Industrial Biotechnologies China News Sample - Published by CCM International Ltd

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Industrial Biotechnologies China News

Vol.1 Issue 9, 2009

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Industrial Biotechnologies China News

Vol.1 Issue 9, Sep. 8, 2009

Industrial Biotechnologies China News 0909

BIO-FUELS ...................................................................... 1 Lianhai Biotech to expand butanol with new technology......................1 SFB expands xanthoceras sorbifolia capacity........................................2 Guizhou launches 10,000t/a biodiesel production line ..........................4

BIO-PRODUCTS.............................................................. 6 Donta Group enlarging yeast production ................................................6 Continent Biotech expanding enzyme preparation ................................9 CAS building largest lactase production base in China ......................10 Novozymes expands enzyme production..............................................12 Hunan Yuyuan expands in microbial fertilizer ......................................14 SK sells SCR enzyme technology to China...........................................15

BIO-BASED CHEMICALS ............................................. 16 China’s citric acid export volume up but price down...........................16 VC export price rises ...............................................................................17 Jianding Biotechnology established......................................................19 Baolingbao to develop FOS and dietary fiber .......................................21

BIO-MATERIALS ........................................................... 23 Shenzhen Ecomann launches 5,000t/a PHA..........................................23 Tiancheng Corn to carry out PLA project..............................................24

NEWS IN BRIEF............................................................. 25 China holds 2009 summit forum on microbial fertilizer .......................25 Green Energy Group invests in biodiesel..............................................25 Laibin Tianren launches160,000t/a biofertilizer plant...........................26 China to cultivate large-scale energy forests........................................26 Ministry of Health approves 26 food additives......................................26 Beijing founds biogas technology strategic alliance ...........................26 Guangzhou establishes biotechnology service alliance .....................26 Nanyang Tianrong builds 6,000t/a PPC catalyst ...................................26 Sichuan Guanghe to build 100,000t/a sweet potatoes ethanol ...........26

Ready reports related to industrial biotechnology: - Future of White Biotechnology in China

Edition (2)

- Biofuels Market in China – Edition (1)

- Production and Market of Monosodium

Glutamate (MSG) in China Edition (1)

- Future of White Biotechnology in China-

Edition (1)

- Future of Enzyme in China – Edition (1)

- Production & Market of Yeast Extract in

China - Edition (1)

Coming reports related to industrial biotechnology: - Future of Green Biotechnology in

China

- Future of Red Biotechnology in China

- Lactic Acid Bacterium Industry in

China

- Future of Starch in China

- Future of Enzyme in China – Edition

(2)

- Production and Market of Yeast in Asia

Pacific Rim

CCM related newsletter: - Corn Products China News

Contact us for more information about CCM.

CCM Newsletter Industrial Biotechnologies China News


Headlines of Industrial Biotechnologies China News 0909

Main companies and institutes mentioned in this issue

■ Lianhai Biotech will expand butanol production

based on its new technology.

■ Guizhou launched a 10,000t/a bio-diesel

production line on Aug. 6th 2009.

■ Shuangfeng Forestry Bureau is expanding XS

production capacity in Yichun City.

■ Donta Group is to launch its yeast expansion

project by the end of Sep. 2009.

■ Continent Biotech is building a 15,000t/a enzyme

preparation plant.

■ Novozymes will construct an enzyme production

base in Tianjin.

■ CAS is building a lactase production base in

Jiangxi, aiming to capture China’s huge lactase

market.

■ Hunan Yuyuan signed a capital increase

agreement with Shenzhen Fortune Venture in order

to expand.

■ SK Holding sold SCR enzyme technology to China

Power in late July 2009.

■ In the first seven months of 2009, VC export price

has climbed and may keep growing.

■ Jianding Biotechnology plans to launch its

first-phase glucosamine and activated carbon

production lines by the end of this year.

■ Baolingbao plans to enter FOS and dietary fiber

market through getting listed on Shenzhen Stock

Exchange.

■ China’s citric acid export volume has climbed up

with price fall in the first seven months of 2009.

■ Shenzhen Ecomann launched a 5,000t/a PHA

production line in Shandong.

■ Tiancheng Corn is planning to construct 10,000t/a

PLA with several production lines.

Editor’s Word Welcome to September Issue of Industrial Biotechnologies China News

published by CCM International, a professional consulting company who has

been intently focusing on dynamics of China’s industrial biotechnologies industry.

Growing concerns on environmental protection and energy security have

become key drivers for China’s fast growing industrial biotechnology. Successive

supporting policies are clear indicators showing China’s determination to develop

this industry----On June 2nd, 2009, China's State Council announced a policy

package to accelerate bio-industry development; ---during Aug. 2009, some local

governments like Shandong and Shenzhen issued their own plans; ----Also, in

the 11th Five-Year Plan (2006-2010), Chinese government has proclaimed to

promote biodegradable materials.

Attracted by its huge potential, enterprises both domestic and overseas have

displayed strong interests in bio-industry. For example, Shenzhen Ecomann’s

investment in PHA and Tiancheng Corn’s in PLA, the two promising materials

from renewable resources, covered in this issue are both evidences

demonstrating the trend. Besides, Novozymes’ global strategy on enzymes

expansion covered indicates a global trend for second-generation bio-ethanol.

Besides, under recovering global economy and growing environmental protection

awareness worldwide, more players domestic and overseas are expected to

increase investment in China’s biotechnology sector.



1

BIO-FUELS

Lianhai Biotech to expand butanol with new technology

Jiangsu Lianhai Biological Technology

Co., Ltd. (Lianhai Biotech) will produce

butanol on a large scale by adopting

fermentation method using wastewater

from flour deep-processing as raw

material.

With total investment of USD400 million,

this expansion project is divided into

three phases (TABLE 1).

TABLE 1: Information of the project

Item Investment (USD) Capacity (t/a) Launch time

First phase 60 million 35,000 Sep. 2008

Second phase N/A 100,000 Oct. 2009

Third phase N/A 200,000 Mar. 2011

Source: CCM International

The core technology adopted in this

expansion project uses the patented

strain technology from Shanghai

Institute for Biological Science (SIBS) of

Chinese Academy of Sciences (CAS),

and is jointly developed b y Lianhai

Biotech and Jiangnan University.

According to CAS and experts from

China's fermentation industry, the

technology has reached international

advanced level.

By adopting this new technology, this

project will make the following major

breakthroughs:

To achieve recovery of wastewater

from flour deep-processing

industry

To achieve energy conservation

and consumption reduction;

To achieve recycling and clean

production;

To promote Lianhai Biotech to be

the largest butanol producer at

home.

The project has been declared as a

major provincial project of transferring

scientific & technological achievements.

And in early Aug., it has passed the

online assessment by the experts from

Provincial Science and Technology

Department. Upon completion, butanol

supply will become relatively sufficient in

domestic market.

At present, there are eight domestic

enterprises producing butanol by

fermentation, among which Jilin Ji’an

Biochemical Co., Ltd. (Jilin Ji’an) is the

biggest one with the capacity of

50,000t/a, and another three, namely

Jiangsu Jinmaoyuan Biochemical Co.,

Ltd. (Jiangsu Jinmaoyuan), Guangxi

Guiping Jinyuan Alcohol Co., Ltd.

(Guiping Jinyuan) and Jilin Cathay

Industrial Biotechnology Co., Ltd. (Jilin

Cathay) (FIGURE1), has capacity of

30,000t/a for each.



2

FIGURE 1：Capacity of domestic butanol enterprises in 2008

50,000

30,000 30,000 30,000

5,000 5,000 5,000 5,000

0

10,000

20,000

30,000

40,000

50,000

60,000

Jilin Ji'an JiangsuJinmaoyuan

GuipingJinyuan

Jilin Cathay Jilin Zhonghai HeilongjiangHaocheng

TangshanJidong

TongliaoZhongkeTianyuan

(Uni

t: t/a

)


Note: Jilin Zhongha: Jilin Zhonghai Chemical Co., Ltd.

Heilongjiang Haocheng: Heilongjiang Haocheng Chemical Co., Ltd.

Tangshan Jidong: Tangshan Jidong Solvent Co., Ltd.

Tongliao Zhongke Tianyuan: Tongliao Zhongke Tianyuan Starch Chemical Co., Ltd.

Domestic butanol supply has been

falling short of demand, with the output

50% less than the consumption. From

2000 to 2006, domestic butanol

consumption had increased year by

year, and in 2006, the consumption

reached 7,400,000 tonnes at home.

Meanwhile, the butanol prices have

risen from about USD1,318/t in Jan. in

2006 to USD2,342/t at present.

Currently, some domestic butanol

enterprises plan to expand their

production capacity. And annual

increased capacity of the butanol

projects will reach 730,000 tonnes.

Through continuous project expansion,

China will be able to reverse the

dependence on imports.

Although crude oil prices has dropped to

below USD50/barrel caused by financial

crisis since H2 2008, which had led to

production suspension of many butanol

producers. However, butanol application

is expected to become an irreversible

trend, given the potential pressing

situation of oil resources depletion and

the expected price rise of oil, so butanol

fermentation industry is sure to become

promising.

SFB expands xanthoceras sorbifolia capacity

Shuangfeng Forestry Bureau (SFB,

located in Yichun City, Heilongjiang

Province) is building a xanthoceras

sorbifolia (XS) base in Yichun City,

which is expected to become the

biggest bio-energy production base in

Heilongjiang upon completion.

This XS base construction is divided

into two phases. The first-phase

construction with 133 hectares XS has

initiated since 2008, which is expected

to be launched by the end of 2010. The

second phase with 266 hectares XS is

being built at present and will be

launched by the end of 2012. In fact,

SFB has planned to expand its XS



3

capacity to 1,000 hectares in the next

five years.

Insider reveals that after the launch of

this XS base, it will supply XS for China

Nature Petroleum Company (CNPC) as

the raw material for biodiesel or

bioethanol production.

XS (PICTURE) is an ideal raw material

for biodiesel and bioethanol production

with its high oil content, with seed oil

content of about 30%-36% and kernel

oil content of 50%-70%. Besides, it has

high output of about 1,500-2,000kg/h.

Moreover, it is said that biodiesel

produced from XS has about 93.4%

hydrocarbons with 18 carbons and has

no environmental pollution parameter

like sulfur and nitrogen, etc, which

conforms to the quality indexes of

biodiesel. Since 2005, China has

successfully developed the technology

to produce biodiesel with XS as raw

material.

PICTURE: Cross-section of XS

Source: www.Yxsfz.cn

At present, there are about 5,300

hectares XS in China, mainly distributed

in four provinces – Shanxi, Inner

Mongolia, Liaoning and Shaanxi. And

some other provinces like Gansu are

also trying to cultivate this plant, and

Chinese Academy of Forestry has

provided great support to these areas

by popularizing the XS planting

technology, aiming to provide ample raw

material for biodiesel production in the

future. Currently, most of XS are used in

edible oil, medicine, etc, in China.

Chinese government enacted a

‘National standards for biodiesel ‘in

2008, which requires a higher demand

for carbon content in biodiesel. Those

biodiesel producers using waste animal

oil and vegetable oil as raw material

were seriously affected by this standard

and some even went bankrupt. The

quality of biodiesel produced from waste

animal oil and vegetable oil varies a lot,

which can do harm to machines.

This standard has driven biodiesel

producers to actively search for some

high oil content plants as raw materials.

Guizhou, for instance, had launched a

10,000t/a biodiesel production line with

jatropha as raw material this month.

However, raw material cost is too much

for producers using high oil content

plant to produce biodiesel (TABLE 2),

which is a bottleneck for their

development. For example, Sichuan

Gushan Oil Chemical Co. Ltd. (Sichuan

Gushan) produces biodiesel by using

soybean or colza with capacity of

240,000t/a, and the cost on raw material

has seen continuous increase, thus

hindering the development of biodiesel,

according to Mr. Zhao, president of

Sichuan Gushan.



4

TABLE 2: Main biodiesel producers in China and their raw materials

Company Raw material

Sichuan Gushan Soybean or colza.

Liuzhou Minghui Biofuels Co., Ltd. Jatropha, tung, tea plant

Longyan Zhuoyue New Energy Development Co. Ltd Waste animal oil and vegetable oil


XS can be planted in a barren land,

which is easy for mass production. As

non-staple food, XS price is expected

be less influenced by price fluctuation of

other products like agricultural products,

industrial products, etc, which will

contribute to development of XS-based

biodiesel.

As estimated, the demand for biodiesel

in China will increase a lot in the near

future due to global energy shortage.

The prices of petroleum products have

increased for 24 times in 2009, driving

the government to make more efforts to

seek new energies. Besides, biodiesel

production capacity has reached

3,000,000 tonnes in 2008, while actual

output was only 300,000 tonnes,

indicating a huge development

potential.

Guizhou launches 10,000t/a biodiesel production line

Guizhou has launched the first-phase

10,000t/a biodiesel production line in

New Material Industrial Park (Guiyang

City, Guizhou Province) on Aug. 6th

2009.

Currently, the first biodiesel samples of

this project have been sent for test by

Guangzhou Energy Institute of Chinese

Academy of Sciences, and all indexes

of the samples have reached the

National Biodiesel BD100 standards.

Invested by the No.061 Base of China

Aerospace Science & Industry

Corporation (located in Guizhou), a

large scientific research and production

center for aerospace products, this

biodiesel project takes Jatropha as raw

material and is divided into three phases.

Upon completion of the three phases

(TABLE 3), the total capacity will reach

160,000t/a.

TABLE 3: Information of the biodiesel project

Phase Investment (USD) Planned capacity (t/a) Launch time

First phase 4,390,000 10,000 2009

Second phase 7,320,000 50,000 2010

Third phase N/A 100,000 2012


The successful launch of Guizhou’s

10,000t/a biodiesel line is based on the

following advantages.

First of all, Guizhou is rich in biological

resources. There are abundant wild

Jatropha resources in Bouyei-Miao

Autonomous Prefecture of Qianxinan in

southwest Guizhou, as well as the

valleys of Nanpan River, Beipan River,

Red River and Duliu River.

What’s more, there are many barren

mountains suitable for Jatropha

cultivation, and through scientific

cultivation, the average per- hectare

yield of fruit can reach 4,500 kilograms,

which can produce about 100 to 200

kilograms biodiesel. Using Jatropha as

the main raw material for biodiesel

production can not only reduce



5

production cost, but also increase the

local peasants’ income and prevent land

desertification.

Besides, local market prospect of

biodiesel is expected to be bright, as

there are many mining companies in

Guizhou and diesel is greatly needed in

mining operation.

At present, some domestic and foreign

energy companies also concern about

the potential development of Jatropha in

China, and have invested in Jatropha

cultivation. For example, PetroChina

Limited (Petrol China), the biggest

controlled subsidiary of China National

Petroleum Corporation（CNPC）, plans

to invest in Jatropha production base in

Yunnan, and China National Offshore

Oil Corporation (CNOOC) will invest in

Hainan and Sichuan, and British

Sunshine Technology Group, a

commercial forestry plantation company,

cooperates with the Honghe Prefecture

Forestry Bureau of Yunnan Province to

jointly develop Jatropha base.

PICTURE: Distribution of Jatropha bases

Main Jatropha planting regions

Minor Jatropha planting regions Source: CCM International

At present, there are dozens of

biodiesel enterprises including private,

join stock and state-owned enterprises.

Hebei Zhenghe Co., Ltd., Sichuan

Gushan Group Co., Ltd. and Fujian

Zhuoyue Co., Ltd. are relatively larger

enterprises with annual output of above

10,000 tonnes. Although China’s

biodiesel capacity has reached

3,000,000t/a in 2008, the actual annual

output is only 300,000 tonnes, indicating

a huge development potential.

By 2010, China’s annual biodiesel

output will reach 1,000,000 tonnes, and

9,000,000 tonnes by 2020. And the

demand is estimated to reach

20,000,000 tonnes by 2010 in China. In

view of the huge gap between the

supply and the demand, related

enterprises are expected to seize the

market opportunity and speed up the

biodiesel investment (FIGURE 2).



6

FIGURE 2: Capacity of major biodiesel producers in 2008

100,000

50,000 50,000

10,00010,00012,000 6,00030,000

240,000

0

50,000

100,000

150,000

200,000

250,000

SichuanGushan

LiuzhouMinghui

LongyanZhuoyue

XiamenZhuoyue

HebeiZhenghe

HeibeiFukuan

JiangsuKeyuan

GuizhouJiangnanHangtian

ShanxiHuashuo

(Uni

t: t/a

)


As an emerging industry in China,

biodiesel is characterized by both great

development potential and various

restrictions in the early stage. Chinese

government has attached great

importance to the development of

biofuels and released relevant policies

to promote its development. National

People's Congress has implemented

the ‘Renewable Energy Law’ since 2006,

and the Ministry of Finance, National

Development and Reform Commission

and other departments jointly issued

‘Advices on Implementing Fiscal and

Taxation Supporting Policy for

Bioenergy and Biochemical Industry’

and so on. These policies are expected

to provide a strong support for domestic

biodiesel development.

BIO-PRODUCTS

Donta Group enlarging yeast production

Dongguan Donta Group Co., Ltd.

(Donta Group, headquartered in

Dongguan City, Guangdong Province) is

expanding yeast production and is

expected to launch its 48,000t/a dried

yeast and 10,000t/a yeast extract

facilities by the end of Sep. 2009.

Early in May 2006, Donta Group had

established two subsidiaries, Guangxi

Danbaoli Yeast Co., Ltd. (Guangxi

Danbaoli) and Guangxi Yipinxian

Biochemical Science & Technology Co.,

Ltd. (Guangxi Yipinxian) in Laibin City,

Guangxi Province for its yeast capacity

expansion.

Actually, these two subsidiaries were

jointly invested by Donta Group,

Guangxi Laibin Donta group Co., Ltd.

(Laibin, a local subsidiary of Donta

Group, established in 2003) and

Lesaffre Group (the world’s biggest

yeast producer), with investment of

USD102 million.

Donta Group’s yeast expansion project

is based on the following advantages.

Firstly, this project can take the

advantage of adequate raw material

supply in local areas. As the biggest

sugar cane production region in China,

Guangxi has taken up more than 70% of

China’s total sugar cane output these

years. And Laibin took up 18% of

Guangxi’s total with 8.3 million tonnes in

2008. Besides, Donta Group has 7

sugar processing bases supplying



7

treacle as common raw materials of

yeast for the new project. Besides, local

government has been paying much

attention to developing yeast industry by

releasing tax preferential policies for

yeast companies.

Secondly, this project is equipped with

advanced production technology and

equipments sourced from Lesaffre

Group, who has been producing yeast

for 150 years. With the strong technical

support from Lesaffre Group, the new

facilities are expected to make the best

use of the advanced equipments.

Besides, Donta Group has a subsidiary

named as Guangdong Danbaoli Group

Co., Ltd. (Guangdong Danbaoli) with

current dried yeast capacity of 16,000t/a,

which has strong sales network

throughout China and extensively

exports its products to Southeast Asia,

Middle East, South America, Africa, etc.,

which will provide mature sales

networks for these two new companies.

In addition, there are few yeast

producers in Guangxi, but the

consumption volume is estimated at

50,000 tonnes per year, indicating a big

market opportunity.

This cooperation can achieve a win-win

situation. Donta Group wants to bring in

new advanced technology for deeper

development in yeast field, and Lesaffre

Group intends to expand its market

share in China and cut down the

production cost with local rich raw

material supply and large sales network

of Donta Group, according to Mr. Guo,

technical engineer of Guangdong

Danbaoli.

With fast growth of some local

companies, China’s yeast market has

seen intense competitions in recent

years, thus Lesaffre Group prefer to

seek some cooperators to enlarge its

market share in China. As the biggest

yeast producer in the world, Lesaffre

Group launched a yeast production

base with capacity of 3,000t/a in Anhui

Province of China in 1999, and then it

built a sales company in Shanghai in

2002.

In 2008, China’s total yeast production

capacity reached 190,000t/a,

accounting for nearly 20% of the world’s

total capacity, and the actual total output

reached 100,000 tonnes. It is expected

that, as some producers are expanding

production, the total yeast capacity will

reach 210,000t/a in 2009 (FIGURE 3).

FIGURE 3: China’s total yeast capacity, 2005 ~ 2009est.

120,000

150,000170,000

190,000210,000

0

50,000

100,000

150,000

200,000

250,000

2005 2006 2007 2008 2009est.

(Uni

t: t/

a)




8

Besides, yeast industry is becoming

more and more concentrated in China

with the top 3 players (TABLE 4)

accounting for over 70% of China total

capacity. In recent years, the top 2 have

put great efforts to expand their

capacity.

TABLE 4: Major yeast producers in China, 2009

Manufacturer Location Capacity ’08

Hubei Angel Yeast Co., Ltd. Xinjiang, Shandong, Inner Mongolia, Henan, Guangxi and Hubei 91,000

Mauri Yeast Heilongjiang, Hebei, Shandong, Guangdong, Xinjiang 30,000

Guangdong Danbaoli Yeast Co., Ltd. Guangdong 16,000

Guangdong Zhuhai Aoli Yeast Co., Ltd. Guangdong 2,000

Anhui Lesaffre (Mingguang) Anhui 3,000

Shandong Yantai Hongde Food Industry Co., Ltd. Shandong 2,000

Guangdong Jiangmen Center for Biotech. Co., Ltd. Guangdong 4,000

Shandong Xiwang Leavening Co., Ltd. Shandong 1,500

Qiqiha’er Longtai Food Co., Ltd. Heilongjiang 1,500


PICTURE: Distribution of major yeast production regions in China


In addition, in recent years, China’s

demand for yeast and yeast extract has

been increasing year by year attributed

to the development of related industries

like feedstuff and flour products, etc. As

estimated, the major potential market

for yeast in China is rural areas, where

about 90% of homemade flour products

except sour dough do not apply active

dry yeasts, showing a huge market

potential.

Donta Group is a state-owned

enterprise established in 1935, and has



9

a raw sugar processing base with

processing capacity of 700,000t/a,

which provides part of molasses for

Guangdong Danbaoli. As a

conglomerate with 21 factories and

companies located in 4 provinces -

Guangdong, Guangxi, Shanxi, Yunnan,

Donta Group is mainly engaged in four

series of products, namely sugar,

biological engineering, thermal-electric

power and paper-making.

Continent Biotech expanding enzyme preparation

Continent Biotech Group Co., Ltd.

(Continent Biotech, headquartered in

Qingdao City, Shandong Province) is

now constructing a 7,000t/a solid

enzyme preparation production line, the

second phase of its 15,000t/a enzyme

preparation plant, in Weifang City,

Shandong Province.

Continent Biotech’s 15,000t/a enzyme

preparation plant consists of the

first-phase 8,000t/a for liquid enzyme

preparation, which was completed on

Jul. 20th 2009 with investment of

USD12 million, and the second-phase

7,000t/a for solid enzyme preparation

with investment of USD22 million. Upon

completion of this plant, Continent

Biotech will expand its total enzyme

preparation capacity to 20,000t/a, and is

expected to become the largest enzyme

preparation producer in Shandong.

Early in Aug. 2008, Continent Biotech

has begun to construct this 15,000t/a

enzyme preparation plant in Weifang. At

present, the company has constructed

one major workshop with 240 m3

fermentation capacity, one distilling

workshop and two power workshops. In

this plant, Continent Biotech will

produce various enzyme preparations

like feed enzyme, edible enzyme and

industrial enzyme etc. But feed

enzymes like phytase, alkaline pectase,

liquid complex enzyme and alkaline

xylanase will remain the company’s key

products.

Actually, Continent Biotech is the first

enzyme producer at home to

industrialize liquid enzyme spraying

uniformity technology which is

developed independently in 2001. By

applying this technology in its enzyme

preparation production, reaction

temperature can keep below 60℃ thus

maintaining high enzyme activity, as in

normal reaction temperature would

surpass 60℃ with enzyme activity

losing largely.

Besides, with this technology, Continent

Biotech has built another two liquid feed

enzyme production bases respectively

in Binzhou City with 3,000t/a complex

enzyme and Linyi City with 1,000t/a

phytase and 1,000t/a xylanase in recent

years.

According to Mr. Duan, technical

engineer of Continent Biotech, enzyme

products produced by this technology

have been accepted by users because

of its high quality and short supply. In

2008, Continent Biotech’s sales network

has spread throughout China, even to

some other countries in Asia like Japan,

Philippines, etc. , and its sales value

reached about USD44 million.

Continent Biotech has been paying

great attention to after-sales service for

clients both at home and abroad. It built

a biotech research institute in Shandong

in 2005, for the sake of developing

market-target and high-quality feed

enzyme and supply technology support

for various clients in clients.

In 2008, there were over one hundred

feed enzyme producers in China with

relatively small production capacity and

low-quality products, except

Novozymes (China) Biotechnology Co.,

Ltd, the largest enzyme producer in the

world. Owing to lack of strong market

competitiveness, in terms of technology

and capitals, many domestic

small-scale feed enzyme producers

choose to stop or suspend expansion,

except Continent Biotech and

Guangdong VTR Bio-tech Co., Ltd.,

both of which continue capacity

expansion. The latter in July launched a

20,000t/a feed enzyme base in Inner

Mongolia.

The demand for feed enzyme will

continue to rise in the future in China, as

more and more feedstuff producers

realize that feed enzyme can greatly

enhance utilization rate of nutrition in

feed, which can efficiently decrease

production cost. Given this trend, feed

enzyme is expected to be widely used in

animal feedstuff. Moreover, increasing



10

feedstuff output in China year on year is

another key driver for increasing use of

feed enzyme preparation (FIGURE 4).

FIGURE 4: Feedstuff output in China, 2005~2009

0

20

40

60

80

100

120

140

160

2005 2006 2007 2008 2009 est

(Uni

t: m

illion

tonn

es)


Meanwhile, increasing numbers of feed

enterprises expect to cooperate with

feed enzyme producers, based on

high-quality feed enzyme and good

after-sales service. In this situation, feed

enzyme producers taking advantage of

high-quality products and good

after-sales performance can resolve

various production difficulties for feed

enterprises. Actually, feed enzyme

producers should develop new

technology to improve the quality of

products, thus increasing

competitiveness in the future.

Established in 2001, Continent Biotech

is composed of six manufacturing

enterprises and mainly engaged in

enzyme, probiotics, protein, bio-fertilizer,

allicin and so forth. The company is

equipped with the most advanced liquid

and solid-state fermentation facilities in

the world and ascends into the leading

large-scale biological preparation and

manufacturing enterprises.

CAS building largest lactase production base in China

Chinese Academy of Science (CAS)

established a subsidiary Chinese

Academy of Science Lactase Co., Ltd.

(CASL) on Aug.18th, 2009, and started

to construct China’s biggest lactase

production base in Dean County,

Jiangxi Province, aiming to capture

China’s huge lactase market.

With total investment of USD19.02

million, the construction of this

production base is divided into two

stages, consisting of seven production

lines. Upon completion, CASL will

achieve 3,000t/a lactase capacity

（TABLE 5）.

TABLE 5: Information of CASL’s new project

Item First phase Second phase

Capacity 1,500t/a 1,500t/a

Investment USD11.7 million USD7.32 million

Start time Aug. 2009 Oct. 2010

Launch time 2010 2011




11

Lactase, also named as

beta-galactosidase (β-galactosidase),

normally exists in human body in

intestinal epithelial cells, thereby

contributing to digestion of lactose

present in dairy foods. However, large

numbers of people in Asia and Africa,

accounting for 70% of Asia and Africa’s

total as estimated, have a genetic

deficiency of this enzyme and are

unable to digest lactose.

The new base will adopt the technology

of using thalli Mutated Aspergillus Niger

to produce lactase developed by CAS in

2006, which can enhance lactose

hydrolysis efficiency and cut down the

production cost compared to using the

other thalli under the same condition.

Besides, it will mainly produce a new

lactase, which can rapidly and efficiently

hydrolyze lactose to glucose and

galactose with 6,000u/g, compared with

3,000u/g or 5,000u/g for existing

products.

At present, China has few lactase

producers, and most of them have small

capacity. As reported, the total lactase

production capacity in China was only

20t/a in 2008. For example, Harbin

Meihua Biotechnology Co., Ltd. (Meihua

Biotechnology), the only active producer

in China currently, has lactase capacity

of only 8t/a.

According to Mr. Zhang, salesman of

Meihua Biotechnology, some

companies stopped lactase production

in 2008 due to its high production cost

and inefficient technology, thus leading

to small profit, given the adverse

situation of economic downturn at that

time. Owing to domestic insufficient

supply but huge demand, 98% of

China’s lactase is imported from other

countries like US and Japan, etc., as

estimated.

Thanks to increasing demand for low

lactose milk products, the demand for

lactase in China has been increasing in

recent years. It was estimated that

Chinese demand for lactase was about

2,700 tonnes in 2008, most of which

was imported from overseas at price of

about USD59,000/t, higher than that of

USD43,000/t in domestic market

(FIGURE 5).

FIGURE 5: Output of lactose milk products and demand for lactase in China, 2005~2008

3,000,000

2,500,0002,000,000

1,850,000

2700

18002000

2300

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2005 2006 2007 2008

Uni

t: to

nne

0

500

1,000

1,500

2,000

2,500

3,000

Lactose milk products Lactase


For the sake of better lactose absorption

when consuming dairy products, many

countries add lactase to dairy foods or

other dairy meals. According to Ms.

Yang, Deputy Secretary General of

Chinese Nutrition Society, the

proportion of Chinese adults suffering

from lactose intolerance is as high as

92%, implying promising market for low

lactose milk, as well as a huge demand

for lactase to decompose lactose for

reasonable nutrition absorption.



12

Novozymes expands enzyme production

Novozymes, the world’s biggest

industrial enzymes producer,

announced on Aug. 3rd 2009 that it will

construct an enzyme preparation

production base in Tianjin

Economic-Technological Development

Area and expects to launch it by 2010.

Through this expansion, Tianjin

Novozymes will become Novozymes’

third global enzyme production base.

After the launch of this new base, with

total investment of about USD53 million

and coverage area of 5,599m2,

Novozymes is predicted to double its

enzyme preparation capacity in China

(FIGURE 6).

FIGURE 6: Main enzyme producers’ market share in the world

47%

4%21%

6%

22%

Novozymes BASF Danisco DSM Others

Source: Novozymes’ annual report, 2007

According to Mr. Ren, senior manager

from Asia Bioenergy Department of

Novozymes, the company is very

optimistic about China’s future

development of the second generation

bioethanol, namely using crop wastes

as raw materials, as China highly

concerns about energy supply and

security and has abundant supply of

agro-forestry wastes as a large

agricultural country. Also, Novozymes

predicts that the second generation

bioethanol consumption will explosively

grow in 2012.

Novozymes has been producing various

enzymes that are widely used in food,

brewing, washing and other industrial

fields since 1998 (FIGURE 7). And after

nearly 10 years’ research and

development, it has solved some major

technical obstacles in

second-generation bioethanol

production process, and is expected to

produce second bioethanol enzymes on

a large scale in 2010.

FIGURE 7: Novozymes enzyme annual sales, 2004~2008

0

400

800

1,200

1,600

2004 2005 2006 2007 2008

(Uni

t: m

illion

USD

)




13

Enzymes production cost is an

important factor influencing the

development of second-generation

bioethanol production. At present,

enzyme preparation cost accounts for

35% of total production cost for


production, and after large-scale

industrialization, the cost proportion will

be reduced to 20-25%. According to

Novozymes’ estimation, the


production cost in China will be

USD2.59 per gallon in 2010, and can be

reduced to USD1.5 per gallon by 2015,

which will be very competitive compared

with gasoline price (USD2 per gallon).

According to Mr. Steen Riisgaard, CEO

of Novozymes, there is only one step

away for the company to make use of

crop wastes to produce fuel ethanol on

a large scale.

The second-generation bioethanol has

a long value chain, including raw

material collection, transport and

storage, as well as cellulosic ethanol

production, sales and so on, among

which the cellulose technology can

reduce production cost largely. And the

breakthrough of this technology needs

multilateral collaboration to achieve a

mutual development. Novozymes and

COFCO in early 2009 reached a new

cooperation agreement with Sinopec to

initiate large-scale commercial

production by using crop wastes as raw

materials to produce second-generation

bioethanol.

Chinese government has been paying

more and more attention to

second-generation bioethanol. On July

9th 2009, the enzyme preparation

branch of China Fermentation Industry

Association held a discussion in

Qingdao. Over twenty domestic large

biotechnology enterprises and research

institutes attended the meeting

(FIGURE 8). The branch president

announced the development plan of the

enzyme preparation industry. Although

domestic biotechnology enterprises

have made rapid progress in recent

years, their enzyme annual output is still

much less than multinational

enterprises’.

FIGURE 8: Major enzyme producers’ capacity in 2008

6,0006,500

8,000

4,000

0

2,000

4,000

6,000

8,000

10,000

Hunan Jinshi ZhengzhouFuyuan

JiangyinBaishenglong

Henan Yangshao

(Uni

t: t/a

)


Note: Hunan Jinshi Group Co., Ltd.

Zhengzhou Fuyuan Biotechnology Co., Ltd.

Jiangyin Baishenglong Bioengineering Co., Ltd.

Henan Yangshao living to turn the engineering Co., Ltd.



14

Hunan Yuyuan expands in microbial fertilizer

Hunan Yuyuan Bio-technological Co.,

Ltd. (Hunan Yuyuan, located in Hunan

national bio-industry base Changsha

City, Hunan Province), a leading

enterprise of microbial fertilizer industry,

signed an agreement with Shenzhen

Fortune Venture Capital Co., Ltd.

(Shenzhen Fortune Venture) to obtain

capital for capacity expansion and R&D

strengthening on Aug. 21st 2009.

Actually, after establishment, Hunan

Yuyuan had invested about USD15

million to build a 10,000 t/a.microbial

fertilizer production line. This production

line has the largest investment and

largest production capacity, and its

technical level and equipment are the

most advanced in China. And currently,

it has putt high concentrations of

bacteria powder into commercial mass

production.

Hunan Yuyuan’s expansion of microbial

fertilizer is attributed to at least four

reasons.

Firstly, Chinese government has

formulated some policies to promote the

extensive use of microbial fertilizer. For

example, the first document release by

Chinese government this year stipulate

to strengthen the protection and

improvement of soil, and to promote and

the use of microbial fertilizer in the

whole country.

Secondly, some farmers have begun to

accept and use microbial fertilizer,

which has brought tremendous

opportunities for microbial fertilizer

manufacturers.

Compared with common fertilizer,

microbial fertilizer has advantages in

ecological protection, crop quality

improvement and fertilizer efficiency

enhancement, as microbial fertilizer can

increase beneficial bacteria in soil to

help crops use nutrients. According to

Fertilizer Testing Center of Ministry of

Agriculture, farm products output can

increase 12% ~20% by using microbial

fertilizer. So in vegetable growing

regions like Shouguang, farms use

microbial fertilizer more and more

widely.

Furthermore, the average utilization rate

of common fertilizer is only 20%~30%,

while that of microbial fertilizer is more

higher , for example, the nitrogen fixed

in rhizobia can almost all be absorbed

by plants.

More and more farmers realize

important role of microbial fertilizer in

practical production, so microbial

fertilizers have become more and more

popular than common fertilizers with

farmers.

Thirdly, the current status of the soil

gives business opportunities to

microbial fertilizer manufacturers. The

soil compaction and salinization have

become widespread, as farmers have

been using nitrogen fertilizer for a long

time. Compared with common fertilizer,

microbial fertilizer not only can break

potassium and phosphate and fix

nitrogen, but also can greatly increase

fertilizer utilization rate, so it is

increasingly favored by farmers.

Fourthly, microbial fertilizer has a large

profit margin, compared with common

fertilizer. And currently, only a few have

been engaged in microbial fertilizer

production, and thus they have huge

development potential to capture market

share amid this less intense market

competition. The large formal

manufacturers, in particular, like Hunan

Yuyuan, are expected to work hard and

make great progress on this field,

depending on their sufficient funds and

strong scientific and technological

background. As for other small

companies, like family workshops, they

are running on a small scale and weak

in competitiveness.

Currently, there are more 500 microbial

fertilizer companies in China (TABLE 6),

annual output is about 5 million tonnes,

and the application areas are nearly 6

million hectares. Microbial fertilizer

product categories continue to increase,

so far, the products registered in the

Ministry of Agriculture are divided into

two major categories of antimicrobial

and microbial fertilizer including 11

varieties. In the next five years, China's

microbial fertilizer annual output is

expected to reach 8 million ~ 10 million

tones. And it is expected that microbial

fertilizer industries will play a more

important role in agricultural production.



15

TABLE 6: Some domestic microbial fertilizer companies in 2008

Company Capacity (t/a) in Location

Hebei Fuhua Kangtute Environmental Co., Ltd. 100,000 Shijiazhuang, Hebei

Hebei Juwei Biological Engineering Co., Ltd. 100,000 Baoding, Hebei

Dezhou Sunshine Biotechnology Co., Ltd. 100,000 Dezhou, Shandong

Dalian Shibeide Biotechnology Co., Ltd. 100,000 Dalian, Liaoning

Shenyang Shennongren Biochemical Engineering Co., Ltd. 30,000 Shenyang, Liaoning

Liaoning Yuanheng Biotechnology Co., Ltd. 30,000 Chaoyang, Liaoning

Beijing Wlong Technology Co., Ltd. 30,000 Beijing, Beijing

Heilongjiang Suihua Nongken Chenhuan Biology Science & Technology Co., Ltd. 20,000 Suihua, Heilongjiang

Shanxi Yi’an Biological Engineering Co., Ltd. 5,000 Yuncheng, Shanxi

Beijing First Biological Engineering Co., Ltd. 5,000 Beijing


Although, due to the financial crisis in

2008, market demand for microbial

fertilizer production has experienced

weak growth. In the long run, with the

economy see rapid development and

increase in per capita income, Chinese

government will increase the

investments in microbial fertilizer, which

will increase the demand for microbial

fertilizer. Meanwhile, the new industry

system will also prompt domestic

microbial fertilizer industry to reshuffle.

SK sells SCR enzyme technology to China

SK Holding Co., Ltd. (SK Holding,

headquartered in Seoul, South Korea)

sold its Selective Catalytic Reduction

(SCR) enzyme technology to Qingdao

Huatuo Technology Co., Ltd., a

subsidiary of China Power Investment

Company (China Power) in late July

2009, which will enable China Power to

be the first Chinese company to apply

enzyme technology into industrial

exhaust emissions treatment at home.

SCR enzyme technology can be used to

clean up the exhaust emissions like

carbon dioxide, sulfur dioxide, carbon

monoxide, etc. Researched by SK

Holding since 1996, this technology has

been successfully used in South

Korea’s power plants after 2003,

accounting for 20% of the country’s total

market share currently. Besides, SK

Holding signed a cooperation

agreement with Germany-based EnBW

Group in July 2007 and began to

explore the overseas markets.

Insider reveals that SK Holding will

cooperate with more companies to

promote this enzyme technology in

power plants and chemical plants and

enhance its application in China in the

near future.

Based on varieties of Bacillus, SCR

enzyme technology uses enzyme as

catalysts, which enjoys higher

purification efficiency, simpler operation

and lower cost compared with the other

exhaust emission treatment

technologies in China, thus it’s expected

to be applied in a variety of recycling

and waste treatment enterprises.

For instance, compared with SCR

chemistry catalysts technology

commonly adopted in China, which

uses chemicals like vanadium pentoxide

and titanium dioxide as raw materials to

deal with pollutants of nitrogen oxide

and sulphur dioxide, etc, SCR enzyme

technology has higher catalysis

efficiency and lower temperature, and

can reclaim more kinds of exhaust

emissions, even solid waste.

At present, there are several kinds of

exhaust emissions treatment

technologies in China, (TABLE 7), such

as carbon dioxide reclaiming technology,

which has played a growingly important

role in recent years due to the

greenhouse effect caused by rising

carbon dioxide emission. But it can only

treat one or two kinds of waste gases,

thus restricting its wider application.



16

TABLE 7: Major exhaust emission technologies in China

Technology Main adopters Launch time

ZH active carbon adsorbing organic exhaust gases

purifying & recycling treatment technology

Hangzhou South Environment Protective Coating Equipment

Co., Ltd. 1993

SCR chemistry catalysts technology Jiangsu Zhongke Energy-Saving Environmental Protection

Technology Co., Ltd. 2006

Carbon dioxide reclaiming technology Chengdu Demei Engineering Technology Co., Ltd. 2001

High-voltage electrostatic trapping technology Gansu Kejin Environmental Technology Co., Ltd. 2002

Phosphorus emission reclaiming technology Yunnan Nanlin Group Co., Ltd. 2008


With the rising awareness of

environmental protection, more and

more Chinese countries intend to seek

new technologies to reduce pollution. In

2008, Chinese government issued a

standard of ‘Absorption Gas Cleaner for

Industrial Emission’, which clearly

stipulates the technical standards for

popular waste treatment devices.

Therefore, SCR enzyme technology,

which satisfies China’s demand for

environmental technologies, is expected

to be accepted by more enterprises.

BIO-BASED CHEMICALS

China’s citric acid export volume up but price down

Despite US and EU’s anti-dumping

duties on Chinese citric acid in 2009,

China’s citric acid export volume has

still kept increasing, up 1.2% year on

year to 393,616 tonnes in the first seven

months of 2009 (FIGURE 9). Except to

EU and US, export price of citric acid to

other countries has slipped largely over

the same period of 2008 since early

2009.

FIGURE 9: China’s citric acid export volume, Jan. ~Jul. 2009

37,200

48,181

62,08968,707

60,624

53,910

62,905

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09

(Uni

t: to

nne)

Source: China Customs



17

Respectively since Jun. 2008 and Sep.

2008, EU and US have begun to levy

high anti-dumping duties on China’s key

citric acid producers like Anhui BBCA

Biochemical Co., Ltd. and Shandong

TTCA etc., which erodes Chinese

players’ price advantage in these

markets.

As an export-oriented product,

homemade citric acid’s encountering

anti-dumping sanction from EU and

USA has seriously impacted domestic

citric acid export, because nearly 40%

of China’s citric acid export was to EU

and US before. According to statistics

from China Customs, in the first seven

months of 2009, US citric acid import

volume from China has decreased by

87.6% and EU import down 28%.

However, domestic citric acid producers

have been endeavoring to develop

other new and large markets like India,

Mexico, Thailand and Indonesia etc.

after the anti-dumping duties had been

implemented. Actually, India has totally

imported 32,424 tonnes citric acid from

China during the first seven months in

2009, up 39% over the same period of

2008, which makes it the largest

importer of Chinese citric acid currently.

Prices of homemade citric acid exported

to EU and US have stayed at relatively

high level of around USD1,000/t, due to

anti-dumping duties during this period,

but export prices to other countries like

Southeast Asia, Africa and South

America saw a big drop, ranging from

USD680/t and USD820/t,

USD100~200/t lower than that in the

first seven months of 2008.

Although Ministry of Commerce

Administration has executed Export

License Administration on domestic

citric acid exporters since early 2009,

this Export License Administration with

relatively low requirements for domestic

citric acid producers couldn’t efficiently

restrain pernicious price competition

among them. In order to enlarge market

share in oversea markets with no

anti-dumping duties, domestic citric acid

exporters choose to cut down the price.

Besides, decreasing raw material price

also resulted in price fall of domestic

citric acid. Corn and sulphuric acid are

key raw materials for citric acid

production. In H1 2009, corn price

remained similar to that in H1 2008, but

sulphuric acid price has plummeted to

around USD30/t from USD245/t since

the breakout of global financial crisis. At

present, sulphuric acid price is still at

low level of USD36/t and corn price

keeps stable at around USD234/t in

Northeast China.

Citric acid export price has kept stable

currently, and it is hard to raise the price

due to current citric acid surplus supply

in China. Once both sulphuric acid and

corn price rise in the following months,

citric acid price may also be pushed up

slightly in the market.

China has been the largest citric acid

producer with total output of around

750,000 tonnes per year in the world,

and has exported around 80% of its total

output on average in recent years.

However, its production has been

restrained by the government due to

high pollution during citric acid

production.

VC export price rises

Average export price of Vitamin C (VC)

has climbed up in the first seven months

of 2009, continuing an uptrend

compared to the same period last year.

According to statistics from China

Customs (TABLE 8), in the first seven

months of 2009, VC average export

price has reached USD10,297/t, up

29.6% compared to the same period

last year, while most of the other vitamin

export prices have experienced

downtrend. The impacts of weak

domestic demand have been partly

offset by the high VC export price.



18

TABLE 8: China’s VC export situation, Jan~ Jul, 2009

Item Jan - Jul, 2008 Jan - Jul, 2009 Growth rates (%)

Export (tonne) 51,632 47,905 -7.2

Value (USD) 410,165,661 493,274,479 20.3

Average (USD/t) 7,944 10,297 29.6

Source: China Customs

The main reasons for VC export price

rise are as follows:

Firstly, China has become the world’s

VC production base, thus enabling

domestic VC enterprises to price the

products.

As an important exporter of VC, China

has strong competitiveness in global VC

market. China produces VC by using

two-step fermentation process, which

has reached the world-advanced level

and thus being prohibited for export.

Based on the technology edge, China’s

VC has good product quality and enjoys

low production cost.

In recent years, with strong

competitiveness of China’s VC, some

multinational corporations have

gradually stopped VC production. As a

result, global dependence on Chinese

VC has gradually increased. For

example, China VC export volume was

less than 80,000 tonnes in 2007, but it

increased to 85,239 tonnes in 2008. By

the end of 2008, China VC sales value

had accounted for 86% of total VC sales

value in US market. At present, about

80% of the world’s VC products are

sourced from China.

The four biggest domestic VC

enterprises include (FIGURE 10）

Northeast Pharmaceutical Group Co.,

Ltd (NPC), North China Pharmaceutical

Group Co., Ltd (NCPC), China

Shijiazhuang Pharmaceutical Group Co.,

Ltd (CSPC) and Aland (Jiangsu)

Nutraceutical Co., Ltd. (Aland). The VC

export prices of these four enterprises

all stayed at a relatively high level of

about USD1,000/t, a big upthrust

compared with the same period last

year, signifying their strong pricing

power.

FIGURE 10: Capacity of major domestic VC enterprises in 2008

35,000

25,000

20,00018,000

0

10,000

20,000

30,000

40,000

CSPC NPC Aland NCPC

(Uni

t: t/a

)


Secondly, VC is mainly used in

industries of pharmaceuticals, health

food, and food additives, etc. that

provide necessary daily products, thus

less being affected by economic

downturn. And VC only constitutes a

very small proportion of its downstream

products’ cost, so downstream clients

are not sensitive to the price change of

VC.

Thirdly, VC products have seen



19

excellent sales performance after the

outbreak of H1N1 influenza around the

world, as VC preparation can effectively

prevent influenza. Besides, many new

kinds of VC composite preparations can

also effectively enhance immunity and

prevent influenza, so they had sold well

from last winter to this spring, thus

promoting the soaring demand of VC.

In light of huge VC demand and its high

prices currently (FIGURE 11), the four

VC enterprises had been in full

operation in the first five months this

year. With sufficient VC supply in the

domestic markets, its price only

fluctuated slightly in early June.

However, to curb the slight price decline

this June, the four biggest VC

enterprises decided to stop production

from July to September. As a result, VC

price has risen in July, and is expected

to maintain uptrend in the near future

with reduced supply.

FIGURE 11: Domestic VC export prices, Jan. – Jul. 2009

9,903

10,415

10,033

10,558

10,409

10,551

10,202

9,400

9,600

9,800

10,000

10,200

10,400

10,600

10,800

Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09

(Uni

t: U

SD/t)


In the long run, VC export price may

maintain relatively high level, attributed

to the following factors. Firstly, H1N1

influenza may continue its prevalence

for a long time and may break out in the

autumn and winter this year. Secondly,

the price of corn, one of VC’s raw

materials, may keep at high level

because of current severe drought in

China. Thirdly, although some domestic

small and medium-sized companies

plan to produce VC, their products only

sell in domestic market, so their

expansions can not affect VC export

price.

Jianding Biotechnology established

Jiangsu Jianding Biotechnology Co., Ltd.

(Jianding Biotechnology), a company

newly established on Aug. 10th 2009,

has initiated the construction of

first-phase production lines of 3,000t/a

glucosamine and 12,000t/a activated

carbon, which will be launched by the

end of 2009.

Jianding Biotechnology has

independent technology for

co-production of glucosamine and

activated carbon. Adopting this

technology, glucosamine can be

extracted from citric acid waste, and

then the waste is further processed to

produce high-quality activated carbon.

This technology is believed to create

huge economic and environmental

benefits by reutilizing waste from

production.

For one thing, glucosamine, as an

important health product, is widely used

as nutritional supplements for articular

cartilage treatment, and is the only

health product approved by the medical



20

community and nutrition research

institutions in US and Europe, for its

therapeutical effect on bone and joint

diseases. The market value of

glucosamine and its downstream

products like health products and

pharmaceuticals is estimated to reach

USD7 billion.

Currently, domestic glucosamine

production mainly use shrimp shell and

crab shell as raw materials, which leads

to heavy metal residues and large

amounts of ash contained in

glucosamine products. With

vegetarianism spreading over Europe

and US, enabling citric acid-based

glucosamine products to become

greatly popular among consumers,

glucosamine products produced by

Jianding Biotechnology using this

technology is predicted to have a highly

competitive position in health products

market as this technology is developed

independently at home, and the

overseas market has not obtained the

technology up to now.

For another, co-production of

glucosamine and activated carbon can

reduce environmental pollution. With its

activated carbon capacity accounting for

more than 1/3 of global total, China is

the world’s largest producer of activated

carbon, a major chemical material with

annual consumption volume of more

than one million tonnes in the world. But

currently, large quantities of high-quality

timber and bamboo are consumed at

home to produce activated production

every year, leading to high energy

consumption and severe environmental

pollution. Therefore, using this

technology can greatly relieve the

environmental pressure.

It is thus expected that Jianding

Biotechnology will have a very important

position in China’s health product

industry, and will promote China’s

overall health product industry to

develop more eco-friendly.

With entry into health products industry

in the 1980s, China has rapidly

developed in this field in the past

decade. By the end of 2007, China has

approved more than 8,900 varieties of

health products. And more than 1,640

health product manufacturers have

achieved total production value of over

USD17 billion annually (FIGURE 12).

FIGURE 12: Glucosamine output in China, 2002~2007

01,0002,000

3,0004,0005,0006,000

7,0008,0009,000

10,000

(Uni

t: to

nne)

2002 2003 2004 2005 2006 2007


Some enterprises from other industries

are very optimistic on the future

development of China health product

industry. In the end of 2008, , Wuliangye

Group Co., Ltd., a well-known liquid

brand, cooperated with Giant

Corporation to enter health care market.

Mr. Wang Dahong, Secretary General of

China Health Care Association, said

that some Japanese automobile

companies with sufficient funds are

waiting for an opportunity to enter health

product industry in China.

‘Food Safety Law’ and ‘Rules of

Supervision and Administration on

Health Food Products’ will also promote



21

integration in health product industry,

which will change glucosamine

manufacturers’ competitive landscape in

China (TABLE 9).

TABLE 9：Information of glucosamine manufacturers in China, 2008

Locations Number of

manufacturers, ‘08 Capacity '08, t/a Output '07, t

Number of

manufacturers ‘08 Capacity '08 Output '07

Zhejiang 9 7,150 3,430 33.30% 36.80% 38.00%

Jiangsu 9 4,960 2,645 33.30% 25.50% 29.30%

Shandong 4 3,110 1,360 14.80% 16.00% 15.10%

Fujian 2 3,510 1,320 7.40% 18.10% 14.60%

Shanghai 1 350 180 3.70% 1.80% 2.00%

Liaoning 1 200 50 3.70% 1.00% 0.60%

Jiangxi 1 150 30 3.70% 0.80% 0.30%

Total 27 19,430 9,015 100% 100% 100%


Despite facing many challenges,

China’s health care products industry is

expected to have huge development

potential with the rising market demand

and continuous technological advances

and management enhancement.

Note: With USD3,000,000 investment,

Jianding Biotechnology was jointly

established by Jiangsu Top-Bridge

Capital Co., Ltd. (Top-Bridge Capital)

and another two companies, namely

Nantong Foreign Trade Medicines and

Health Products Co., Ltd. and Jiangsu

Bochuan Chemical Co., Ltd.

Baolingbao to develop FOS and dietary fiber

Baolingbao Biology Co., Ltd.

(Baolingbao, located in Shandong and

mainly supplies food additive) got listed

on Shenzhen Stock Exchange on Aug.

19th 2009 with an IPO of 20 million A

stocks, aiming to raise fund for its

oligofructose (FOS) and dietary fiber

production lines.

With total investment of USD39.8 million,

Baolingbao will construct production

facilities of FOS (USD22 million,

10,000t/a), a kind of oligosaccharide,

and water-soluble dietary fiber

(USD17.8 million, 30,000t/a). Upon

completion of these two projects,

Baolingbao will become the largest

oligosaccharide production base with

the most comprehensive variety of

oligosaccharide in China.

These two new production lines will both

adopt membrane filter and enzyme

catalysis methods to produce higher

purity FOS and water-solubility dietary

fiber, which can improve the purity from

50% to 80%, insiders revealed. At

present, some Chinese companies have

begun to use enzyme catalysis method,

such as Jiangmen Quantum Hi-tech

Biological Engineering Co., Ltd. with

current oligosaccharide capacity of

15,000t/a.

Besides, the new method enjoys

various advantages. For example, it can

simplify the processes, shorten the

production time, and generate higher

output. Moreover, the two production

lines can share parts of the

infrastructure, thus reducing the total

production cost.

Also, Baolingbao Biology can promote

new products with its strong sales

network, thereby further strengthening

its status as China’s leading prebiotics

processor. Currently, it has established

stable business relationships with many

large enterprises, including Mengniu,

Yili, Coca-Cola, etc. Some products

have major roles in China with a large

market share. For example, Baolingbao

accounted for about 70% of domestic

Isomaltooligosaccharide (IMO) market

with IMO sales of 46,000 tonnes in 2008

(TABLE 10).



22

TABLE 10: Sales volume and market share of Baolingbao’s two main products

Product IMO High fructose corn syrup

Year 2007 2008 2007 2008

Sales volume (tonne) 27,000 33,000 57,000 62,000

Market share in China 70% 70% 11% 10%


According to Mr. Liu, president of

Baolingbao, the company at present

can meet different market demands for

these two products, which will

consolidate the basis of existing

customers. Besides, it will enrich its

product varieties and improve the

ingredient system, which is expected to

attract new customers and enhance

Baolingbao’s competitiveness.

At present, the demand for FOS and

dietary fiber has increased year by year

(FIGURE 13). With people’s increasing

health awareness, these food products

adding oligosaccharides for treatment of

intestinal diseases have been accepted

gradually by Chinese people. More and

more upstream and downstream

sectors extensively add

oligosaccharides into food products. In

2008, there were about 8 FOS

processors with capacity amounting to

40,000t/a in China (TABLE 11). As

estimated, domestic FOS downstream

(milk products, beverage, biscuit, etc.)

demand will reach around 80,000

tonnes in 2010, with high-purity powder

FOS demand sharing around 50% of

their total.

FIGURE 13: Demand for FOS in China, 2006-2010est.

8,000

16,000

25,000

44,000

80,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Uni

t: to

nne

2006 2007 2008 2009est 2010est

Source: www.Chinamzj.com

TABLE 11: Main FOS processors in China

Company Launch time FOS capacity in 2008

Jiangmen Quantum Hi-tech Biological Engineering Co., Ltd. 1997 15,000t/a

Yunnan Tianyuan Health-Care Food Co., Ltd. 1998 3,000t/a

Guangxi Honghua Aoligao Biological Science & Technology Co., Ltd. 2003 1,500t/a

Zhuhai Hightech Zone Weideli Bioengineering & Technology Co., Ltd. 1999 10,000t/a




23

Chinese government has promulgated a

policy of ‘Food Nutrition Labeling

Regulation’, which explicitly requires the

statement of water-soluble dietary fiber

addition volume for foods that are

labeled ‘dietary fiber’ - liquid food (with

content of 1.5%), solid food (3%), which

increases water-soluble dietary fiber

demand. In 2008, China’s output of

water-soluble dietary fiber reached

110,000 tonnes. Insiders believe that it

will be largely applied in food industry in

the near future.

BIO-MATERIALS

Shenzhen Ecomann launches 5,000t/a PHA

Shenzhen Ecomann Bio-technology Co.,

Ltd. (Shenzhen Ecomann,

headquartered in Shenzhen,

Guangdong Province) launched its

first-phase 5,000t/a

polyhydroxyalkanoics （PHAs）

production base in Zoucheng City,

Shandong Province on July 29th, 2009.

With total investment of USD93 million,

the construction of this production base

is divided into three phases. Upon

completion, the PHAs base will achieve

100,000t/a total capacity (TABLE 12).

TABLE 12: Construction plan of Shenzhen Ecomann’s PHA base

Item First phase Second phase Third phase

Investment USD12 million USD51 million USD30 million

Capacity 5,000t/a 50,000t/a 45,000t/a

Starting time May 2008 May 2010 Early 2011

Launch time July 2009 2011 Late 2011


PHAs is a kind of PHA, which is named

by Shenzhen Ecomann, and is mainly

produced by using corn as raw material

currently. The company is working hard

to adopt other raw materials like potato,

sugar cane, corn straw and vegetable

fibre, etc. in the near future.

According to Mr. Yang, salesman of

Shenzhen Ecomann, PHAs is produced

through fermentation, a monomer

containing 4 carbon atoms, which has

higher tenacity for PHAs than Tianjin

Green Biotechnology Co., Ltd. (Tianjin

Green)’s PHBV (another type of PHA)

with 5 carbon atoms.

Shenzhen Ecomann has established

partnership with some Japanese and

American end users, and has exported

its PHA products to these countries

according to Mr. Yang.

Actually, there are some difficulties for

PHA development. At present, China’s

application of biodegradable materials,

especially PHAs, is not as extensive as

that of Japan and US, due to poor

performance and high cost (as

estimated, PHA production cost is

around USD6/kg, while traditional PVC

plastic is around USD1/kg). However,

some high-end materials like materials

for surgery in China use PHA more and

more.

Besides, supply shortage of corn is

another barrier for Chinese PHA

development. Five tonnes of corn is

needed to produce one tonne of PHA.

Therefore a 100,000t/a PHA plant will

need 500,000 tonnes of corn every year.

Though, Shenzhen Ecomann can use

other raw materials with higher price,

such as non-grain materials like cane

sugar with current price of USD600/t,

depending on its strong fiscal ability, the

company still depends on corn, which is

still the major raw material. And this has

become a common problem restricting

the development of PHA.



24

At present, there are only 3 PHA

producers in China 2009 (TABLE 13).

However, Tianjin Green’s 10,000t/a

PHBV plant in Tianjin

Economic-Technological Development

Area (TEDA) is still being constructed

and is expected to be launched this

September, which will enable Tianjin

Green to become China’s largest PHA

producer.

TABLE 13: PHA producers in China, 2009

Producer Establishment Time Current capacity, t/a Planned capacity, t/a

Ningbo Tian’an Biologic Material Co., Ltd. 2003 2,000 5,000

Tianjin Green 2004 10 10,000

Shenzhen Ecomann 2005 5,000 100,000


Established in 2005, Shenzhen

Ecomann is a technology-based

enterprise specializing in development,

production and sales of renewable

materials. On May 27th 2008, the

construction of PHAs plant in Zoucheng

City is invested by Shenzhen Ecomann,

covering area of 14 hectares.

PICTURE: Founding ceremony of Shenzhen Ecomann’s PHA project in Shandong

Source: Shenzhen Ecomann

Tiancheng Corn to carry out PLA project

Jilin-based Tiancheng Corn

Development Co., Ltd. (Tiancheng

Corn), a modern enterprise specializing

in the deep and fine processing of corn,

is planning to carry out a polylactic acid

(PLA, a biodegradable, thermoplastic,

aliphatic polyester derived from

renewable resources such as corn

starch and sugarcanes) project with

capacity of 10,000t/a. It will initiate

construction before the end of 2009.

Using corn starch as raw material, the

PLA project will be constructed as the

third stage project of Tiancheng Corn’s

corn deep processing and grain logistics

project started in 2005 (TABLE 14). The

company will cooperate with Jiangxi

Provincial Academy of Sciences to

finish this stage of project.

TABLE 14: Tiancheng Corn’s corn deep processing and grain logistics project

Stage Investment (USD) Launch time Increased capacity (t/a)

First stage 171,288,000 2006 300,000

Second stage 24,888,000 2008 300,000

Third stage 70,272,000 2010 10,000




25

Tiancheng Corn is confident that its PLA

project will enjoy a promising prospect

in the future, thanks to the following

aspects.

Firstly, as an environmentally friendly

biomaterial, PLA has been widely used

in the world and enjoys an increasing

demand. With increasing awareness on

environmental protection, Chinese

government has paid more attention to

environmentally friendly materials and

provided much support to their

development. For example, Chinese

government has listed the promotion

and development of biodegradable

materials (including PLA) in the 11th

Five-Year Plan (2006-2010), aiming to

boost the development.

Though Taizhou-based Zhejiang Hisun

Biomaterials Co., Ltd. (Zhejiang Hisun)

is currently the largest PLA producer in

China with capacity of 5,000t/a, its

leading position will be replaced by

Tiancheng Corn after the new PLA

project launched.

Secondly, PLA is a deep-processing

product with high added value. Though

being more and more widely used in

various fields, there are few companies

mastering its production technology at

present. So profit margin for PLA

production is still large.

Thirdly, the project will have sufficient

raw material supply. Located in Siping, a

large corn production city in Jilin

Province, Tiancheng Corn will have no

difficulty in getting sufficient raw material

with low price. It was reported that

Siping’s corn output was 500 million

tonnes in 2008.

Fourthly, Tiancheng Corn enjoys very

convenient transportation. Siping City is

an important transportation hub in the

Northeast with intensive highways and

railways extending to all directions.

Besides, it is surrounded by four airports

and is close to the ports of Yingkou,

Jinzhou and Dandong. With such

convenient transportation, Tiancheng

Corn will be able to save a handsome

sum in product transport.

It is believed that the convenient

transportation will contribute a lot the

Tiancheng Corn’s further development.

NEWS IN BRIEF

China holds 2009 summit forum on microbial fertilizer China held the 2009 summit forum on

microbial fertilizer on Aug. 31st 2009 in

Nanyang Business Hotel, which focused

on microbial fertilizer prospect in China.

Summit organizers include Chinese

Academy of Agricultural Sciences,

China Agricultural University, and

Chinese Ministry of Agriculture Microbial

Fertilizer Testing Center.

Boeing to cooperate with China on biofuel In late Aug. 2009, according to Mr.

Matthew Ganz, vice president of Boeing

Commercial Airplanes (Boeing) as well

as manager from Research &

Technology Department, Boeing is

strengthening the cooperation with

China on biofuel development, in terms

of raw material sourcing and the

commercial production. At present, the

bilateral cooperation is underway.

Green Energy Group invests in biodiesel

Green Energy Group Co., Ltd. (Green

Energy Group) declared on Aug. 24th

2009 that the company would construct

Jatropha-based biofuel refinery project

and began to cultivate Jatropha.

Besides, this pilot plant will also produce

biodiesel and other biochemical

byproducts.



26

Laibin Tianren launches160,000t/a biofertilizer plant Laibin Tianren Bio-organic Fertilizer Co.,

Ltd. (Laibin Tianren) on Aug. 17th 2009

held a foundation ceremony in Laibin

City, Guangxi Province, to launch a

160,000t/a biofertilizer plant, using crop

wastes like corn stalks, peanut vine and

sugar cane bagasse as raw materials.

China to cultivate large-scale energy forests Mr. Zhang, deputy director from the

State Forestry Administration said in

early Aug. 2009 that China would

cultivate about 13,000,000 hectares

energy forests nationwide. These

energy forests will meet the demand of

more than 6,000,000 tonnes of

biodiesel.

Ministry of Health approves 26 food additives China Ministry of Health approved 26

types of food additives on Aug. 6th 2009,

including nutrient supplement, food

enzyme preparations, food spices, etc.

to stipulate the additive varieties that

can be added into food to ensure food

safety.

.Beijing founds biogas technology strategic alliance

On Aug. 25th 2009, Biogas Technology

Strategic Alliance was set up in Beijing

by 19 members including High-tech

Bureau of Chinese Academy of

Sciences, Tsinghua University, etc. This

alliance will focus on biogas

development and technology support for

companies.

Guangzhou establishes biotechnology service alliance

Guangzhou established a biotechnology

service alliance on Aug. 19th 2009,

which was achieved by 20 members

including Guangzhou Bio-Engineering

Center, Guangzhou Baiyunshan

Pharmaceutical Factory, Da’an Gene

Co., Ltd. of Sun Yat-sen University, etc.,

aiming to improve the biotechnology

development of Guangdong.

Nanyang Tianrong builds 6,000t/a PPC catalyst

With investment of USD6.6 million,

Nanyang Tianrong Technology Industry

Co., Ltd. (Nanyang Tianrong) is building

6,000t/a PPC (a degradable plastic)

catalyst, which will exclusively supply

products to Henan Tianguan Group Co.,

Ltd., aiming to improve its catalyst

business through this leading company

in PPC industry.

Sichuan Guanghe to build 100,000t/a sweet potatoes ethanol

With investment of USD98 million,

Sichuan Guanghe Energy Technology

Development Co., Ltd. (Sichuan

Guanghe) is building 100,000t/a ethanol

base with sweet potatoes as raw

material, targeting to capture ethanol

market depending on rich raw materials

in Sichuan.

CCM International Limited

Address: 17th Floor, Huihua Commercial & Trade Building, No.80 Xianlie Zhong

Road Guangzhou, 510070, P.R.China

Tel: +86-20-37616606

Fax: +86-20-37616968

Email: [email protected]

Website: www.cnchemicals.com

Industrial Biotechnologies China News Sample - Published by CCM International Ltd

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