On 2 Nov. 2011, Ministry of Environmental Protection of China (MEP) published a notice that an environmental protection verification on the producers in starch, starch sugar, alcohol, monosodium glutamate (MSG) and citric acid industries was being carried out since Nov. 2011. The move shows the great determination of Chinese government to restrain the corn deep-processing industry, especially that with high pollution, according to CCM’s November issue of Corn Products China News.
According to the notice, this environmental protection verification covers all producers in the related industries around the country (except Hong Kong, Macao and Taiwan) and is divided into four procedures.
Firstly, producers shall run self-examination on their own waste treatment situation, and deliver the results, related documents, and the application forms of this environmental protection verification to MEP before 1 Dec. 2011. Otherwise, they are automatically considered to have given up participations in the verification. Secondly, MEP will check the results of producers' self-examinations and related documents together with China Biotech Fermentation Industry Association and China Starch Industry Association. Thirdly, local environmental departments will onsite inspect the factories of producers who pass the second procedure. Fourthly, MEP will publish the list of producers who have passed all the verifications.
The verification is launched to impose restraining measures on producers which are not on the final list, either because of failing to apply for participation or meet the environmental protection standard in the verification. For example, local governments will refuse to accept any application for environmental examination, reject any environmental assessment for any new projects, whether newly-constructed or expanded, or provide any certificate of compliance for unlisted producers. Besides, the unlisted producers are forbidden to run IPO (initial public offerings) and will have difficulty in getting loans from financial institutes. In the mean time, local government will strengthen daily supervision over the unlisted producers. When producers fail to improve the environmental protection facilities as requested, they will be possibly compelled to stop productions.
The verification is one step for the government to restrain the corn deep-processing industry in order to reduce corn's consumption volume. According to Guidance about Promoting the Healthy Development of Corn Deep-processing Industry (the Guidance) published in 2007, the proportion of corn consumption in deep-processing industry among its total consumption shall be less than 26%. However, in terms of Mr. Sun, secretary general of China Starch Industry Association, corn's consumption volume in deep-processing industry in 2010 reached about 52 million tonnes, accounting for 28.9% approximately in corn's total consumption. Moreover, he estimated that the proportion in 2011 might get higher. Thus, the government will keep regulating and restricting the corn deep-processing industry in order to reduce the proportion to the object one in 2012.
In fact, large producers hold a positive view about the verification. For example, Baolingbao Biology Co., Ltd. (Baolingbao), one of the biggest starch sugar producers in China, gives applause to the new move. "The strict environmental protection verification can help to accentuate our company's advantages in the fields of production technology and waste treatment," said by a manager in Baolingbao's bond department.
It's estimated that the whole verification project will be finished in H1 2012, with limited effect on relative industries in the short term. But in the long run, it can assist to weed out small producers with inferior technology and high pollution, contributing to improve the average quality level of products of those industries, increase industry concentration, and curb corn's consumption volume in related industries. Take the MSG industry as example, in correspondence with CCM International's latest report Future of White Biotechnology in China published in June 2011, the total MSG capacity of small producers with less than 100,000t/a capacity reaches over 810,000t/a in 2011, accounting for 26.8% among domestic total MSG capacity. However, most of the producers may have waste treatment issues that will put them into trouble or even force them to shut down during the verification.
Source: Corn Product China News 1111
http://www.cnchemicals.com/Newsletter/NewsletterDetail_6.html
Content of Corn Products ChinaNews 1111:
Citric acid's export volume slightly declines during Jan. to Sept. 2011
VC's export volume declines 4.8% during Jan. to Sept.
Chinese corn products Imp. & Exp. analysis in September 2011
Domestic DDGS price suffers a decline in Nov. 2011
Lysine price slowly declining since October 2011
USD7.7 billion, total output value of China's amino acid industry in 2010
Environmental protection verification on some corn deep-processing industries being carried out
Xiwang Sugar's sales volume of crystalline fructose enjoys obvious increase in Q3 2011
Meihua Group to acquire a starch producer
Henan Lotus Flower to sell its subsidiaries for debt payment
Price of home-made potato starch rebounds in Nov. 2011
Domestic corn price sees a slight downtrend in Nov. 2011, but may rebound later
An advanced MSG production technology proved successful
Corn Products China News, a monthly publication issued by CCM International on 20th of every month, revealsthe driving force of news storiesand deeply analyzes the influence of trends and dynamicson domestic and international corn deep processing industry.
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