NDRC Says No to New Vitamin C Projects
Year:2009 ISSUE:36
COLUMN:NEW SETUP, AGREEMENT & PLAN
Click:363    DateTime:Jan.25,2010
NDRC Says No to New Vitamin C Projects     

A report involving vitamin C sector was recently released by the National Development and Reform Commission (NDRC) and the Ministry of Industry and Information Technology (MIIT) after a united survey. The report says that China's vitamin C sector sees a surplus capacity and is urgent to be supervised and controlled.
   Vitamin C is mainly consumed in the pharmaceuticals, foodstuffs and additives sectors. The report says China currently consumes 20 000 tons of vitamin C per year, around 20% of the global total. China now has 127 000 t/a of vitamin C production capacity in five companies including Northeast Pharmaceutical Group, North China Pharmaceutical Group Co., Ltd., Jiangshan Pharmaceutical Co., Ltd., and CSPC Pharmaceutical Group Limited, together accounting for 84.6% of the world total.
   NDRC thought that the highly concentrated production capacity, large scale and advanced technology helped Chinese vitamin C business occupy a majority share in the global market. Therefore, China's vitamin C sector suffered less impact from the global financial crisis.
   "Regrettably, the spot survey stated that some local governments and companies, neglecting the related national policies and regulations, irregularly approved or constructed new vitamin C projects in recent years," the report said. "Now the vitamin C projects that are newly constructed, under construction or planned will add 80 000 t/a of capacity together. It is predicted that China's vitamin C capacity will approach 180 000 t/a by the end of 2010, and exceed 200 000 t/a by the end of 2012. The capacity growth surpasses greatly the demand growth."   
   If letting it expand freely, China's vitamin C capacity will be twice the global demand, inevitably causing a fiercer competition. Price slashing will arise like before. The selling price of vitamin C may be lower than its production cost. NDRC worries that China's vitamin C sector will hence lose its competitiveness in the global market and will suffer other problems such as bankruptcy, cutting job and worse credit.
   In view of current situation, NDRC, combined with MIIT, is about to issue control policies and measures for the sector, in the aspects of entry threshold, approving new project, production management, trade supervision, punishment on irregular actions, in order to curb the blind expansion and help the sector run stably.