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JK Sucralose confident of 50% growth in 2013 as demand for low/zero calorie options continues to sur

Author:    Update Time:2013-02-19

Leading Chinese sucralose producer JK Sucralose says it is confident its sales of the high intensity sweetener will grow 50% in 2013 as new capacity comes online and demand for zero or reduced sugar products continues to increase.


While market leader Tate & Lyle recently said sucralose volumes for the full year are likely to be slightly lower than last year, JK Sucralose’s global marketing director Hongmei Yang told FoodNavigator-USA: “We are still seeing very high sales growth.”


She added: “We are also going to launch micronized sucralose (ultra fine powdered sucralose with tiny particles of just 12 microns across) and liquid sucralose (sucralose in a water solution) in 2013 due to market demand.”  (Currently JK is supplying a less fine sucralose powder and granular sucralose.)


The world’s second largest producer of sucralose, JK says annual production capacity at its facility in China’s Jiangsu Province is set to grow exponentially over the next five years.


The world’s second largest producer of sucralose, JK says annual production capacity at its facility in China’s Jiangsu Province is set to grow exponentially over the next five years.


Its annual capacity is currently 1,500tons, but this will increase to 1,800 tons by the end of year, said Yang: “Our target in 2015 is 3,500 to 4,000 tons and we aim to reach 6,000tons by 2018.”


Market prices went up 10-15% last summer but have since come down again as supply increased to meet demand


While some US buyers reported availability and pricing problems last summer   in China, supply had since caught up with demand, she said: “The whole market price went up 10-15% [but has since] come down again due to the sufficient supply.







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However, JK “did not change [its] prices that much because we are supplying to loyal customers and we didn’t want them to suffer [as a result of] the shortage”, she claimed.


The fact that Tate & Lyle re-opened its sucralose plant in Alabama last year - adding to industry capacity - had not impacted JK’s sales, said Yang, who claims JK is three-to-five years ahead of Chinese rivals from a technological perspective.


“Actually there was no effect on JK Sucralose as the whole sucralose market is growing.”


While the price of sugar in the US has recently come down, sugar prices “ will not have a big influence on sucralose use”, she predicted.


“Due to the world living standards improving, the demand for zero/low calorie products will increase and sucralose will play a major role [in meeting] this need.”


Meanwhile, JK is involved in legal action relating to what it calls “the monopoly situation of sucralose supply in Japan”, with further news expected in March, she revealed.


“Tate & Lyle and its agent San-Ei Gen F.F.I., Inc applied for a lot of applications patents in Japan and customers cannot use other source material. However we cannot talk a lot at the moment since the court case is going on right now.”


Phytochem International Inc: Many manufacturers are prepared for a 30% increase in sucralose demand this year


So what do US sucralose buyers say about pricing and availability today?


California-based botanical extracts distributor PhytoChem International Inc said shortages the firmhad encountered last year were now over.


Sales and marketing manager Tom Winn added: “It has taken time to upgrade facilities and relocate factories [in China to comply with environmental regulations], [in China to comply with environmental regulations], but this industry-wide infrastructure upgrade now appears to be over. Many manufacturers are prepared for a 30% increase in sucralose demand this year.”


He added: “The demand for sucralose worldwide continues to rise as it is seen as a safer alternative to aspartame, which is being re-evaluated by the European Food Safety Authority [as part of the systematic re-evaluation of all food additives authorized in the EU prior to January 20, 2009]Click Here


“Phytochem predicts that industry growth will be through Chinese manufacturers who are significantly undercutting Tate & Lyle.”


He added: “Currently Chinese manufacturers are selling at a slim margin and there isn’t much room for downward movement. But enough capacity remains to fill the usual summertime demand spike.Price and supply should be fairly stable at least in the near term.


“However, there is one wild card. If the European Commission decides to ban aspartame, this could destabilize the market.”


DNP: Recently, demand has decreased, but in the long run, consumption will continue to increase


Fellow California-based nutraceutical ingredients distributor DNP International said sucralose demand was “high in the last three seasons”.


As a result, “most manufactures expanded their production”, said the firm.


But it added: “Recently, the demand has decreased, which caused the price to drop.  In the long run, [however] the consumption of this product will continue to increase.


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