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					                Corn Products China News
Corn Products
                                                      Vol.4 Issue 1, 2011

                   Copyright © CCM International Limited
                                   Corn Products China News
                                                                Vol. 4 Issue 1. 2011               Publication date: 20 January, 2011

News in Brief
1  Baolingbao Biology considers transferring raw material price increasing risk through
   hedge service
1	 Corn	Starch	in	Tieling	City	firstly	exported	to	oversea
1	 Anhui	BBCA	obtains	value	added	tax	refunding
                                                                                            Welcome to the January issue of Corn
1 Chinese CPI in 2010 rises by 3.3%
1	 The	6th	China	(Shanghai)	International	Starch	&	Starch	Derivatives	Exhibition	2011	to	
                                                                                            Products China News, specially published
     be hold                                                                                by CCM International.
Supply and Demand                                                                           Stepping into 2011, prices of most corn products
2	 China	to	impose	VC	export	quota	in	2011?
                                                                                            stably run at a relative high level, caused by stably
Import	and	Export	Analysis                                                                  high	corn	price.	However,	it	still	has	exception.	Price	
3	 Chinese	corn	products	Imp.	&	Exp.	analysis	in	November	2010                              of cornstarch has decreased in Jan. 2011 all over
Price Update                                                                                the country, and VC price still undergoes a low level
6	   Ex-factory	prices	of	corn	products	in	Dec.	2010                                        at the same time. In this issue, CCM has tried to
6    FOB corn price in Dalian Port from Feb. 2010 ~ Jan. 2011                               predict that Chinese government is likely to impose
7    Domestic citric acid price keeps uptrend                                               export	quota	on	VC	industry.	In	addition,	another	
8    China's cornstarch price decreases                                                     trade friction between the US and China happened
                                                                                            at the end of 2010, that is, China decides to run an
Market & Company Dynamic
9	 DDGS	from	the	US	faces	anti-dumping	investigation	in	China                               anti-dumping	investigation	into	DDGS	originated	
10	 Quantum	High-Tech	succeeds	in	getting	listed                                            from the US.
11 Meihua Group's dream of listing comes true
13	 Shanxi	Huarong	initiates	60,000t/a	citric	acid                                          In 2011, Chinese corn products industry will be full
14 Alliance for China's amino acid industry established                                     of	opportunities.	Two	companies	(Quantum	High-
15	 Xiwang	Food	to	expand	refined	corn	oil	capacity                                         tech and Meihua Group) succeed in getting listed
                                                                                            to	 expand	 their	 businesses,	 and	 a	 new	 company	
Competitiveness                                                                             (Shanxi	Huarong)	marches	into	citric	acid	industry.
15 Sucrose price or to keep uptrend in near future

Corn Supply                                                                                 By the way, it would be honored to tell you that 2011
16 Analysis into China's corn market in 2011                                                is	the	10-year	Anniversary	of	CCM,	and	CCM	will	
New Technology & New Products & R&D                                                         continue to provide you more professional, timely,
17	 New	energy-efficient	fermentation	biotechnology	promoted                                accurate and complete news to you.

                                               Main companies mentioned in this issue
        Corn Products China News                                                                                 Vol. 4 Issue 1. 2011

 Corn Products China News at a glance                                     News in Brief
  There is a possibility for Chinese government to impose
VC	export	quota	on	VC	in	2011.                                   Baolingbao Biology considers transferring
                                                                 raw material price increasing risk through
   In November 2010, performance of Chinese corn
products’ imports still witnessed downtrend, and import
                                                                               hedge service
volume decreased by 68% over October 2010. In contrast,              n January 17, 2011, Baolingbao Biology Co., Ltd. announced that at
the	export	volume	rebounded,	which	increased	by	16%.
                                                                     present the company considers transferring the risk of raw material
  	China	runs	anti-dumping	investigation	into	DDGS	from	        price increase through hedge service, but there are no specific plans or
the US.                                                         programs at present.
  	Quantum	High-Tech	succeeds	in	getting	listed	in	China's	
Growth Enterprises Market, which will facilitate it to raise
funds	for	its	business	expansion.                                Corn	starch	in	Tieling	City	firstly	exported	
  Meihua Group succeeds in getting listed at the end of                          to oversea
2010,	and	it	will	expand	its	businesses	in	the	near	future.

  	Shanxi	Huarong	begins	to	establish	an	anhydrous	citric	
acid	production	plant	with	capacity	of	60,000t/a.
                                                                O     n December 23, 2010, 240.75 tonnes corn starch, produced by Tieling
                                                                      Wanshunda	 Starch	 Co.,	 Ltd.	 was	 exported	 to	 Singapore	 after	 being	
                                                                quarantined	by	Tieling	Entry-Exit	Inspection	and	Quarantine	Bureau.	This	
   Amino Acids Industry Technology Innovation and               is	the	first	time	for	corn	starch	produced	in	Tieling	City,	Liaoning	Province	to	
Strategic Alliance has been established at the end of 2010.     be	exported.
  	Xiwang	Food	plans	to	expand	its	refined	corn	oil	capacity	
to	350,000t/a	from	200,000t/a.

  Domestic citric acid price still maintains uptrend at the           Anhui	BBCA	obtains	value	added	tax	
beginning of 2011.                                                               refunding
  Domestic cornstarch price decreases in January 2011.

 Sucrose price in China is increasing at present, and may
                                                                O    n January 11, 2011, Anhui BBCA Biochemical Co., Ltd. announced
                                                                     that	after	being	examined	and	verified	by	the	Ministry	of	Finance,	the	
                                                                paid	value	added	tax	in	2009	of	about	USD3.81	million	is	permitted	to	be	
maintain at high level in 2011.
                                                                refunded.	This	value	added	tax	will	be	reckoned	in	Non-operating	income	in	
  Corn price will keep at a high level in 2011 as its           2010.
undersupply situation.

 	 A	 new	 energy-efficient	 fermentation	 biotechnology	 is	
promoted by the country.
                                                                          Chinese CPI in 2010 rises by 3.3%
                                                                O    n January 20, 2011, National Bureau of Statistics of China announced
                                                                     that	 the	 Consumer	 Price	 Index	 (CPI)	 in	 2010	 rose	 by	 3.3%	 over	
                                                                that in 2009, and in December 2010, the CPI increased by 4.6% over the
                                                                corresponding time of 2009 and 0.5% over last month.

                                                                   The 6th China (Shanghai) International
                                                                   Starch	&	Starch	Derivatives	Exhibition	
                                                                              2011 to be hold
                                                                T  he 6th China (Shanghai) International Starch & Starch Derivatives
                                                                   Exhibition	2011	will	be	held	on	May	26-28,	2011,	in	Shanghai	Everbright	
                                                                Convention	&	Exhibition	Center.

     CCM International Limited                                        1                             
         Corn Products China News                                                                                                                         Vol. 4 Issue 1. 2011

Supply and Demand

                                          China	to	impose	VC	export	quota	in	2011?

 I  n August 2010, when domestic price
    of Vitamin C (VC) slumped to its
 lowest level, it was reported that National
                                                                                            FIGURE1:	Domestic	VC	price	in	China,	2009-2010

                                                                               1 6 ,000
 Development and Reform Commission
                                                                               1 4 ,000
 ( N D R C ) 	 w o u l d 	 i m p o s e 	 V C 	 e x p o r t	
 quota	at	the	end	of	2010	for	the	healthy	                                     1 2 ,000
 development of this industry. However,                                        1 0,000
                                                                 Unit:	USD/t

 until now, the measure has not come
                                                                                8 ,000
 out	 yet,	 and	 some	 experts	 consider	 the	
 measure will be published and carried                                          6 ,000
 out in 2011, while others don't think so.                                      4 ,000
 Hereinafter, analysis will be made into
                                                                                2 ,000
 this	 question:	 Will	 Chinese	 government	
 impose	VC	export	quota	in	2011?	                                                  -
                                                                                          Ja n   Feb      Ma r    A pr   Ma y   Ju n      Ju l    Aug      Sep     Oct       Nov    Dec
 Let's	first	understand	current	situation	of	
 Chinese VC industry. On one hand, total                                                                                        2 009            2 01 0
 capacity	of	Chinese	VC	product	definitely	
 exceeds	 the	 global	 demand.	 China's	                                                                     Source: CCM International
 top five large VC companies' capacity                                                 FIGURE2:	Export	price	and	volume	of	Chinese	VC,	2009-2010
 (124,000t/a	 in	 2010)	 has	 accounted	
 for about 90% of global VC capacity.
                                                                               1 4 ,000                                                                                  1 2 ,000
 And	 some	 expansion	 projects	 are	 still	
 being under construction right now. It                                        1 2 ,000                                                                                  1 0,000
 is estimated that total capacity of VC in
 China	will	climb	to	200,000t/a	in	2012.	                                      1 0,000
                                                                                                                                                                         8 ,000
 The terrible overcapacity situation has

                                                                                                                                                                                     Unit:	USD/t
                                                                Unit: tonne

                                                                                8 ,000
 caused	 serious	 resource	 waste	 and	 cut-
                                                                                                                                                                         6 ,000
 throat competition in domestic market,                                         6 ,000
 which hinders healthy development of
                                                                                                                                                                         4 ,000
 this industry.                                                                 4 ,000

                                                                                2 ,000                                                                                   2 ,000
 On the other hand, VC price has situated
 at a low level at present, hurting most
                                                                                   -                                                                                     -
 VC manufacturers in China. Although
                                                                                          Ja n Feb Ma r A pr Ma y Ju n Ju l A u g Sep Oct Nov Dec
 VC price has rebounded a little since
 October 2010 aided by the production
                                                                                                     Ex por t	v olu m e	2 009          Ex por t	v olu m e	2 01 0
 suspension	of	some	major	VC	producers,	
 like	Shijiazhuang	Pharmaceutical	Group	                                                             Ex por t	pr ice	2 009             Ex pot	pr ice	2 01 0
 Co.,	Ltd.,	(Shijiazhuang	Pharmaceutical)	                                                                   Source: CCM International
 it still stays at a low level at present. On
                                                              quota	 measure	 sounds	 a	 suitable	 way.	                        First, the measure can eliminate some
 Jan. 11th 2011, the average VC price in
                                                              Export	quota	measure	means	the	annual	                            small manufacturers and turn around
 China	 was	 about	 USD6,798/t,	 while	 it	
                                                              export	 volume	 will	 be	 controlled	 by	 the	                    current overcapacity situation to some
 was	USD11,730/t	in	corresponding	period	
                                                              government,	and	each	qualified	exporter,	                         extent.	Normally,	the	small	manufacturers	
 of 2010. (FIGURE1) Besides, despite its
                                                              including manufacturers and traders, will                         are	 unqualified	 to	 get	 export	 quota,	
 export	volume	increased	significantly	in	
                                                              be	 assigned	 an	 annual	 specific	 quota	 of	                    especially those with inefficient
 2010,	 average	 export	 price	 went	 down	
                                                              the	top	limit	export	volume,	and	this	top	                        technology and high pollution. Thus,
 over 2009, caused by the increased output
                                                              limit volume will be decided by capacity                          these manufacturers will be driven back
 of Chinese VC. (FIGURE2)
                                                              and	 previous	 export	 volume	 of	 each	                          from the international market, and it is
                                                              manufacturer. The measure can bring the                           likely for them to get out of this industry.
 On the basis of the above situation, it is
                                                              following advantages.
 urgent	to	regulate	this	industry	and	export	
                                                                                                                                Second,	 it	 can	 ease	 current	 cut-throat	

     CCM International Limited                                                                   2                                         
        Corn Products China News                                                                                        Vol. 4 Issue 1. 2011

 competition, and enhance Chinese VC pricing power. Currently,               Therefore,	 it's	 predicted	 that	 it	 is	 quite	 probable	 for	 China	 to	
 the	export	price	is	cut	down	by	foreign	buyers	as	there	are	lots	of	        impose	 export	 quota	 on	 VC	 in	 2011.	 The	 government	 should	
 exporters	for	them	to	choose.	And	in	order	to	seize	more	market	            enhance the supervision on the implementation of this measure,
 share,	many	exporters	lower	their	quotations.	If	the	measure	is	            if not, the measure would lose its role.
 carried	out,	the	major	exporters	can	make	alliance	to	strengthen	
 the	 pricing	 power.	 Besides,	 it	 also	 can	 avoid	 anti-dumping	

Import	and	Export	Analysis

             Chinese	corn	products	Imp.	&	Exp.	analysis	in	November	2010

    1.	Imp.	&	Exp.	value	analysis	(TABLE1	)
    1.1 Thanks to the surge of import volume, the import value of furfural increased by 42,532% in November 2010 over October 2010,
    although	its	import	price	decreased	to	USD547/t,	compared	with	USD39,800/t	in	October	2010.	In	fact,	China	totally	imported	
    about	310	tonnes	furfural	from	Iran	this	November,	while	the	number	was	zero	in	previous	months.	And	the	imported	furfural	
    almost	flowed	to	Xiamen	City,	Fujian	Province.	

    1.2	Owing	to	the	increased	export	volume	of	glucose	and	syrup	(50%>fructose	content	≥20%),	its	export	value	increased	by	80%	
    in	November	2010	over	October	2010.	Philippines	increased	its	import	volume	of	the	product	from	China	significantly,	amounting	
    to	916	tonnes,	while	it	was	just	22	tonnes	in	October	2010.	Besides,	Papua	New	Guinea	imported	179	tonnes	of	this	product	in	
    November	2010,	with	the	lowest	price	of	USD468/t,	compared	with	the	highest	price	of	USD2,406/t	to	Germany.	Moreover,	
    because	Vietnam,	the	largest	export	destination	with	the	relatively	high	price	of	USD2,050/t	last	month,	didn’t	import	the	product	
    in	November	2010.	The	export	price	reduced	by	60%.

                                       TABLE1:	Imp.	&	Exp.	value	of	Chinese	corn	products,	November	2010
                                                            Import             Monthly            Export           Monthly
                                                          value, USD         growth rate        value, USD       growth rate
                         Corn                               17,423,036              -70%            2,459,110            85%
                         Cornstarch                            874,210                -25%         11,433,831             -20%
                         Citric acid                           413,550                114%        66,158,728              39%
                         Citrate                               169,746                -43%        10,718,069              38%
                         Glucose and glucose syrup
                                                                98,831                -47%        26,322,742               25%
                         (Fructose content <20%)
                         Glucose and syrup
                                                               534,176                 -13%           732,785             80%
                         (50%>fructose	content	≥20%)
                         Fructose and fructose syrup
                                                               622,114                  -5%        6,606,504                4%
                         (Fructose content >50%)
                         Mannitol                              50,523                  35%          1,136,223             34%
                         Xylitol                                10,306                -96%         3,209,948               -9%
                         Sorbitol                              37,089                   -7%         4,771,691              15%
                         Furfural                              169,674             42,532%          7,622,128             29%
                         Furfuryl alcohol and
                                                              140,920                 428%        13,323,827               -7%
                         tetrahydrofurfuryl alcohol
                         Lysine                                  7,710                -93%          4,416,869            198%
                         Lysine ester and salt                 156,701                -83%        12,943,560               -9%
                         Glutamic acid(GA)                       8,275                 88%         2,366,670             138%
                         Sodium glutamate                       50,723                 46%        25,046,846                0%
                         Inositol                               21,403                 28%         2,093,028              -25%
                         Total                              20,788,987                -67%       201,362,559               17%
                                                            Source: China Customs

    CCM International Limited                                            3                                  
    Corn Products China News                                                                            Vol. 4 Issue 1. 2011

2.	Imp.	&	Exp.	volume	analysis	(TABLE2	)
2.1	The	major	reason	for	the	increase	in	import	volume	of	mannitol	in	November	2010	is	that	China	increased	the	import	volume	
of this product from France this month over last month. The import volume of mannitol in November 2010 is 8 tonnes compared
with	just	2	tonnes	last	month.	About	8	tonnes	of	mannitol	imported	went	to	Shanghai	City.

2.2 Probably caused by the approaching of cold weather and the increasing demand for meat, many countries in Europe increased
their	import	volume	of	lysine	from	China	in	November	2010.	Take	Poland,	Netherlands,	and	Ukraine	for	example,	they	imported	
565 tonnes, 248 tonnes, and 109 tonnes lysine from China separately, while these three countries' import volume from China was
zero	last	month.	Besides,	Belgium	also	almost	doubled	its	import	volume	of	lysine	from	China	in	November	2010,	amounting	to	
720 tonnes.

2.3	Export	performance	of	Glutamic	acid	(GA)	was	also	good	in	November	2010.	Vietnam,	the	US,	and	Italy	increased	their	import	
volume of GA from China, amounting to 1,420 tonnes, 20 tonnes, and 5 tonnes, rising by 203%, 1,200%, and 2,400% separately.

                                TABLE2:	Imp.	&	Exp.	volume	of	Chinese	corn	products,	November	2010
                                                  Import               Monthly          Export         Monthly
                                               volume, tonne         growth rate    volume, tonne    growth rate
               Corn                                    78,555                -69%            8,546            77%
               Cornstarch                                1,248               -17%           25,749           -20%
               Citric acid                                129                43%            68,674            36%
               Citrate                                      41               -21%           10,845            43%
               Glucose and glucose syrup
                                                           84               -23%            54,769            24%
               (Fructose content <20%)
               Glucose and syrup
                                                         1,987               -12%            1,182           346%
               (50%>fructose	content	≥20%)
               Fructose and fructose syrup
                                                          264                39%            12,124             -1%
               (Fructose content >50%)
               Mannitol                                    10               208%               617            30%
               Xylitol                                       1              -99%             1,165           -10%
               Sorbitol                                    37                95%             8,440            15%
               Furfural                                   310          3,100,650%            3,657            24%
               Furfuryl alcohol and
                                                            16              142%             5,084           -16%
               tetrahydrofurfuryl alcohol
               Lysine                                     0.16              -95%             2,564           201%
               Lysine ester and salt                        7               -99%             7,409           -20%
               Glutamic acid(GA)                          0.36                8%             1,670           142%
               Sodium glutamate                            20                 0%            17,068            -2%
               Inositol                                  0.38                28%               201           -28%
               Total                                    82,710              -68%           229,763            16%
                                                      Source: China Customs

3.	Imp.	&	Exp.	price	analysis	(TABLE3)
3.1 Thanks to the price surge of citric acid from Germany and Austria, the average import price of citric acid increased by 50% in
November	2010.	Import	price	of	citric	acid	from	Germany	and	Austria	was	USD2,346/t	and	USD4,002/t	in	November	2010,	while	
it	was	USD2,061/t	and	USD1,678/t	in	October	2010	respectively.	Besides,	Germany	was	the	largest	import	origin	of	Chinese	citric	
acid in November 2010, and Austria was the third largest.

3.2 In November 2010, China began to import Fructose and fructose syrup (Fructose content >50%) from Israel and Pakistan, with
import	volume	of	about	40	tonnes	for	each	respectively.	And	the	import	price	from	these	two	countries	(	USD1,185/t	and	USD850/t	
respectively) was much lower than that of other countries. Moreover, the import price from the largest import origin, South Korea,
decreased	to	USD1,578/t	in	November	2010	from	USD2,238/t	in	October	2010.	Therefore,	the	import	price	of	the	product	reduced	
by 32% in November 2010.

 CCM International Limited                                       4                          
  Corn Products China News                                                                                                    Vol. 4 Issue 1. 2011

                                   TABLE3:	Imp.	&	Exp.	price	of	Chinese	corn	products,	November	2010
                                                        Import price,               Monthly            Export price,         Monthly
                                                           USD/t                  growth rate             USD/t            growth rate
              Corn                                                    222                   -4%                  288                  5%
              Cornstarch                                              700                   -9%                   444                 0%
              Citric acid                                            3,217                  50%                   963                 3%
              Citrate                                                4,132                 -28%                  988                 -3%
              Glucose and glucose syrup
                                                                     1,174                  -31%                  481                 0%
              (Fructose content <20%)
              Glucose and syrup
                                                                      269                       0%               620                -60%
              (50%>fructose	content	≥20%)
              Fructose and fructose syrup
                                                                     2,358                 -32%                   545                 5%
              (Fructose content >50%)
              Mannitol                                               5,028                 -56%                 1,842                 3%
              Xylitol                                                7,928                 215%                 2,756                 0%
              Sorbitol                                               1,002                 -52%                   565                 0%
              Furfural                                                547                  -99%                 2,085                 4%
              Furfuryl alcohol and
                                                                     8,904                 118%                 2,621                11%
              tetrahydrofurfuryl alcohol
              Lysine                                                49,742                  54%                 1,723                -1%
               Lysine ester and salt                                22,873                1,175%                1,747                13%
               Glutamic acid(GA)                                    23,050                  74%                 1,417                -1%
              Sodium glutamate                                       2,517                  46%                 1,467                 1%
              Inositol                                              55,737                -0.15%               10,421                 5%
                                                                Source: China Customs

                                                                     TABLE4:	Export	proportion	of	top	5	and	top	10	destinations	of	Chinese	
   4 . 	 E x p o r t 	 d e s t i n a t i o n s 	 a n a l y s i s	                   corn products by volume, October ~ November 2010
                                                                                                                 Nov	-10                 Oct	-10
   4.1	 The	 major	 reason	 for	 decreased	 export	                                                         Top	five    Top ten   Top	five    Top ten
   proportion of top five and top ten destinations                     Corn                                   100%         100%     100%           100%
   of	 corn	 starch	 is	 that	 the	 largest	 export	
                                                                       Cornstarch                              89%         97%       95%           99%
   destination, Indonesia, decreased its import
   volume markedly in November 2010 to 9,926                           Citric acid                             33%         49%       30%           48%
   tonnes, while it was 20,087 tonnes in October                       Citrate                                 38%         59%        41%          64%
   2010.                                                               Glucose and glucose syrup
                                                                                                                61%         77%      54%            77%
                                                                       (Fructose content <20%)
   4.2	In	November	2010,	India,	Japan,	and	Brazil	                     Glucose and syrup
                                                                                                                97%        100%      84%           100%
   decreased their import volume of mannitol from                      (50%>fructose	content	≥20%)
   China, which amounted to 144 tonnes, 61 tonnes                      Fructose and fructose syrup
                                                                                                               92%         99%       96%           99%
                                                                       (Fructose content >50%)
   and 19 tonnes, while the import volume in
   October 2010 was 167 tonnes, 81 tonnes, and 48                      Mannitol                                 72%        87%       81%           93%
   tonnes	respectively.	Thus,	the	export	proportion	                   Xylitol                                 86%         96%       86%           98%
   of	top	five	and	top	ten	destinations	of	mannitol	                   Sorbitol                                64%         80%       65%           86%
   in November 2010 declined.
                                                                       Furfural                                 97%        100%      97%           100%
                                                                       Furfuryl alcohol and
                                                                                                                76%        89%       78%           92%
                                                                       tetrahydrofurfuryl alcohol
                                                                       Lysine                                   76%        90%        91%          100%
                                                                       Lysine ester and salt                   58%         76%       60%            77%
                                                                       Glutamic acid(GA)                       99%         100%      99%           100%
                                                                       Sodium glutamate                         57%         77%      55%           74%
                                                                       Inositol                                56%         78%       57%           80%
                                                                                                     Source: China Customs

CCM International Limited                                                       5                                 
     Corn Products China News                                                                                                        Vol. 4 Issue 1. 2011

Price Update
                                    Ex-factory	prices	of	corn	products	in	Jan.	2011
                                                                    Price in January 2011                             Price in December 2010
                                                                 (USD/t)                     (RMB/t)             (USD/t)               (RMB/t)

          Corn starch (North China)                                     440                     2,920                    450              3,000

          Corn starch (South China)                                     490                     3,250                    503              3,350

          Ethanol (Industrial grade)                                    837                     5,550                    818              5,450

          Ethanol (Food grade)                                       1,000                      6,633                    980              6,533
          80% Maltose syrup                                             473                     3,140                    488              3,250
          70% Sorbitol                                                  660                     4,378                    690              4,600
          Monohydrate citric acid                                       980                     6,497                    953              6,350

          Oxidized	starch(Food	grade)                                   995                     6,600                    983              6,550
          68%	Xylitol	(Liquid)                                          838                     5,560                    834              5,560
          HFCS (Fructose: 42%)                                          475                     3,150                    465              3,100
          HFCS (Fructose: 55%)                                          618                     4,100                    600              4,000
          Crystal Isomaltitol                                       4,297                     28,500                   4,502             30,000
          Maltodextrin                                                  568                     3,765                    556              3,705
          75%	Maltitol	(Liquid	)                                        658                     4,365                    660              4,400
          Anhydrous glucose (Food grade)                                761                     5,050                    752              5,010
          Glucose Monohydrate                                           550                     3,650                    540              3,600
          Itaconic acid                                             2,200                     14,593                   2,200             14,661
          98.5% lysine                                               2,156                    14,300                   2,236             14,900
                                                                  Source: CCM International

                FOB corn price in Dalian Port from Feb. 2010 ~ Jan. 2011




                                  3 00
                    Unit,	USD/t



                                  27 0


                                             26-   19-    2 0-   2 0-      21-        2 0-     1 8-     2 0-   2 0-     19-    17-     2 0-
                                             Feb   Ma r   A pr   Ma y      Ju n       Ju l     Aug      Sep    Oct      Nov    Dec     Ja n

                                  Cor n   267      27 8   282    290       292    288          297      294    299      314    311     310

                                                                  Source: CCM International

   CCM International Limited                                                      6                                    
      Corn Products China News                                                                                                                      Vol. 4 Issue 1. 2011

                                 Domestic citric acid price keeps uptrend

E     ntering the new year 2011, domestic
      citric acid price witnesses uptrend,
majorly	aided	by	the	price	increase	of	its	
                                                                FIGURE3: Average price of monohydrate citric acid in China, 2010 ~ Jan. 2011

                                                                      1 2 00

raw	 material	 and	 auxiliary	 material.	 In	
                                                                      1 000
January 2011, the price of monohydrate
citric	 acid	 averagely	 reached	 USD980/                              800

                                                       Unit:	USD/t
t all over the country, increasing by 2.8%
                                                                       6 00
over that at the end of 2010. (FIGURE3)
                                                                       4 00
Domestic	 quotation	 of	 monohydrate	
                                                                       2 00
citric acid in Anhui BBCA Biochemical
Co., Ltd. (Anhui BBCA), China's leading                                      0
citric	 acid	 enterprise,	 was	 USD1,118/                                         Ja n - Feb- Ma r - A pr - Ma y - Ju n -      Ju l- A u g - Sep-    Oc t - Nov - Dec - Ja n -
                                                                                   10     10   10     10     10     10          10    10      10      10     10    10    11
t on Jan. 13th 2011, and the company
has	 stopped	 its	 domestic	 quotation	 for	                                                              Source: CCM International
anhydrous citric acid. An insider from the
                                                                         FIGURE4: Average price of sulphuric acid in China, 2010 ~ Jan. 2011
company disclosed that all the anhydrous
citric	acid	was	for	export,	thus	no	product	                          140
can be supplied to domestic market. He
also	 expresses	 that	 the	 price	 increase	
                                                                      1 00
was mainly caused by the upgoing raw
                                                        Unit:	USD/t

material price.                                                        80


At the s ame t ime , We i f ang E ns i g n                             40
Industry Co., Ltd. (Weifang Ensign)                                    20
quoted	 its	 anhydrous	 citric	 acid	 and	
monohydrate	 citric	 acid	 at	 USD1,193/                                         Ja n -   Feb - Ma r - A pr - Ma y - Ju n -   Ju l - A u g - Sep-   Oc t -   Nov - Dec -    Ja n -
                                                                                  10       10    10     10     10     10       10     10      10     10       10    10       11
t	 and	 1,088/t	 for	 domestic	 market	
respectively. Besides, another smaller                                                                   Source: CCM International
citric acid manufacturer, namely
HuangShi XingHua Biochemical Co.,                               FIGURE5:	Export	price	and	volume	of	Chinese	citric	acid,	Jan.	~	Nov.	2010
Ltd.,	 made	 quotations	 for	 anhydrous	
citric acid and monohydrate citric acid at                            9 0 ,0 0 0                                                                                           980
                                                                      8 0 ,0 0 0                                                                                           960
USD1,186/t	and	USD1,065/t	respectively.	
Sales managers from both these two                                    7 0 ,0 0 0
companies	 also	 express	 that	 the	 price	                           6 0 ,0 0 0
                                                                                                                                                                                     Unit:	USD/t
                                                  Unit: tonne

                                                                                                                                                                           9 00
ascending is supported by the high price                              5 0 ,0 0 0
of corn and sulphuric acid.                                           4 0 ,0 0 0
                                                                      3 0 ,0 0 0
It's well known that Chinese corn price                               2 0 ,0 0 0                                                                                           820
has	kept	increasing	in	2010,	which	exerts	                            1 0 ,0 0 0                                                                                           800
cost	 pressure	 on	 corn	 deep-processing	                                   -                                                                                             7 80
manufacturers and drives up price of                                                  Ja n - Feb- Ma r - A pr - Ma y - Ju n - Ju l- A u g - Sep- Oct - Nov -
most	 corn	 deep-processing	 products.	                                                10     10   10     10     10     10     10    10      10   10    10
Although in Jan. 2011 corn price stops
                                                                                                    Ex por t 	v olu m e         A v er a g e	ex por t 	pr ice
surging, it still runs at high level. On
Jan. 13th 2011, corn price in Weifang                                          Source: CCM International
City, Shandong Province maintained at
                                                inflation.	 Sulphuric	 acid	 price	 jumped	    RMB appreciation is one of the factors for
                                                to	 USD100/t	 in	 Jan.	 2011,	 while	 it	 was	 export	price	increase	of	citric	acid.
                                                USD52/t	at	the	corresponding	period	of	
As	the	major	auxiliary	material	of	citric	
                                                last year. (FIGURE4)                           However,	some	experts	also	concerns	that	
acid, sulphuric acid's price also has
                                                                                               if	 export	 volume	 of	 citric	 acid	 reduces	
impacted on citric acid price. In 2010,
                                                By the way, citric acid also achieved sound    in	 2011	 for	 some	 anti-dumping	 issues,	
sulphuric acid price has also surged
                                                export	 performance	 in	 Nov.	 2010,	 with	    domestic citric acid price will decrease,
significantly, like most commodities
                                                both	 export	 volume	 and	 price	 increase.	   as about 73% of Chinese citric acid is for
in China, which is caused by domestic
                                                (FIGURE5)	Some	experts	considered	that	        exports.			

   CCM International Limited                                                                 7                                        
  Corn Products China News                                                                                                                 Vol. 4 Issue 1. 2011

                                   China's cornstarch price decreases

M     arching into 2011, domestic
      price of cornstarch witnesses
downtrend all over the country.
                                               FIGURE6:	Cornstarch	price	in	Changchun,	Guangzhou	and	Weifang	City,	Oct.	2010	~	
                                                                                                          Jan. 2011

(TABLE5) Take Changchun City,                             6 00
Weifang	City,	 and	 Guangzhou	City	for	
example,	 average	 cornstarch	 price	 in	                 550
these	three	cities	reduced	to	USD453/
t,	 USD471/t	 and	 USD491/t	 in	 Jan.	                    5 00

2011, down 4.4%, 1.6% and 1.9%

separately over last month. (FIGURE6)
The	 following	 reasons	 can	 explain	 the	               4 00
decrease of cornstarch price.
Firstly, market demand for cornstarch
is decreasing. During October and                         3 00
                                                                  1-   8-    15-   22-   29-      5-     12-    19-    26-    3-    1 0-   17-     24-   31-    7-     14-
November 2010, lots of cornstarch
                                                                 Oct   Oct   Oct   Oct   Oct     Nov     Nov    Nov    Nov   Dec    Dec    Dec     Dec   Dec   Ja n    Ja n
consuming companies rushed to
purchase cornstarch to increase their                                                          Gu a n g zh ou     Ch a n g ch u n      Weifa n g
stoc k in ord e r t o g u arant e e t he ir
production before Chinese Spring                                                          Source: CCM International
Festival, so the cornstarch price was                             TABLE5: Cornstarch price in some cities, Dec. 2010 ~ Jan. 2011
pushed uptrend at that time. However,                                                             Dec. 17th 2010,            Jan. 17th 2011
                                                           City              Province                                                                    Change rate
                                                                                                     USD/t                      USD/t
after that, demand from most of the
                                                 Shanghai                    Shanghai                         506                       498                           -1.5%
downstream manufacturers reduced.
                                                 Suzhou                      Jiangsu                                  511                   485                       -5.0%
Thus, cornstarch companies have to
lower	their	quotations.		                        Fuzhou                      Fujian                                   511                   488                       -4.4%
                                                 Nanchang                    Jiangxi                                  509                   491                       -3.6%
Secondly, small manufacturers decrease           Wuhan                       Hubei                                    511                   491                       -3.8%
their prices in order to increase
                                                 Chengdu                     Sichuan                                  511                   491                       -3.8%
their sales volume and reduce their
                                                 Shenyang                    Liaoning                                 461                   438                       -5.0%
stock. Attracted by the comparatively
high profit margin since H2 2010                 Qinghuangdao                Hebei                                    471                   446                       -5.4%
(an	 executive	 officer	 from	 COFCO	                                                     Source: CCM International
disclosed that the profit margin of
                                               manufacturers, which also has impact                               It's believed that cornstarch price
corn starch in Sept. 2010 reached
                                               on the price decrease of cornstarch.                               will rebound after Chinese Spring
USD15/t.	),	many	small	manufacturers	
                                                                                                                  Festival. On one hand, the downstream
rushed into cornstarch production at
                                               Someone may think the supply increase                              manufacturers have to replenish
that time, which increased cornstarch
                                               of corn in the market since Oct. 2010                              their stock after the festival, and the
supply in China. Besides, many small
                                               would be also a factor for cornstarch                              demand for cornstarch will increase.
manufacturers cut their prices, for
                                               price decrease, however, it might not                              On the other hand, owing to the high
current low transaction rate and their
                                               be the key reason as CCM estimated.                                price of corn, the small cornstarch
high stock.
                                               Although newly harvested corn has been                             manufacturers have no much profit
                                               marketed, its price still stays at a high                          against current low price, and some of
Thirdly,	 the	 product	 quality	 of	 small	
                                               level,	for	example,	corn	price	in	Weifang	                         them even suffer loss.
manufacturers is inferior, thus, their
                                               City	 in	 Jan.	 2011	 was	 USD308/t,	 the	
prices are much lower than that of large
                                               same as that in Dec. 2010.

                                                                                         Future of Modified Starch in Asia Pacific
                        CCM’s Market Reports                                             Export summary data of Citric acid in China in
                         For more details, please contact CCM at                         Production, Market and Manufacturing Cost of
                                                       Sugar Alcohols in China

CCM International Limited                                                    8                                              
     Corn Products China News                                                                                                                                          Vol. 4 Issue 1. 2011

Market & Company Dynamic

               DDGS	from	the	US	faces	anti-dumping	investigation	in	China

   O    n Dec. 28th 2010, Ministry of
        Commerce of the People's Republic
   of China (MCPRC) published a note
                                                                                          FIGURE7:	Import	volume	and	price	of	DDGS,	2009-2010

                                                                                 5 00,000                                                                                                6 00
   that	 China	 decides	 to	 run	 an	 anti-
                                                                                 4 5 0,000                                                                                               550
   dumping investigation into Distillers
                                                                                                                                                                                         5 00
   dried grains with solubles (DDGS)                                             4 00,000
   originated from the US since Dec. 28th                                        3 5 0,000
   2010. It's believed that this move may                                                                                                                                                4 00
                                                                                 3 00,000
   help domestic DDGS industry to some                                                                                                                                                   350

                                                                                                                                                                                                Unit:	USD/t
                                                                   Unit: tonne

   extent.	                                                                      2 5 0,000                                                                                               3 00

                                                                                 2 00,000                                                                                                250
   According to the note published by                                                                                                                                                    2 00
                                                                                 1 5 0,000
   MCPRC, the investigation period is                                                                                                                                                    150
   from July 1st 2009 to June 30th 2010,                                         1 00,000
                                                                                                                                                                                         1 00
   and	 the	 industry	 injury	 investigation	                                     5 0,000                                                                                                50
   period is from Jan. 1st 2007 to June
                                                                                      -                                                                                                  -
   30th 2010. Normally, the investigation
                                                                                              Ja n    Feb    Ma r   A pr   Ma y    Ju n     Ju l     Aug    Sep     Oct    Nov   Dec
   may	be	finished	on	Dec.	28th	2011.	
                                                                                  Im por t v olu m e 2 009      Im por t v olu m e 2 01 0          Im por t pr ice 2 009     Im por t pr ice 2 01 0
   This investigation can date back to
   Nov. 16th 2010, when Anhui BBCA                                Note: The import volume in January, February, March, and April in 2009 was
   Biochemical Co., Ltd., Jilin Fuel Alcohol                           2,872 tonnes, 40 tonnes, 1,061 tonnes, and 758 tonnes respectively.
   Co., Ltd., Fukang Alcohol Co., Ltd., Jilin                                               Source: China Customs
   New Tianlong Wine Co., Ltd. and other                         Besides,	 with	 superior	 quality,	 DDGS	                                  of	 anti-dumping	 duty	 to	 be	 imposed.	
   large domestic DDGS manufacturers                             from the US is more popular in                                             But it is sure that the import volume of
   submitted the application to MCPRC,                           domestic market despite its high price.                                    DDGS	will	reduce	if	anti-dumping	duty	
   re g a r d i n g 	 r u n n i n g 	 a n t i - d u m p i n g	   Price of imported DDGS in Guangdong                                        is levied," said the insider.
   investigation into DDGS from the US.                          Province	 was	 USD306/t	 on	 Dec.	 31st	
   And the ministry has decided to carry                         2010,	 while	 ex-factory	 price	 of	 the	                                  Some	experts	view	that	domestic	DDGS	
   out the investigation, as DDGS output                         product in Shandong Province was                                           manufacturers can grab more profit
   of the applicants accounts for more                           USD226/t.	 And	 an	 insider	 from	 a	                                      as the product's price will be upraised
   than 50% of natioanl total. And it's                          DDGS trading company said that the                                         after	the	anti-dumping	duty	is	levied.	
   believed that the imported DDGS hurts                         color of domestic DDGS looks not so                                        It's predicted that domestic supply of
   domestic industry.                                            good as imported one, and its protein                                      DDGS can't satisfy its demand in 2011,
                                                                 content	may	be	insufficient	sometimes.	                                    and China needs to import the product.
   Since 2006, the import volume of                                                                                                         (Corn Products China News 1012,
   DDGS	has	kept	increasing	significantly,	                      However, given the price differential                                      P3) Thus, aided by the undersupply
   with 621 tonnes, 2,153 tonnes, 6,741                          becomes wider, many feed                                                   situation	 and	 anti-dumping	 duty,	
   tonnes, and 652,166 tonnes in 2006,                           manufacturers may have a stronger                                          market price of DDGS may be pushed
   2007, 2008 and 2009 separately.                               willingness to domestic products.                                          up. However, the undersupply situation
   Moreover, the number climbed to                               Thus,	if	China	does	levy	anti-dumping	                                     may make Chinese government not
   the peak of 2.9 million tonnes during                         duty on imported DDGS from the US,                                         levy	the	anti-dumping	duty	finally,	or	
   January and November in 2010.                                 domestic DDGS may get its opportunity                                      the duty may be not so high, as the
   (FIGURE7) Such a large import volume                          with much lower price. "It's hard to                                       government must guarantee the healthy
   has accounted for about 91% in total                          estimate the impact on the industry for                                    development of feed industry.
   output of DDGS in China.                                      now, because it depends on the rate

  CCM International Limited                                                                          9                                                   
        Corn Products China News                                                                                                                              Vol. 4 Issue 1. 2011

                                  Quantum	High-Tech	succeeds	in	getting	listed

D    ec. 22nd 2010 is the first day for
     J i a n g m e n 	 Q u a n t u m 	 H i g h - T e c h	
Biochemical Engineering Co., Ltd.
                                                                            FIGURE8:	Production	situation	of	FOS	in	Quantum	High-Tech,	2007	~	H1	2010

                                                                                   1 0 ,0 0 0                                                                                               1 4 0%
(Quantum	 High-Tech)	 to	 get	 listed	 in	
                                                                                     9 ,0 0 0
China's Growth Enterprises Market                                                                                                                                                           1 2 0%
                                                                                     8 ,0 0 0
in	 Shenzhen	 Stock	 Exchange.	 By	 this	                                                                                                                                                   1 00%
                                                                                     7 ,0 0 0
move, the company plans to raise funds

                                                                   Unit: tonne
                                                                                     6 ,0 0 0                                                                                               80%
to	 expand	 its	 fructooligosaccharide	
                                                                                     5 ,0 0 0
(FOS) and galactooligosaccharide (GOS)
                                                                                     4 ,0 0 0                                                                                               6 0%
                                                                                     3 ,0 0 0                                                                                               4 0%
Quantum	 High-Tech	 expects	 to	 raise	                                              2 ,0 0 0
                                                                                                                                                                                            2 0%
USD25	million	to	expand	the	capacity	of	                                             1 ,0 0 0
FOS	and	GOS	by	10,000t/a	and	2,000t/                                                        -                                                                                               0%
a respectively. As long as the funds are                                                                2 007             2 008                 2 009                  H1 2 0 1 0
available, their construction will be
started, and construction period for both                                                                   Ca pa cit y         Ou t pu t          Ca pa cit y 	Ut iliza t ion
these two production lines is 2 years.
                                                            Note: The FOS capacity in H1 2010 is 5,000 tonnes per half year, then after the
Eying the strong prospect of FOS and
                                                            technology upgrading, the capacity of FOS in the whole year of 2010 increased to 11,000
GOS industries, coupled with current full
capacity operation of these two products,                   tonnes per year.
the	company	expects	to	grab	more	market	                    Output	in	the	above	mentioned	figure	is	calculated	by	that	of	low	purity	FOS,	and	the	
shares and earn fatter profit through this                  high purity FOS has converted into low purity FOS.
expansion.		                                                Source:	Prospectus	of	Quantum	High-Tech

According to its prospectus, Quantum                                                             FIGURE9: Sales volume of FOS in China, 2007 ~ 2014
High-Tech	has	expanded	its	FOS	capacity	
                                                                                 1 2 0 ,0 0 0                                                                                                9 0%
for twice since 2007 (FIGURE8), and
its	 capacity	 utilization	 can	 always	 reach	                                                                                                                                              80%
                                                                                 1 0 0 ,0 0 0
around 100%, indicating current capacity                                                                                                                                                     7 0%
can't satisfy the market demand.
                                                                                  8 0 ,0 0 0                                                                                                 6 0%
                                                              Unit: tonne

                                                                                                                                                                                             5 0%
Chinese FOS industry will witness rapid                                           6 0 ,0 0 0
growth	 in	 next	 few	 years	 thanks	 to	 the	                                                                                                                                               4 0%

fast	development	of	health-care	products	                                         4 0 ,0 0 0                                                                                                 3 0%
and infant formula industry. According
                                                                                                                                                                                             2 0%
to	 a	 report	 from	 Beijing	 Leadership	                                         2 0 ,0 0 0
                                                                                                                                                                                             1 0%
Management Consulting Co., Ltd.
(Leadership), a strategic management                                                    -                                                                                                    0%
                                                                                                2 006    2 007   2 008     2 009      2 01 0    2 01 1       2 01 2     2 01 3    2 01 4
consultation company in China, 60% FOS                                                                                                (Est .)   (Est .)      (Est .)    (Est .)   (Est .)
was	 predicted	 to	 be	 used	 in	 health-care	
                                                                                                                          Sa les v olu m e      Gr ow t h r a t e
food and milk powder, and 30% in infant
formula in 2010. Besides, accompany with                     Note: The markedly lower growth rate in 2009 is caused by the “melamine scandal” in
higher and higher public's living standard                                                         2008.
and the tendency of aging population                                             Source:	Prospectus	of	Quantum	High-Tech
in China, more and more prebiotics are
needed. (FOS is a kind of prebiotics.) It's                 manufacturer	in	China,	enjoys	advantages	                                  low purity FOS can reach 4,000 tonnes per
estimated that the sales volume of FOS                      in these two products. Its FOS products'                                   year, while that of its biggest competitor,
in China can reach 100,000 tonnes in                        purity ranges from 50% to 95% with                                         namely	Yunnan	Jiansheng	Bio-technology	
2014 while it was 16,000 tonnes in 2009.                    powder	and	liquid	status,	while	few	other	                                 Co., Ltd., is only 2,500 tonnes per year.
(FIGURE9)	 Thus,	 Quantum	 High-Tech	                       companies can produce FOS with the
believes it can earn more profit through                    whole purity range. Besides, in 2009,                                      Besides,	Quantum	High-Tech	has	a	large	
expanding	the	capacity.	                                    the	 market	 share	 of	 Quantum	 High-                                     and stable client to support its good
                                                            Tech in Chinese FOS reached about 44%.                                     performance, namely Perfect (China) Co.,
Quantum	 High-Tech,	 the	 largest	 FOS	                     Quantum	Hign-Tech's	sales	volume	of	for	                                   Ltd. (Perfect China), which focuses on

   CCM International Limited                                                                        10                                          
      Corn Products China News                                                                                     Vol. 4 Issue 1. 2011

health-care	food	and	skin	care	products.	In	H1	2010,	the	
turnover from Perfect China accounted for 43% in total
turnover	of	Quantum	High-Tech.	And	accompany	with	
the increased demand for FOS, the company will keep
striving to find more large clients and manage well its
customer relationship to grab more market share.
                                                                       Make Fast Informed
It is worth noting that as FOS supply increases, its
price has started to decline since 2008. In H1 2010, the
                                                                       Business Decisions with
average price of low purity and high purity FOS was

USD1,059/t	and	USD2,329/t,	compared	with	USD1,224/
t	and	USD5,010/t	respectively	in	2008.		

Besides,	in	high	purity	FOS	field,	Quantum	High-Tech	
loads	relatively	high	pressure.	Meiji	Corp	and	OFAFTI	                      Biotechnologies
                                                                            China News
Corp	are	the	main	exporters	of	Chinese	imported	high	
purity	FOS,	which	are	the	major	large	competitors	for	
Quantum	High-Tech.	Besides,	Baolingbao	Biology	Co.,	
Ltd. (Baolingbao) plans to launch its high purity FOS
production	line	with	capacity	of	10,000t/a	at	the	end	of	               Monthly Newsletter with insightful analysis on
Jan.	2011,	which	may	become	another	major	competitor	
for the company in high purity market of FOS. Currently,                          Bio-Fuel
China's high purity FOS is mainly depended on imports.
As for the product of GOS, it also has good prospect. It                          Bio-Chemical
is estimated that GOS demand in China will climb to
6,000	tonnes	~	10,000	tonnes	in	next	2	~	3	years,	while	
current	capacity	of	domestic	GOS	is	smaller	than	2,500t/
a and sales volume of domestic manufacturers was only
1,500	tonnes	in	2009,	thus,	great	market	potential	exists	
in	this	field.

By	the	way,	Quantum	High-Tech	will	enter	health-care	                   For more details, please contact CCM at
products industry and as reported, the company will try       
to	merge	other	prebiotics	manufacturers	to	expand	its	
business scale.

                             Meihua Group's dream of listing comes true

O   n Dec. 24th 2010, China Securities Regulatory Commission
    (CSRC)	published	its	approval	that	Wuzhou	Minovo	Co.,	Ltd.	
(Wuzhou	Minovo)	merges	Meihua	Biotechnology	Group	Co.,	Ltd	
                                                                            and	 the	 rest	 will	 be	 held	 by	 Wuzhou	 Group	 (2.19%)	 and	 the	
                                                                            shareholders	of	public	share	of	Wuzhou	Minovo.	(8.54%)

(Meihua Group) through issuing additional shares of 900 million,            Actually,	Wuzhou	Minovo,	a	listed	company	in	Shanghai	Stock	
which	signifies	Meihua	Group	succeeds	in	Backdoor	listing.                  Exchange,	was	engaged	in	producing	electric	equipments	before	
                                                                            merging, and the company performed not well in 2007 and 2008
The	merger	of	Wuzhou	Minovo	and	Meihua	Group	can	date	back	                 with	meager	profit.	So	it	expects	to	increase	its	profit	and	develop	
to Mar. 2009, and it includes two mutually conditional parts: On            better	by	dint	of	the	transition	from	electric	equipments	industry	
one	hand,	Wuzhou	Minovo	sells	its	most	assets	to	Wuzhou	Group,	             to	 fermentation	 and	 amino	 acid	 industry	 which	 enjoy	 great	
the	 largest	 shareholder	 of	 Wuzhou	 Minovo	 before,	 with	 value	        prospect as the company believed.
of	USD37	million.	On	the	other	hand,	Wuzhou	Minovo	merges	
Meihua Group through issuing 900 million additional shares                  Monosodium glutamate (MSG) industry, an important
with	 value	 of	 USD874	 million.	 And	 after	 the	 merger,	 Wuzhou	        fermentation industry, is developing well at present. Its average
Minovo will be renamed as Meihua Biotechnology Group Co., Ltd.              annual growth rate of output during 2004 to 2008 reached
(New Meihua Group) and at the same time, Meihua group will be               13.6%, and its national total output from Q1 and Q3 in 2010
revoked its corporate capacity. In addition, the shareholders of            reached about 1.8 million tonnes, increasing by 17.7% over the
Meihua Group totally own 89.27% shares of New Meihua Group,                 corresponding period of 2009. In addition, it's predicted that the

   CCM International Limited                                           11                              
  Corn Products China News                                                                                       Vol. 4 Issue 1. 2011

   total output of MSG in 2010 may reach 2.1 million tonnes.            expects	to	expand	its	businesses	to	a	further	step	through	
                                                                        listing. The MSG's turnover of Meihua Group was about
   Moreover, as the government has restrained development               USD574 million and USD598 million in 2008 and 2009
   of	 corn	 deep-processing	 industry	 since	 2007,	 along	            respectively, and its market share during the same period
   with the close attention paid by the government to MSG               reached 18.1% and 14.6%. (TABLE6)
   industry for its high pollution, the number of MSG
   manufacturers reduced from 200 to about 20, which                    After	 being	 listed,	 Meihua	 Group	 plans	 to	 expand	 its	
   relaxes	the	intense	competition	situation	in	this	industry.	
                                                              	         businesses.	 Right	 now,	 the	 company	 has	 an	 under-
   Currently, the total output of top 12 manufacturers                  construction	project.	The	investment	of	the	first	stage	of	
   accounts for about 89% of the national total.                        this	 project	 (including	30,000t/a	 capacity	 of	 threonine,	
                                                                        30,000t/a	capacity	of	lysine	and	160,000t/a	capacity	of	
   In addition, some leading MSG manufacturers, which                   glucose) is USD211 million and it is planned to complete in
   also produce glutamic acid (GA) as well, the raw material            April	2011;	that	in	the	second	stage	(40,000t/a	threonine,	
   of MSG, reduce their sales volume of GA and use them to              6,000t/a	nucleotide,	and	160,000t/a	glucose)	is	USD151	
   produce MSG by themselves in order to upraise their MSG              million and it is planned to start in May 2011 and launch
   market share. This move reduces MSG output of some                   in May 2012. The company also has interest in inosine,
   small producers whose GA is sourced from outside. Thus,              vernine, tryptophan, and arginine production in the future.
   the industrial concentration becomes higher and higher.
                                                                        Meihua	Group	is	not	just	involved	in	MSG	industry,	but	
   The high industry concentration contributes to high gross            also in other amino acid products, such as threonine,
   profit	margin	and	market	price	for	the	leading	companies.	           corn	byproducts	(maize	embryo),	and	feed.	Besides,	the	
   The	sales	gross	profit	margin	of	the	top	two	manufacturers,	         company also produces upstream industry products, like
   Fufeng Group Limited and Meihua Group, reached 30%                   ammonia, and it even generates electricity, which makes
   and 29% in 2009, while it was 18% and 22% in 2008                    it	 enjoys	 cost	 advantage.	 At	 present,	 the	 company	owns	
   respectively.	 Average	 MSG	 price	 is	 about	 USD1,360/t	           two	major	production	bases,	located	in	Tongliao	City	and	
   currently,	compared	with	about	USD950/t	and	USD1,564/                Bazhou	 City	 respectively,	 with	 MSG	 capacity	 350,000t/
   t in corresponding period of 2009 and 2010.                          a,	threonine	capacity	35,000t/a,	feed	capacity	300,000t/
                                                                        a,	 corn	 byproducts	 capacity200,000t/a,	 and	 ammonia	
   Meihua Group is a main producer in MSG industry and                  capacity	80,000t/a.

                  TABLE6: Market situation of top 6 manufacturers in MSG industry in China, 2008 ~ 2009
                                                                                      Sales volume, tonne         Market share, %
     NO                      Company                            million USD
                                                               2008     2009            2008         2009         2008      2009

      1   Fufeng Group Limited                                     516         676       332,871      661,425       20.1       25.9

      2   Meihua Biotechnology Group Co., Ltd.                     574         598      369,682        371,614      18.1       14.6

      3   Linghua Group Incorporated Company                       459         417       151,769      268,675        8.2       10.5

      4   Shandong Qilu Monosodium Glutamate Group                 264         387      144,624       182,246       12.2        7.1

      5   Henan Lianhua Monosodium Glutamate Co., Ltd.             333         362      224,373       287,585        9.0       11.3

      6   Xinle Monosodium Glutamate Foods Company                 276         314       166,128       191,316       7.8        7.5

                                        Note: The market share is calculated by output.
                                                   Source: Meihua Group

                        CCM’s Coming Market                                   Survey of High Intensity Sweeteners in Asia
                        Reports Announcement                                  Pacific
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CCM International Limited                                          12                              
      Corn Products China News                                                                                                          Vol. 4 Issue 1. 2011

                            Shanxi	Huarong	initiates	60,000t/a	citric	acid

O    n	 Dec.	 18th	 2010,	 Shanxi	 Huarong	
     Citric	acid	Chemicals	Co.,	Ltd.	(Shanxi	
Huarong) held a foundation stone laying
                                                 PICTURE1:	Foundation	stone	laying	ceremony	of	Shanxi	Huarong’s	anhydrous	citric	acid	
                                                                                                           project,	2010

ceremony	 of	 its	 60,000t/a	 anhydrous	
citric	 acid	 project	 (PICTURE1),	 which	
signifies	that	the	company	begins	to	march	
into China’s citric acid industry.

Located in Dali Science Industrial Park
with an area of 22 hectares, the anhydrous
citric acid plant mainly produces
anhydrous citric acid, compound feed
and	liquid	carbon	dioxide	products,	with	
capacity	 of	 60,000t/a,	 68,000t/a	 and	
26,000t/a	 separately.	 Total	 investment	
for this plant is about USD75 million.
An	 executive	 officer	 in	 Shanxi	 Huarong	
disclosed	that	the	project	can	be	put	into	
operation at the end of 2011, and it’s
estimated that the company can contribute
to	annual	tax	payment	of	USD8.6	million.

It's reported that citric acid production
technology	 in	 this	 company	 is	 quite	
advanced, which can reduce the corn
consumption, energy consumption and                                                                Source:	Shanxi	Huarong
water consumption by 13%, 35% and 60%            manufacturers may witness an opportunity                               the development of China's citric acid
separately per tonne citric acid production,     by dint of the demand increase. And                                    industry.
indicating that its manufacturing cost can       the	 quality	 of	 our	 anhydrous	 citric	 acid	
be	as	low	as	USD226/t.                           product	satisfies	BP93/BP98	standard	and	                              However, the manufacturers can find the
                                                 GB/T8269-1998	 standard,	 and	 I	 believe	                             ways	to	cope	with	the	anti-dumping	issues,	
The	 executive	 officer	 also	 revealed	 that	   the product will have a good performance                               such	 as	 expanding	 the	 market	 where	 no	
both domestic and international markets          by	then.''	said	by	the	executive	officer.	                             anti-dumping	and	anti-subsidy	duties	are	
are the targets for the company's citric                                                                                imposed, entrepot trade, etc. In 2010, the
acid products. Although some countries           However, China's citric acid industry has                              annual growth rate of China's citric acid's
levy	anti-dumping	and	anti-subsidy	duties	       situated in overcapacity currently, and                                export	volume	reached	9%,	while	it	was	2%	
on	China's	citric	acid,	Shanxi	Huarong	still	    it's not so easy for the new manufacturers                             and 3% in 2009 and 2008 respectively.
has	confidence	in	the	international	market,	     to win their own place in this industry.
thanks to its huge demand for citric acid.       In 2009, the total domestic capacity of                                The	executive	 officer	 in	 Shanxi	Huarong	
It's reported that the global demand for         citric	 acid	 was	 about	 1,200,000t/a,	 and	                          didn't disclose the company's measures to
citric acid is about 1.3 million tonnes, and     about 73% of Chinese citric acid was                                   cope	with	other's	countries'	anti-dumping	
its annual growth rate will keep at 5% ~ 7%      exported.	What's	worse,	some	countries,	                               issue	 at	 present,	 but	 he	 expressed	 the	
in	next	few	years.                               like	 the	 US	 and	 EU,	 levy	 anti-dumping	                           market environment may change after a
                                                 a n d 	 a n t i - s u b s i d y 	 d u t i e s 	 o n 	 C h i n a ' s	   year since the products in this plant is to
''As the largest citric acid production          citric acid products, which reduces the                                be marketed a year later, and the company
base in the world, China's citric acid           profit of manufacturers and restrains                                  will make corresponding tactics by then.

   CCM International Limited                                                     13                                        
  Corn Products China News                                                                                                                 Vol. 4 Issue 1. 2011

                   Alliance for China's amino acid industry established

  A    mino Acids Industry Technology
       Innovation and Strategic Alliance
  (the Alliance) was established at
                                                      PICTURE2: Establishment ceremony of Amino Acids Industry Technology
                                                                                 Innovation and Strategic Alliance, 2010

  the end of 2010, initiated by China
  Fermentation Industry Association
  (CFIA). (PICTURE2) And it's believed
  that the Alliance can bring positive
  effect on China's amino acid industry.

  So far, there are 65 members in the
  Alliance, which is involved in the
  manufacture, trade, and research
  of amino acids and some leading
  companies	 also	 join	 in	 the	 Alliance,	
  like Baolingbao Biology Co., Ltd.
  Actually, only the members in CFIA
  can	join	in	the	Alliance,	disclosed	by	
  an	 executive	 officer	 in	 CFIA.	 So	 if	 a	
  company wants to become a member
  of the Alliance, it has to accede to
  CFIA	firstly.	Then	it	should	submit	an	
  application to the Alliance, and after                                 Source: China Fermentation Industry Association
  being approved by the Alliance, the
                                                  situation through establishing the                             S e c o n d l y , 	 t o 	 c o - s h a r e 	 t h e 	 n e w	
  company can become a member of it.
                                                  Alliance. The Alliance will be engaged                         technology and information amongst
  The	executive	officer	also	said	that	the	
                                                  in the following work to play its role in                      members in the Alliance, and
  applicant has to be involved in amino
                                                  2011.                                                          strengthen cooperation with some
  acid industry, and foreign company is
                                                                                                                 research institutes, like college and
  not restrained.
                                                  Firstly, to promote technical                                  scientific research institution. The
                                                  cooperation and make breakthrough                              Alliance shall fund to support the R
  The Alliance is to facilitate healthy,
                                                  in core technologies. The Alliance will                        & D by research institutes or leading
  fast and strong development for
                                                  focus on some research of advanced                             manufacturers, and the new research
  China's amino acid industry. Now
                                                  manufacturing technology, like clean                           a c h i e v e m e n t s 	 w i l l 	 b e 	 c o - s h a r e d	
  although there are over hundreds
                                                  and	 energy-saving	 production,	 bio-                          amongst members.
  of large amino acid manufacturers
                                                  manufacturing, chromatographic
  in China, whose annual production
                                                  separation, membrane filtration                                Thirdly, to establish a training system
  value totally can reach USD6.76
                                                  technologies. It will also define some                         for members in order to cultivate
  billion,	 and	 their	 tax	 payment	 also	
                                                  standards for this industry and pay                            talented people in amino acid industry.
  can reach USD0.75 billion per year,
                                                  close	attention	to	the	industrialization	
  the innovation capability of them is
                                                  of some new technologies and                                   Fourthly,	 to	 build	 up	 a	 pre-warning	
  poor, especially in the aspect of new
                                                  high	 value-added	 products,	 such	                            mechanism of amino acid industry
  technology's R&D, energy saving,
                                                  a s 	 D - a m i n o 	 a c i d , 	 β - a m i n o 	 a c i d ,	   risk and ally members to cope with
  environmental protection, etc.
                                                  nonprotein amino acid, small peptide,                          industry risks. And the Alliance will
                                                  etc.                                                           also enhance communication between
  Thus, CFIA and relative government
                                                                                                                 members,	like	high	profile	visit.
  departments try to ameliorate this

                           CCM’s Market Reports                                           Production, Market & Benchmarking of
                           Announcement                                                   Xanthan Gum in China
                            For more details, please contact CCM at
                                                                                          The Survey of Sorbitol in Asia Pacific
                                                        Production and Market of Xylitol in China

CCM International Limited                                                    14                                              
     Corn Products China News                                                                                           Vol. 4 Issue 1. 2011

                          Xiwang	Food	to	expand	refined	corn	oil	capacity

      O     n Jan. 5th 2011, Hunan Ginde
            Development Co., Ltd. (Hunan
      Ginde) published a note that its board
                                                                  TABLE7: Performance of Xiwang Food, 2008~H1 2010
                                                                           Sales volume, tonne
                                                                     Corn oil in      small-package           Turnover,      Net profit,
                                                                                                             million USD     million USD
      meeting approved a proposal about                                bulk             corn oil
      expanding	 150,000t/a	 refined	 corn	              2008              75,800                   4,400              140                6
      oil capacity of Xiwang Food Co., Ltd.
                                                         2009              64,600                   17,900             148               11
      (Xiwang	Food),	which	is	the	wholly-
                                                        H1 2010            29,100                   17,300              74                6
      owned subsidiary of Hunan Ginde
      now.	 But	 this	 project	 still	 needs	 the	                                Source: CCM International
      final	confirmation	in	the	first	interim	       the	 output	 of	 corn	 oil	 in	 China	 just	     Food believe that it is high time to
      general meeting of stockholders                accounted for 1% in total output of              expand	its	corn	oil	capacity.	For	now,	
      in	 2011.	 "This	 project	 is	 almost	         major	 vegetable	 oils	 in	 2009,	 while	        the company is the largest corn oil
      confirmed because the company                  the number was 10% in the US. If the             manufacturers in China with capacity
      needs more capacity to satisfy the             proportion can reach 4% in China, the            of	refined	corn	oil	and	small-package	
      market demand in future." said by              annual	demand	for	corn	oil	will	jump	            corn	 oil	 of	 about	 200,000t/a	 and	
      Miss	 Huang,	 executive	 officer	 in	          to	1	million	tonnes,	which	exceeds	the	          150,000t/a	 respectively.	 And	 after	
      Hunan Ginde.                                   current capacity much.                           the	 expansion	 project	 is	 completed,	
                                                                                                      Xiwang	 Food	 will	 own	 350,000t/
      On Dec. 28th 2010, Department of               Therefore, Chinese corn oil                      a refined corn oil capacity. And it's
      Public Offering Supervision in China           manufacturers are taking efforts                 believed that Xiwang Food will also
      Securities Regulatory Commission               to	 expand	 their	 market	 share	 and	           expand	 the	 capacity	 of	 its	 small-
      approved Hunan Ginde to purchase               increase brand awareness in order                package corn oil, since small packaged
      the stock ownership of Xiwang                  to grab more profit. Xiwang Food is              oil,	the	major	product	of	the	company,	
      Food. Xiwang Group is the largest              the most active one. The latest move             enjoys	high	profit	margin	and	strong	
      shareholder of Hunan Ginde, and it             is that Xiwang Food donated about                market potential.
      also possesses Xiwang Food, thus,              USD52,790 and corn oil valuing
      Xiwang Group's corn oil business               USD45,249 to some impoverished                   Besides,	 the	 company	 expects	 to	
      can finally go public by this way, as          children with congenital heart disease           achieve 100,000 tonnes and 150,000
      Hunan Ginde's corn oil business has            on Dec. 23rd 2010, and by this move,             tonnes	 sales	 volume	 for	 its	 small-
      gone public.                                   corn oil and Xiwang Brand spread                 package corn oil respectively in
                                                     more widely. The company also plans              2011 and 2012. It believes its brand
      Actually, corn oil market has strong           to increase its promotion funds to               "Xiwang"	 can	 exceed	 Arawana	 and	
      prospect in the future, and current            USD38 million in 2011 from USD15                 Fortune to become the top 1 brand
      total capacity in China can't satisfy          million in 2010. Aided by such a                 in Chinese corn oil market in 2011.
      its potential demand. During 2000 to           series of efforts, Xiwang Food has               And some institutes estimate Xiwang
      2009, the compound annual growth               created outstanding achievement in               Food's	profit	can	reach	USD27	million	
      rate of corn oil's output reached              2010,	with	net	profit	of	USD6	million	           and USD38 million in 2011 and 2012
      over 13%, much higher than average             in	the	first	half	of	2010.	(TABLE7)	             respectively.
      growth rate of 5.6% for other vegetable
      oils. But according to the data from           The great market potential and
      Food	 and	 Agriculture	 Organization,	         increased sales volume make Xiwang

                           Sucrose price or to keep uptrend in near future

      A   verage	sucrose	price	went	uptrend	to	USD1,086/t	on	Jan.	13th	2011	from	USD1,056/t	on	Nov.	25th	2010.	(FIGURE10)	
          The	quotation	of	sucrose	in	Nanning	City,	Wuhan	City	and	Ningbo	City	was	about	USD1,054/t,	USD1,088/t,	and	
      USD1,085/t	separately.	It's	predicted	that	it	will	maintain	this	uptrend	in	near	future	and	stay	at	a	high	level	in	2011,	
      aided by the following factors.

   CCM International Limited                                             15                                
     Corn Products China News                                                                                                    Vol. 4 Issue 1. 2011

      During November 2010 and April                                        FIGURE10: Sucrose price in China, Nov. 2010 ~ Jan. 2011
      2011	(2010/2011),	supply	and	demand	
      gap of sucrose in China may reach 2                       1 ,1 4 0
      million tonnes, which will drive up its                   1 ,1 2 0
      price. According to the data published
                                                                1 ,1 00
      on Jan. 7th 2011 by China Sugar

      Association (CSA), the total output                       1 ,08 0
      of	sucrose	in	2010/2011	is	estimated	                     1 ,06 0
      to reach 12 million tonnes, while the
                                                                1 ,04 0
      sales volume is predicted to be 14
      million tonnes.                                           1 ,02 0

                                                                1 ,000
      Fast development of its downstream                                    1-    8-    15-    22-   29-    6-    13-     2 0-    27 -    3-    1 0-
      industries increased its demand. It's                                Nov   Nov    Nov    Nov   Nov   Dec    Dec     Dec     Dec    Ja n   Ja n
      estimated that the output of biscuit,
      cake and beverage have increased by                                                     Source: CCM International
      about 38%, 40% and 26% separately
                                                  Besides,	 the	 freezing	 weather	 in	                     predicted to reach 170 million tonnes,
      in 2010 over 2009, thus the demand
                                                  Guangxi	 Province	 recently	 also	 has	                   up 7.3% over the corresponding
      for sucrose may increase by 10%
                                                  negative impact on sugarcane's output                     time	 of	 2009-2010	 and	 its	 global	
                                                  in	the	next	production	period.	Until	                     consumption	will	just	increase	by	2%	
                                                  Jan. 9th 2011, the affected area of                       to 167 million tonnes, so sucrose has a
      Owing	 to	 the	 drought	 in	 Guangxi	 in	
                                                  sugarcane	in	Guangxi	totally	reached	                     slight surplus in the world, which can
      2010, the most important sucrose
                                                  130,000 hectares, which makes the                         hold down its international price.
      production base in China, the sugar
                                                  public worry about its output in the
      content	in	sugarcane	in	Guangxi	was	
                                                  future, thus driving up its price.                        In general, sucrose price in China
      low, which also affects the output of
                                                                                                            may still run at a high level in 2011,
      sucrose. In previous year, 10 tonnes
                                                  However, there is still good news to                      and it will drive up the prices of
      sugarcane can produce 1 tonne
                                                  hold down the price. It is predicted                      its substitutes, like high fructose
      sucrose,	but	in	2010/2011,	it	needs	12	
                                                  that	India	will	export	about	1	million	                   corn syrup (HFCS), and Glucose
      tonnes sugarcane. The total output in
                                                  tonnes sucrose during Nov. 2010 to                        Monohydrate, whose average prices
      the last two months in 2010 all over
                                                  Oct.	2011,	and	become	a	net	exporter	                     in	 Jan.	 2011	 reached	 USD475/
      the country was only 2.94 million
                                                  of sucrose during this period, thanks                     t	 (Content:	 42%)	 and	 USD550/t	
      tonnes, which is lower than 3.09
                                                  to the sugarcane harvest in this                          respectively, up 2.1% and 1.8% over
      million tonnes in the corresponding
                                                  country. And global output of sucrose                     Dec. 2010.
      period of 2009.
                                                  during Nov. 2010 and Oct. 2011 is

Corn Supply

                               Analysis into China's corn market in 2011

      I  t's	well	known	that	corn	price	in	China	has	kept	ascending	in	2010,	which	was	USD283/t	on	Jan.	1st	2010	in	Shandong	
         Province,	while	it	climbed	to	USD308/t	on	Dec.	31st	2010.	Entering	2011,	the	price	of	corn,	key	raw	material	of	corn	
      products, will be still the spotlight. Thus it's necessary to predict how corn market will go in 2011. As CCM predicted, corn
      price may maintain current high level due to its undersupply situation.

      The demand for corn in 2011 will keep increasing. Feed industry, the largest consuming sector of corn, is developing
      well and fast, and it needs more corn in 2011. It's estimated that over 160 million tonnes corn were consumed by feed
      industry, increasing by 7% over 2009. If calculated by this development rate, feed industry will consume over 1.7 million
      tonnes corn in 2011.

      Corn	consumption	in	corn	deep-processing	industry	also	will	increase	in	2011.	China's	food	industry	has	rebounded	
      from	financial	crisis	and	melamine	scandal	occurred	in	2008,	so	the	demand	for	some	corn	products,	like	starch,	starch	
      sugar, sugar alcohol, has also increased in 2010, and it will keep this increasing trend in 2011. Actually in 2010, the corn
      consumption	in	deep-processing	industry	was	estimated	at	about	43	million	tonnes,	up	8%	over	2009.	In	2011,	it	may	

   CCM International Limited                                                       16                              
     Corn Products China News                                                                                      Vol. 4 Issue 1. 2011

      reach 46 million tonnes if calculated by this development rate.

      China	needs	to	replenish	the	national	corn	stock.	In	order	to	increase	corn	supply	and	stabilize	its	price,	China	began	to	
      auction national temporarily reserved corn in April 2010, and the total transaction volume until Dec. 28th 2010 reached
      14.5	million	tonnes	in	2010.	Besides,	total	transaction	volume	in	national	trans-province	auction	in	2010	reached	10.7	
      million	tonnes.	What's	more,	a	quantity	of	corn	in	national	temporary	reserves	auctioned	has	sourced	from	national	
      reserve since June 11th 2010. It's reported that the national corn reserves remains not too much, and it needs to be
      replenished in 2011 in order to guarantee the national food security.

      However, rich harvest in 2010 is good news to drive down the price. It's predicted that corn yield in 2010 may reach
      158~168 million tonnes, increasing by 2% ~ 8% over last year. But, it still can not satisfy the demand in 2011. Hence, the
      government	is	predicted	to	take	the	following	measures	to	stabilize	corn	price.		

      First, the possibility of the government to implement the national corn temporary reserve policy in 2011 is slim. The
      purpose of the government to implement this policy in last two years was to protect the interest of farms as corn price at
      that time was too low, and since corn price in 2011 is obviously high and farms' interest can be guaranteed, it has little
      necessity to adopt this policy.

      Second,	 the	 development	 of	 corn	 deep-processing	 industry	 will	 still	 be	 restrained	 in	 2011.	 Chinese	 government	
      takes healthy development of feed industry as a priority; thus, take current undersupply situation into account, corn
      consumption in corn deep processing industry will be limited.

      Third, China will increase the import volume of corn in 2011. Until November, the total import volume of corn in 2010
      has	already	reached	about	1.6	million	tonnes,	and	it's	estimated	that	the	number	in	2011	may	exceed	it.

      Besides,	 the	 government	 will	 also	 release	 some	 policies	 to	 stabilize	 corn	 price,	 such	 as	 encouraging	 corn	 planting,	
      reducing the cost in the whole supply chain. And although China's money and credit policy in 2011 is "Prudent", rather
      than "Moderately loose" in 2010, the credit for agricultural products is not so tight in order to ensure agricultural
      products supply.

New Technology & New Products & R&D

              New	energy-efficient	fermentation	biotechnology	promoted

      A   new	 energy-efficient	 fermentation	 biotechnology	
          is	 listed	 in	 "List	 of	 energy-saving	 technology	
      promoted by the Nation (the List)", published by National
                                                                           and energy consumption are saved.

                                                                           The	second	part	is	to	use	compressed	air	to	mix	material	
      Development and Reform Commission (NDRC) at the                      fluid	 in	 fermentation,	 instead	 of	 mechanical	 mixer.	 A	
      end of Nov. 2010. The List includes 30 new energy saving             draft tube will be set in the fermentation tank, and the
      technologies involving in 11 industries, such as chemical,           compressed air will enter the tank from bottom. By dint of
      biotechnology, etc.                                                  the	pressure	of	compressed	air,	the	fermentation	liquor	in	
                                                                           the	draft	tube	will	be	pushed	to	flow	from	lower	to	upper,	
      The new fermentation biotechnology can reduce 20%                    and	after	the	liquor	reaches	the	top	of	the	tube,	it	will	flow	
      of	 energy	 consumption,	 and	 is	 cost-effective	 for	 the	         to the bottom in the space between the tube and tank, and
      manufacturers.	 It	 includes	 two	 major	 parts.	 The	 first	        then keeps being pushed up again. This cycle can make the
      part is new air compression of refrigeration technology.             liquor	be	mixed	perfectly,	and	saves	energy,	besides,	it	also	
      In the refrigeration procedure of fermentation, the new              can lower down the possibility of infecting bacteria.
      technology is to use compressed air as refrigerant. When
      the compressed air released, its temperature around will             Take	800	steres	fermentation	tank	for	example,	this	new	
      decrease to 110 centigrade degree from 180 centigrade                fermentation biotechnology can save 170 steres water per
      degree.	And	at	the	mean	time,	quantities	of	heat	will	be	            day, and steam consumption can reduce to 292 tonnes
      released when compressing air, and this heat can be used             from 320 tonnes per tank, and power consumption also
      to dry the fungus dreg, instead of using steam. Thus, water          can reduce to 19,391kwh from 29,593kwh per tank, and the

   CCM International Limited                                          17                               
  Corn Products China News                                                                                  Vol. 4 Issue 1. 2011

   refrigerating time can reduce to 3.5 hours from 18 hours.        energy consumption to 0.8 tce from 1 tce in one tonne
                                                                    product. Moreover, it not only helps the manufacturers
   Thus, if this new fermentation biotechnology can be              reduce their manufacturing cost, but also win some
   applied in 60% of the fermentation industry, it can save         preferential treatment from the government.
   energy	of	1.2	million	tce	(ton	of	standard	coal	equivalent)	
   each year. It's predicted that the total energy consumption      Since this new technology is being greatly promoted by
   in fermentation industry all over the country can reach          the government, if manufacturers adopt it, they may
   25 million tce, and the energy consumption in the                enjoy	 more	 preferentials	 from	 the	 government,	 like	 tax	
   fermentation procedure will account for 40% of the total.        preference.
   And this new fermentation biotechnology can reduce the

CCM International Limited                                      18                              
       Corn Products China News                                                                           Vol. 4 Issue 1. 2011

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