CCM: China’s oligosaccharide business to develop sustainably

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Publish time: 5th September, 2016      Source: CCM
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  In recent two years, the concept of "Big Health' has been well recognised. Many sweetener producers in succession have carried out business activities for this business:

  

  

  Source: Baidu

  

      
  •     29 July - Shandong Longlive Bio-technology Co., Ltd. (Shandong Longlive) finished acquisitions of Xiamen Kuaiyun Information Technology Co., Ltd. and Winnerspring Union (Beijing) Technology Development Co., Ltd., for its "Internet + Big Health' strategy   
      
  •     1 Aug. - Baolingbao Biology Co., Ltd. (Baolingbao) established a subsidiary, to step into the market of food for special medical purpose   

   

  Oligosaccharides play a key role in the "Big Health' business. Now in China, oligosaccharide manufacturers include:

  

      
  •     New Francisco Biotechnology Corporation (NFBC): galacto oligosaccharide (GOS), capacity estimated at 15,000 t/a   
      
  •     Shandong Bailong Chuangyuan Bio-technology Co., Ltd.: isomaltooligosaccharide (IMO), capacity given at 100,000 t/a for liquids and 50,000 t/a for solids   
      
  •     Shandong Longlive: xylo oligosaccharide (XOS), capacity given at 4,000 t/a   
      
  •     Baolingbao: IMO, capacity given at 50,000 t/a   
      
  •     Quantum Hi-tech Biological Co., Ltd. (QHT): fructo oligosaccharide (FOS, 50,000 t/a) and GOS (10,000 t/a)   

  
Oligosaccharides, as prebiotics, contribute largely to the proliferations of bifidobacterium, improvement of gastrointestinal tract functions, blood lipid reduction and immunity enhancement. They are widely applied in healthcare products, dairy products and functional beverages.

  

  

   

  It is expected that the output value of "Big Health" business in China will exceed USD3.02 trillion (RMB20 trillion) in the next ten years. According to CCM's research, the development of oligosaccharides business accordingly will be focuses on:

  
- Capacity expansion:

  

  now the combined production capacity of oligosaccharides surpasses 370,000 t/a (XOS: around 40,000 t/a, GOS: 30,000+ t/a, FOS: 100,000+ t/a, and IMO: 200,000+ t/a). Particularly thanks to the aging population and the two-child policy, the demand for oligosaccharides will increase. This will encourage manufacturers to expand the capacity and enhance their competitiveness: Shandong Longlive is now commissioning its 6,000 t/a XOS plant, expected to increase the total capacity to 10,000 t/a.

  
- Technology development:

  

  1990s saw the start of the oligosaccharides business in China. However at that time, the prices were high due to the technology barriers. After years of development, the manufacturers now made achievements: Shandong Longlive obtained several patents for its XOS production; QHT released 6 state-level fructo oligosaccharides (FOS) reference materials; NFBC launched GOS of nearly 100% purity.

  
- Price fall:

  

  Gradually mature technology will help cut down the production costs. This, along with strategies to increase demand, will cause price falls. In 2015, the averaged ex-works price of FOS was USD6,550/t (RMB43,412/t), down by 13.37% YoY, and XOS down by 1.21% to USD35,558/t (RMB235,667/t).

  
- Product mix enrichment:

  

  given oligosaccharides' functions and gradually decreasing prices, downstream users will be inclining to applying oligosaccharides and will develop more oligosaccharides related products. In Feb. this year, CNSIC Kangjian (Beijing) Technology Co., Ltd. (affiliated company to China National Salt Industry Corporation) launched low-sodium salt containing prebiotics (suitable for the elder, infants, the pregnant and hypertension patients); in late June, Hunan Xuetian Salt Technology Development Co., Ltd. began marketing a prebiotics contained salt (especially suitable for people having problems in intestines and stomach).

  
Now the "Big Health" business is at a stage of development, supported by many government policies. For instance, in the China Food and Nutritionals Development Outline (2014-2020), provisions on the intakes of nutrients and the control over nutritional diseases are listed. In this context, CCM expects the oligosaccharides business to sustain stable development and to benefit related producers.

   

  Ex-works prices of FOS and XOS in China, 2012-2015 & H1 2016

  

  Source: CCM

   

  This article comes from Sweeteners China News 1608, CCM

   

  

  

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  CCM is the leading market intelligence provider for China's agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

  

   

  

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  Tag: sweetener  oligosaccharide