Longtime CoQ10 supplier Kaneka has announced a price increase in advance of competitor’s Mitsubishi’s exit from the market.
Mitsubishi Gas Chemical announced last year that it will exit cease CoQ10 production in March, 2013. In response, Kaneka will raise prices by 10% effective in mid January, 2013.
“The impending Mitsubishi withdrawal from the CoQ10 market will shift 15 to 20 metric tons of annual volume to Kaneka and other suppliers,” said Richard Weis, vice president of sales and marketing for Kaneka.
"We have seen a decisive upward trend in the price of CoQ10 over the past 18 months. Although Kaneka regrets any increase in price to its customers, mounting stressors on margin and supply have necessitated that we follow the market up," he said.
Unsustainably low prices
John Jarmul, U.S. Marketing Manager for Kaneka, told NutraIngredients-USA in October that CoQ10 bulk prices have been unsustainably low for years, and Mitsubishi’s retreat from the market reinforces that fact.
"We have seen an upward trend in the price of CoQ10 over the past year, and Mitsubishi’s departure will surely continue that movement," he said.
"The Mitsubishi withdrawal from the CoQ10 market will certainly have an effect on supply, especially for those customers that require material is of U.S. or Japanese origin. Kaneka is now the sole CoQ10 manufacturer in both the United States and Japan," he noted.
“Kaneka might be playing the trump card because they know that their quality is the best available,” CoQ10 expert Brian Lipshutz, PhD, a professor of chemistry at the University of California Santa Barbara, told NutraIngredients-USA.
“There are places that will not buy Chinese material. They can raise their prices and get away with it,” he said.
Washout from legal battle
This latest development in the CoQ10 market follows the outcome of a long, involved patent fight. In October, the International Trade Commission dismissed a case brought by Kaneka against seven suppliers of the ingredient who allegedly infringed on Kaneka’s US patent. In addition to Mitsubishi, the complaint named Zhejiang Medicine Co. Ltd., ZMC-USA, LLC, Xiamen Kingdomway Group Company, Pacific Rainbow International, Inc, Maypro Industries, Inc., and Shenzou Biology & Technology Co., Ltd. The court ruled that Kaneka’s patent was valid, but the competitors’ processes did not infringe on it.