Robust Growth of Bio-Manufacturing
Year:2017 ISSUE:11
COLUMN:INORGANICS
Click:361    DateTime:Jun.15,2017
Robust Growth of Bio-Manufacturing

By Chen Fang, Chengdu Documentationand Information Center, Chinese Academy of Sciences

The average annual growth rate of the biological industry in China exceeded 15% during the Twelfth Five-year (2011-2015) Plan period. The industrial scale exceeded RMB3 500 billion in 2015. The bio-manufacturing sector has developed rapidly.

Export growth in traditional advantageous sectors is stable

China’s lysine capacity in 2015 was 2 200 kt/a, and 260kt of lysine and esters/salts was exported, a YoY increase of 1.2%. The export value was US$322 million. Products were sold to over 60 countries and regions including Russia, the Netherlands, the United States, Demark, Lithuania and Belgium.
The export volume of Angel Yeast Co., Ltd. has grown at over 12% for several consecutive years, and over 95% of products made by this company for export are sold under its own brands.
Moreover, 70-80% of the citric acid output in China is exported.

International cooperation in developing capacity is accelerated

Angel Yeast Co., Ltd. owns a capacity of 110 kt/a yeast and 46 kt/a yeast extracts. It has established eight major headquarter bases and applied-technology centers at home and abroad in recent years. The company constructed a plant in Egypt at the end of 2010. The plant has a total investment of US$75 million and a design capacity of 15 kt/a dry yeast. The plant has maintained full-load production and sound operation ever since its completion. Angel started construction of a plant in Russia in September 2015. The plant has a total investment of RMB463 million and a design capacity of 20 kt/a. Production will start in 2017.
In May 2014, Shandong RZBC Group Co., Ltd. registered and established Bosu Biochemical Co., Ltd. in Hungary. An investment of US$130 million was made in the construction of a citric acid plant in Kazincbarcika, in the northeast of Hungary. The design capacity of the plant is 100 kt/a citric acid and its salts.

Product competitiveness in emerging markets is upgraded

The rapid expansion of markets such as foods, beverages and textiles drives development of the enzyme preparations market. The growth of the enzyme preparation sector in China is still extremely prominent today. The output of enzyme preparations was around 1 200 kt in 2015, a YoY increase of 4.3%. The number of enterprises with annual sales revenue exceeding RMB100 million has reached eight. Many different varieties are made, and some special enzymes have achieved commercial production. The market competitiveness of products is also greatly improved. The share of China-made enzyme preparations in the domestic market has gone up sharply from less than 10% in the initial years of the Twelfth Five-year Plan period to nearly 30% today. Compared with 2014, the export volume in 2015 was 3.9% higher and the export value was 5.8% higher.
The self-supply ability of some biological products has increased and their supply to the domestic market has stabilized. For example, China’s dependence on imported methionine is quite high. Ningxia Unisplendour Tianhua Methionine Co., Ltd. has invested RMB6.0 billion to construct a feed-grade DL-methionine plant and matched facilities in three phases. After completion of the project in 2018 the capacity will be 200 kt/a. After expansion of a methionine plant of Shandong NHU Amino Acids Co., Ltd. its capacity will be 300 kt/a. The supply/demand status of methionine in China is hoped to change substantially in the future.
L-alanine fermentation production technology developed by Tianjin Institute of Industrial Biotechnology, Chinese Academy of Sciences, has already completed a pilot test and has been transferred to Anhui Huaheng Biotechnology Co., Ltd. The latter has achieved commercial production of L-alanine for the first time in the world and become a supplier of BASF, a German chemical giant. In November 2014 Anhui Huaheng Biotechnology Co., Ltd. and BASF Europe signed a letter of intent to construct an L-alanine production unit in Hefei using the fermentation process, through a joint venture or other form.

Transnational M&As unfold

Enterprises with great strength started to optimize the allocation of assets and capacities through transnational M&As. For example, ChemChina has acquired Adama, an Israeli pesticide giant, at an estimated price of US$2.4 billion. Bright Food (Group) Co., Ltd. has acquired Tnuva, the biggest milk product company of Israel, at a price around US$1.25 billion. In February 2016, ChemChina announced that it will buy a 100% stake in Syngenta through a public offer, and the transaction value will be US$43.0 billion.

International R&D collaboration is strengthened

In September 2013, Qingdao Vland Biotech Inc. got approval from China’s Ministry of Science and Technology and established an international collaboration research center for bio-catalysis technology. It has launched over a dozen international collaboration projects in recent years. Partners include nearly 20 entities in the United States, Canada, Russia, Finland, Bulgaria, Germany and Indonesia. The company has invested tens of millions of RMB in international collaboration, introduced quite a few key technologies, developed over a dozen new products and created a direct economic return of over RMB100 million. The business growth of the company and the overall development of the biological industry are therefore effectively promoted.