2011 compared with that in 2010.

However, domestic carbon black industry also faces fiercer and fiercer competition and stricter and stricter environmental restrictions. Meanwhile, the government tends to regulate and control the industry expansion.

What is the future of carbon black in China? What is the risk and opportunity in this industry at present and in the future? All answers will be shared in CCM’s upcoming report of The Future of Carbon Black in China. If you are interested in this report, please feel free to contact us at econtact@cnchemicals.com.

(Guangzhou China, October 8, 2011)

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Grandhope Launches IPO in Shenzhen Growth Enterprise Market

August 9, 2011, CCM - Grandhope Biotech Co., Ltd. (Grandhope) launched Initial Public Offerings (IPO) in Shenzhen Growth Enterprise Market (GEM) on July 7, 2011. It plans to invest about USD38 million in the construction of national regenerative medical implants engineering laboratory, high-tech industrialization of sterile biological membrane, market expansion and maintenance of the core business, according to CCM’s August Issue of Industrial Biotechnology China News.
 
Grandhope has become the sixth listed biomedical enterprises in Guangzhou, China. Mr. Zhu, chairman of the board in Grandhope, claimed that the listing of Grandhope would help the company establish more comprehensive management mechanism. It was a good chance to achieve the effective combination between the management of production and the use of resource and capital.

The raised fund for Grandhope's IPO will be mainly applied to these investments: construction of regenerative medical implants national engineering laboratory, high-tech industrialization of sterile biological membrane, market expansion and maintenance of the core business. Mr. Zhu especially explained the strategy of the first three projects: the construction of the laboratory, which costs Grandhope USD5.9 million, would lead the company to strengthen the core competitiveness in the high-tech field. In order to get more profit and market share, Grandhope invested USD3.1 million in  high-tech industrialization of sterile biological membrane, which would promote the adjustment of the product structure. The market expansion valued at USD7.7 million would improve the company's influence in the market.  

Grandhope's successful listing depends on its technology and insight of the medical device industry market.

Grandhope mainly relies on its independent R&D to get into the medical device industry. Grandhope is a high-tech enterprise engaged in regenerative medical materials and medical implants development, production and sales. Because of Grandhope's independent R&D, it has developed a new type medical material made by cow's or pig's membranes, which belongs to the extracellular matrix material. Based on the technology of extracellular material, Grandhope's products develop epoxy tissue fixation technology, full antigen-technology and mechanics induced modification technology and organizational techniques to resolve the weakness of the traditional extracellular matrix material. Its product has the capability of high stability, low immunogenicity and tissue regeneration inducement which had their own advantages in the industry competition. Grandhope applied these to launch its products such as biotype hard brain membrane, general thoracic surgical repair membrane and sterile bio-protection membrane.

Extracellular matrix material, which will replace the conventional biomedical materials such as synthetical biomaterials and alloy materials, can adhere to the injury compatibly. By its function, it can replace the disease tissue's function during the cell regeneration. Furthermore, the cell regeneration can be induced by this material compared with the conventional biomedical materials, which just play a short term alternative role to the injury. 

Grandhope is optimistic about its products' future prospects in domestic medical device market, especially in meningeal medical market. Grandhope gained great profit mainly from its brain membrane from 2006 to 2010. The products' actual quantity had been accumulated to100,000 till 2010 without medical negligence. Its biotype brain membrane, higher cost performance than the products from foreign enterprises, has occupied 43% of China's biotype brain membrane's market share in 2010 instead of 32% in 2008. Compared with Grandhope's products, the market share of foreign companies, such as Germany's B. Braun Medical, Johnson & Johnson, etc., declined gradually from 45% in 2008 to 25% in 2010. Mr. Zhang, deputy general manager of Grandhope, predicted that the biotype brain membrane market would maintain 20% annual growth because of craniotomy increasing, which would increase the market demand. Meanwhile, the sales of general thoracic surgical repair membrane and sterile bio-protection membrane rise gradually.

Furthermore, Granhope will focus on R&D medical cosmetic surgery market in future although it has some difficulties in collaborative project with Renhe Group, this project will not be arranged in next three months.

Grandhope's insight into the global medical device industry leads the enterprise to focus on the extracellular matrix material's R&D in recent years. Owing to rapid expansion with the growth rate of 6% - 12% per year from 2006 to 2008, the global medical device industry is growing into the pillar industry of the global economy. In 2009, the production value of global medical device industry was over USD370 billion. More importantly, the output value of China's medical device industry is growing over 20% per year in a fast speed in 2001-2011. The profit of China's medical device industry is over USD38 billion. Surgical implant is one of the most important product categories in medical device industry. It is the most effective mean especially in cardiovascular disease and bone disease. The output value of surgical implants has reached USD6.2 billion in 2009 compared with that of USD3.1 billion in 2006. China's surgical implant's market will become the second largest market after the market in the US in the next 10 years, as China Association for Medical Devices Industry estimated.

Source: Industrial Biotechnology China News 1108

http://www.cnchemicals.com/Newsletter/NewsletterDetail.aspx?id=21

Main content of  Industrial Biotechnology China News 1108:

Shandong Jingdian to produce glycerin-based PG
Baosteel to promote industrialization of carbon monoxide-based fuel ethanol
Celanese to seize China's ethanol market
Trade analysis of China's butanol
Angel Yeast to accelerate its expansion of yeast capacity
Domestic hemicellulase investment increases greatly
CAS plans to accelerate its commercial production of SA
Rapid L-tryptophan expansion in China 
Changjiang Chemical Fiber makes a breakthrough on industrialization of PLA fiber
RSPC to invest in PTT fiber
Wanwei Updated High-tech's PVA expansion
Trade analysis of China's PLA 
Grandhope launches IPO in Shenzhen Growth Enterprise Market

Industrial Biotechnology China News, a monthly publication issued by CCM International on 8th of every month, focuses on biofuels, bio-products, bio-based chemicals, bio-materials and industrial biotechnology applications, offers latest investment hotspots, new technology & product, company & market dynamics, and government regulations, aiming to facilitate your insight into China's industrial biotechnology.

Please visit http://www.cnchemicals.com for more information or contact us at econtact@cnchemicals.com.

Regulations on Pesticide Management Will Make Great Impact in China

Guangzhou China, August 2, 2011 – New regulations on pesticide management are to be nailed down soon and they will largely impact current pesticide market, according to CCM’s latest issue of Crop Protection China News.

On July 21, 2011, the Legislative Affairs Office of China State Council released a draft for seeking opinions on Regulations on Pesticide Management, with the purpose to further regulate domestic pesticide industry and ensure domestic food security.

Two big changes in the draft include (1) Cancel the temporary registration of pesticides and further standardize the processes of pesticide registration; (2) Set up license system of pesticide business and the validity period of pesticide business license is three years.

If the government releases the above two regulations, the cost of pesticide registration and pesticide dealing will be largely increased. That means small pesticide players in China may face great challenges in future company operation which would provide good chances for the integration of domestic pesticide industry.

The two big changes in the draft will largely impact current pesticide market in the future. Although the implementation may encounter a lot of difficulties, combining with implementation with China Pesticide Industry Policy, domestic pesticide industry will enter a new era in the future.

More news about the industrial trend, company dynamics, market price, and future forecast will be shared in Crop Protection China News.

You may find more in the latest issue of Crop Protection China News:

-On July 21, 2011, the Legislative Affairs Office of China State Council releases a draft for seeking opinions on Regulations on Pesticide Management.-On July 26, 2011 China releases 12th Five-Year Plan for Pesticide Industry which has stimulated the boost of pesticide stocks against market trend.-China newly approved 861 pesticide production licenses in H1 2011.-China cotton price has experienced continuous descent for four months since March 2011, nearly hitting the minimum purchase price set by the government.-Overcapacity, raw material price hike, RMB appreciation continue bothered domestic glyphosate players in H1 2011.-Export of domestic imidacloprid technical witnessed huge increase in the first five months of 2011 compared with the same period of 2010.-Anhui Huilong intends to purchase 51% equities of Huangshan Xinan which indicates its expansion road unveils after its IPO.-NATESC predicts pests and diseases of mid and late rice will be more serious than that of 2010.-Ministry of Agriculture aims to promote the professional control on pests in the whole country.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.
Please visit http://www.cnchemicals.com for more information or contact econtact@cnchemicals.com

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

New Regulations on Pesticide Management to be Nailed down Soon

August 2, 2011, CCM – On July 21, 2011, the Legislative Affairs Office of China State Council released a draft for seeking opinions on Regulations on Pesticide Management, with the purpose to further regulate domestic pesticide industry and ensure domestic food security.
According to CCM’s latest issue of Crop Protection China News, regulations on Pesticide Management have experienced several revisions after it was issued and implemented on May 8, 1997. However, the last revised version of Regulations on Pesticide Management on July 27, 2002 no longer keeps pace with the great development of domestic pesticide industry in recent years. Moreover, food security accidents triggered by irrational use of pesticides which frequently happened in recent years have alerted Chinese Government the emergency to fix the deficiencies of pesticide management.

Hence, Chinese Government decides to amend this policy again by carrying out a more intensive one over pesticide management. The draft released for seeking opinions this time includes eight chapters and 84 articles, covering registration, production, sales, etc. of domestic pesticide industry.

Compared with the current pesticide management policy, the draft is formed by adding one chapter and 35 articles with more intense regulations into the current one.

According to the draft of Regulations on Pesticide Management, two of the items may deeply impact domestic pesticide industry.

1. Cancel the temporary registration of pesticides and further standardize the processes of pesticide registration, mainly emphasizing on pesticide safety, the effectiveness evaluation of pesticides, higher investigation requirements, etc.

2. Set up license system of pesticide business and the validity period of pesticide business license is three years. Cancel the restriction that only some pesticide operators, such as pesticide supply and marketing cooperatives, agricultural technology extension station, etc., own the qualification to apply for pesticide business licenses, stating that individual business dealers could also apply for pesticide business if they meet the requirement of pesticide operation standards according to the regulations of local government.

Between the two large modifications, cancelling the temporary registration of pesticides is considered to be the most critical one. China has started the temporary registration system of pesticides since 2001. Owing to its much lower fees and shorter registration processes on getting the permission of pesticide production, it has provided great benefits to either most pesticide players in China or the development of domestic pesticide industry.

However, fast development of domestic pesticide industry has offered a positive environment for pesticide business, thus more and more pesticide players sprang up in China in the last decade which has somewhat given rise to a chaotic market in domestic pesticide industry.

To better manage domestic pesticide market and cut down the numbers of pesticide players, cancelling the temporary registration of pesticides is considered to be an irresistible trend. Actually Chinese government has also considered setting up a special registration system which is popular in international pesticide industry in response to emergency situation.

As for setting up license system of pesticide business, it is another trend of domestic pesticide management in the future. Owing to the great negative effects caused by food security events in recent years, such as poison cowpea in Hainan Province, two main pesticide consumption provinces in China are carrying out or to carry out license system of pesticide business, namely Hainan Province and Shandong Province.

The implementation of license system is believed to be nationally promoted after the revision and release of Regulations on Pesticide Management in the near future. However, there may be some kinds of regional disparities according to the real situation in local areas.

Apparently, it may be difficult to understand the government's decision on permitting individual dealers to apply for pesticide business while Hainan is carrying out the Implementation Measures of Hainan Province Pesticide Wholesale and Retail Business License Management Regulation (Trial), saying it is going to limit the number of individual pesticide dealers to 205 in the whole island from more than 4000.

According to the draft, although it intends to permit individual dealers to apply for pesticide business, it still sets a higher threshold but not clearly stated in the draft. The requirement may be released in the coming implementary provisions and there will be some differences among provinces.

Outlook
Actually, the amendment of Regulations on Pesticide Management had been launched last year and it was expected to be released by the end of 2010. However, owing to a wide divergence of opinion among government departments, pesticide players, etc., the issue of the policy has to be pushed off and revised over and over again.

The two big changes in the draft will largely impact current pesticide market in the future. Although the implementation may encounter a lot of difficulties, combining with implementation with China Pesticide Industry Policy, domestic pesticide industry will enter a new era in the future.

Source: Crop Protection China News 1114

http://www.cnchemicals.com/Newsletter/NewsletterDetail_16.html

Content of Crop Protection China News 1114:

New Regulations on Pesticide Management to be nailed down soon
New policy boosts pesticide stocks against market trend
China newly issues 861 pesticide production licenses in H1 2011
China cotton price to hit minimum purchase one
Downturn of domestic glyphosate continues in H1 2011
Domestic imidacloprid export up in H1 2011
Anhui Huilong's expansion kicks off
Rice pests and diseases to be serious in H2 2011
China promotes the professional control on pests

Crop Protection China News, a semimonthly publication issued by CCM International on 15th and 30th(31th) of every month, aims to gain a deep insight into Chinese market, supply the latest market data and strategy support, analyze the newest legislation and policy and grasp the future market trend.

Please visit http://www.cnchemicals.com for more information or contact us at econtact@cnchemicals.com

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China