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Major JK Sucralose expansion predicts market surge by Foodnavigator

Author:Foodnavigator    Update Time:2009-11-24

Major JK Sucralose expansion predicts market surge

By Caroline Scott-Thomas, 24-Nov-2009

Related topics: Financial & Industry, Sweeteners (intense, bulk, polyols)

JK Sucralose has announced that it intends to expand capacity at its Jiangsu, China plant to 4,000 metric tonnes by 2020, confident that the market is set to skyrocket.

Expansion plans announced earlier this year – to reach a capacity of 300 tonnes in 2010 and 800 tonnes by 2012 – were made public just weeks before it won an International Trade Commission patent case, in which Tate & Lyle had accused four Chinese manufacturers as well as a number of US distributors of using its patented processes to produce sucralose. JK Sucralose became voluntarily involved in the case in 2007, and the ruling, on April 7 this year, effectively splintered Tate & Lyle’s dominance of the sucralose market.

Now, following this opening of the market, JK Sucralose has outlined even more ambitious plans to expand capacity to 1200 tonnes by 2013, eventually reaching 4000-tonne capacity by 2020. The company is operating at capacity and produced about 200 tonnes of sucralose this year.

Speaking to through an interpreter, CEO of JK Sucralose Alex An said: “The positive impact from the court case is not after we won the case, it was before we won the case. Within two years, JK was the only company to voluntarily intervene. Because we took this step, customers believe in us. After we won the court case it speeded up our sales. We used the two years of the court case to get our global sales network established.”

And as that network spreads, JK Sucralose believes that demand for its sucralose is set to take off across the globe.

The CEO outlined three properties that he expects will drive sucralose uptake among manufacturers: “The first one is safety. The second one is good taste – it has the closest taste to sugar. And the third one is that the processing stability is very high…These three characteristics bring a very long life cycle. We think it could be in the market for a hundred years…Consumers like it for good taste, and manufacturers like is because it is very easy to handle.”

American growth

Although North America is the world’s largest market for high intensity sweeteners, responsible for 60 percent of consumption, An said he still thinks Americans have an appetite for more sucralose.

“The US is a relatively mature market but we still see growth,” he said. “We think it could still double or triple.”

Market prices have fallen from their 2005 level of about $340 a kilo, to around $100 a kilo, but An said he expects to see sucralose prices drop by a further 30 percent as capacity expands and technology improves, adding to growth momentum.

“If this decrease happens, sucralose can replace any other sweetener easily,” he said. “…In 2005, the price went up dramatically because the supply could not compete. In reality the price of sucralose cannot be that high: It is only because of shortage.”

Global sucralose consumption stood at 6,608 tonnes in 2008, up from 4321 tonnes in 2003, according to figures from Euromonitor International. Even in October last year, before the final ITC ruling, it said it expected consumption to climb to 11,765 tonnes by 2011.



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