On Oct. 26, 2012, Guangxi State Farms Mingyang Biochemical Group, Inc. (Mingyang Biochemical) finished the first phase of its 100,000t/a cassava starch and supporting facilities program in Vietnam, and started the construction of the second phase, according to CCM’s Novemberr issue of Biomaterials China News.

The total program represents production capacity of 100,000t/a cassava modified starch and storage capacity of 300,000t/a dry cassava. The planned investment is USD68 million and the program will cover an area of 20 ha. The first phase will mainly see the construction of 15,000t/a (positive ion) modified starch production line. After the first phase project is put into full production, it can generate the sales value of USD14.5 million per year, and consume about 16,000t/a cassava starch. In the second phase, the company will construct another 50,000t/a cassava starch production line and a warehouse covering an area of 5 ha. It is estimated that the second phase will be finished by the end of 2013.

Mingyang Biochemical is domestic largest starch processing company with capacity of 350,000t/a cassava starch and 150,000t/a alcohol. The company plans to realize 500,000t/a cassava starch and its deep processing products and 500,000t/a alcohol by 2015. In the future, the company plans to extend biological energy and biological material business, and achieve business revenue of USD0.79 billion (RMB5 billion).

In order to reach its target, Mingyang Biochemical is insisting on overseas development strategy. It may purchase cassava or even build cassava processing plant in the region where cassava is abundant in order to ensure sufficient raw material supply and reduce production and transportation costs.

Since Southeast Asia is the major cassava planting area in the world, Mingyang Biochemical chooses Southeast Asia countries as its overseas business base. The program of 100,000t/a cassava starch and supporting facilities located in Vietnam is also the first overseas cassava program. The company divides its overseas business into three blocks: Vietnam, Laos and Cambodia; Indonesia and the Philippines; Thailand.

Developing overseas business can help the company to control raw materials supply as much as possible. Meanwhile, it may be one of the effective measures to reduce cost and improve benefits.

In the face of increasing demand for cassava from domestic processing enterprises, China's cassava is in short supply due to limited usable planting area and unfavorable climate, so many domestic consumers have to turn to imported cassava, causing the import volume of cassava to increase fast. In response, Chinese enterprises are losing the bargaining power and have to bear more transportation costs.

Once Mingyang Biochemical constructs production base in regions rich in cassava such as Vietnam and Thailand, it can control the whole production chain without buying expensive imported raw material. Meanwhile, the raw material transportation cost can be reduced a lot as well. Furthermore, hiring local employees may help cut human cost a lot since China’s human cost is increasing fast.

Besides, thanks to Mingyang Biochemical’s technical advantage, it can rapidly open up local market and secure more market share.

Source:Biomaterials China News 1211

http://www.cnchemicals.com/Newsletter/NewsletterDetail_245.html

Main content of Biomaterials China News 1211:

Some coastal textile enterprises enter algae fiber industry

Rainbow Green World is disbanded

Wanwei High-tech to gain 200 million tonnes coal

COFCO Yushu launches glucose program for its PLA

Corn price decreases sharply in harvest season

Mingyang Biochemical constructs first oversea cassava program in Vietnam

Potato price returns to normal in 2012

China's export volume of PLA increases a lot in Sept. 2012

China's fresh cassava import volume increases a lot in Sept. 2012

China's import price of castor oil and its derivatives increases 14% in Sept. 2012

Foxconn to invest in biodegradable materials

DuPont Sorona products present in China

FRIPP develops long-chain dicarboxylic acid products

Security Technology Shenzhen to showcase biodegradable anti-counterfeiting materials

ECUST develops fully-degradable film

… …

Biomaterials China News, with 12 to 14 topics in one issue, published on the 8th every month, will bring you the latest information on the latest market dynamics, company dynamics, new biomaterials products, new biomaterials technology development, new legislations and policies and raw material supply dynamics that are shaping the market.

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