China's Fermentation Industry Develops Rapidly

1 Output increases steadily

The main products of China's fermentation industry include amino
acid, organic acid, enzyme preparation, yeast, starch and starch
sugar, special functional fermented products, etc. Monosodium
glutamate is the main product of amino acid, and citric acid is
the main product of organic acid. The total output of the five
major products (including monosodium glutamate, citric acid,
enzyme preparation, yeast and starch sugar) in 2005 was 6.8
million tons, including 1.36 million tons of monosodium
glutamate, 630 thousand tons of citric acid, and 4.2 million tons
of starch sugar. In addition, lysine, lactic acid and
special-function fermented products also have relatively large
output, and the output of these was 275 thousand tons, 60
thousand tons and 800 thousand tons respectively in 2005.

    (1) Amino acid

There are over ten varieties of amino acid produced by
fermentation processes in China. China's annual output of
monosodium glutamate accounts for 70% of the global total.
Lysine, used as an additive for animal feedstock, has been
exported in addition to satisfying domestic demand.

    (2) Starch and starch sugar

The number of starch sugar varieties has increased from 6 to
around 27, and their applications have also expanded from
sweetener to other fields.

    (3) Organic acid

Organic acid manufactured by fermentation develops rapidly.
China's output and exported amount of citric acid hold a leading
position in the world for some years. Production of L-lactic acid
and itaconic acid has provided a new way for substituting biomass
products for petrochemical products.

    (4) Yeast

The average annual growth of output for highly active dry yeast
has been maintained at over 20%. The varieties of yeast have
developed from the original bread active dry yeast to various
yeasts applied in sectors such as alcohol, wine, white wine,
yellow wine, vinegar and health products.

    (5) Enzyme preparation

In addition to traditional starch enzymes, glucoamylase and
proteinase, the development and production of enzymes for feed,
composite enzymes (enzymes used in fruit juice, the textile
industry and flour processing, etc) have become a new focus for
economic growth. In the past 5 years, the average annual growth
of the output and sales volume in 20 key enzyme preparation
companies reached 28% and 19% respectively. China's exported
amount of enzyme preparation accounted for over 35% of total
enzyme preparation output in 2005.

    (6) Special-function fermented products

Oligosaccharide sector develops rapidly. The products that have
been commercialized also include active peptides, functional
glycitols, functional red yeast rice, fungi polysaccharide,
micro-ecological preparations and biological preservatives.

  2   Development toward cyclic economy

Fermentation is an industry that deeply processes agricultural
products. The government requires domestic companies to save
grain, water and energy, to protect the environment, and to
develop toward cyclic economy with resource-saving type. During
the Eleventh Five-year Program period (2006-2010), the annual
growth rate of the output for major fermented products will be
10%-15%. It is expected that the total output of China's major
fermented products will reach 14.8 million tons in 2010.

Development goals and strategies

    (1) Amino acid

China will establish a key common technological innovation
platform for amino acid fermented products, which will reduce
production costs by over 10% and increase output by over 10%.
Bio-technologies such as modern microbial breeding,
fermentation engineering and metabolism engineering will be
adopted to reduce production cost and improve product quality.

    (2) Organic acid

Although restricted by antidumping efforts, the output of citric
acid will still increase at an average annual rate of 8%-10% and
the amount exported will further increase. The yield of citric
acid will increase to 15% from 12%, the fermentation cycle will
be shortened by 10%, grain consumption will be reduced by 7%,
electricity consumption will be reduced by 20% and water
consumption will decrease 10%.
    The key points for the development of lactic acid lie in
broadening the application scope of polylactic acid and
establishing and implementing environmental regulations.

    (3) Enzyme preparation

Enzyme preparation is the core technology of the fermentation
industry. During the Eleventh Five-year Program period
(2006-2010), original enzyme preparations will continue to be
required to improve enzyme activity and product grade. Domestic
companies will speed up the development and production of
special composite enzyme preparations such as the
special-purpose composite enzyme preparations for new types of
starch sugar, flour processing, meat processing, grease
processing, flavoring production, animal feed production,
leather manufacture, textile manufacture, pulp processing and
paper making.

    (4) Starch and starch sugar

The development of starch and starch sugar will focus on further
improving product quality, producing high quality products
using new high tech separation technology, the development of
comprehensive utilization and deep processing with corn as raw
material, the application of starch sugar in non-food industries,
developing some chemical products with biomass sugar replacing
petroleum as raw material and preferential development of solid
starch sugar, beer syrup and oligosaccharide for health care.
For the reason of price, caution should be taken to the
production of fructose - glucose syrup.

    (5) Yeast

The annual growth rate of the output for highly active dry yeast
will reach 10%-20%. China's yeast manufacturers should locate
close to the production bases of raw materials, utilize new high
tech methods to treat waste water, continuously develop the
international market and create famous international yeast
brands, continually promote the development of yeast related
products, and constantly reduce production costs and improve
profit ability.

    (6) Special-function fermented products

The Chinese government encourages the development of
oligosaccharides, peptides and natural antioxidant products and
strengthening the research and development of composite
functional products. Efforts should be made to the development
of nutritive fortifiers, antioxidants, unsaturated fatty acids,
probiotics, food colors, biological preservatives, flavorings
and perfuming agents.

    (7) New biomass products

Mono ethylene glycol (MEG), propylene glycol, xylitol, maltitol,
mannitol and erithritol have broad development prospects.
Products with relatively rapid research and development include
polylactic acid-based full biodegradable plastics, ethylene
oxide, MEG, biochemical diesel oil (esterification and enzyme
methods) and carbon dioxide-based fully degradable plastics,
among which polylactic acid has promising development prospects
and many domestic companies are doing research and development
on it.

Table 1 Output of Major Products