By Zhang Lun
In 2017, China's cumulative export of vitamin products reached 250 kt, with a 2-digit YoY growth. The export amounts and export prices of various vitamin varieties were all in the upward trend, and the export prices of certain varieties even reached a new 10-year high.
Export amount and value both increase
In 2017, China's vitamin production reached 290 kt. According to relevant statistics of the Customs, the export volume of vitamin C reached 148 795 tons in 2017, an increase of 17 636 tons from the 131 159 tons in the previous year (the same below), with the growth rate at 13.4%. The export volume of vitamin E reached 68 784 tons, an increase of 7 484 tons, 12.2%. The export volume of vitamin A reached 3 422 tons, an increase of 466 tons, with the growth rate at 15.8%. The export volume of vitamin B1 reached 6 989 tons, an increase of 1 341 tons, with the growth rate at 23.7%. The export volume of vitamin B2 reached 2 739 tons, an increase of 536 tons, with the growth rate at 24.3%. The export volume of vitamin B6 reached 6 140 tons, an increase of 1 125 tons, with the growth rate at 22.4%. The export volume of vitamin B12 reached 348 tons, an increase of 16 tons, with the growth rate at 4.8%.
The export values also increased significantly, with the annual amount reached nearly US$2.7 billion, an increase of more than 20%. According to statistics from the customs, the export value of vitamin C in 2017 reached US$879.74 million, an increase of US$448.66 million from the previous year (the same below), namely 104%. The export value of vitamin E reached US$460.6 million, an increase of US$19.06 million with the growth rate at 4.3%. The export value of vitamin A reached US$169.11 million, an increase of US$77.31 million, with the growth rate at 84.2%. The export value of vitamin B1 reached US$328.26 million, an increase of US$107.04 million, with the growth rate at 48.4%. The export value of vitamin B2 reached US$88.71 million, an increase of US$12.91 million, with the growth rate at 17.0%. The export value of vitamin B6 reached US$195.41 million, an increase of US$48.83 million, with the growth rate at 32.9%. The export value of vitamin B12 reached US$172.6 million, an increase of US$29.96 million, with the growth rate at 21.0%.
The vitamin products’ export amount and prices also rose significantly in 2017. According to statistics from the customs, the average export price of vitamin C in 2017 reached US$5.91/kg, an increase of US$2.63 from the previous year (the same below), with the growth rate at 80.2%. The average export price of vitamin A reached US$49.4/kg, an increase of US$18.3, with the growth rate at 58.9%. The average export price of vitamin B1 reached US$47.0/kg, an increase of US$7.8, with the growth rate at 19.9%. The average export price of vitamin B6 reached US$31.8/kg, an increase of US$2.53, with the growth rate at 8.6%. The average export price of vitamin B12 reached US$496/kg, an increase of US$66, with the growth rate at 15.3%. There are also some products did not enjoy huge rises in 2017, which was mainly because they had risen largely in 2016, such as vitamin E and vitamin B2.
Four driving factors
1. The world economy is recovering
The global economic situation continues to improve, international trade continues to pick up, international investment continues to increase, and the world economy is gradually recovering.
In 2017, the share of China's vitamin C, vitamin A, vitamin B1, vitamin B2, vitamin B6, vitamin D3 and other API in Europe market rose significantly. Vitamin API exported to Europe accounted for about 40% of China's vitamin API exports, back to the level of 2011. The increase in the share of vitamins exported to Europe has benefited from the recovery of feed production in Europe. On the other hand, European vitamin manufacturers are mainly concentrated in the production of high-end products such as medicine, gradually giving up feed-grade vitamin production and started to purchase from China.
In 2017, the share of Chinese vitamin APIs in Asian market is also increasing. Among them, exports to Vietnam, Thailand, South Korea, India and other Southeast Asian countries are growing at a faster rate. Vitamin B1, vitamin B2, vitamin B6, vitamin E and biotin are major contributing factors of the increase in exports to India. And the exports to Japan also went up.
2. Rigid demand in the market
The main application areas of vitamin products are feed additives, pharmaceuticals and cosmetics, food and beverages. The downstream consumption of the whole vitamin industry is relatively stable. About 50% of the global vitamins are used for feed additives, and the market share of medicines and cosmetics and food and beverages accounts for 30% and 20% respectively. The growth rate of the food and beverage market (estimated at 10% to 15%) is faster than that of medicine (3% to 5%) and feed (1% to 2%). Vitamin C, vitamin B1, and vitamin B6 have benefited from the rapid growth of vitamin beverages (sports or functional beverages).
Except for a few varieties (vitamin B12, vitamin B1, inositol, vitamin C, etc.), over 70% of most vitamin varieties are used in feeds. After the 2008 financial crisis and the consumption downturn caused by the European debt crisis in 2009, the European and American livestock and feed markets began to recover gradually in 2013. In 2017, the feed consumption in Europe and America basically recovered to the level of 2008-2009. Feed consumption in Southeast Asia and South America also maintained a relatively fast growth rate.
3. High production enthusiasm
The global supply of vitamin A and E API and products tightened. Especially in Europe, the market prices of vitamins A and E have risen successively and pushed up the Chinese market. Not only has the market price risen sharply, but the products are also very popular. In addition, due to environmental protection, production restrictions, elimination of backward production capacity and other factors, the supply of other vitamin products is tight, sales prices are also rising, the profits of normal production companies have increased significantly, and production enthusiasm is very high.
4. Supporting policies
Governments at all levels in China have introduced a series of policies to further reduce the burden on enterprises, eliminate backward production capacity, adjust the trade structure, create an enabling environment, promote the healthy development of the real economy, and promote the steady improvement of foreign trade.
Future development
1. Rigid demand still strong
At present, the amounts of vitamins used in feed additives are very high and will increase steadily in the future. In its report released in October 2017, the EU expects that meat production in 28 EU countries will increase by 0.8% from 2017 to 2018. Asian countries (except China) will have a 2.2% increase in meat production in 2018 compared to 2017. The steady increase in livestock production will benefit the growth of vitamin consumption.
2. China’s advantages
After decades of development and growth, China's vitamin industry has mostly been able to enjoy independent intellectual property rights, relatively low production costs, and high industrial concentration (many vitamin products are concentrated in 3 to 4 enterprises), and advanced production technology. The production equipment is large in scale, the raw materials for production can be self-supported, the shares in the domestic and foreign markets are large, the cost performance is high, and it has strong competitiveness in the international market.
3. Ever increasing environmental protection pressure
Environmental protection is one of China’s long-term national policy. Under the trend of tightening environmental protection policies, such impact on the vitamin industry has gradually emerged in the past few years. The environmental protection costs of vitamin products will gradually increase in the future, and the pressure on production and operation of enterprises will also increase in the future. In addition, safety production is also a long-term, systematic problem, and the introduction of environmental protection and safety production standards and policies will have some impact on vitamin manufacturers.
4. Overcapacity issue still exists
At present, China's vitamin capacity is about 350 kt, and the annual output reaches 300 kt. Over the years, many vitamin varieties are suffering from overcapacity, and market competition is fierce. Take vitamin C for instance. The world market capacity is about 190 kt/a, while China's vitamin C capacity has reached 220 kt/a. China’s annual output is 170 kt, and the export volume is about 150 kt, with an 85% high export dependence.
5. More additional capacities
Due to the skyrocketing price of vitamin products in recent years, industrial capitals and financial capitals are very active in the industry, and activities such as mergers and acquisitions occur frequently, which, to a certain extent, will also cause repeated construction. The year 2018 will see new products and projects launched as well as new comers to this industry.
In recent years, new and expanded vitamin projects include:
Vitamin B2: Inner Mongolia Shenzhou Biotechnology obtained the production license for feed grade vitamin B2 at the end of 2016, and the results of the environmental impact assessment of the 1 kt/a vitamin B2 technical transformation project have been announced. Tongliao Huanghelong Biological has obtained the production license for vitamin B2 feed additive in 2017, with a production capacity of 1 kt/a.
Vitamin A: Zhejiang Pharmaceutical Xinchang’s 1 kt/a of vitamin A plant is scheduled to be put into production recently.
Vitamin B6: Major new manufacturers include Hubei Zhenhua, Chongqing Minfeng, and Ruibang Biological.
Vitamin C: Shandong Luwei Pharmaceutical Co., Ltd. has rebuilt the workshop to build a 30 kt/a vitamin C project, and the results of the EIA was released in September 2017. The Northeastern Pharmaceutical’s Vitamin C Intelligent Green Factory is planned to be put into operation in 2019 to realize a new intelligent manufacturing model for vitamin C and series products. After completion of production, it is estimated that the annual output of vitamin C will reach 25 kt and the output value will be nearly RMB800 million. Anhui Taige's 30 kt/a vitamin C project was officially put into operation at the end of 2017.
Vitamin E: The 20 kt/a vitamin E project of Nengte Technology (a wholly-owned subsidiary of Guanfu Co., Ltd.) was officially put into operation on March 11, 2017, and officially sold on March 16, and the company has been certified by the European Union FAMI-QS. The company has exported more than 100 tons of vitamin E 95% oil to Germany. Fujian Gelanni’s RMB600 million vitamin E deep processing project was put into production recently. The company produces 1 500 tons of 90-99.9% refined phytosterols, 2 500 tons of 25-90% natural vitamin E oils, and 10 000 tons of fatty acid methyl esters of different grades. Its products are sold to many countries and regions such as Europe, America, Japan and Southeast Asia. Meanwhile, Jiangsu Dafeng Haijianuo Pharmaceutical Co., Ltd.’s vitamin E oil, E powder and other vitamin products have also entered the market.
