December 13, 2021
Lockdown in Shangyu district, Zhejiang threatens vitamin A, E production
Starting December 11 1300 hr, Shangyu district, Shaoxing city, Zhejiang province has closed all entrances and exits. Due to the aggravation of the Covid pandemic, China tightened controls in Shaoxing among other places.
As of December 11, Shaoxing city reported a total of 52 local confirmed covid cases, out of which 51 confirmed cases in Shangyu district and 10 cases were asymptomatic infections.
By December 10, many enterprises in Shangyu district have suspended production or cut output.
NHU and Zhejiang Pharmaceutical are The world's two major vitamin A and E manufacturers, and both have production plants in Shaoxing. NHU has two major plants are in Shangyu district and Xinchang county of Shaoxing city. In a media interview, NHU revealed that its plant in Shangyu received an official notice to orderly suspend production on the afternoon of December 9. The company said that its production in Xinchang county was not affected and that it was still evaluating the impact of the abrupt notice.
Meanwhile, Zhejiang Pharmaceutical claimed that the company's production had not been affected by the pandemic lockdown measures, and its facilities in Xinchang was operating normally.
As of last Friday (December 10), prices of vitamin A and E remained stable in the domestic market. However, following the announcement of the road block in Shangyu district on December 11 afternoon, prices are expected to soar amid supply concerns.
Several vitamin products, other than calcium pantothenate and inositol, have softened in prices lately. However, should the production and delivery of vitamin products be disrupted due to stricter pandemic controls, prices are likely to rebound in the coming period.
Occupying 1,500 mu of land, NHU's production plant in Shangyu district manufactures VA, VE, PPS, PPA and astaxanthin among other products. Its facilities in Xinchang occupies 800 mu of land and produces mainly vitamin E, D3, biotin and coenzyme Q10. These plants have the capacity to produce 8,000 tonnes of vitamin A (500,000 IU) and 60,000 tonnes of vitamin E (50% powder) per annum.
Meanwhile, Zhejiang Pharmaceutical has a production capacity of 5,600 tonnes of vitamin A and 20,000 tonnes of vitamin E oil per year.
Both the vitamin A and vitamin E markets are oligopoly. The global production capacity of vitamin A is basically controlled by five suppliers, namely NHU, Zhejiang Pharmaceutical, Jindawei, DSM, and BASF, whereas that of vitamin E is dominated by NHU, Zhejiang Pharmaceutical, DSM, and BASF.