Galactic j-v doubles lactic acid capacity in China
joint venture plant in China to meet rising demand for the additive
in food production.
The company opened a new lactic acid plant in China just two years ago as part of a joint venture, called B&G, with BBCA Biochemical. In a short time it has managed to secure 50 per cent of the domestic market and has also built up a significant market share in surrounding Asian markets, according to general manager Jean-Christophe Bogaert. "The market in China is growing by about 15 per cent each year but our sales are growing much faster," he told AP-Foodtechnology.com. "We have very competitive production costs, partly because we're integrated with a major corn processing site owned by BBCA Chemical," he explained. "But we also have better quality products than those offered by the domestic suppliers. We have proved the advantages of our products to our China customers." Lactic acid is used extensively by the food industry as a flavour agent, preservative, and acidity adjuster in foods. Sodium lactate, a humectant, is used in cakes to produce a tender crumb and to reduce staling and the ingredient is also increasingly used by meat and fish processors as an anti-microbial. The global market for lactic acid in foods is estimated at 275,000 tons with average annual growth of 10 per cent. But Bogaert says "the tremendous development of processed food is boosting demand for lactic acid in Asia especially". Around 80 per cent of B&G's production currently goes to the food industry, with about half sold in China and the rest exported to south-east Asia, the US, Middle East and Europe. But the company is also looking to increase its sales to the feed industry in China where it would be used to replace antibiotics. In addition it is counting on rising demand for PLA (poly-lactic acid), a biodegradable polymer made of lactic acid that will see growing interest with soaring costs for more traditional plastics. Already the biggest L-lactic acid production unit in Asia, with capacity of 30,000 tons, the expansion at B&G's plant in Anhui province will be finished during 2007. The world's biggest lactic acid producer Purac is also building a new plant in eastern Thailand to meet demand for the world market. The €98 million investment will provide the firm with a lactic acid capacity of 100,000 tons undiluted, and 15,000 tons for sodium/potassium lactate. "This is a completely different economy of scale to [B&G's] 60,000 tons," commented Haiko Zuidhoff, managing director of Purac's Asia-Pacific operations. "And it could be doubled to 200,000 tons in the future." Galactic claims to be the world's second biggest producer of lactic acid and derivatives with plants in Belgium and the US. Its joint venture partner BBCA Biochemical, listed on the stock exchange in Shenzhen, is the world's biggest citric acid producer and also makes starch, amino acids, fuel ethanol and sweeteners from cereal grains.