November 24, 2006

 

China's Luzhou Bio-chem to boost HFCS production

 

 

Luzhou Bio-chem, one of China's biggest corn sweetener producers, has plans to boost production of high fructose corn syrup (HFCS) to meet growing use of the sweetener in Chinese beverages.

 

The Singapore-listed company said this week that it had completed enhancements to its Shaanxi and Henan plants that would allow it to produce both HFCS and high maltose syrup.

 

HFCS and maltitol earn higher prices in the ingredients market than other corn sweeteners and Luzhou has already converted its Shandong and Liaoning plants to produce these higher value products.

 

The company has also entered into agreements to supply HFCS to leading food and beverage manufacturers in China.

 

China's production of high fructose syrup is about 100,000 tonnes every year, according to Hu Guohua, secretary general of the country's additives association.

 

Though a low level compared with the US and Europe, consumption has been growing in line with the strong growth in China's beverage industry.

 

Corn sweeteners in general have also seen a strong surge in demand this year with high sugar prices leading food makers to seek alternatives.

 

During the last year, sugar prices increased to RMB6,000 (US$763) per tonne, up from RMB2,600 (US$330) the previous year, after a drought reduced a significant part of China's sugarcane crop. Although prices have dropped again to about RMB4,000 per tonne, (US$508) they are set to stay high into the coming year.

 

According to China Sugar Association chairman Jia Zhiren, starch-based corn sweetener could drastically replace natural sugar consumption in China.

 

Luzhou's revenue for corn sweeteners increased by 45 percent during the first nine months of the year to RMB704.4 million (US$90 million), thanks to a 60 percent increase in demand from food and beverage customers.