Domestic Tomato Processing Industry Sees Overcapacity

China, a world's leading tomato paste producer, apart from the U.S. and Italy, witnessed continuous gloom of tomato processing industry in 2011, mainly caused by domestic overcapacity and slack sales in overseas market. The sluggish tomato processing industry would probably reduce the operating rate of tomato processing enterprises and lower farmers' enthusiasm for planting processing tomato in 2012, according to CCM International’s April Issue of Seed China News.

For tomato processing enterprises, 2011 was a tough year, with operating results inferior to previous years.

For example, Xinjiang Chalkis Co., Ltd. (Chalkis), a listed company specialized in tomato paste producing and marketing, predicted on 31 Jan. 2011 that it would have an unbelievably poor performance in 2011, with net loss hitting USD136.25 million (RMB880 million). Chalkis mainly contributes its heavy loss to the depressed export price of tomato paste and the soaring production cost.

COFCO Tunhe Co., Ltd. (COFCO Tunhe), the largest tomato processor in China, also suffered unsatisfactory performance in tomato processing business, with the operating profit margin decreasing from 20.31% in 2010 to 14.55% in 2011. The company blames its decreased profit in tomato paste to continuous price downturn, increasing cost and sluggish overseas market. In 2011, COFCO Tunhe totally achieved net profit of USD5.01 million (RMB32.38 million), thanks to considerable government subsidies and investment returns.

Gansu Dunhuang Seed Co., Ltd. (Gansu Dunhuang), a dominant seed company, also witnessed deficit in tomato paste business in 2011. Revealed by Gansu Dunhuang, its subsidiary engaged in tomato paste processing presents a net loss of USD1.28 million (RMB8.27 million) in 2011, heavier over the previous year, mainly owing to domestic overcapacity and decreased export.

Leading tomato processors were so depressed in 2011, not to mention small and medium ones which generally suffered serious deficits in 2011, even facing business failures.

According to industry insiders, tomato processing companies have made rapid capacity expansion during the past few years, causing the current overcapacity and intense competition. Since most tomato paste produced by domestic companies is sold abroad, the sluggish tomato paste market in Europe and the U.S. has made their performance even worse in 2011. Moreover, the depressed price and the soaring cost have posed greater challenges to domestic tomato processors.

In view of the slack sales and oversupply, tomato processing companies would significantly cut their production capacity in 2012. It is expected that most tomato paste manufacturers would have to deal with large stocks to return funds.

It is released that at present COFCO Tunhe Co., Ltd. (COFCO Tunhe) whose capacity of tomato paste is over 350,000t/a, still has a large number of stocks of tomato paste, with constant downturn in export. Actually, COFCO Tunhe has planned to put more efforts to enhance its sugar processing business in future.

As for Gansu Dunhuang Seed Co., Ltd. (Gansu Dunhuang), it has already transferred most of the investment originally in tomato processing project into corn seed business at the end of 2011.strong resistance and high quality will be continuously promoted for the protection of food security in China.

The gloomy tomato processing industry would seriously affect farmers' enthusiasm for planting processing tomato. It can be predicted that the planting area of processing tomato in 2012 would keep declining, following the significant decrease in 2011.

In China, processing tomato planting is mainly concentrated in Xinjiang, Gansu and Inner Mongolia. Xinjiang, as the largest production base of processing tomato at home, owns planting area of processing tomato of around 64,000 ha. In 2011, the output of processing tomato reached 4.35 million tonnes in Xinjiang, accounting for 15% of the world's total yield. With more than 110 tomato processing companies, Xinjiang annually exports over 700,000 tonnes of tomato paste to over 100 countries and regions in the world.

Source: Seed China News 1204

http://www.cnchemicals.com/Newsletter/NewsletterDetail_28.html

Content of Seed China News 1204:

Winall Hi-tech vigorously expands business 2011

Shandong Denghai: both revenue and net profit increase in 2011

Hefei Fengle's net profit down 39.21% in 2011

WanXiang Doneed: sharp growth in net profit 2011

Domestic tomato processing industry sees overcapacity

Corn single-grain sowing technology promoted rapidly in Huang-Huai-Hai Plain

Longping High-tech suspends listing for asset restructuring

Grand Agriseeds to control a large rice seed company

Vegetable seed technological innovation incubator opened in Shouguang, Shandong

Domestic scientists successfully transplant oil palm plantlet

Seed China News, a monthly publication issued by CCM International on 30th of every month, offers timely update and close follow-up of China’s seed industry dynamics, analyzes market data and finds out factors influencing market development

About CCM International

CCM International 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 International offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

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

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_1055.html

How Will Global Mancozeb Market Go from 2012 to 2016?

Mancozeb, a broad-spectrum fungicide, introduced in 1962 but still plays a significant role in the world fungicide market. It is used on a wide variety of food/feed crops, including fruit trees, vegetable crops, field crops, etc. Mancozeb can control early blight, late blight, anthracnose, rust, downy mildew, etc. The demand of mancozeb is increasing year by year, and its global capacity increased largely during 2003 to 2009. With its market value reaching USD400 million in 2009, mancozeb’s global capacity is estimated to exceed 220,000t/a in 2010. What is the overall information of mancozeb registration, supply, demand, international trade flows and market price in global market? What are the 2012 – 2016 future trends of above aspects respectively?

As one of the most popular bulk commodities of fungicides, mancozeb is manufactured concentrate on Asia-pacific, South America and Europe. In recent years, global market of mancozeb has had some changes. The Asia-pacific, shares the largest percent of global mancozeb market, and China and India are the largest producers of mancozeb in Asia-pacific. Furthermore, South America also has a big share of mancozeb market, but its production bases nearly serve for North America market. The U.S. is the represent country. Most of the mancozeb is exported to the U.S. European market deserves attention as it takes up a large part of total mancozeb market share in the world. About 80% of European mancozeb is consumed by itself. How does mancozeb industry develop in major countries, such as China, India, Australia, Thailand, USA etc? What are the registration, supply, demand, and future forecast of mancozeb in these countries?

In addition, some huge producers of mancozeb had some merger projects and there are some policies related to mancozeb in some countries, which would certainly have influence on the global market of mancozeb. For example, UPL purchased the fungicide business which including the mancozeb technical business in the world and related property from DuPont in June 2010. What’s more, Dow AgroScience India was resisted by Indian government due to its bribe on pesticide registration. These factors probably make the global circulation situation of mancozeb change. What are the company dynamics of key mancozeb manufacturers in the world, including Dow AgroSciences, UPL, Bayer, Du Pont etc?

All questions will be answered in CCM International’s upcoming report of Survey of Global Mancozeb. The report is expected to come out in May, 2012. If you need more detail of this report, please feel free to contact us at econtact@cnchemicals.com.

About CCM International

CCM International 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 International offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer. For more information, please visit http://www.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

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_r_1056.html

China's PVDF industry to Maintain Rapid Growth in 12th Five-year Plan Period

China's PVDF industry developed rapidly from 2006 to 2011 and it will maintain rapid growth during the 12th Five-year Plan Period, driven by the booming market, resource advantage and Chinese government's encourage, according to CCM’s April Issue of China Fluoride Materials Monthly Report.

With a booming market, China's PVDF industry has grew rapidly from 2006 to 2011. In 2010, the total capacity of PVDF has reached 6,000t/a, sextuple of that in 2006. Simultaneously, the output of PVDF has soared from 300 tonnes in 2006 to 4,400 tonnes in 2010.

In 2011, because some new production lines of PVDF came into operation, the capacity of PVDF soared to 13,500t/a, and its output soared to 8,400 tonnes. In March 2011, Arkema (Changshu) Chemicals Co., Ltd. (Arkema Changshu) launched a new PVDF production line with capacity of 5,000t/a, accounting for 37% of the total in China. Moreover, the PVDF capacity of Shanghai 3F New Material Co., Ltd. (Shanghai 3F) has also reached 5,000t/a in 2011.

Nevertheless, driven by the booming market, resource advantage and government's encourage, it's foreseeable that China's PVDF industry will maintain rapid growth during the 12th Five-year Plan Period.

In order to meet the growing market demand for PVDF, some PVDF producers in China has planned to extend the production. On Jan. 6th, 2011, Arkema announced that intending to meet the fast-growing demand for PVDF resins, the company had decided to speed up the development of Arkema Changshu and to increase the plant capacity by 50% by the middle of 2012. It means that Arkema Changshu's PVDF capacity will reach about 7,000t/a in the middle of 2012.

On April 10th, 2012, Miss He, the securities services representative of Shanghai 3F claimed that in order to meet the gradually increasing demand for PVDF, the company will gradually extend the PVDF production capacity to 10,000t/a.

Apart from the booming market, resource advantage and Chinese government's encourage has attracted multinationals to invest in China's PVDF industry.

Kureha Corp. (Kureha), a Japan-based fluorochemical producer, announced in September 2011 that it is to invest USD78.74 million to construct a new factory in Changshu, Jiangsu Province. With a designed capacity of 5,000t/a for PVDF, the construction will start in the next summer and will complete in spring 2014.

Solvay Group, a Belgium-based high-performance specialty polymers producer, announced in June 2011 that it had launched a project to build a specialty polymers production plant for PVDF in China. The plant will be built at Solvay's industrial site in Changshu in Jiangsu Province and is scheduled to become operational at the beginning of 2014.

In recent years, Chinese government has restricted the fluorite export. Therefore, multinationals outside China are facing fluorite resource shortage, especially for those based in Japan. Simultaneously, Chinese government has promulgated some policies and legislations, such as the Guided Catalogue for Industrial Structure Adjustment (2011) and  the 12th Five-year Development Plan of China Fluorine Chemical Industry, to encourage the development of fluoropolymer industry in China.

Source: China Fluoride Materials Monthly Report 1204

http://www.cnchemicals.com/Newsletter/NewsletterDetail_241.html

Main content of China Fluoride Materials Monthly Report 1204:

Dongyue Group to acquire two mining areas' exploration licenses

Zhejiang Juhua to construct production line of HFC-125 with importing technique

Shanghai 3F launches the first phase of HFO-1234yf production for Dupont

Price of HFC-134a to fall in Q2 2012 in China

Zhejiang Yongtai completes the acquisition of 20% share of Yongfei Chemical

The average price of aluminum fluoride remains low in China

China's PVDF industry to maintain rapid growth in 12th Five-year Plan Period

Trend of domestic PTFE price is still downward

Sannong to construct 11,500t/a organic fluoride project

Domestic PTFE fiber to substitute for import product foot by foot

DFD achieves business growth in 2011, LiPF6 to be profit growth point

ANOKY plans to purchase Color Root Hubei

Import and Export analysis of fluoride chemicals in China in Feb. 2012

China Fluoride Materials Monthly Report, a monthly publication issued by CCM International on 20th of every month, covers the sectors on policy & legislation, company dynamic, supply & demand, price update, etc. of China’s fluoride material market. It will help you follow the dynamic throughout the whole value chain immediately.

About CCM International

CCM International 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 International offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer. For more information, please visit http://www.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

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_1045.html

Demand for Fluorine Products to Keep Increasing in China

There is no doubt that fluorine industry has been one of the fastest developing and most promising chemical industries in China and China is the second largest economy in the world. Thus, fluorine chemicals, such as inorganic fluoride, refrigerant, fluor-polymer and fluor-intermediate four main sectors, are absolutely worth investigating.

In order to have a comprehensive understanding of fluorine industry, lots of investigation have been made. To inorganic fluoride, a widely investigation is made and not only traditional products, but also lithium hexafluorophosphate which is fast developed in the past two years, is further investigated. To fluor-refrigerant, HCFC-22, HFC-134a and HFC-410A are deeply surveyed and some valuable analysis has been done. To fluor-polymer, both resin and rubber is researched and a whole graphic is drawn. To fluor-intermediate, major synthesis routes are investigated and some exclusive opinions are raised. In the new report of CCM International’s Survey of Fluorine Industry in China (Edition 2), details, analysis and forecast about each sector of fluorine industry in China mentioned above are presented.

As we know, after ten years of development and with the appreciated policies implemented, China has formed a complete industrial chain, from fluorite supply to each sector in downstream industry. However, most China's production of fluorine chemical concentrates in primary products so far, and there is a high proportion of these primary products for export.

Central Government adopts a series of policies to protect the fluorite resources and upgrade the industry structure. For example, exploitation quota has been set up since 2010 and it is predicted that the quota will be generally reduced in the coming five years. Moreover, fluorine chemical industry has been listed as a sub-plan in Twelfth Five Years Plan. A series of polices in restriction of fluorite and hydrogen fluoride production has been put forward and integration of fluorite resources forcefully becomes the hot point after 2010. As a result, the prices' of many fluorine chemicals have increased a lot since 2010 and price of fluorite rises to the peak in June 2011.

Domestic demand for fluorine products is estimated to keep increasing steadily in the coming five years, which is considered to be the most important driven factor to China's fluorine chemical industry. So it is crucial to find out the consumption, as well as the supply/demand, technology, key player analysis, investment opportunities etc. of China’s fluorine industry.

In this report, you will discover:
- Fluorite supply situation
- Policies analysis related to fluorine industry
- Production situation of inorganic fluoride, refrigerant, fluor-polymer
- Technique route for synthesis of fluor-intermediates
- Main application for inorganic fluoride, fluor-refrigerant, fluor-polymer and fluor-intermediate
- In-depth analysis including

(1) Industrial chain analysis

(2) Key players’ analysis
(3) Investment analysis using Poter's Five Force Model

About CCM International

CCM International 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 International offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer. For more information, please visit http://www.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

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_r_1051.html

Biomaterial Industry to Enjoy Rapid Development

China announces to cut its GDP growth target to 7.5% in 2012, according to Premier Wen Jiabao's announcement in his government work report delivered to the National People's Congress on March 5^th , 2012. This is the first time for the Chinese government to lower its economic growth target after its years-long efforts to maintain an 8% economic growth rate for seven consecutive years. The major reason of cutting GDP growth target is that the Chinese government plans to focus on accelerating the transformation of the pattern of economic development and making economic development more sustainable and efficient so as to achieve higher-level and higher-quality development over a longer period of time.

Meanwhile, the Chinese government has been releasing a series of "Twelfth Five-Year Plan", such as the "Twelfth Five-Year Plan for New Materials Industry", the "Plan for Grain Processing Industry (2011-2020)", the "Twelfth Five-Year Plan for Industrial Technology Innovation (2011-2015)", the "Twelfth Five-Year Implementation Plan for Multiple Utilization of Crop Stalk", the "Twelfth Five-Year Plan for Clean Production", etc. Based on the above policies, as one of strategic emerging industries, biomaterial industry will undoubtedly enter a stage of rapid development.

The April Issue of Biomaterials China News published by CCM International covers all the information above. It provides you the latest policies, market trend, market dynamics, company dynamics, new biomaterials products and new biomaterials technology development of biomaterial industry. Followings are the headline news in the latest issue:

>> India Directorate General of Foreign Trade (DGFT) published a ban on cotton export on March 5, 2012, and then it was canceled on March 12, 2012, which has limited influence on Chinese cotton market.
>> On March 13, 2012, Shanghai Lyocell Fiber received ecological certification from Switzerland Validation Test Textile.
>> Yibin Hmei is making efforts to promoting its silkworm chrysalis protein fiber in domestic market.
>> Hayley Ann is growing fast currently, which may gain great success.
>> Jiangsu Xinmin is actively accelerating R&D of PBST
>> On March 29, 2012, Wuhan Huali starts to construct its new research & production base in Wuhan City, Hubei Province, and their capacity will expand to 100,000t/a in the next two years from 40,000t/a.
>> China Hi-tech Group will take more measures to support Bao Ding Swan to accelerate cellulosic fiber industrialization.
>> More and more domestic companies are investing in lignin production and domestic lignin product types are becoming diversified.
>> Corn price has kept increasing from November 2011, due to its loss of supply and demand balance in domestic market in the short period.

… …

About CCM International

CCM International 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 International offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer. For more information, please visit http://www.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

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_c_1050.html

Decreasing Monochloromethane Price Compresses Glyphosate Profit

It's often said by professionals that glyphosate technical production adopting glycine route has the strongest competitiveness among the three routes (glycine, DEA, IDAN) because of its cost advantage, attributed to the recovery of monochloromethane, the by-product. However, the decreasing price of monochloromethane has compressed the profit margin of glyphosate technical adopting glycine route, according to CCM International’s April Issue of Glyphsoate China Monthly Report.

In April 2012, the ex-works price of monochloromethane has descended to USD350/t (RMB2,200/t), down 18.5% over March 2012. Compared with that in Oct. 2011, monochloromethane price in April 2012 decreased by 46.3%. In fact, monochloromethane price has witnessed a sharp decline in the past half year (from Q3 2011 to Q1 2012). The average ex-works price of monochloromethane in the first three quarters of 2011 is over USD800/t (RMB5,000/t).

"The stagnant demand in downstream industry has led to price downturn of monochloromethane in the past half year, and the sale of monochloromethane has become a problematic," a market insider said.

 

The main end use of monochloromethane is organic silicon. Now the low operating rate of organic silicon, resulting from the overcapacity and competition from overseas product, has led to the stagnant monochloromethane demand and then price downtrend.

 

The average recovery rate is about 500kg by-product monochloromethane when producing one tonne of glyphosate technical, and the recovery cost of monochloromethane is about USD80/t (RMB500/t). Thus, the gross profit from monochloromethane recovery and sales is about USD95/t (RMB600/t) from glyphosate technical production in April 2012, compared with more than USD160/t (RMB1,000/t) from that in H1 2011.

While other glyphosate technical manufacturers sell out monochloromethane, Zhejiang Wynca Chemicals Industry Group Co., Ltd. (Zhejiang Wynca) developed combined production technologies of glyphosate and organic silicon, and its monochloromethane is for private use. Coupled with the higher recovery rate, Zhejiang Wynca could gain more value in monochloromethane recovery. Some other glyphosate manufacturers, such as Sichuan Fuhua Tongda Agro-chemical Technology Co., Ltd., Hubei Xingfa Group (its subsidiary Hubei Taisheng Chemical are operating 40,000t/a glyphosate capacity) plans to develop downstream industry of monochloromethane.

Monochloromethane is mainly generated at hydrolysis process of glyphosate synthesis. The recovery process of monochloromethane includes four steps: water scrubbing, alkaline washing, drying and condensation.

Source: Glyphsoate China Monthly Report 1204

http://www.cnchemicals.com/Newsletter/NewsletterDetail_14.html

Content of Glyphsoate China Monthly Report 1204:

Anhui Huaxing saved from ST marking

Nantong Jiangshan:Technology improvement ensures sustainable development

Chaotic market of glyphosate 41% IPA

China bans mixed glyphosate formulation with glyphosate content lower than 30%

Treated mother liquid used to produce 30% glyphosate SL

Decreasing monochloromethane price compresses glyphosate profit

China's glyphosate demand to grow at CAGR of 9.5% in 2012-2016

Mixed formulation containing glyphosate salt and fomesafen salt

Glyphosate price slightly decreases in April 2012

Glyphosate export volume in Feb. 2012 increases by 3.1% MoM

Glyphosate China Monthly Report, a monthly publication issued by CCM International on 20^th of every month, will keep track of latest dynamics, hotspots and competitiveness analysis, and forecasts on market trends of China’s glyphosate industry.

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.

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

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_1044.html

Domestic MSG Industry Suffers A Lower Profit Level in 2011

Based on the 2011 annual report of Meihua Holdings Group Co., Ltd. (Meihua Group) and the Announcement of Annual Results for the Year Ended 31 Dec. 2011 of Fufeng Group Limited (Fufeng Group), top 2 monosodium glutamate (MSG) producers in China, as well as CCM International's latest report, Production and Market of Monosodium Glutamate (MSG) in China, published in Feb. 2012, it's found that China's MSG industry suffered a lower profit level in 2011 than 2010, majorly due to the significant increase in raw material cost, according to CCM International’s April issue of Corn Products China News.

In fact, the gross margins of Meihua Group and Fufeng Group both saw a decrease in 2011 over those in 2010, majorly caused by the poor performance of their MSG businesses. Specifically, the gross margin of Meihua Group's MSG and GA (glutamic acid) business declined to 22.8% in 2011 from 32.9% in 2010. And that of Fufeng Group's MSG segment including products of MSG, GA, fertilizers, threonine, corn oil, branched-chain amino acid, chicken powder, starch sweeteners, etc, also declined to 16.1% in 2011 from 22.7% in 2010. (TABLE) 

As a matter of fact, the larger increase scale of raw material cost than that of MSG price is the key factor for MSG's lower profit level in 2011. In line with Fufeng Group, its average sales price of MSG only rose by 1% to USD1,250/t in 2011 over that in 2010 (FIGURE), while the average market price of MSG's key raw material, corn starch, grew by 16.5% to USD494/t in 2011 according to CCM International, resulting in the profit decline in its MSG business.

 

But actually, MSG's demand in 2011 performed well in accordance with CCM International's MSG report: its domestic apparent consumption volume enjoyed a 4.3% increase to over 2 million tonnes compared with that in 2010. In the mean time, its export volume also saw a 40.0% increase to about 290,000 tonnes. So it's believed that there were other reasons to explain the small increase scale of MSG price, such as Fufeng Group's low price strategy.

 

In accordance with Fufeng Group's claim, it intentionally adopted low price strategy in 2011, in order to accelerate the elimination of small and inferior MSG producers in order to further increase industry concentration and Fufeng Group's market share in the industry. As Fufeng Group is the largest MSG producer in China, together with its 30% market share in domestic MSG industry in 2011 as it claimed, Fufeng Group's low sales price restrained the overall average market price of MSG to head up. Therefore, small producers without cost advantage were driven to suspend or even stop production for the low profit. And in fact, through this low price strategy, MSG's sales volume in Fufeng Group enjoyed a 25% increase in 2011, amounting to 615,630 tonnes compared with that in 2010.

Fufeng Group believes that the company will enjoy absolute competitive advantages and maintain its leadership in domestic MSG market in the future, because the company's annual MSG production capacity will increase to 1 million t/a by Q2 2012. And the company plans to keep adopting the low price strategy in 2012, trying to further increase the company's market share. 

All in all, it's believed that MSG's industry concentration will keep increasing, with market share focused in several leading producers, like Meihua Group and Fufeng Group. By then, MSG's profit will increase to a reasonable level and become relatively stable. Besides, governmental restriction can facilitate the progress. In view of MSG's high pollution and overcapacity situation, Chinese government has encouraged to increase the product's industry concentration through eliminating inferior capacity in 2010 and 2011. Actually, in 2010, about 234,000t/a of MSG capacity was eliminated by government, accounting for 8.2% of the total capacity all over the country. Moreover, according to the 2011 edition of Guideline Catalogue for Industrial Restructuring (the Guideline) published in April 2011 by the National Development and Reform Commission, MSG industry will maintain being restrained from 2011 to 2015.

Source: Corn Product China News 1204

http://www.cnchemicals.com/Newsletter/NewsletterDetail_6.html

Content of Corn Products China News 1204:

VC’s output in China rises by 7% in 2011

Domestic output of L-arginine increases 34.8% in 2011

Chinese corn products Imp. & Exp. analysis in February 2012

Domestic citric acid price witnesses stability in April 2012

Domestic MSG industry suffers lower profit level in 2011

Analysis into starch sugar business of Xiwang Sugar and Global Sweeteners in 2011

Global Sweeteners will wholly own HFCS joint venture

Lysine contributes most to Global Bio-chem’s good performance in 2011

Corn starch in China performs slightly poorly in 2011

Tongchuang Biotechnology to increase its 70% syrup sorbitol capacity to 200,000t/a in 2012

Cassava starch's import volume increases by 18.1% in 2011

Domestic corn price's growth rate slows down in April 2012

Corn Products China News, a monthly publication issued by CCM International on 20^th of every month, reveals the driving force of news stories and deeply analyzes the influence of trends and dynamics on domestic and international corn deep processing industry.

About CCM International

CCM International 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 International offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer. For more information, please visit http://www.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

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_1043.html