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Industrial Biotechnologies China News


                                         Vol.1 Issue 9, 2009




Biotechnologies
      Copyright © CCM International Limited
Industrial Biotechnologies China News
                                                                                                           Vol.1 Issue 9, Sep. 8, 2009




                        Industrial Biotechnologies China News 0909
      BIO-FUELS ...................................................................... 1                    Ready reports related to
Lianhai Biotech to expand butanol with new technology...................... 1                               industrial biotechnology:
SFB expands xanthoceras sorbifolia capacity........................................ 2                       - Future of White Biotechnology in China
Guizhou launches 10,000t/a biodiesel production line .......................... 4                           Edition (2)
                                                                                                            - Biofuels Market in China – Edition (1)
      BIO-PRODUCTS .............................................................. 6
                                                                                                            - Production and Market of Monosodium
Donta Group enlarging yeast production ................................................ 6
                                                                                                            Glutamate (MSG) in China Edition (1)
Continent Biotech expanding enzyme preparation ................................ 9
                                                                                                            - Future of White Biotechnology in China-
CAS building largest lactase production base in China ...................... 10
                                                                                                            Edition (1)
Novozymes expands enzyme production.............................................. 12
                                                                                                            - Future of Enzyme in China – Edition (1)
Hunan Yuyuan expands in microbial fertilizer ...................................... 14
                                                                                                            - Production & Market of Yeast Extract in
SK sells SCR enzyme technology to China........................................... 15
                                                                                                            China - Edition (1)
      BIO-BASED CHEMICALS ............................................. 16
China’s citric acid export volume up but price down........................... 16                           Coming reports related to
VC export price rises ............................................................................... 17    industrial biotechnology:
Jianding Biotechnology established...................................................... 19                  - Future of Green Biotechnology in
Baolingbao to develop FOS and dietary fiber ....................................... 21                           China
                                                                                                             - Future of Red Biotechnology in China
      BIO-MATERIALS ........................................................... 23
                                                                                                             - Lactic Acid Bacterium Industry in
Shenzhen Ecomann launches 5,000t/a PHA.......................................... 23
                                                                                                                 China
Tiancheng Corn to carry out PLA project.............................................. 24
                                                                                                             - Future of Starch in China
      NEWS IN BRIEF............................................................. 25                          - Future of Enzyme in China – Edition
China holds 2009 summit forum on microbial fertilizer ....................... 25                                 (2)
Green Energy Group invests in biodiesel.............................................. 25                     - Production and Market of Yeast in Asia
Laibin Tianren launches160,000t/a biofertilizer plant........................... 26                              Pacific Rim
China to cultivate large-scale energy forests........................................ 26
Ministry of Health approves 26 food additives...................................... 26                      CCM related newsletter:
Beijing founds biogas technology strategic alliance ........................... 26                          - Corn Products China News
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                                   Contact us for more information
                                                                                                            about CCM.



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CCM Newsletter                                                                            Industrial Biotechnologies China News

                                        Headlines of Industrial Biotechnologies China News 0909


■   Lianhai Biotech will expand butanol production                                            Editor’s Word
    based on its new technology.
                                                                  Welcome to September Issue of Industrial Biotechnologies China News
■   Guizhou      launched      a    10,000t/a        bio-diesel
                                                                  published by CCM International, a professional consulting company who has
    production line on Aug. 6th 2009.
                                                                  been intently focusing on dynamics of China’s industrial biotechnologies industry.
■   Shuangfeng Forestry Bureau is expanding XS
    production capacity in Yichun City.
                                                                  Growing concerns on environmental protection and energy security have
■   Donta Group is to launch its yeast expansion
                                                                  become key drivers for China’s fast growing industrial biotechnology. Successive
    project by the end of Sep. 2009.
                                                                  supporting policies are clear indicators showing China’s determination to develop
■   Continent Biotech is building a 15,000t/a enzyme
                                                                  this industry----On June 2nd, 2009, China's State Council announced a policy
    preparation plant.
                                                                  package to accelerate bio-industry development; ---during Aug. 2009, some local
■   Novozymes will construct an enzyme production
                                                                  governments like Shandong and Shenzhen issued their own plans; ----Also, in
    base in Tianjin.
                                                                  the 11th Five-Year Plan (2006-2010), Chinese government has proclaimed to
■   CAS is building a lactase production base in
                                                                  promote biodegradable materials.
    Jiangxi, aiming to capture China’s huge lactase
    market.
                                                                  Attracted by its huge potential, enterprises both domestic and overseas have
■   Hunan      Yuyuan    signed     a      capital    increase
                                                                  displayed strong interests in bio-industry. For example, Shenzhen Ecomann’s
    agreement with Shenzhen Fortune Venture in order
                                                                  investment in PHA and Tiancheng Corn’s in PLA, the two promising materials
    to expand.
                                                                  from renewable resources, covered in this issue are both evidences
■   SK Holding sold SCR enzyme technology to China
                                                                  demonstrating the trend. Besides, Novozymes’ global strategy on enzymes
    Power in late July 2009.
                                                                  expansion covered indicates a global trend for second-generation bio-ethanol.
■   In the first seven months of 2009, VC export price

    has climbed and may keep growing.
                                                                  Besides, under recovering global economy and growing environmental protection
■   Jianding     Biotechnology     plans     to   launch    its
                                                                  awareness worldwide, more players domestic and overseas are expected to
    first-phase glucosamine and activated carbon
                                                                  increase investment in China’s biotechnology sector.
    production lines by the end of this year.
■   Baolingbao plans to enter FOS and dietary fiber
                                                                   Main companies and institutes mentioned in this issue
    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.




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CCM Newsletter                                                                                 Industrial Biotechnologies China News



     BIO-FUELS

                                Lianhai Biotech to expand butanol with new technology


Jiangsu Lianhai Biological Technology            from flour deep-processing as raw                this expansion project is divided into
Co., Ltd. (Lianhai Biotech) will produce         material.                                        three phases (TABLE 1).
butanol on a large scale by adopting
fermentation method using wastewater             With total investment of USD400 million,


                                                    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                    industry                                   domestic market.
expansion project uses the patented                    To achieve energy conservation
strain technology from Shanghai                        and consumption reduction;                 At present, there are eight domestic
Institute for Biological Science (SIBS) of             To achieve recycling and clean             enterprises producing butanol by
Chinese Academy of Sciences (CAS),                     production;                                fermentation, among which Jilin Ji’an
and is jointly developed b y Lianhai                   To promote Lianhai Biotech to be           Biochemical Co., Ltd. (Jilin Ji’an) is the
Biotech and Jiangnan University.                       the largest butanol producer at            biggest one with the capacity of
According to CAS and experts from                      home.                                      50,000t/a, and another three, namely
China's fermentation industry, the                                                                Jiangsu Jinmaoyuan Biochemical Co.,
technology has reached international             The project has been declared as a               Ltd. (Jiangsu Jinmaoyuan), Guangxi
advanced level.                                  major provincial project of transferring         Guiping Jinyuan Alcohol Co., Ltd.
                                                 scientific & technological achievements.         (Guiping Jinyuan) and Jilin Cathay
By adopting this new technology, this            And in early Aug., it has passed the             Industrial Biotechnology Co., Ltd. (Jilin
project will make the following major            online assessment by the experts from            Cathay) (FIGURE1), has capacity of
breakthroughs:                                   Provincial Science and Technology                30,000t/a for each.
     To achieve recovery of wastewater           Department. Upon completion, butanol
     from flour deep-processing                  supply will become relatively sufficient in




                                                                                                                                               1

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CCM Newsletter                                                                                   Industrial Biotechnologies China News


                                             FIGURE 1:Capacity of domestic butanol enterprises in 2008


                  60,000
                            50,000
                  50,000


                  40,000
    (Unit: t/a)




                                           30,000       30,000        30,000
                  30,000

                  20,000

                  10,000                                                              5,000          5,000          5,000         5,000

                       0
                           Jilin Ji'an     Jiangsu     Guiping      Jilin Cathay   Jilin Zhonghai Heilongjiang     Tangshan     Tongliao
                                         Jinmaoyuan    Jinyuan                                     Haocheng          Jidong     Zhongke
                                                                                                                                Tianyuan



 Source: CCM International
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                      enterprises plan to expand their                producers. However, butanol application
falling short of demand, with the output              production capacity. And annual                 is expected to become an irreversible
50% less than the consumption. From                   increased capacity of the butanol               trend, given the potential pressing
2000 to 2006, domestic butanol                        projects will reach 730,000 tonnes.             situation of oil resources depletion and
consumption had increased year by                     Through continuous project expansion,           the expected price rise of oil, so butanol
year, and in 2006, the consumption                    China will be able to reverse the               fermentation industry is sure to become
reached 7,400,000 tonnes at home.                     dependence on imports.                          promising.
Meanwhile, the butanol prices have
risen from about USD1,318/t in Jan. in                Although crude oil prices has dropped to
2006 to USD2,342/t at present.                        below USD50/barrel caused by financial
                                                      crisis since H2 2008, which had led to
Currently, some domestic butanol                      production suspension of many butanol


                                             SFB expands xanthoceras sorbifolia capacity


Shuangfeng Forestry Bureau (SFB,                      biggest bio-energy production base in           initiated since 2008, which is expected
located in Yichun City, Heilongjiang                  Heilongjiang upon completion.                   to be launched by the end of 2010. The
Province) is building a xanthoceras                                                                   second phase with 266 hectares XS is
sorbifolia (XS) base in Yichun City,                  This XS base construction is divided            being built at present and will be
which is expected to become the                       into two phases. The first-phase                launched by the end of 2012. In fact,
                                                      construction with 133 hectares XS has           SFB has planned to expand its XS
                                                                                                                                                 2

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CCM Newsletter                                                                                Industrial Biotechnologies China News


capacity to 1,000 hectares in the next           XS (PICTURE) is an ideal raw material           no environmental pollution parameter
five years.                                      for biodiesel and bioethanol production         like sulfur and nitrogen, etc, which
                                                 with its high oil content, with seed oil        conforms to the quality indexes of
Insider reveals that after the launch of         content of about 30%-36% and kernel             biodiesel. Since 2005, China has
this XS base, it will supply XS for China        oil content of 50%-70%. Besides, it has         successfully developed the technology
Nature Petroleum Company (CNPC) as               high output of about 1,500-2,000kg/h.           to produce biodiesel with XS as raw
the raw material for biodiesel or                Moreover, it is said that biodiesel             material.
bioethanol production.                           produced from XS has about 93.4%
                                                 hydrocarbons with 18 carbons and has


                                                      PICTURE: Cross-section of XS




                                            Source: www.Yxsfz.cn


At present, there are about 5,300                for carbon content in biodiesel. Those          However, raw material cost is too much
hectares XS in China, mainly distributed         biodiesel producers using waste animal          for producers using high oil content
in four provinces – Shanxi, Inner                oil and vegetable oil as raw material           plant to produce biodiesel (TABLE 2),
Mongolia, Liaoning and Shaanxi. And              were seriously affected by this standard        which is a bottleneck for their
some other provinces like Gansu are              and some even went bankrupt. The                development. For example, Sichuan
also trying to cultivate this plant, and         quality of biodiesel produced from waste        Gushan Oil Chemical Co. Ltd. (Sichuan
Chinese Academy of Forestry has                  animal oil and vegetable oil varies a lot,      Gushan) produces biodiesel by using
provided great support to these areas            which can do harm to machines.                  soybean or colza with capacity of
by popularizing the XS planting                                                                  240,000t/a, and the cost on raw material
technology, aiming to provide ample raw          This standard has driven biodiesel              has seen continuous increase, thus
material for biodiesel production in the         producers to actively search for some           hindering the development of biodiesel,
future. Currently, most of XS are used in        high oil content plants as raw materials.       according to Mr. Zhao, president of
edible oil, medicine, etc, in China.             Guizhou, for instance, had launched a           Sichuan Gushan.
                                                 10,000t/a biodiesel production line with
Chinese government enacted a                     jatropha as raw material this month.
‘National standards for biodiesel ‘in
2008, which requires a higher demand




                                                                                                                                         3

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CCM Newsletter                                                                                 Industrial Biotechnologies China News

                                       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
                     Source: CCM International


XS can be planted in a barren land,                                                                  production capacity has reached
which is easy for mass production. As              As estimated, the demand for biodiesel            3,000,000 tonnes in 2008, while actual
non-staple food, XS price is expected              in China will increase a lot in the near          output was only 300,000 tonnes,
be less influenced by price fluctuation of         future due to global energy shortage.             indicating a huge development
other products like agricultural products,         The prices of petroleum products have             potential.
industrial products, etc, which will               increased for 24 times in 2009, driving
contribute to development of XS-based              the government to make more efforts to
biodiesel.                                         seek new energies. Besides, biodiesel


                                    Guizhou launches 10,000t/a biodiesel production line


Guizhou has launched the first-phase               Academy of Sciences, and all indexes              biodiesel project takes Jatropha as raw
10,000t/a biodiesel production line in             of the samples have reached the                   material and is divided into three phases.
New Material Industrial Park (Guiyang              National Biodiesel BD100 standards.               Upon completion of the three phases
City, Guizhou Province) on Aug. 6th                                                                  (TABLE 3), the total capacity will reach
2009.                                              Invested by the No.061 Base of China              160,000t/a.
                                                   Aerospace Science & Industry
Currently, the first biodiesel samples of          Corporation (located in Guizhou), a
this project have been sent for test by            large scientific research and production
Guangzhou Energy Institute of Chinese              center for aerospace products, this


                                                 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

                      Source: CCM International


The successful launch of Guizhou’s                 Autonomous Prefecture of Qianxinan in             cultivation, and through scientific
10,000t/a biodiesel line is based on the           southwest Guizhou, as well as the                 cultivation, the average per- hectare
following advantages.                              valleys of Nanpan River, Beipan River,            yield of fruit can reach 4,500 kilograms,
                                                   Red River and Duliu River.                        which can produce about 100 to 200
First of all, Guizhou is rich in biological                                                          kilograms biodiesel. Using Jatropha as
resources. There are abundant wild                 What’s more, there are many barren                the main raw material for biodiesel
Jatropha resources in Bouyei-Miao                  mountains suitable for Jatropha                   production can not only reduce
                                                                                                                                              4

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CCM Newsletter                                                                             Industrial Biotechnologies China News


production cost, but also increase the         At present, some domestic and foreign          Oil Corporation (CNOOC) will invest in
local peasants’ income and prevent land        energy companies also concern about            Hainan and Sichuan, and British
desertification.                               the potential development of Jatropha in       Sunshine Technology Group, a
                                               China, and have invested in Jatropha           commercial forestry plantation company,
Besides, local market prospect of              cultivation. For example, PetroChina           cooperates with the Honghe Prefecture
biodiesel is expected to be bright, as         Limited (Petrol China), the biggest            Forestry Bureau of Yunnan Province to
there are many mining companies in             controlled subsidiary of China National        jointly develop Jatropha base.
Guizhou and diesel is greatly needed in        Petroleum Corporation(CNPC), plans
mining operation.                              to invest in Jatropha production base in
                                               Yunnan, and China National Offshore


                                               PICTURE: Distribution of Jatropha bases




                            Main Jatropha planting regions
                            Minor Jatropha planting regions
                        Source: CCM International


At present, there are dozens of                biodiesel capacity has reached                 demand is estimated to reach
biodiesel enterprises including private,       3,000,000t/a in 2008, the actual annual        20,000,000 tonnes by 2010 in China. In
join stock and state-owned enterprises.        output is only 300,000 tonnes, indicating      view of the huge gap between the
Hebei Zhenghe Co., Ltd., Sichuan               a huge development potential.                  supply and the demand, related
Gushan Group Co., Ltd. and Fujian                                                             enterprises are expected to seize the
Zhuoyue Co., Ltd. are relatively larger        By 2010, China’s annual biodiesel              market opportunity and speed up the
enterprises with annual output of above        output will reach 1,000,000 tonnes, and        biodiesel investment (FIGURE 2).
10,000 tonnes. Although China’s                9,000,000 tonnes by 2020. And the


                                                                                                                                       5

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CCM Newsletter                                                                                    Industrial Biotechnologies China News

                                             FIGURE 2: Capacity of major biodiesel producers in 2008


                              250,000
                                              240,000

                              200,000


                              150,000

                                                  100,000
                (Unit: t/a)




                              100,000

                                                             50,000    50,000
                               50,000
                                                                                  30,000
                                                                                             12,000         10,000    10,000       6,000
                                   0
                                        Sichuan    Liuzhou   Longyan Xiamen   Hebei             Heibei     Jiangsu    Guizhou Shanxi
                                        Gushan     Minghui   Zhuoyue Zhuoyue Zhenghe            Fukuan     Keyuan     Jiangnan Huashuo
                                                                                                                      Hangtian


               Source: CCM International


As an emerging industry in China,                    to promote its development. National                Taxation Supporting Policy for
biodiesel is characterized by both great             People's Congress has implemented                   Bioenergy and Biochemical Industry’
development potential and various                    the ‘Renewable Energy Law’ since 2006,              and so on. These policies are expected
restrictions in the early stage. Chinese             and the Ministry of Finance, National               to provide a strong support for domestic
government has attached great                        Development and Reform Commission                   biodiesel development.
importance to the development of                     and other departments jointly issued
biofuels and released relevant policies              ‘Advices on Implementing Fiscal and



     BIO-PRODUCTS

                                                  Donta Group enlarging yeast production


Dongguan Donta Group Co., Ltd.                       Ltd. (Guangxi Yipinxian) in Laibin City,            Donta Group’s yeast expansion project
(Donta Group, headquartered in                       Guangxi Province for its yeast capacity             is based on the following advantages.
Dongguan City, Guangdong Province) is                expansion.
expanding yeast production and is                                                                        Firstly, this project can take the
expected to launch its 48,000t/a dried               Actually, these two subsidiaries were               advantage of adequate raw material
yeast and 10,000t/a yeast extract                    jointly invested by Donta Group,                    supply in local areas. As the biggest
facilities by the end of Sep. 2009.                  Guangxi Laibin Donta group Co., Ltd.                sugar cane production region in China,
                                                     (Laibin, a local subsidiary of Donta                Guangxi has taken up more than 70% of
Early in May 2006, Donta Group had                   Group, established in 2003) and                     China’s total sugar cane output these
established two subsidiaries, Guangxi                Lesaffre Group (the world’s biggest                 years. And Laibin took up 18% of
Danbaoli Yeast Co., Ltd. (Guangxi                    yeast producer), with investment of                 Guangxi’s total with 8.3 million tonnes in
Danbaoli) and Guangxi Yipinxian                      USD102 million.                                     2008. Besides, Donta Group has 7
Biochemical Science & Technology Co.,                                                                    sugar processing bases supplying

                                                                                                                                                  6

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treacle as common raw materials of                     exports its products to Southeast Asia,
yeast for the new project. Besides, local              Middle East, South America, Africa, etc.,         With fast growth of some local
government has been paying much                        which will provide mature sales                   companies, China’s yeast market has
attention to developing yeast industry by              networks for these two new companies.             seen intense competitions in recent
releasing tax preferential policies for                                                                  years, thus Lesaffre Group prefer to
yeast companies.                                       In addition, there are few yeast                  seek some cooperators to enlarge its
                                                       producers in Guangxi, but the                     market share in China. As the biggest
Secondly, this project is equipped with                consumption volume is estimated at                yeast producer in the world, Lesaffre
advanced production technology and                     50,000 tonnes per year, indicating a big          Group launched a yeast production
equipments sourced from Lesaffre                       market opportunity.                               base with capacity of 3,000t/a in Anhui
Group, who has been producing yeast                                                                      Province of China in 1999, and then it
for 150 years. With the strong technical               This cooperation can achieve a win-win            built a sales company in Shanghai in
support from Lesaffre Group, the new                   situation. Donta Group wants to bring in          2002.
facilities are expected to make the best               new advanced technology for deeper
use of the advanced equipments.                        development in yeast field, and Lesaffre          In 2008, China’s total yeast production
                                                       Group intends to expand its market                capacity reached 190,000t/a,
Besides, Donta Group has a subsidiary                  share in China and cut down the                   accounting for nearly 20% of the world’s
named as Guangdong Danbaoli Group                      production cost with local rich raw               total capacity, and the actual total output
Co., Ltd. (Guangdong Danbaoli) with                    material supply and large sales network           reached 100,000 tonnes. It is expected
current dried yeast capacity of 16,000t/a,             of Donta Group, according to Mr. Guo,             that, as some producers are expanding
which has strong sales network                         technical engineer of Guangdong                   production, the total yeast capacity will
throughout China and extensively                       Danbaoli.                                         reach 210,000t/a in 2009 (FIGURE 3).




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



                                     250,000

                                                                                                                 210,000

                                     200,000                                                     190,000
                                                                               170,000
                                                               150,000
                                     150,000
                       (Unit: t/a)




                                               120,000

                                     100,000



                                      50,000



                                          0
                                                2005               2006         2007              2008           2009est.



                   Source: CCM International




                                                                                                                                                     7

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Besides, yeast industry is becoming              accounting for over 70% of China total          put great efforts to expand their
more and more concentrated in China              capacity. In recent years, the top 2 have       capacity.
with the top 3 players (TABLE 4)


                                              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
Source: CCM International


                                      PICTURE: Distribution of major yeast production regions in China




                                   Source: CCM International


In addition, in recent years, China’s            estimated, the major potential market           dry yeasts, showing a huge market
demand for yeast and yeast extract has           for yeast in China is rural areas, where        potential.
been increasing year by year attributed          about 90% of homemade flour products
to the development of related industries         except sour dough do not apply active           Donta Group is a state-owned
like feedstuff and flour products, etc. As                                                       enterprise established in 1935, and has

                                                                                                                                        8

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a raw sugar processing base with              conglomerate with 21 factories and             series of products, namely sugar,
processing capacity of 700,000t/a,            companies located in 4 provinces -             biological engineering, thermal-electric
which provides part of molasses for           Guangdong, Guangxi, Shanxi, Yunnan,            power and paper-making.
Guangdong Danbaoli. As a                      Donta Group is mainly engaged in four


                                      Continent Biotech expanding enzyme preparation


Continent Biotech Group Co., Ltd.             xylanase will remain the company’s key         Continent Biotech has been paying
(Continent Biotech, headquartered in          products.                                      great attention to after-sales service for
Qingdao City, Shandong Province) is                                                          clients both at home and abroad. It built
now constructing a 7,000t/a solid             Actually, Continent Biotech is the first       a biotech research institute in Shandong
enzyme preparation production line, the       enzyme producer at home to                     in 2005, for the sake of developing
second phase of its 15,000t/a enzyme          industrialize liquid enzyme spraying           market-target and high-quality feed
preparation plant, in Weifang City,           uniformity technology which is                 enzyme and supply technology support
Shandong Province.                            developed independently in 2001. By            for various clients in clients.
                                              applying this technology in its enzyme
Continent Biotech’s 15,000t/a enzyme          preparation production, reaction               In 2008, there were over one hundred
preparation plant consists of the             temperature can keep below 60℃ thus            feed enzyme producers in China with
first-phase 8,000t/a for liquid enzyme        maintaining high enzyme activity, as in        relatively small production capacity and
preparation, which was completed on           normal reaction temperature would              low-quality products, except
Jul. 20th 2009 with investment of             surpass 60℃ with enzyme activity               Novozymes (China) Biotechnology Co.,
USD12 million, and the second-phase           losing largely.                                Ltd, the largest enzyme producer in the
7,000t/a for solid enzyme preparation                                                        world. Owing to lack of strong market
with investment of USD22 million. Upon        Besides, with this technology, Continent       competitiveness, in terms of technology
completion of this plant, Continent           Biotech has built another two liquid feed      and capitals, many domestic
Biotech will expand its total enzyme          enzyme production bases respectively           small-scale feed enzyme producers
preparation capacity to 20,000t/a, and is     in Binzhou City with 3,000t/a complex          choose to stop or suspend expansion,
expected to become the largest enzyme         enzyme and Linyi City with 1,000t/a            except Continent Biotech and
preparation producer in Shandong.             phytase and 1,000t/a xylanase in recent        Guangdong VTR Bio-tech Co., Ltd.,
                                              years.                                         both of which continue capacity
Early in Aug. 2008, Continent Biotech                                                        expansion. The latter in July launched a
has begun to construct this 15,000t/a         According to Mr. Duan, technical               20,000t/a feed enzyme base in Inner
enzyme preparation plant in Weifang. At       engineer of Continent Biotech, enzyme          Mongolia.
present, the company has constructed          products produced by this technology
one major workshop with 240 m3                have been accepted by users because            The demand for feed enzyme will
fermentation capacity, one distilling         of its high quality and short supply. In       continue to rise in the future in China, as
workshop and two power workshops. In          2008, Continent Biotech’s sales network        more and more feedstuff producers
this plant, Continent Biotech will            has spread throughout China, even to           realize that feed enzyme can greatly
produce various enzyme preparations           some other countries in Asia like Japan,       enhance utilization rate of nutrition in
like feed enzyme, edible enzyme and           Philippines, etc. , and its sales value        feed, which can efficiently decrease
industrial enzyme etc. But feed               reached about USD44 million.                   production cost. Given this trend, feed
enzymes like phytase, alkaline pectase,                                                      enzyme is expected to be widely used in
liquid complex enzyme and alkaline                                                           animal feedstuff. Moreover, increasing
                                                                                                                                        9

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CCM Newsletter                                                                                                 Industrial Biotechnologies China News


feedstuff output in China year on year is                             feed enzyme preparation (FIGURE 4).
another key driver for increasing use of


                                                                  FIGURE 4: Feedstuff output in China, 2005~2009



                                                    160
                                                    140
                           (Unit: million tonnes)




                                                    120
                                                    100
                                                    80
                                                    60
                                                    40
                                                    20
                                                     0
                                                               2005           2006             2007          2008         2009 est

                        Source: CCM International


Meanwhile, increasing numbers of feed                                 enterprises. Actually, feed enzyme              enzyme, probiotics, protein, bio-fertilizer,
enterprises expect to cooperate with                                  producers should develop new                    allicin and so forth. The company is
feed enzyme producers, based on                                       technology to improve the quality of            equipped with the most advanced liquid
high-quality feed enzyme and good                                     products, thus increasing                       and solid-state fermentation facilities in
after-sales service. In this situation, feed                          competitiveness in the future.                  the world and ascends into the leading
enzyme producers taking advantage of                                                                                  large-scale biological preparation and
high-quality products and good                                        Established in 2001, Continent Biotech          manufacturing enterprises.
after-sales performance can resolve                                   is composed of six manufacturing
various production difficulties for feed                              enterprises and mainly engaged in


                                                          CAS building largest lactase production base in China


Chinese Academy of Science (CAS)                                      Jiangxi Province, aiming to capture             stages, consisting of seven production
established a subsidiary Chinese                                      China’s huge lactase market.                    lines. Upon completion, CASL will
Academy of Science Lactase Co., Ltd.                                                                                  achieve 3,000t/a lactase capacity
                   th
(CASL) on Aug.18 , 2009, and started                                  With total investment of USD19.02               (TABLE 5).
to construct China’s biggest lactase                                  million, the construction of this
production base in Dean County,                                       production base is divided into two


                                                                      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
         Source: CCM International

                                                                                                                                                               10

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Lactase, also named as                                  lactase, which can rapidly and efficiently       and inefficient technology, thus leading
beta-galactosidase (β-galactosidase),                   hydrolyze lactose to glucose and                 to small profit, given the adverse
normally exists in human body in                        galactose with 6,000u/g, compared with           situation of economic downturn at that
intestinal epithelial cells, thereby                    3,000u/g or 5,000u/g for existing                time. Owing to domestic insufficient
contributing to digestion of lactose                    products.                                        supply but huge demand, 98% of
present in dairy foods. However, large                                                                   China’s lactase is imported from other
numbers of people in Asia and Africa,                   At present, China has few lactase                countries like US and Japan, etc., as
accounting for 70% of Asia and Africa’s                 producers, and most of them have small           estimated.
total as estimated, have a genetic                      capacity. As reported, the total lactase
deficiency of this enzyme and are                       production capacity in China was only            Thanks to increasing demand for low
unable to digest lactose.                               20t/a in 2008. For example, Harbin               lactose milk products, the demand for
                                                        Meihua Biotechnology Co., Ltd. (Meihua           lactase in China has been increasing in
The new base will adopt the technology                  Biotechnology), the only active producer         recent years. It was estimated that
of using thalli Mutated Aspergillus Niger               in China currently, has lactase capacity         Chinese demand for lactase was about
to produce lactase developed by CAS in                  of only 8t/a.                                    2,700 tonnes in 2008, most of which
2006, which can enhance lactose                                                                          was imported from overseas at price of
hydrolysis efficiency and cut down the                  According to Mr. Zhang, salesman of              about USD59,000/t, higher than that of
production cost compared to using the                   Meihua Biotechnology, some                       USD43,000/t in domestic market
other thalli under the same condition.                  companies stopped lactase production             (FIGURE 5).
Besides, it will mainly produce a new                   in 2008 due to its high production cost


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



                             3,500,000                                                                                        3,000
                                                                                                           2700   3,000,000
                             3,000,000                                                 2300                                   2,500
                             2,500,000                             2000                            2,500,000
                                              1800                                                                            2,000
               Unit: tonne




                                                                           2,000,000
                             2,000,000                 1,850,000
                                                                                                                              1,500
                             1,500,000
                                                                                                                              1,000
                             1,000,000

                              500,000                                                                                         500

                                    0                                                                                         0
                                               2005                 2006                 2007                  2008

                                                           Lactose milk products                   Lactase




              Source: CCM International


For the sake of better lactose absorption               Yang, Deputy Secretary General of                92%, implying promising market for low
when consuming dairy products, many                     Chinese Nutrition Society, the                   lactose milk, as well as a huge demand
countries add lactase to dairy foods or                 proportion of Chinese adults suffering           for lactase to decompose lactose for
other dairy meals. According to Ms.                     from lactose intolerance is as high as           reasonable nutrition absorption.


                                                                                                                                                 11

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                                                            Novozymes expands enzyme production


Novozymes, the world’s biggest                                      Area and expects to launch it by 2010.             After the launch of this new base, with
industrial enzymes producer,                                        Through this expansion, Tianjin                    total investment of about USD53 million
announced on Aug. 3rd 2009 that it will                             Novozymes will become Novozymes’                   and coverage area of 5,599m2,
construct an enzyme preparation                                     third global enzyme production base.               Novozymes is predicted to double its
production base in Tianjin                                                                                             enzyme preparation capacity in China
Economic-Technological Development                                                                                     (FIGURE 6).


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

                                                                           22%




                                                                                                     47%
                                                                      6%




                                                                           21%
                                                                                     4%

                                                                      Novozymes   BASF    Danisco    DSM   Others


                                                                  Source: Novozymes’ annual report, 2007


According to Mr. Ren, senior manager                                agro-forestry wastes as a large                    fields since 1998 (FIGURE 7). And after
from Asia Bioenergy Department of                                   agricultural country. Also, Novozymes              nearly 10 years’ research and
Novozymes, the company is very                                      predicts that the second generation                development, it has solved some major
optimistic about China’s future                                     bioethanol consumption will explosively            technical obstacles in
development of the second generation                                grow in 2012.                                      second-generation bioethanol
bioethanol, namely using crop wastes                                                                                   production process, and is expected to
as raw materials, as China highly                                   Novozymes has been producing various               produce second bioethanol enzymes on
concerns about energy supply and                                    enzymes that are widely used in food,              a large scale in 2010.
security and has abundant supply of                                 brewing, washing and other industrial


                                                          FIGURE 7: Novozymes enzyme annual sales, 2004~2008


                                                          1,600



                                                          1,200
                                    (Unit: million USD)




                                                           800



                                                           400



                                                             0
                                                                      2004        2005        2006          2007        2008

                                  Source: CCM International

                                                                                                                                                              12

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Enzymes production cost is an                        crop wastes to produce fuel ethanol on          more and more attention to
important factor influencing the                     a large scale.                                  second-generation bioethanol. On July
development of second-generation                                                                     9th 2009, the enzyme preparation
bioethanol production. At present,                   The second-generation bioethanol has            branch of China Fermentation Industry
enzyme preparation cost accounts for                 a long value chain, including raw               Association held a discussion in
35% of total production cost for                     material collection, transport and              Qingdao. Over twenty domestic large
second-generation bioethanol                         storage, as well as cellulosic ethanol          biotechnology enterprises and research
production, and after large-scale                    production, sales and so on, among              institutes attended the meeting
industrialization, the cost proportion will          which the cellulose technology can              (FIGURE 8). The branch president
be reduced to 20-25%. According to                   reduce production cost largely. And the         announced the development plan of the
Novozymes’ estimation, the                           breakthrough of this technology needs           enzyme preparation industry. Although
second-generation bioethanol                         multilateral collaboration to achieve a         domestic biotechnology enterprises
production cost in China will be                     mutual development. Novozymes and               have made rapid progress in recent
USD2.59 per gallon in 2010, and can be               COFCO in early 2009 reached a new               years, their enzyme annual output is still
reduced to USD1.5 per gallon by 2015,                cooperation agreement with Sinopec to           much less than multinational
which will be very competitive compared              initiate large-scale commercial                 enterprises’.
with gasoline price (USD2 per gallon).               production by using crop wastes as raw
                                                     materials to produce second-generation
According to Mr. Steen Riisgaard, CEO                bioethanol.
of Novozymes, there is only one step
away for the company to make use of                  Chinese government has been paying


                                                FIGURE 8: Major enzyme producers’ capacity in 2008


                                    10,000

                                                                                          8,000
                                     8,000
                                                                      6,500
                                                6,000
                                     6,000
                      (Unit: t/a)




                                                                                                            4,000
                                     4,000


                                     2,000


                                        0
                                             Hunan Jinshi          Zhengzhou          Jiangyin        Henan Yangshao
                                                                    Fuyuan          Baishenglong


                  Source: CCM International
                  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.
                                                                                                                                            13

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CCM Newsletter                                                                                 Industrial Biotechnologies China News


                                            Hunan Yuyuan expands in microbial fertilizer


Hunan Yuyuan Bio-technological Co.,               opportunities for microbial fertilizer          potassium and phosphate and fix
Ltd. (Hunan Yuyuan, located in Hunan              manufacturers.                                  nitrogen, but also can greatly increase
national bio-industry base Changsha                                                               fertilizer utilization rate, so it is
City, Hunan Province), a leading                  Compared with common fertilizer,                increasingly favored by farmers.
enterprise of microbial fertilizer industry,      microbial fertilizer has advantages in
signed an agreement with Shenzhen                 ecological protection, crop quality             Fourthly, microbial fertilizer has a large
Fortune Venture Capital Co., Ltd.                 improvement and fertilizer efficiency           profit margin, compared with common
(Shenzhen Fortune Venture) to obtain              enhancement, as microbial fertilizer can        fertilizer. And currently, only a few have
capital for capacity expansion and R&D            increase beneficial bacteria in soil to         been engaged in microbial fertilizer
strengthening on Aug. 21st 2009.                  help crops use nutrients. According to          production, and thus they have huge
                                                  Fertilizer Testing Center of Ministry of        development potential to capture market
Actually, after establishment, Hunan              Agriculture, farm products output can           share amid this less intense market
Yuyuan had invested about USD15                   increase 12% ~20% by using microbial            competition. The large formal
million to build a 10,000 t/a.microbial           fertilizer. So in vegetable growing             manufacturers, in particular, like Hunan
fertilizer production line. This production       regions like Shouguang, farms use               Yuyuan, are expected to work hard and
line has the largest investment and               microbial fertilizer more and more              make great progress on this field,
largest production capacity, and its              widely.                                         depending on their sufficient funds and
technical level and equipment are the                                                             strong scientific and technological
most advanced in China. And currently,            Furthermore, the average utilization rate       background. As for other small
it has putt high concentrations of                of common fertilizer is only 20%~30%,           companies, like family workshops, they
bacteria powder into commercial mass              while that of microbial fertilizer is more      are running on a small scale and weak
production.                                       higher , for example, the nitrogen fixed        in competitiveness.
                                                  in rhizobia can almost all be absorbed
Hunan Yuyuan’s expansion of microbial             by plants.                                      Currently, there are more 500 microbial
fertilizer is attributed to at least four                                                         fertilizer companies in China (TABLE 6),
reasons.                                          More and more farmers realize                   annual output is about 5 million tonnes,
                                                  important role of microbial fertilizer in       and the application areas are nearly 6
Firstly, Chinese government has                   practical production, so microbial              million hectares. Microbial fertilizer
formulated some policies to promote the           fertilizers have become more and more           product categories continue to increase,
extensive use of microbial fertilizer. For        popular than common fertilizers with            so far, the products registered in the
example, the first document release by            farmers.                                        Ministry of Agriculture are divided into
Chinese government this year stipulate                                                            two major categories of antimicrobial
to strengthen the protection and                  Thirdly, the current status of the soil         and microbial fertilizer including 11
improvement of soil, and to promote and           gives business opportunities to                 varieties. In the next five years, China's
the use of microbial fertilizer in the            microbial fertilizer manufacturers. The         microbial fertilizer annual output is
whole country.                                    soil compaction and salinization have           expected to reach 8 million ~ 10 million
                                                  become widespread, as farmers have              tones. And it is expected that microbial
Secondly, some farmers have begun to              been using nitrogen fertilizer for a long       fertilizer industries will play a more
accept and use microbial fertilizer,              time. Compared with common fertilizer,          important role in agricultural production.
which has brought tremendous                      microbial fertilizer not only can break


                                                                                                                                             14

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                                       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
 Source: CCM International


Although, due to the financial crisis in            economy see rapid development and                 will increase the demand for microbial
2008, market demand for microbial                   increase in per capita income, Chinese            fertilizer. Meanwhile, the new industry
fertilizer production has experienced               government will increase the                      system will also prompt domestic
weak growth. In the long run, with the              investments in microbial fertilizer, which        microbial fertilizer industry to reshuffle.


                                           SK sells SCR enzyme technology to China


SK Holding Co., Ltd. (SK Holding,                   agreement with Germany-based EnBW                 chemistry catalysts technology
headquartered in Seoul, South Korea)                Group in July 2007 and began to                   commonly adopted in China, which
sold its Selective Catalytic Reduction              explore the overseas markets.                     uses chemicals like vanadium pentoxide
(SCR) enzyme technology to Qingdao                                                                    and titanium dioxide as raw materials to
Huatuo Technology Co., Ltd., a                      Insider reveals that SK Holding will              deal with pollutants of nitrogen oxide
subsidiary of China Power Investment                cooperate with more companies to                  and sulphur dioxide, etc, SCR enzyme
Company (China Power) in late July                  promote this enzyme technology in                 technology has higher catalysis
2009, which will enable China Power to              power plants and chemical plants and              efficiency and lower temperature, and
be the first Chinese company to apply               enhance its application in China in the           can reclaim more kinds of exhaust
enzyme technology into industrial                   near future.                                      emissions, even solid waste.
exhaust emissions treatment at home.
                                                    Based on varieties of Bacillus, SCR               At present, there are several kinds of
SCR enzyme technology can be used to                enzyme technology uses enzyme as                  exhaust emissions treatment
clean up the exhaust emissions like                 catalysts, which enjoys higher                    technologies in China, (TABLE 7), such
carbon dioxide, sulfur dioxide, carbon              purification efficiency, simpler operation        as carbon dioxide reclaiming technology,
monoxide, etc. Researched by SK                     and lower cost compared with the other            which has played a growingly important
Holding since 1996, this technology has             exhaust emission treatment                        role in recent years due to the
been successfully used in South                     technologies in China, thus it’s expected         greenhouse effect caused by rising
Korea’s power plants after 2003,                    to be applied in a variety of recycling           carbon dioxide emission. But it can only
accounting for 20% of the country’s total           and waste treatment enterprises.                  treat one or two kinds of waste gases,
market share currently. Besides, SK                                                                   thus restricting its wider application.
Holding signed a cooperation                        For instance, compared with SCR
                                                                                                                                                15

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                                                    TABLE 7: Major exhaust emission technologies in China

                      Technology                                                             Main adopters                          Launch time

ZH active carbon adsorbing organic exhaust gases                      Hangzhou South Environment Protective Coating Equipment
                                                                                                                                        1993
purifying & recycling treatment technology                            Co., Ltd.
                                                                      Jiangsu Zhongke Energy-Saving Environmental Protection
SCR chemistry catalysts technology                                                                                                      2006
                                                                      Technology Co., Ltd.

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

         Source: CCM International


With the rising awareness of                               standard of ‘Absorption Gas Cleaner for         which satisfies China’s demand for
environmental protection, more and                         Industrial Emission’, which clearly             environmental technologies, is expected
more Chinese countries intend to seek                      stipulates the technical standards for          to be accepted by more enterprises.
new technologies to reduce pollution. In                   popular waste treatment devices.
2008, Chinese government issued a                          Therefore, SCR enzyme technology,



     BIO-BASED CHEMICALS

                                              China’s citric acid export volume up but price down


Despite US and EU’s anti-dumping                           year to 393,616 tonnes in the first seven       the same period of 2008 since early
duties on Chinese citric acid in 2009,                     months of 2009 (FIGURE 9). Except to            2009.
China’s citric acid export volume has                      EU and US, export price of citric acid to
still kept increasing, up 1.2% year on                     other countries has slipped largely over


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


                                         80,000
                                                                                  68,707
                                         70,000
                                                                      62,089                 60,624    62,905
                                         60,000
                                                                                                                 53,910
                                                            48,181
                                         50,000
                         (Unit: tonne)




                                                  37,200
                                         40,000

                                         30,000

                                         20,000

                                         10,000

                                             0
                                                  Jan-09    Feb-09    Mar-09      Apr-09     May-09    Jun-09      Jul-09


                     Source: China Customs


                                                                                                                                                 16

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Respectively since Jun. 2008 and Sep.      importer of Chinese citric acid currently.      remained similar to that in H1 2008, but
2008, EU and US have begun to levy                                                         sulphuric acid price has plummeted to
high anti-dumping duties on China’s key    Prices of homemade citric acid exported         around USD30/t from USD245/t since
citric acid producers like Anhui BBCA      to EU and US have stayed at relatively          the breakout of global financial crisis. At
Biochemical Co., Ltd. and Shandong         high level of around USD1,000/t, due to         present, sulphuric acid price is still at
TTCA etc., which erodes Chinese            anti-dumping duties during this period,         low level of USD36/t and corn price
players’ price advantage in these          but export prices to other countries like       keeps stable at around USD234/t in
markets.                                   Southeast Asia, Africa and South                Northeast China.
                                           America saw a big drop, ranging from
As an export-oriented product,             USD680/t and USD820/t,                          Citric acid export price has kept stable
homemade citric acid’s encountering        USD100~200/t lower than that in the             currently, and it is hard to raise the price
anti-dumping sanction from EU and          first seven months of 2008.                     due to current citric acid surplus supply
USA has seriously impacted domestic                                                        in China. Once both sulphuric acid and
citric acid export, because nearly 40%     Although Ministry of Commerce                   corn price rise in the following months,
of China’s citric acid export was to EU    Administration has executed Export              citric acid price may also be pushed up
and US before. According to statistics     License Administration on domestic              slightly in the market.
from China Customs, in the first seven     citric acid exporters since early 2009,
months of 2009, US citric acid import      this Export License Administration with         China has been the largest citric acid
volume from China has decreased by         relatively low requirements for domestic        producer with total output of around
87.6% and EU import down 28%.              citric acid producers couldn’t efficiently      750,000 tonnes per year in the world,
                                           restrain pernicious price competition           and has exported around 80% of its total
However, domestic citric acid producers    among them. In order to enlarge market          output on average in recent years.
have been endeavoring to develop           share in oversea markets with no                However, its production has been
other new and large markets like India,    anti-dumping duties, domestic citric acid       restrained by the government due to
Mexico, Thailand and Indonesia etc.        exporters choose to cut down the price.         high pollution during citric acid
after the anti-dumping duties had been                                                     production.
implemented. Actually, India has totally   Besides, decreasing raw material price
imported 32,424 tonnes citric acid from    also resulted in price fall of domestic
China during the first seven months in     citric acid. Corn and sulphuric acid are
2009, up 39% over the same period of       key raw materials for citric acid
2008, which makes it the largest           production. In H1 2009, corn price


                                                  VC export price rises


Average export price of Vitamin C (VC)     Customs (TABLE 8), in the first seven           downtrend. The impacts of weak
has climbed up in the first seven months   months of 2009, VC average export               domestic demand have been partly
of 2009, continuing an uptrend             price has reached USD10,297/t, up               offset by the high VC export price.
compared to the same period last year.     29.6% compared to the same period
                                           last year, while most of the other vitamin
According to statistics from China         export prices have experienced




                                                                                                                                       17

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                                                   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                    low production cost.
rise are as follows:                                                                                      The four biggest domestic VC
                                                        In recent years, with strong                      enterprises include (FIGURE 10)
Firstly, China has become the world’s                   competitiveness of China’s VC, some               Northeast Pharmaceutical Group Co.,
VC production base, thus enabling                       multinational corporations have                   Ltd (NPC), North China Pharmaceutical
domestic VC enterprises to price the                    gradually stopped VC production. As a             Group Co., Ltd (NCPC), China
products.                                               result, global dependence on Chinese              Shijiazhuang Pharmaceutical Group Co.,
                                                        VC has gradually increased. For                   Ltd (CSPC) and Aland (Jiangsu)
As an important exporter of VC, China                   example, China VC export volume was               Nutraceutical Co., Ltd. (Aland). The VC
has strong competitiveness in global VC                 less than 80,000 tonnes in 2007, but it           export prices of these four enterprises
market. China produces VC by using                      increased to 85,239 tonnes in 2008. By            all stayed at a relatively high level of
two-step fermentation process, which                    the end of 2008, China VC sales value             about USD1,000/t, a big upthrust
has reached the world-advanced level                    had accounted for 86% of total VC sales           compared with the same period last
and thus being prohibited for export.                   value in US market. At present, about             year, signifying their strong pricing
Based on the technology edge, China’s                   80% of the world’s VC products are                power.
VC has good product quality and enjoys                  sourced from China.


                                               FIGURE 10:    Capacity of major domestic VC enterprises in 2008



                                      40,000
                                                   35,000


                                      30,000
                                                                        25,000
                        (Unit: t/a)




                                                                                         20,000
                                      20,000                                                               18,000



                                      10,000



                                          0
                                                    CSPC                 NPC             Aland              NCPC

                       Source: CCM International


Secondly, VC is mainly used in                          less being affected by economic                   are not sensitive to the price change of
industries of pharmaceuticals, health                   downturn. And VC only constitutes a               VC.
food, and food additives, etc. that                     very small proportion of its downstream
provide necessary daily products, thus                  products’ cost, so downstream clients             Thirdly, VC products have seen
                                                                                                                                                     18

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excellent sales performance after the                      promoting the soaring demand of VC.                fluctuated slightly in early June.
outbreak of H1N1 influenza around the                                                                         However, to curb the slight price decline
world, as VC preparation can effectively                   In light of huge VC demand and its high            this June, the four biggest VC
prevent influenza. Besides, many new                       prices currently (FIGURE 11), the four             enterprises decided to stop production
kinds of VC composite preparations can                     VC enterprises had been in full                    from July to September. As a result, VC
also effectively enhance immunity and                      operation in the first five months this            price has risen in July, and is expected
prevent influenza, so they had sold well                   year. With sufficient VC supply in the             to maintain uptrend in the near future
from last winter to this spring, thus                      domestic markets, its price only                   with reduced supply.


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

                                      10,800


                                      10,600                             10,551
                                                                                        10,558

                                      10,400                                                         10,415
                                                                10,409
                                                                                                                        10,202
                      (Unit: USD/t)




                                      10,200

                                      10,000                                                                     10,033
                                                   9,903
                                       9,800


                                       9,600


                                       9,400
                                               Jan-09      Feb-09      Mar-09     Apr-09       May-09     Jun-09        Jul-09

                    Source: CCM International


In the long run, VC export price may                       autumn and winter this year. Secondly,             small and medium-sized companies
maintain relatively high level, attributed                 the price of corn, one of VC’s raw                 plan to produce VC, their products only
to the following factors. Firstly, H1N1                    materials, may keep at high level                  sell in domestic market, so their
influenza may continue its prevalence                      because of current severe drought in               expansions can not affect VC export
for a long time and may break out in the                   China. Thirdly, although some domestic             price.


                                                        Jianding Biotechnology established


Jiangsu Jianding Biotechnology Co., Ltd.                   Jianding Biotechnology has                         huge economic and environmental
(Jianding Biotechnology), a company                        independent technology for                         benefits by reutilizing waste from
newly established on Aug. 10th 2009,                       co-production of glucosamine and                   production.
has initiated the construction of                          activated carbon. Adopting this
first-phase production lines of 3,000t/a                   technology, glucosamine can be                     For one thing, glucosamine, as an
glucosamine and 12,000t/a activated                        extracted from citric acid waste, and              important health product, is widely used
carbon, which will be launched by the                      then the waste is further processed to             as nutritional supplements for articular
end of 2009.                                               produce high-quality activated carbon.             cartilage treatment, and is the only
                                                           This technology is believed to create              health product approved by the medical
                                                                                                                                                       19

       www.cnchemicals.com Copyright CCM International Ltd.                                             Email: econtact@cnchemicals.com
CCM Newsletter                                                                                          Industrial Biotechnologies China News


community and nutrition research                          technology is predicted to have a highly         technology can greatly relieve the
institutions in US and Europe, for its                    competitive position in health products          environmental pressure.
therapeutical effect on bone and joint                    market as this technology is developed
diseases. The market value of                             independently at home, and the                   It is thus expected that Jianding
glucosamine and its downstream                            overseas market has not obtained the             Biotechnology will have a very important
products like health products and                         technology up to now.                            position in China’s health product
pharmaceuticals is estimated to reach                     For another, co-production of                    industry, and will promote China’s
USD7 billion.                                             glucosamine and activated carbon can             overall health product industry to
                                                          reduce environmental pollution. With its         develop more eco-friendly.
Currently, domestic glucosamine                           activated carbon capacity accounting for
production mainly use shrimp shell and                    more than 1/3 of global total, China is          With entry into health products industry
crab shell as raw materials, which leads                  the world’s largest producer of activated        in the 1980s, China has rapidly
to heavy metal residues and large                         carbon, a major chemical material with           developed in this field in the past
amounts of ash contained in                               annual consumption volume of more                decade. By the end of 2007, China has
glucosamine products. With                                than one million tonnes in the world. But        approved more than 8,900 varieties of
vegetarianism spreading over Europe                       currently, large quantities of high-quality      health products. And more than 1,640
and US, enabling citric acid-based                        timber and bamboo are consumed at                health product manufacturers have
glucosamine products to become                            home to produce activated production             achieved total production value of over
greatly popular among consumers,                          every year, leading to high energy               USD17 billion annually (FIGURE 12).
glucosamine products produced by                          consumption and severe environmental
Jianding Biotechnology using this                         pollution. Therefore, using this


                                                   FIGURE 12: Glucosamine output in China, 2002~2007


                                          10,000
                                           9,000
                                           8,000
                                           7,000
                          (Unit: tonne)




                                           6,000
                                           5,000
                                           4,000
                                           3,000
                                           2,000
                                           1,000
                                              0
                                                   2002         2003       2004        2005         2006     2007


                         Source: CCM International


Some enterprises from other industries                    Corporation to enter health care market.         waiting for an opportunity to enter health
are very optimistic on the future                                                                          product industry in China.
development of China health product                       Mr. Wang Dahong, Secretary General of
industry. In the end of 2008, , Wuliangye                 China Health Care Association, said              ‘Food Safety Law’ and ‘Rules of
Group Co., Ltd., a well-known liquid                      that some Japanese automobile                    Supervision and Administration on
brand, cooperated with Giant                              companies with sufficient funds are              Health Food Products’ will also promote
                                                                                                                                                  20

       www.cnchemicals.com Copyright CCM International Ltd.                                             Email: econtact@cnchemicals.com
Industrial Biotechnologies China News 0909 Highlights
Industrial Biotechnologies China News 0909 Highlights
Industrial Biotechnologies China News 0909 Highlights
Industrial Biotechnologies China News 0909 Highlights
Industrial Biotechnologies China News 0909 Highlights
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Industrial Biotechnologies China News 0909 Highlights

  • 1. Industrial Biotechnologies China News Vol.1 Issue 9, 2009 Biotechnologies Copyright © CCM International Limited
  • 2. Industrial Biotechnologies China News Vol.1 Issue 9, Sep. 8, 2009 Industrial Biotechnologies China News 0909 BIO-FUELS ...................................................................... 1 Ready reports related to Lianhai Biotech to expand butanol with new technology...................... 1 industrial biotechnology: SFB expands xanthoceras sorbifolia capacity........................................ 2 - Future of White Biotechnology in China Guizhou launches 10,000t/a biodiesel production line .......................... 4 Edition (2) - Biofuels Market in China – Edition (1) BIO-PRODUCTS .............................................................. 6 - Production and Market of Monosodium Donta Group enlarging yeast production ................................................ 6 Glutamate (MSG) in China Edition (1) Continent Biotech expanding enzyme preparation ................................ 9 - Future of White Biotechnology in China- CAS building largest lactase production base in China ...................... 10 Edition (1) Novozymes expands enzyme production.............................................. 12 - Future of Enzyme in China – Edition (1) Hunan Yuyuan expands in microbial fertilizer ...................................... 14 - Production & Market of Yeast Extract in SK sells SCR enzyme technology to China........................................... 15 China - Edition (1) BIO-BASED CHEMICALS ............................................. 16 China’s citric acid export volume up but price down........................... 16 Coming reports related to VC export price rises ............................................................................... 17 industrial biotechnology: Jianding Biotechnology established...................................................... 19 - Future of Green Biotechnology in Baolingbao to develop FOS and dietary fiber ....................................... 21 China - Future of Red Biotechnology in China BIO-MATERIALS ........................................................... 23 - Lactic Acid Bacterium Industry in Shenzhen Ecomann launches 5,000t/a PHA.......................................... 23 China Tiancheng Corn to carry out PLA project.............................................. 24 - Future of Starch in China NEWS IN BRIEF............................................................. 25 - Future of Enzyme in China – Edition China holds 2009 summit forum on microbial fertilizer ....................... 25 (2) Green Energy Group invests in biodiesel.............................................. 25 - Production and Market of Yeast in Asia Laibin Tianren launches160,000t/a biofertilizer plant........................... 26 Pacific Rim China to cultivate large-scale energy forests........................................ 26 Ministry of Health approves 26 food additives...................................... 26 CCM related newsletter: Beijing founds biogas technology strategic alliance ........................... 26 - Corn Products China News 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 Contact us for more information about CCM. www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 3. CCM Newsletter Industrial Biotechnologies China News Headlines of Industrial Biotechnologies China News 0909 ■ Lianhai Biotech will expand butanol production Editor’s Word based on its new technology. Welcome to September Issue of Industrial Biotechnologies China News ■ Guizhou launched a 10,000t/a bio-diesel published by CCM International, a professional consulting company who has production line on Aug. 6th 2009. been intently focusing on dynamics of China’s industrial biotechnologies industry. ■ Shuangfeng Forestry Bureau is expanding XS production capacity in Yichun City. Growing concerns on environmental protection and energy security have ■ Donta Group is to launch its yeast expansion become key drivers for China’s fast growing industrial biotechnology. Successive project by the end of Sep. 2009. supporting policies are clear indicators showing China’s determination to develop ■ Continent Biotech is building a 15,000t/a enzyme this industry----On June 2nd, 2009, China's State Council announced a policy preparation plant. package to accelerate bio-industry development; ---during Aug. 2009, some local ■ Novozymes will construct an enzyme production governments like Shandong and Shenzhen issued their own plans; ----Also, in base in Tianjin. the 11th Five-Year Plan (2006-2010), Chinese government has proclaimed to ■ CAS is building a lactase production base in promote biodegradable materials. Jiangxi, aiming to capture China’s huge lactase market. Attracted by its huge potential, enterprises both domestic and overseas have ■ Hunan Yuyuan signed a capital increase displayed strong interests in bio-industry. For example, Shenzhen Ecomann’s agreement with Shenzhen Fortune Venture in order investment in PHA and Tiancheng Corn’s in PLA, the two promising materials to expand. from renewable resources, covered in this issue are both evidences ■ SK Holding sold SCR enzyme technology to China demonstrating the trend. Besides, Novozymes’ global strategy on enzymes Power in late July 2009. expansion covered indicates a global trend for second-generation bio-ethanol. ■ In the first seven months of 2009, VC export price has climbed and may keep growing. Besides, under recovering global economy and growing environmental protection ■ Jianding Biotechnology plans to launch its awareness worldwide, more players domestic and overseas are expected to first-phase glucosamine and activated carbon increase investment in China’s biotechnology sector. production lines by the end of this year. ■ Baolingbao plans to enter FOS and dietary fiber Main companies and institutes mentioned in this issue 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. www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 4. CCM Newsletter Industrial Biotechnologies China News BIO-FUELS Lianhai Biotech to expand butanol with new technology Jiangsu Lianhai Biological Technology from flour deep-processing as raw this expansion project is divided into Co., Ltd. (Lianhai Biotech) will produce material. three phases (TABLE 1). butanol on a large scale by adopting fermentation method using wastewater With total investment of USD400 million, 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 industry domestic market. expansion project uses the patented To achieve energy conservation strain technology from Shanghai and consumption reduction; At present, there are eight domestic Institute for Biological Science (SIBS) of To achieve recycling and clean enterprises producing butanol by Chinese Academy of Sciences (CAS), production; fermentation, among which Jilin Ji’an and is jointly developed b y Lianhai To promote Lianhai Biotech to be Biochemical Co., Ltd. (Jilin Ji’an) is the Biotech and Jiangnan University. the largest butanol producer at biggest one with the capacity of According to CAS and experts from home. 50,000t/a, and another three, namely China's fermentation industry, the Jiangsu Jinmaoyuan Biochemical Co., technology has reached international The project has been declared as a Ltd. (Jiangsu Jinmaoyuan), Guangxi advanced level. major provincial project of transferring Guiping Jinyuan Alcohol Co., Ltd. scientific & technological achievements. (Guiping Jinyuan) and Jilin Cathay By adopting this new technology, this And in early Aug., it has passed the Industrial Biotechnology Co., Ltd. (Jilin project will make the following major online assessment by the experts from Cathay) (FIGURE1), has capacity of breakthroughs: Provincial Science and Technology 30,000t/a for each. To achieve recovery of wastewater Department. Upon completion, butanol from flour deep-processing supply will become relatively sufficient in 1 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 5. CCM Newsletter Industrial Biotechnologies China News FIGURE 1:Capacity of domestic butanol enterprises in 2008 60,000 50,000 50,000 40,000 (Unit: t/a) 30,000 30,000 30,000 30,000 20,000 10,000 5,000 5,000 5,000 5,000 0 Jilin Ji'an Jiangsu Guiping Jilin Cathay Jilin Zhonghai Heilongjiang Tangshan Tongliao Jinmaoyuan Jinyuan Haocheng Jidong Zhongke Tianyuan Source: CCM International 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 enterprises plan to expand their producers. However, butanol application falling short of demand, with the output production capacity. And annual is expected to become an irreversible 50% less than the consumption. From increased capacity of the butanol trend, given the potential pressing 2000 to 2006, domestic butanol projects will reach 730,000 tonnes. situation of oil resources depletion and consumption had increased year by Through continuous project expansion, the expected price rise of oil, so butanol year, and in 2006, the consumption China will be able to reverse the fermentation industry is sure to become reached 7,400,000 tonnes at home. dependence on imports. promising. Meanwhile, the butanol prices have risen from about USD1,318/t in Jan. in Although crude oil prices has dropped to 2006 to USD2,342/t at present. below USD50/barrel caused by financial crisis since H2 2008, which had led to Currently, some domestic butanol production suspension of many butanol SFB expands xanthoceras sorbifolia capacity Shuangfeng Forestry Bureau (SFB, biggest bio-energy production base in initiated since 2008, which is expected located in Yichun City, Heilongjiang Heilongjiang upon completion. to be launched by the end of 2010. The Province) is building a xanthoceras second phase with 266 hectares XS is sorbifolia (XS) base in Yichun City, This XS base construction is divided being built at present and will be which is expected to become the into two phases. The first-phase launched by the end of 2012. In fact, construction with 133 hectares XS has SFB has planned to expand its XS 2 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 6. CCM Newsletter Industrial Biotechnologies China News capacity to 1,000 hectares in the next XS (PICTURE) is an ideal raw material no environmental pollution parameter five years. for biodiesel and bioethanol production like sulfur and nitrogen, etc, which with its high oil content, with seed oil conforms to the quality indexes of Insider reveals that after the launch of content of about 30%-36% and kernel biodiesel. Since 2005, China has this XS base, it will supply XS for China oil content of 50%-70%. Besides, it has successfully developed the technology Nature Petroleum Company (CNPC) as high output of about 1,500-2,000kg/h. to produce biodiesel with XS as raw the raw material for biodiesel or Moreover, it is said that biodiesel material. bioethanol production. produced from XS has about 93.4% hydrocarbons with 18 carbons and has PICTURE: Cross-section of XS Source: www.Yxsfz.cn At present, there are about 5,300 for carbon content in biodiesel. Those However, raw material cost is too much hectares XS in China, mainly distributed biodiesel producers using waste animal for producers using high oil content in four provinces – Shanxi, Inner oil and vegetable oil as raw material plant to produce biodiesel (TABLE 2), Mongolia, Liaoning and Shaanxi. And were seriously affected by this standard which is a bottleneck for their some other provinces like Gansu are and some even went bankrupt. The development. For example, Sichuan also trying to cultivate this plant, and quality of biodiesel produced from waste Gushan Oil Chemical Co. Ltd. (Sichuan Chinese Academy of Forestry has animal oil and vegetable oil varies a lot, Gushan) produces biodiesel by using provided great support to these areas which can do harm to machines. soybean or colza with capacity of by popularizing the XS planting 240,000t/a, and the cost on raw material technology, aiming to provide ample raw This standard has driven biodiesel has seen continuous increase, thus material for biodiesel production in the producers to actively search for some hindering the development of biodiesel, future. Currently, most of XS are used in high oil content plants as raw materials. according to Mr. Zhao, president of edible oil, medicine, etc, in China. Guizhou, for instance, had launched a Sichuan Gushan. 10,000t/a biodiesel production line with Chinese government enacted a jatropha as raw material this month. ‘National standards for biodiesel ‘in 2008, which requires a higher demand 3 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 7. CCM Newsletter Industrial Biotechnologies China News 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 Source: CCM International XS can be planted in a barren land, production capacity has reached which is easy for mass production. As As estimated, the demand for biodiesel 3,000,000 tonnes in 2008, while actual non-staple food, XS price is expected in China will increase a lot in the near output was only 300,000 tonnes, be less influenced by price fluctuation of future due to global energy shortage. indicating a huge development other products like agricultural products, The prices of petroleum products have potential. industrial products, etc, which will increased for 24 times in 2009, driving contribute to development of XS-based the government to make more efforts to biodiesel. seek new energies. Besides, biodiesel Guizhou launches 10,000t/a biodiesel production line Guizhou has launched the first-phase Academy of Sciences, and all indexes biodiesel project takes Jatropha as raw 10,000t/a biodiesel production line in of the samples have reached the material and is divided into three phases. New Material Industrial Park (Guiyang National Biodiesel BD100 standards. Upon completion of the three phases City, Guizhou Province) on Aug. 6th (TABLE 3), the total capacity will reach 2009. Invested by the No.061 Base of China 160,000t/a. Aerospace Science & Industry Currently, the first biodiesel samples of Corporation (located in Guizhou), a this project have been sent for test by large scientific research and production Guangzhou Energy Institute of Chinese center for aerospace products, this 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 Source: CCM International The successful launch of Guizhou’s Autonomous Prefecture of Qianxinan in cultivation, and through scientific 10,000t/a biodiesel line is based on the southwest Guizhou, as well as the cultivation, the average per- hectare following advantages. valleys of Nanpan River, Beipan River, yield of fruit can reach 4,500 kilograms, Red River and Duliu River. which can produce about 100 to 200 First of all, Guizhou is rich in biological kilograms biodiesel. Using Jatropha as resources. There are abundant wild What’s more, there are many barren the main raw material for biodiesel Jatropha resources in Bouyei-Miao mountains suitable for Jatropha production can not only reduce 4 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 8. CCM Newsletter Industrial Biotechnologies China News production cost, but also increase the At present, some domestic and foreign Oil Corporation (CNOOC) will invest in local peasants’ income and prevent land energy companies also concern about Hainan and Sichuan, and British desertification. the potential development of Jatropha in Sunshine Technology Group, a China, and have invested in Jatropha commercial forestry plantation company, Besides, local market prospect of cultivation. For example, PetroChina cooperates with the Honghe Prefecture biodiesel is expected to be bright, as Limited (Petrol China), the biggest Forestry Bureau of Yunnan Province to there are many mining companies in controlled subsidiary of China National jointly develop Jatropha base. Guizhou and diesel is greatly needed in Petroleum Corporation(CNPC), plans mining operation. to invest in Jatropha production base in Yunnan, and China National Offshore PICTURE: Distribution of Jatropha bases Main Jatropha planting regions Minor Jatropha planting regions Source: CCM International At present, there are dozens of biodiesel capacity has reached demand is estimated to reach biodiesel enterprises including private, 3,000,000t/a in 2008, the actual annual 20,000,000 tonnes by 2010 in China. In join stock and state-owned enterprises. output is only 300,000 tonnes, indicating view of the huge gap between the Hebei Zhenghe Co., Ltd., Sichuan a huge development potential. supply and the demand, related Gushan Group Co., Ltd. and Fujian enterprises are expected to seize the Zhuoyue Co., Ltd. are relatively larger By 2010, China’s annual biodiesel market opportunity and speed up the enterprises with annual output of above output will reach 1,000,000 tonnes, and biodiesel investment (FIGURE 2). 10,000 tonnes. Although China’s 9,000,000 tonnes by 2020. And the 5 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 9. CCM Newsletter Industrial Biotechnologies China News FIGURE 2: Capacity of major biodiesel producers in 2008 250,000 240,000 200,000 150,000 100,000 (Unit: t/a) 100,000 50,000 50,000 50,000 30,000 12,000 10,000 10,000 6,000 0 Sichuan Liuzhou Longyan Xiamen Hebei Heibei Jiangsu Guizhou Shanxi Gushan Minghui Zhuoyue Zhuoyue Zhenghe Fukuan Keyuan Jiangnan Huashuo Hangtian Source: CCM International As an emerging industry in China, to promote its development. National Taxation Supporting Policy for biodiesel is characterized by both great People's Congress has implemented Bioenergy and Biochemical Industry’ development potential and various the ‘Renewable Energy Law’ since 2006, and so on. These policies are expected restrictions in the early stage. Chinese and the Ministry of Finance, National to provide a strong support for domestic government has attached great Development and Reform Commission biodiesel development. importance to the development of and other departments jointly issued biofuels and released relevant policies ‘Advices on Implementing Fiscal and BIO-PRODUCTS Donta Group enlarging yeast production Dongguan Donta Group Co., Ltd. Ltd. (Guangxi Yipinxian) in Laibin City, Donta Group’s yeast expansion project (Donta Group, headquartered in Guangxi Province for its yeast capacity is based on the following advantages. Dongguan City, Guangdong Province) is expansion. expanding yeast production and is Firstly, this project can take the expected to launch its 48,000t/a dried Actually, these two subsidiaries were advantage of adequate raw material yeast and 10,000t/a yeast extract jointly invested by Donta Group, supply in local areas. As the biggest facilities by the end of Sep. 2009. Guangxi Laibin Donta group Co., Ltd. sugar cane production region in China, (Laibin, a local subsidiary of Donta Guangxi has taken up more than 70% of Early in May 2006, Donta Group had Group, established in 2003) and China’s total sugar cane output these established two subsidiaries, Guangxi Lesaffre Group (the world’s biggest years. And Laibin took up 18% of Danbaoli Yeast Co., Ltd. (Guangxi yeast producer), with investment of Guangxi’s total with 8.3 million tonnes in Danbaoli) and Guangxi Yipinxian USD102 million. 2008. Besides, Donta Group has 7 Biochemical Science & Technology Co., sugar processing bases supplying 6 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 10. CCM Newsletter Industrial Biotechnologies China News treacle as common raw materials of exports its products to Southeast Asia, yeast for the new project. Besides, local Middle East, South America, Africa, etc., With fast growth of some local government has been paying much which will provide mature sales companies, China’s yeast market has attention to developing yeast industry by networks for these two new companies. seen intense competitions in recent releasing tax preferential policies for years, thus Lesaffre Group prefer to yeast companies. In addition, there are few yeast seek some cooperators to enlarge its producers in Guangxi, but the market share in China. As the biggest Secondly, this project is equipped with consumption volume is estimated at yeast producer in the world, Lesaffre advanced production technology and 50,000 tonnes per year, indicating a big Group launched a yeast production equipments sourced from Lesaffre market opportunity. base with capacity of 3,000t/a in Anhui Group, who has been producing yeast Province of China in 1999, and then it for 150 years. With the strong technical This cooperation can achieve a win-win built a sales company in Shanghai in support from Lesaffre Group, the new situation. Donta Group wants to bring in 2002. facilities are expected to make the best new advanced technology for deeper use of the advanced equipments. development in yeast field, and Lesaffre In 2008, China’s total yeast production Group intends to expand its market capacity reached 190,000t/a, Besides, Donta Group has a subsidiary share in China and cut down the accounting for nearly 20% of the world’s named as Guangdong Danbaoli Group production cost with local rich raw total capacity, and the actual total output Co., Ltd. (Guangdong Danbaoli) with material supply and large sales network reached 100,000 tonnes. It is expected current dried yeast capacity of 16,000t/a, of Donta Group, according to Mr. Guo, that, as some producers are expanding which has strong sales network technical engineer of Guangdong production, the total yeast capacity will throughout China and extensively Danbaoli. reach 210,000t/a in 2009 (FIGURE 3). FIGURE 3: China’s total yeast capacity, 2005 ~ 2009est. 250,000 210,000 200,000 190,000 170,000 150,000 150,000 (Unit: t/a) 120,000 100,000 50,000 0 2005 2006 2007 2008 2009est. Source: CCM International 7 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 11. CCM Newsletter Industrial Biotechnologies China News Besides, yeast industry is becoming accounting for over 70% of China total put great efforts to expand their more and more concentrated in China capacity. In recent years, the top 2 have capacity. with the top 3 players (TABLE 4) 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 Source: CCM International PICTURE: Distribution of major yeast production regions in China Source: CCM International In addition, in recent years, China’s estimated, the major potential market dry yeasts, showing a huge market demand for yeast and yeast extract has for yeast in China is rural areas, where potential. been increasing year by year attributed about 90% of homemade flour products to the development of related industries except sour dough do not apply active Donta Group is a state-owned like feedstuff and flour products, etc. As enterprise established in 1935, and has 8 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 12. CCM Newsletter Industrial Biotechnologies China News a raw sugar processing base with conglomerate with 21 factories and series of products, namely sugar, processing capacity of 700,000t/a, companies located in 4 provinces - biological engineering, thermal-electric which provides part of molasses for Guangdong, Guangxi, Shanxi, Yunnan, power and paper-making. Guangdong Danbaoli. As a Donta Group is mainly engaged in four Continent Biotech expanding enzyme preparation Continent Biotech Group Co., Ltd. xylanase will remain the company’s key Continent Biotech has been paying (Continent Biotech, headquartered in products. great attention to after-sales service for Qingdao City, Shandong Province) is clients both at home and abroad. It built now constructing a 7,000t/a solid Actually, Continent Biotech is the first a biotech research institute in Shandong enzyme preparation production line, the enzyme producer at home to in 2005, for the sake of developing second phase of its 15,000t/a enzyme industrialize liquid enzyme spraying market-target and high-quality feed preparation plant, in Weifang City, uniformity technology which is enzyme and supply technology support Shandong Province. developed independently in 2001. By for various clients in clients. applying this technology in its enzyme Continent Biotech’s 15,000t/a enzyme preparation production, reaction In 2008, there were over one hundred preparation plant consists of the temperature can keep below 60℃ thus feed enzyme producers in China with first-phase 8,000t/a for liquid enzyme maintaining high enzyme activity, as in relatively small production capacity and preparation, which was completed on normal reaction temperature would low-quality products, except Jul. 20th 2009 with investment of surpass 60℃ with enzyme activity Novozymes (China) Biotechnology Co., USD12 million, and the second-phase losing largely. Ltd, the largest enzyme producer in the 7,000t/a for solid enzyme preparation world. Owing to lack of strong market with investment of USD22 million. Upon Besides, with this technology, Continent competitiveness, in terms of technology completion of this plant, Continent Biotech has built another two liquid feed and capitals, many domestic Biotech will expand its total enzyme enzyme production bases respectively small-scale feed enzyme producers preparation capacity to 20,000t/a, and is in Binzhou City with 3,000t/a complex choose to stop or suspend expansion, expected to become the largest enzyme enzyme and Linyi City with 1,000t/a except Continent Biotech and preparation producer in Shandong. phytase and 1,000t/a xylanase in recent Guangdong VTR Bio-tech Co., Ltd., years. both of which continue capacity Early in Aug. 2008, Continent Biotech expansion. The latter in July launched a has begun to construct this 15,000t/a According to Mr. Duan, technical 20,000t/a feed enzyme base in Inner enzyme preparation plant in Weifang. At engineer of Continent Biotech, enzyme Mongolia. present, the company has constructed products produced by this technology one major workshop with 240 m3 have been accepted by users because The demand for feed enzyme will fermentation capacity, one distilling of its high quality and short supply. In continue to rise in the future in China, as workshop and two power workshops. In 2008, Continent Biotech’s sales network more and more feedstuff producers this plant, Continent Biotech will has spread throughout China, even to realize that feed enzyme can greatly produce various enzyme preparations some other countries in Asia like Japan, enhance utilization rate of nutrition in like feed enzyme, edible enzyme and Philippines, etc. , and its sales value feed, which can efficiently decrease industrial enzyme etc. But feed reached about USD44 million. production cost. Given this trend, feed enzymes like phytase, alkaline pectase, enzyme is expected to be widely used in liquid complex enzyme and alkaline animal feedstuff. Moreover, increasing 9 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 13. CCM Newsletter Industrial Biotechnologies China News feedstuff output in China year on year is feed enzyme preparation (FIGURE 4). another key driver for increasing use of FIGURE 4: Feedstuff output in China, 2005~2009 160 140 (Unit: million tonnes) 120 100 80 60 40 20 0 2005 2006 2007 2008 2009 est Source: CCM International Meanwhile, increasing numbers of feed enterprises. Actually, feed enzyme enzyme, probiotics, protein, bio-fertilizer, enterprises expect to cooperate with producers should develop new allicin and so forth. The company is feed enzyme producers, based on technology to improve the quality of equipped with the most advanced liquid high-quality feed enzyme and good products, thus increasing and solid-state fermentation facilities in after-sales service. In this situation, feed competitiveness in the future. the world and ascends into the leading enzyme producers taking advantage of large-scale biological preparation and high-quality products and good Established in 2001, Continent Biotech manufacturing enterprises. after-sales performance can resolve is composed of six manufacturing various production difficulties for feed enterprises and mainly engaged in CAS building largest lactase production base in China Chinese Academy of Science (CAS) Jiangxi Province, aiming to capture stages, consisting of seven production established a subsidiary Chinese China’s huge lactase market. lines. Upon completion, CASL will Academy of Science Lactase Co., Ltd. achieve 3,000t/a lactase capacity th (CASL) on Aug.18 , 2009, and started With total investment of USD19.02 (TABLE 5). to construct China’s biggest lactase million, the construction of this production base in Dean County, production base is divided into two 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 Source: CCM International 10 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 14. CCM Newsletter Industrial Biotechnologies China News Lactase, also named as lactase, which can rapidly and efficiently and inefficient technology, thus leading beta-galactosidase (β-galactosidase), hydrolyze lactose to glucose and to small profit, given the adverse normally exists in human body in galactose with 6,000u/g, compared with situation of economic downturn at that intestinal epithelial cells, thereby 3,000u/g or 5,000u/g for existing time. Owing to domestic insufficient contributing to digestion of lactose products. supply but huge demand, 98% of present in dairy foods. However, large China’s lactase is imported from other numbers of people in Asia and Africa, At present, China has few lactase countries like US and Japan, etc., as accounting for 70% of Asia and Africa’s producers, and most of them have small estimated. total as estimated, have a genetic capacity. As reported, the total lactase deficiency of this enzyme and are production capacity in China was only Thanks to increasing demand for low unable to digest lactose. 20t/a in 2008. For example, Harbin lactose milk products, the demand for Meihua Biotechnology Co., Ltd. (Meihua lactase in China has been increasing in The new base will adopt the technology Biotechnology), the only active producer recent years. It was estimated that of using thalli Mutated Aspergillus Niger in China currently, has lactase capacity Chinese demand for lactase was about to produce lactase developed by CAS in of only 8t/a. 2,700 tonnes in 2008, most of which 2006, which can enhance lactose was imported from overseas at price of hydrolysis efficiency and cut down the According to Mr. Zhang, salesman of about USD59,000/t, higher than that of production cost compared to using the Meihua Biotechnology, some USD43,000/t in domestic market other thalli under the same condition. companies stopped lactase production (FIGURE 5). Besides, it will mainly produce a new in 2008 due to its high production cost FIGURE 5: Output of lactose milk products and demand for lactase in China, 2005~2008 3,500,000 3,000 2700 3,000,000 3,000,000 2300 2,500 2,500,000 2000 2,500,000 1800 2,000 Unit: tonne 2,000,000 2,000,000 1,850,000 1,500 1,500,000 1,000 1,000,000 500,000 500 0 0 2005 2006 2007 2008 Lactose milk products Lactase Source: CCM International For the sake of better lactose absorption Yang, Deputy Secretary General of 92%, implying promising market for low when consuming dairy products, many Chinese Nutrition Society, the lactose milk, as well as a huge demand countries add lactase to dairy foods or proportion of Chinese adults suffering for lactase to decompose lactose for other dairy meals. According to Ms. from lactose intolerance is as high as reasonable nutrition absorption. 11 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 15. CCM Newsletter Industrial Biotechnologies China News Novozymes expands enzyme production Novozymes, the world’s biggest Area and expects to launch it by 2010. After the launch of this new base, with industrial enzymes producer, Through this expansion, Tianjin total investment of about USD53 million announced on Aug. 3rd 2009 that it will Novozymes will become Novozymes’ and coverage area of 5,599m2, construct an enzyme preparation third global enzyme production base. Novozymes is predicted to double its production base in Tianjin enzyme preparation capacity in China Economic-Technological Development (FIGURE 6). FIGURE 6: Main enzyme producers’ market share in the world 22% 47% 6% 21% 4% Novozymes BASF Danisco DSM Others Source: Novozymes’ annual report, 2007 According to Mr. Ren, senior manager agro-forestry wastes as a large fields since 1998 (FIGURE 7). And after from Asia Bioenergy Department of agricultural country. Also, Novozymes nearly 10 years’ research and Novozymes, the company is very predicts that the second generation development, it has solved some major optimistic about China’s future bioethanol consumption will explosively technical obstacles in development of the second generation grow in 2012. second-generation bioethanol bioethanol, namely using crop wastes production process, and is expected to as raw materials, as China highly Novozymes has been producing various produce second bioethanol enzymes on concerns about energy supply and enzymes that are widely used in food, a large scale in 2010. security and has abundant supply of brewing, washing and other industrial FIGURE 7: Novozymes enzyme annual sales, 2004~2008 1,600 1,200 (Unit: million USD) 800 400 0 2004 2005 2006 2007 2008 Source: CCM International 12 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 16. CCM Newsletter Industrial Biotechnologies China News Enzymes production cost is an crop wastes to produce fuel ethanol on more and more attention to important factor influencing the a large scale. second-generation bioethanol. On July development of second-generation 9th 2009, the enzyme preparation bioethanol production. At present, The second-generation bioethanol has branch of China Fermentation Industry enzyme preparation cost accounts for a long value chain, including raw Association held a discussion in 35% of total production cost for material collection, transport and Qingdao. Over twenty domestic large second-generation bioethanol storage, as well as cellulosic ethanol biotechnology enterprises and research production, and after large-scale production, sales and so on, among institutes attended the meeting industrialization, the cost proportion will which the cellulose technology can (FIGURE 8). The branch president be reduced to 20-25%. According to reduce production cost largely. And the announced the development plan of the Novozymes’ estimation, the breakthrough of this technology needs enzyme preparation industry. Although second-generation bioethanol multilateral collaboration to achieve a domestic biotechnology enterprises production cost in China will be mutual development. Novozymes and have made rapid progress in recent USD2.59 per gallon in 2010, and can be COFCO in early 2009 reached a new years, their enzyme annual output is still reduced to USD1.5 per gallon by 2015, cooperation agreement with Sinopec to much less than multinational which will be very competitive compared initiate large-scale commercial enterprises’. with gasoline price (USD2 per gallon). production by using crop wastes as raw materials to produce second-generation According to Mr. Steen Riisgaard, CEO bioethanol. of Novozymes, there is only one step away for the company to make use of Chinese government has been paying FIGURE 8: Major enzyme producers’ capacity in 2008 10,000 8,000 8,000 6,500 6,000 6,000 (Unit: t/a) 4,000 4,000 2,000 0 Hunan Jinshi Zhengzhou Jiangyin Henan Yangshao Fuyuan Baishenglong Source: CCM International 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. 13 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 17. CCM Newsletter Industrial Biotechnologies China News Hunan Yuyuan expands in microbial fertilizer Hunan Yuyuan Bio-technological Co., opportunities for microbial fertilizer potassium and phosphate and fix Ltd. (Hunan Yuyuan, located in Hunan manufacturers. nitrogen, but also can greatly increase national bio-industry base Changsha fertilizer utilization rate, so it is City, Hunan Province), a leading Compared with common fertilizer, increasingly favored by farmers. enterprise of microbial fertilizer industry, microbial fertilizer has advantages in signed an agreement with Shenzhen ecological protection, crop quality Fourthly, microbial fertilizer has a large Fortune Venture Capital Co., Ltd. improvement and fertilizer efficiency profit margin, compared with common (Shenzhen Fortune Venture) to obtain enhancement, as microbial fertilizer can fertilizer. And currently, only a few have capital for capacity expansion and R&D increase beneficial bacteria in soil to been engaged in microbial fertilizer strengthening on Aug. 21st 2009. help crops use nutrients. According to production, and thus they have huge Fertilizer Testing Center of Ministry of development potential to capture market Actually, after establishment, Hunan Agriculture, farm products output can share amid this less intense market Yuyuan had invested about USD15 increase 12% ~20% by using microbial competition. The large formal million to build a 10,000 t/a.microbial fertilizer. So in vegetable growing manufacturers, in particular, like Hunan fertilizer production line. This production regions like Shouguang, farms use Yuyuan, are expected to work hard and line has the largest investment and microbial fertilizer more and more make great progress on this field, largest production capacity, and its widely. depending on their sufficient funds and technical level and equipment are the strong scientific and technological most advanced in China. And currently, Furthermore, the average utilization rate background. As for other small it has putt high concentrations of of common fertilizer is only 20%~30%, companies, like family workshops, they bacteria powder into commercial mass while that of microbial fertilizer is more are running on a small scale and weak production. higher , for example, the nitrogen fixed in competitiveness. in rhizobia can almost all be absorbed Hunan Yuyuan’s expansion of microbial by plants. Currently, there are more 500 microbial fertilizer is attributed to at least four fertilizer companies in China (TABLE 6), reasons. More and more farmers realize annual output is about 5 million tonnes, important role of microbial fertilizer in and the application areas are nearly 6 Firstly, Chinese government has practical production, so microbial million hectares. Microbial fertilizer formulated some policies to promote the fertilizers have become more and more product categories continue to increase, extensive use of microbial fertilizer. For popular than common fertilizers with so far, the products registered in the example, the first document release by farmers. Ministry of Agriculture are divided into Chinese government this year stipulate two major categories of antimicrobial to strengthen the protection and Thirdly, the current status of the soil and microbial fertilizer including 11 improvement of soil, and to promote and gives business opportunities to varieties. In the next five years, China's the use of microbial fertilizer in the microbial fertilizer manufacturers. The microbial fertilizer annual output is whole country. soil compaction and salinization have expected to reach 8 million ~ 10 million become widespread, as farmers have tones. And it is expected that microbial Secondly, some farmers have begun to been using nitrogen fertilizer for a long fertilizer industries will play a more accept and use microbial fertilizer, time. Compared with common fertilizer, important role in agricultural production. which has brought tremendous microbial fertilizer not only can break 14 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 18. CCM Newsletter Industrial Biotechnologies China News 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 Source: CCM International Although, due to the financial crisis in economy see rapid development and will increase the demand for microbial 2008, market demand for microbial increase in per capita income, Chinese fertilizer. Meanwhile, the new industry fertilizer production has experienced government will increase the system will also prompt domestic weak growth. In the long run, with the investments in microbial fertilizer, which microbial fertilizer industry to reshuffle. SK sells SCR enzyme technology to China SK Holding Co., Ltd. (SK Holding, agreement with Germany-based EnBW chemistry catalysts technology headquartered in Seoul, South Korea) Group in July 2007 and began to commonly adopted in China, which sold its Selective Catalytic Reduction explore the overseas markets. uses chemicals like vanadium pentoxide (SCR) enzyme technology to Qingdao and titanium dioxide as raw materials to Huatuo Technology Co., Ltd., a Insider reveals that SK Holding will deal with pollutants of nitrogen oxide subsidiary of China Power Investment cooperate with more companies to and sulphur dioxide, etc, SCR enzyme Company (China Power) in late July promote this enzyme technology in technology has higher catalysis 2009, which will enable China Power to power plants and chemical plants and efficiency and lower temperature, and be the first Chinese company to apply enhance its application in China in the can reclaim more kinds of exhaust enzyme technology into industrial near future. emissions, even solid waste. exhaust emissions treatment at home. Based on varieties of Bacillus, SCR At present, there are several kinds of SCR enzyme technology can be used to enzyme technology uses enzyme as exhaust emissions treatment clean up the exhaust emissions like catalysts, which enjoys higher technologies in China, (TABLE 7), such carbon dioxide, sulfur dioxide, carbon purification efficiency, simpler operation as carbon dioxide reclaiming technology, monoxide, etc. Researched by SK and lower cost compared with the other which has played a growingly important Holding since 1996, this technology has exhaust emission treatment role in recent years due to the been successfully used in South technologies in China, thus it’s expected greenhouse effect caused by rising Korea’s power plants after 2003, to be applied in a variety of recycling carbon dioxide emission. But it can only accounting for 20% of the country’s total and waste treatment enterprises. treat one or two kinds of waste gases, market share currently. Besides, SK thus restricting its wider application. Holding signed a cooperation For instance, compared with SCR 15 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 19. CCM Newsletter Industrial Biotechnologies China News TABLE 7: Major exhaust emission technologies in China Technology Main adopters Launch time ZH active carbon adsorbing organic exhaust gases Hangzhou South Environment Protective Coating Equipment 1993 purifying & recycling treatment technology Co., Ltd. Jiangsu Zhongke Energy-Saving Environmental Protection SCR chemistry catalysts technology 2006 Technology Co., Ltd. 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 Source: CCM International With the rising awareness of standard of ‘Absorption Gas Cleaner for which satisfies China’s demand for environmental protection, more and Industrial Emission’, which clearly environmental technologies, is expected more Chinese countries intend to seek stipulates the technical standards for to be accepted by more enterprises. new technologies to reduce pollution. In popular waste treatment devices. 2008, Chinese government issued a Therefore, SCR enzyme technology, BIO-BASED CHEMICALS China’s citric acid export volume up but price down Despite US and EU’s anti-dumping year to 393,616 tonnes in the first seven the same period of 2008 since early duties on Chinese citric acid in 2009, months of 2009 (FIGURE 9). Except to 2009. China’s citric acid export volume has EU and US, export price of citric acid to still kept increasing, up 1.2% year on other countries has slipped largely over FIGURE 9: China’s citric acid export volume, Jan. ~Jul. 2009 80,000 68,707 70,000 62,089 60,624 62,905 60,000 53,910 48,181 50,000 (Unit: tonne) 37,200 40,000 30,000 20,000 10,000 0 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Source: China Customs 16 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 20. CCM Newsletter Industrial Biotechnologies China News Respectively since Jun. 2008 and Sep. importer of Chinese citric acid currently. remained similar to that in H1 2008, but 2008, EU and US have begun to levy sulphuric acid price has plummeted to high anti-dumping duties on China’s key Prices of homemade citric acid exported around USD30/t from USD245/t since citric acid producers like Anhui BBCA to EU and US have stayed at relatively the breakout of global financial crisis. At Biochemical Co., Ltd. and Shandong high level of around USD1,000/t, due to present, sulphuric acid price is still at TTCA etc., which erodes Chinese anti-dumping duties during this period, low level of USD36/t and corn price players’ price advantage in these but export prices to other countries like keeps stable at around USD234/t in markets. Southeast Asia, Africa and South Northeast China. America saw a big drop, ranging from As an export-oriented product, USD680/t and USD820/t, Citric acid export price has kept stable homemade citric acid’s encountering USD100~200/t lower than that in the currently, and it is hard to raise the price anti-dumping sanction from EU and first seven months of 2008. due to current citric acid surplus supply USA has seriously impacted domestic in China. Once both sulphuric acid and citric acid export, because nearly 40% Although Ministry of Commerce corn price rise in the following months, of China’s citric acid export was to EU Administration has executed Export citric acid price may also be pushed up and US before. According to statistics License Administration on domestic slightly in the market. from China Customs, in the first seven citric acid exporters since early 2009, months of 2009, US citric acid import this Export License Administration with China has been the largest citric acid volume from China has decreased by relatively low requirements for domestic producer with total output of around 87.6% and EU import down 28%. citric acid producers couldn’t efficiently 750,000 tonnes per year in the world, restrain pernicious price competition and has exported around 80% of its total However, domestic citric acid producers among them. In order to enlarge market output on average in recent years. have been endeavoring to develop share in oversea markets with no However, its production has been other new and large markets like India, anti-dumping duties, domestic citric acid restrained by the government due to Mexico, Thailand and Indonesia etc. exporters choose to cut down the price. high pollution during citric acid after the anti-dumping duties had been production. implemented. Actually, India has totally Besides, decreasing raw material price imported 32,424 tonnes citric acid from also resulted in price fall of domestic China during the first seven months in citric acid. Corn and sulphuric acid are 2009, up 39% over the same period of key raw materials for citric acid 2008, which makes it the largest production. In H1 2009, corn price VC export price rises Average export price of Vitamin C (VC) Customs (TABLE 8), in the first seven downtrend. The impacts of weak has climbed up in the first seven months months of 2009, VC average export domestic demand have been partly of 2009, continuing an uptrend price has reached USD10,297/t, up offset by the high VC export price. compared to the same period last year. 29.6% compared to the same period last year, while most of the other vitamin According to statistics from China export prices have experienced 17 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 21. CCM Newsletter Industrial Biotechnologies China News 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 low production cost. rise are as follows: The four biggest domestic VC In recent years, with strong enterprises include (FIGURE 10) Firstly, China has become the world’s competitiveness of China’s VC, some Northeast Pharmaceutical Group Co., VC production base, thus enabling multinational corporations have Ltd (NPC), North China Pharmaceutical domestic VC enterprises to price the gradually stopped VC production. As a Group Co., Ltd (NCPC), China products. result, global dependence on Chinese Shijiazhuang Pharmaceutical Group Co., VC has gradually increased. For Ltd (CSPC) and Aland (Jiangsu) As an important exporter of VC, China example, China VC export volume was Nutraceutical Co., Ltd. (Aland). The VC has strong competitiveness in global VC less than 80,000 tonnes in 2007, but it export prices of these four enterprises market. China produces VC by using increased to 85,239 tonnes in 2008. By all stayed at a relatively high level of two-step fermentation process, which the end of 2008, China VC sales value about USD1,000/t, a big upthrust has reached the world-advanced level had accounted for 86% of total VC sales compared with the same period last and thus being prohibited for export. value in US market. At present, about year, signifying their strong pricing Based on the technology edge, China’s 80% of the world’s VC products are power. VC has good product quality and enjoys sourced from China. FIGURE 10: Capacity of major domestic VC enterprises in 2008 40,000 35,000 30,000 25,000 (Unit: t/a) 20,000 20,000 18,000 10,000 0 CSPC NPC Aland NCPC Source: CCM International Secondly, VC is mainly used in less being affected by economic are not sensitive to the price change of industries of pharmaceuticals, health downturn. And VC only constitutes a VC. food, and food additives, etc. that very small proportion of its downstream provide necessary daily products, thus products’ cost, so downstream clients Thirdly, VC products have seen 18 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 22. CCM Newsletter Industrial Biotechnologies China News excellent sales performance after the promoting the soaring demand of VC. fluctuated slightly in early June. outbreak of H1N1 influenza around the However, to curb the slight price decline world, as VC preparation can effectively In light of huge VC demand and its high this June, the four biggest VC prevent influenza. Besides, many new prices currently (FIGURE 11), the four enterprises decided to stop production kinds of VC composite preparations can VC enterprises had been in full from July to September. As a result, VC also effectively enhance immunity and operation in the first five months this price has risen in July, and is expected prevent influenza, so they had sold well year. With sufficient VC supply in the to maintain uptrend in the near future from last winter to this spring, thus domestic markets, its price only with reduced supply. FIGURE 11: Domestic VC export prices, Jan. – Jul. 2009 10,800 10,600 10,551 10,558 10,400 10,415 10,409 10,202 (Unit: USD/t) 10,200 10,000 10,033 9,903 9,800 9,600 9,400 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Source: CCM International In the long run, VC export price may autumn and winter this year. Secondly, small and medium-sized companies maintain relatively high level, attributed the price of corn, one of VC’s raw plan to produce VC, their products only to the following factors. Firstly, H1N1 materials, may keep at high level sell in domestic market, so their influenza may continue its prevalence because of current severe drought in expansions can not affect VC export for a long time and may break out in the China. Thirdly, although some domestic price. Jianding Biotechnology established Jiangsu Jianding Biotechnology Co., Ltd. Jianding Biotechnology has huge economic and environmental (Jianding Biotechnology), a company independent technology for benefits by reutilizing waste from newly established on Aug. 10th 2009, co-production of glucosamine and production. has initiated the construction of activated carbon. Adopting this first-phase production lines of 3,000t/a technology, glucosamine can be For one thing, glucosamine, as an glucosamine and 12,000t/a activated extracted from citric acid waste, and important health product, is widely used carbon, which will be launched by the then the waste is further processed to as nutritional supplements for articular end of 2009. produce high-quality activated carbon. cartilage treatment, and is the only This technology is believed to create health product approved by the medical 19 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com
  • 23. CCM Newsletter Industrial Biotechnologies China News community and nutrition research technology is predicted to have a highly technology can greatly relieve the institutions in US and Europe, for its competitive position in health products environmental pressure. therapeutical effect on bone and joint market as this technology is developed diseases. The market value of independently at home, and the It is thus expected that Jianding glucosamine and its downstream overseas market has not obtained the Biotechnology will have a very important products like health products and technology up to now. position in China’s health product pharmaceuticals is estimated to reach For another, co-production of industry, and will promote China’s USD7 billion. glucosamine and activated carbon can overall health product industry to reduce environmental pollution. With its develop more eco-friendly. Currently, domestic glucosamine activated carbon capacity accounting for production mainly use shrimp shell and more than 1/3 of global total, China is With entry into health products industry crab shell as raw materials, which leads the world’s largest producer of activated in the 1980s, China has rapidly to heavy metal residues and large carbon, a major chemical material with developed in this field in the past amounts of ash contained in annual consumption volume of more decade. By the end of 2007, China has glucosamine products. With than one million tonnes in the world. But approved more than 8,900 varieties of vegetarianism spreading over Europe currently, large quantities of high-quality health products. And more than 1,640 and US, enabling citric acid-based timber and bamboo are consumed at health product manufacturers have glucosamine products to become home to produce activated production achieved total production value of over greatly popular among consumers, every year, leading to high energy USD17 billion annually (FIGURE 12). glucosamine products produced by consumption and severe environmental Jianding Biotechnology using this pollution. Therefore, using this FIGURE 12: Glucosamine output in China, 2002~2007 10,000 9,000 8,000 7,000 (Unit: tonne) 6,000 5,000 4,000 3,000 2,000 1,000 0 2002 2003 2004 2005 2006 2007 Source: CCM International Some enterprises from other industries Corporation to enter health care market. waiting for an opportunity to enter health are very optimistic on the future product industry in China. development of China health product Mr. Wang Dahong, Secretary General of industry. In the end of 2008, , Wuliangye China Health Care Association, said ‘Food Safety Law’ and ‘Rules of Group Co., Ltd., a well-known liquid that some Japanese automobile Supervision and Administration on brand, cooperated with Giant companies with sufficient funds are Health Food Products’ will also promote 20 www.cnchemicals.com Copyright CCM International Ltd. Email: econtact@cnchemicals.com