Luzhou Bio-chem, one of China's biggest corn sweetener producers, is set to boost production of high fructose corn syrup (HFCS) to meet growing use of the sweetener in Chinese beverages.
The Singapore-listed company said that it has completed enhancements to its Shaanxi and Henan plants that will allow it to produce both HFCS and high maltose syrup. HFCS and maltitol earn higher prices in the ingredients market than other corn sweeteners and Luzhou has already converted its Shandong and Liaoning plants to produce these higher value products.
The company also said that it has entered into agreements to supply HFCS to leading food and beverage manufacturers in China. China's production of high fructose syrup is about 100 thousand metric tons every year, according to Hu Guohua, secretary general of the country's additives association.
This is still a very low level compared with the US and Europe but consumption is rising fast in line with the strong growth in China's beverage industry. Another corn processor, Global Bio-chem, is said to have seen its sales of the ingredient increase by 200 per cent in the first half of this year.
Corn sweeteners in general have also seen a strong surge in demand this year with high sugar prices leading food makers to seek alternatives. The cost of producing corn sweeteners is lower than for refining sugar and given the ready supply of raw material (China's 2005 corn crop reached a record 134 million tons), these other sweeteners are now priced significantly lower than sugar.
During the last year, sugar prices have hit CNY6000 per ton, up from CNY2600 the previous year, after a drought reduced a significant part of China's sugar cane crop. Although prices have dropped again to about RMB4000 per ton, they are set to stay high into the coming year.
In an interview with Reuters in September, China Sugar Association chairman Jia Zhiren said that starch-based corn sweetener would likely replace between 700,000 tonnes to 800,000 tonnes of natural sugar consumption in China in the year beginning October, up from 600,000 tonnes the year before. Production would hit 5 million tonnes this year, up from 4.3 million tonnes in 2005, he told the news service.
Luzhou has seen revenue for corn sweeteners increase by 45 per cent during the first nine months of the year to CNY704.4 million, thanks to a 60 per cent increase in demand from food and beverage customers.
Managing director Niu Jixing has said that the fourth quarter, historically its strongest of the year, will beat 3Q results, helped by the additional output of higher value products.
Source:佚名