For a long time, Tate & Lyle had the sucralose market to itself. It discovered it, patented it to the hilt, and perfected the manufacturing process at plants capable of producing it on an industrial scale.
But few monopolies last forever, and after a good 15 years or so as the sole supplier, Tate & Lyle started to see some competition from Chinese and Indian producers, although the former have proved more successful than the latter at challenging its supremacy.
As Tate & Lyle does not disclose its production capacity, we cannot say how it compares to rivals in volume terms, although Chinese firm JK Sucralose claims that by 2018 it will be a close second.
As for production efficiencies, Tate & Lyle claims its '4th generation' technology wipes the floor with rivals': "As a continuous process, for which we remain unique in the industry, it offers significant benefits in terms of yield and sustainability others cannot match with batch processing using earlier technology."
India and China
So how is the competition doing? Industry sources tell us that Alkem’s sucralose production facility in Gujarat has closed down, although the company is not responding to media enquiries, so we cannot confirm this.
Meanwhile, Sundeep Aurora, president of fellow Indian sucralose maker BioPlus Life Sciences says his firm is now focusing its attention on “a new sweetener strategy”.
He adds: “Sucralose is not a major business driver for us. Once we announce our new patented product you will understand why.”
As for China, claims Aurora, the key players are adding capacity, but several other plants have closed, he says. In efficiency terms, he says, Tate & Lyle remains ahead of the pack.
JK Sucralose: Closing gap on Tate & Lyle?
JK Sucralose – which markets itself as the world’s second largest producer of sucralose and claims it is three-to-five years ahead of Chinese rivals from a technological perspective – is one of the producers found not to be infringing Tate & Lyle’s patents in the patent dispute case overseen by the US International Trade Commission (ITC).
And it is growing fast, with annual production capacity at its facility in China’s Jiangsu Province set to grow exponentially over the next six years.
Global marketing director Hongmei Yang says: “JK’s current capacity is 600t, but a new production line will be put into production in July, so by then our annual capacity will reach 1,500t [the plan is then to expand to 2,500t by Dec 2013, 3,500t by 2015 and 4-5,000t by 2018]. In terms of volume, we are closer to Tate & Lyle and not far behind any more.
“Compared with 2011, JK has 35% growth at the moment and will reach 50% growth after we realize the new production line in July.
“The main growth drivers are beverages, foods, dairy, confectionery and healthy products. Sucralose has strong growth in almost all application fields at the moment and we expect this will continue for the coming years.”
We are taking some volume from Tate & Lyle
She adds: “We are taking some volume from Tate & Lyle customers…However, the main volume and growth is still coming from new business.”
And this is coming primarily from the US, Europe and China, she says. ”These three markets have different market characteristics and JK also has a different marketing strategy. For example the application of sucralose in the USA is more mature while there is a lot more new product development activity in Europe and China.
“JK has more than 50-100% growth in each of the above markets compared with 2010.”
And the strategy going forward?
“JK’s marketing strategy is to cover all markets in the world and to be one of the leading sucralose manufacturers in the world,” says Yang.
“JK has already set up a global marketing and sales network with five direct sales offices in the USA, Europe, China, India and Japan.”
Global market for sucralose will reach 15-20,000t by 2020
Yang predicts that the global sucralose market will reach 15-20,000t by 2020, owing to higher sugar prices; the technical advantages of sucralose in terms of taste, heat stability, and its stability across a wide pH range; plus growing demand for healthier, lower calorie foods and beverages.
She adds: “We have quite advanced technology which can compare with Tate & Lyle although it’s a different processing route since we are not infringing Tate & Lyle patents.
“JK’s technology is far ahead of the other Chinese manufacturers by a minimum of three-to five years. JK has already had 12 processing patents granted both in the USA and China.”
Chinese rival Changzhou Niutang, which was also cleared of infringing Tate & Lyle’s patents in 2009, says it will update FoodNavigator-USA on production capacity before the IFT show in June, but is keeping its counsel until then.
The firm, which launched a liquid sucralose product in 2010, said last summer that it would have 800t of capacity available by mid-2012.
According to Chinese press reports, Techno (Fujian) Biotechnology Co's capacity was 300t in 2010, although again, it has not confirmed this, and analysts note that talk is cheap when it comes to sucralose capacity figures and expansion plans.
Click here to read our interview with James Blunt, senior VP product management and marketing, at Tate & Lyle.
Click here to read our interview with Mark Huber, plant manager at Tate & Lyle's McIntosh sucralose factory.
Click here to look at our picture gallery of Tate & Lyle's plant in Alabama.