Production, market and manufacturing cost of sugar alcohols in china

CCM Data & Primary Intelligence

Production, Market and Manufacturing
Cost of Sugar Alcohols in China

The First Edition

Researched & Prepared by:

Guangzhou CCM Information Science & Technology Co., Ltd.
Guangzhou, P. R. China

June 2010

Copyright by Guangzhou CCM Information Science & Technology Co., Ltd. (P. R. China)
Any publication, distribution or copying of the content in this report is prohibited.
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Description:

Great changes of China’s sugar alcohol market takes place in recent years.

Currently, China’s manufacturers of sugar alcohols who are suffering from high production cost gain
nearly no profit due to rising cost of raw materials. As the price of main sugar alcohols’ raw materials,
corncob and cornstarch, has been soaring recently, especially the former, reaching USD109.81/t in
May 2010 from USD46.85/t in 2008.

Sugar alcohols are usually used in food, pharmaceutical and daily-care products; about 70% of sugar
alcohols are used in production of Vitamin C, toothpaste, brand & cake, candy, sugar-free chewing gum
and parental solutions in 2009. There is a consumption uptrend of sugar alcohols in food products,
especially healthcare foods. The market share by volume of sugar alcohols in food field grows from
about 18% to 22%.

With the improving living standard in China, more and more people choose functional food that is
processed by sugar alcohols, like sugar-free chewing gums, cakes & candies with low calories, etc.
Therefore, the future of sugar alcohols is bright and infinite for that’s an inevitable choice.

Besides the situation mentioned above, what other changes took place during 2005 to 2009? What is
the development trend of sugar alcohols’ production and consumption in China? Based on these
questions, CCM will tell you the details in this report.

- Strong point

This report provides readers with a handbook service, comprising of comprehensive & detailed &
systematic data on each side of sugar alcohol market in China, including:

Benchmarking of nine leading sugar alcohol manufacturers in China, and analysis of manufacturers in
aspects of products, production technology, sales & clients, manufacturing cost, financial statement
analysis, etc;
Production, by capacity, output and price, divided by different sugar alcohols, in each manufacturers,
change trend in the last 4-5 years and future 5 years;
Trade situation, by export volume and import volume, divided by different sugar alcohols, in each
manufacturers, change trend in the last 4-5 years and future 5 years;
Manufacturers: latest capacity and output, raw material, price, manufacturing cost, etc;
Consumption: detailed and systematic data on every consumption segments of the sugar alcohol
market, and forecast the consumption situation of sugar alcohol in the next five years in China;

- What is covered?
Production situation of sugar alcohols: sorbitol, xylitol, maltitol, mannitol and erythritol are included in
the analysis of output, capacity, prices, and values of sugar alcohol industry;

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Manufacturers: major active manufacturers of sugar alcohols in China are introduced by latest capacity,
output and raw material last year. Profiles of sugar alcohol manufacturers are available in this report;
Consumption and end use segments: the consumption structure is illustrated and the end use
segments include Vitamin C, food, daily health products, pharmaceuticals and others;
Import and export analysis introducing trade situation in China;
Technology and supply of raw material source in different sugar alcohols are introduced concisely;
Benchmarking: site-visiting with nine leading companies in sugar alcohol industry in China.

- Credibility
Scientific methodologies and varieties of data sources are adopted to ensure the credibility.

Major steps adopted to formulize this report:

Desk research;
Telephone interviews with manufacturers, traders, consumers and researchers of sugar alcohol
industry;
Questionnaires were sent to many sugar alcohol manufacturers to ask for their opinions;
On-line chat tool adopted to communicate with traders/manufacturers in China;
Import and Export analysis to demonstrate the trade situation and also help analyze the production and
consumption situation;
Site-visiting with nine leading sugar alcohol manufacturers including Shandong Futaste, Roquette
China, Guangxi Khalista, etc. to analyze the situation and cost of production and their financial
statement;
Series of internal discussions in order to analyze the data and draw conclusions;
Report generation;

The data collected and compiled were sourced from:
Published articles from periodicals, magazines, journals, the third database;
Government statistics;
Primary info obtained by tel-interviews, on-line chats, emails, questionnaires, etc;
Comments from industrial experts;
Import and export data from Customs;
CCM’s database;
Third-parties’ database;
Information from the Internet;

Data from various channels has been combined and cross-checked to make this report as precise and
credible as possible.

Main content:

No. Content Page
Executive summary 1

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Methodology & sources 3
I Overview of sugar alcohol industry in China 5
I-1 Major sugar alcohols and their properties 5
I-2 Sugar alcohol industry in China 5
I-3 Policies on sugar alcohol industry in China since 2005 6
II Overview of sugar alcohol industry in the world 8
II-1 Supply situation of sugar alcohols in the world 8
II-2 Demand situation of sugar alcohols in the world 9
III Production of major sugar alcohols in China, 2005-2009 10
III-1 Overview of sugar alcohols' production 10
III-2 Output/capacity volume in the past five years 11
III-3 Major producer’s information 17
III-4 Newly-built plants' information 22
III-5 Analysis of production distribution in China 23
IV Raw material analysis 25
IV-1 Major raw materials’ output volume in the past five years 25
IV-1.1 Cornstarch 25
IV-1.2 Corncob 26
IV-1.3 Glucose 26
IV-1.4 Xylose 27
IV-2 The share of major Raw materials in sugar alcohol industry 28
IV-3 Planting area of corn in China 30
IV-4 Relevant policy 32
V Technology 33
V-1 Sorbitol 34
V-1.1 Production technology of sorbitol in China 34
V-1.2 Technology innovations 35
V-1.3 Introduction to key patents 36
V-2 Xylitol 36
V-2.1 Production technology of xylitol in China 36
V-3 Maltitol 42
V-3.1 Production technology of maltitol in China 42
V-4 Mannitol 43
V-4.1 Production technology of mannitol from kelp in China 44
V-4.2 Production technology of mannitol by synthetic method in China 45

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V-5 Erythritol 48
V-5.1 Production technology of erythritol in China 48
VI Price analysis, 2005-2009 (including sorbitol, xylitol, maltitol, mannitiol, erythritol) 51
VI-1 Price change in the past five years and latest price dynamics 51
VI-2 Influencing factors for price change 53
VI-3 Forecast on price 55
VII Market analysis of sugar alcohols in China (including sorbitol, xylitol, maltitol, 58
VII-1 Market size of different types of sugar alcohols 58
VII-2 Market size by volume and growth rate analysis in the past five years 59
VIII Consumption pattern of Chinese sugar alcohols, 2005-2009 64
VIII-1 Overview of sugar alcohols’ consumption pattern 64
VIII-2 Brief introduction to end-use segments 65
VIII-2.1 Vitamin C 65
VIII-2.2 Toothpaste 67
VIII-2.3 Food 70
VIII-2.3.1 Sugar-free chewing gum 70
VIII-2.3.2 Candy 72
VIII-2.3.3 Baking food 74
VIII-2.4 Parenteral solution 77
VIII-2.5 Others 79
IX Import & export analysis of sugar alcohols, 2005-2009 (including sorbitol, xylitol, 80
IX-1 Export and import analysis of sorbitol in 2005-Mar. 2010 80
IX-1.1 Export situation of price, volume and value 80
IX-1.2 Export situation of destinations 84
IX-1.3 Export situation of exporters 90
IX-1.4 Export situation of producers 91
IX-1.5 Import situation of price, volume and value 92
IX-1.6 Import origins of sorbitol in China 95
IX-1.7 Import situation of importers 98
IX-2 Export and import analysis of xylitol in 2005-Mar. 2010 100
IX-2.5 Import situation 112
IX-3 Export and import analysis of maltitol in 2005-Mar. 2010 112

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IX-3.5 Import situation 120
X Forecast on sugar alcohols' development in China, 2010-2014 121
X-1 Key factors influencing sugar alcohols' development 121
X-2 Forecast on sugar alcohol industry 124
X-2.1 Forecast on capacity & output of sugar alcohols 124
X-2.2 Forecast on import and export of sugar alcohols 131
X-2.3 Forecast on consumption of sugar alcohols 135
XI Conclusion and recommendation 143
XI-1 Conclusion 143
XI-2 Suggestion & recommendation 143
XII Benchmarking analysis of leading players 145
XII-1 Shandong Yucheng Lvjian Biological Technology Co., Ltd. (Yucheng Lvjian) 145
XII-1.1 Product information 145
XII-1.2 Estimation on manufacturing cost of crystalline xylitol 145
XII-1.3 Estimation on manufacturing cost of crystalline maltitol 147
XII-2 O’Laughlin Industries Co., Ltd. (Tianjin O’Laughlin) 150
XII-3 Zhejiang Huakang Pharmaceutical Co., Ltd. (Zhejiang Huakang) 153
XII-4 Shandong Longlive Bio-technology Co., Ltd. (Shandong Longlive) 158
XII-5 Roquette China Pharmaceutical Co., Ltd. (Roquette China) 161
XII-5.2 Estimation on manufacturing cost of syrup sorbitol 161
XII-6 Shandong Futaste Pharmaceutical Co., Ltd. (Shandong Futaste) 166
XII-7 Shandong Luzhou Bio-Chem Technology Co., Ltd. (Luzhou Group) 169
XII-8 Shandong Tianli Pharmaceutical Co., Ltd. (Shandong Tianli) 172

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XII-8.2 Estimation on manufacturing cost of syrup sorbitol 172
XII-9 Guangxi Khalista (Liuzhou) Chemical Industries Ltd. (Guangxi Khalista) 175
XII-9.2 Estimation on manufacturing cost 175
XII-10 Financial statement analysis 180
XII-10.1 Yucheng Lvjian 180
XII-10.2 Tianjin O’Laughin 183
XII-10.3 Zhejiang Huakang 186
XII-10.4 Shandong Longlive 189
XII-10.5 Roquette China 192
XII-10.6 Shandong Futaste 195
XII-10.7 Luzhou Group 198
XII-10.8 Shandong Tianli 201
XII-10.9 Guangxi Khalista 204
XII-10.10 Comparison of financial state in different companies in 2009 207
XIII Profile 208
XIII-1 Jilin Changchun Dacheng Industrial Group Company Ltd. 208
… 0
XIII-20 Shandong Binzhou Sanyuan Biotechnology Co., Ltd. 237

Executive summary:

Sugar alcohols produced in China mainly include sorbitol, xylitol, maltitol, mannitol and erythritol.China
is one of the largest sugar alcohol producers in the world, with total output of xx tonnes in 2009,
accounting for xx of global output, rising slightly compared with that of 2008. However, global financial
crisis and less developed market for sugar alcohol held back the growth; some producers even
suspended or stopped production. Currently there are about xx major active producers in China
according to the market situation in May 2010.

Raw¬ material

In sugar alcohol’s production, there are mainly three raw materials, namely cornstarch, corncob and
xylose. To be specific, most producers choose the first two as raw materials; some with advanced
technology prefer solid glucose instead of cornstarch. Solid glucose often comes from starch producers.
There are two kinds of raw materials for xylitol production: xylose and cornstarch.

As to cornstarch, China as the second largest cornstarch producer in the world has abounded
resources of corn with output of xx tonnes in 2009 next to the US. In addition, China is the second
largest corn production country following the US in the world. Total output of glucose reaches to xx in

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2009. As to xylose, China also ranks first in xylose production in the world with total output of xx tonnes
in 2009.

Consumption situation¬

In China, sugar alcohols are mainly used in products like food, daily-care products and
pharmaceuticals.

About xx of sugar alcohols in China are consumed in food, oral health products and medicines in 2009.
In particular, Vitamin C, oral health products, bread & cake, candy and parental solution are main
downstream sections of sugar alcohols. Currently, about xx of total sugar alcohols’ consumption is
used for Vc, and xx for food as sweeteners.

The consumption volume of sugar alcohols in China sees a slight increase in 2009 compared with that
the previous year by only xx tonnes.

Production¬ technology

Currently, there are mainly two methods to produce sugar alcohols in China: traditional chemical
method with glucose hydrotreating and biotechnological method through fermentation with corncob as
raw material. Traditional method with glucose to be hydrotreated at the presence of catalyst to produce
sugar alcohols can easily help realize industrial production of large scale. Bioproduction method is only
used in xylitol, mannitol and erythritol’s production, including microbial fermentation and enzyme
process. Bioproduction is still immature for other sugar alcohols in China.

Import¬ & export

More and more global buyers intend to import sugar alcohols from China in recent years for lower price
and better quality, export volume of sugar alcohols has witnessed an uptrend. In 2009, China imported
only xx tonnes sugar alcohols, while xx tonnes sugar alcohols are exported, which slightly decreases
compared with that of 2008 due to the impact of global financial crisis. The US, Europe and Southeast
Asia are the major exporting destinations.

Character of CCM' Report:

The aim of this report is to provide powerful assistance to the strategy group and the management
team in making correct decision as how to penetrate the ever-increasing China market and how to
catch the maximum commercial opportunities. The report is formulated independently by CCM’s
professional market researchers, based on the first-hand and primary data which are analyzed by
scientific methodology, confirmed with both manufacturers/end users/traders and legal authorities, and
presented in a logic way.

Sample pages：

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III-3 Major producer’s information

Sorbitol

According to CCM’s investigation, 27 enterprises produce or ever produced sorbitol in China.
By the end of May 2010,
- 6 producers stopped;
- 2 producers are idle;
- 19 producers are active.

At present, there are 2 types of sorbitol in China, 70% syrup sorbitol and crystalline sorbitol.

Because transportation cost of syrup sorbitol is high and it’s easily freezing in winter, the
production of 50% syrup sorbitol has stopped recently.

About 15 producers use cornstarch, a major raw material of sorbitol production. For others, 2
producers use sorbitol syrup and the other 2 use glucose and tapioca.

Mannitol

Currently, there are 8 active mannitol producers in China, among which 7 adopt chemical
synthesis method with glucose, only one producer still adopt the traditional method.

Hebei Huaxu Pharmaceutical Co., Ltd. is the top producer of mannitol in China with capacity of
15,000 t/a, whose output reaches 12,000 tonnes in 2009. Jiangsu Lianyungang Zhongda
Seaweed Industrial Co., Ltd. (Lianyungang Zhongda) is the only producer adopting traditional
method with an annual capacity of 800 tonnes in 2009. More and more companies choose
synthesis method. The output of mannitol produced by traditional method will be less and less
till it is completely replaced by synthetic method with glucose.

Some companies stopped mannitol production for insufficient capital to pass GMP certification,
and mannitol production is strictly limits by national requirements. These companies include
Qingdao Gather Great Ocean Seaweed Industry Co., Ltd., Lianyungang Huarui Chemical Co.,
Ltd., Jiuyang Alga Industry Bio-engineering Co., Ltd. and so on.

Only 8 active producers have gained GMP certificate. Lianyungang Zhongda and Shandong
Lianmeng are claimed to pass GMP certification in August 2007. Henan Jincheng doesn’t pass
GMP certification, and it can only supply mannitol to these food consumers or for export.

Table III-3.4 List of China’s mannitol producers, 2010

Raw Capacity, Output, 2009
No. Producer Status Price (USD/t)
material 2010 (t/a) (t)

Food grade:
2,932
1 3,500 600 Medicine
Shandong Qingdao Bright Moon Seaweed Industry grade:
Co., Ltd. Active Glucose 2,493

2 Hebei Huaxu Pharmaceutical Co., Ltd. Active Glucose 15,000 12,000 1,833

Guangxi Nanning Chemical & Pharmaceutical Co.,
3 3,000 2,400 2,933
Ltd. Active Glucose

4 Shandong Jiejing Group Corporation Active Glucose 3,500 2,000 2,493

5 Yucheng Lvjian Biological Technology Co., Ltd. Active Fructose 5,000 3,000 2,493

6 Shandong Lianmeng Chemical Group Co., Ltd. Active Glucose 10,000 8,000 1,620

Jiangsu Lianyungang Zhongda Seaweed Industrial
7 800 800 3,666
Co., Ltd. Active Glucose

8 Yantai Xinwang Seaweed Industry Co., Ltd. Active Starch 2000 550 2,053

Source: CCM International

Production, market and manufacturing cost of sugar alcohols in china

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Production, market and manufacturing cost of sugar alcohols in china