Danisco buys Chinese CMC producer
supplying the texturising agent CMC to customers, after acquiring
one of Chinas leading producers for an undisclosed sum.
The Danish group already markets a large range of different texturisers and says that adding CMC completes the portfolio.
In addition, Zhangjiagang Sanhui Chemical, located 120km from Shanghai, has an efficient, low-cost plant and already supplies a number of multinational food companies.
"We expect Danisco to become an important player on the world market for cellulose gum," said Hans Henrik Hjorth, president of Daniscos Textural Ingredients division.
The deal, announced today, is the latest in a series of moves by foreign companies to gain a share of China's gums market. Danisco already owns a stake in a Chinese xanthan gum maker while Cargill has recently gained full ownership of its former xanthan gum joint venture.
In CMC, world leader Hercules bought a Guangdong producer as early as 2003. Another big producer, CP Kelco, is currently importing CMC from its other production sites but is building significant production of xanthan gum in China.
China offers widely available raw materials for gum makers, at lower cost than other markets. There is also a lower investment required in Chinese production plants.
Danisco will upgrade Zhangjiagang Sanhui Chemicals plant and may add capacity in the future, Hjorth told FoodNavigator.com.
"There is currently no idle capacity so we will probably increase efficiency and transfer more food grade production to this plant," he said.
The Chinese business currently counts domestic food makers as its main customers, giving it annual sales of around €17 million. However Danisco will be seeking to increase its export sales.
Danisco says customers have frequently enquired about CMC, a cellulose gum derived from wood pulp or cotton fibres from the kernels of cottonseeds.
"Our technical people already know CMC fairly well and we have an established sales force visiting CMC customers," added Hjorth.
While investments will be made to improve standards at the plant, Hjorth says the quality of Chinese-made CMC is adequate for many customers although China may be lacking the product variety found elsewhere.
Danisco now has all the important hydrocolloids in its range, boosting its one-stop-supplier strategy. These include pectin, alginate, locust bean gum, carrageenan, xanthan and guar gum.
The current owner of Zhangjiagang Sanhui Chemical will stay on in the business.
