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  • AMINO ACIDS PRODUCT INDUSTRY
    Overview of the global amino acids industry
    Global MSG industry
    Global lysine industry

    Overview of the global amino acids industry


    MSG is an amino acids product which is made through the use of fermentation technology. The fermentation technology can be used in the production of the following principal product categories: alcoholic industry; amino acids; antibiotics; enzymes and vitamins. Efficiency of all fermentation processes depend on the efficient utilisation of carbohydrates which are supplied mainly in the form of glucose and molasses. It is therefore the availability and the pricing of these raw materials that influence the cost competitiveness of the fermentation products.

    The directors believe the amino acids product industry is characterised by high barriers to entry due to the following requirements: (i) capital intensity; (ii) technical knowledge and expertise; (iii) access to abundant and low cost supply of raw materials; (iv) recognised brand name and established sales and distribution network; and (v) economies of scale. As a result, for example, the global MSG industry and the lysine industry, which are part of the amino acids product industry, are dominated by a few leading players in the world.

    General information

    The amino acids product category is dominated by two products, namely MSG and lysine, which are widely used in food flavour enhancing products, pharmaceutical, animal feed and several other industries. Hence, the overall market size for amino acids products is influenced by numerous factors, ranging from general economic and demographic patterns to specific societal, regulatory and technological trends affecting the production and consumption of various end-use products.

    Amongst others, the global food and agricultural industries play a critical role in shaping the amino acids market. The food industry is most relevant due to the position of GA ¡X primarily in the form of MSG ¡X as the major amino acids product by value and by volume. Agriculture is an important consideration because animal feed is the second largest market for the principal use of lysine.

    Global MSG industry

    MSG is commonly used as a flavour enhancing product. The U.S. Food and Drug Administration categorised MSG as ''generally recognised as safe'', or ''GRAS'', along with other common food ingredients, such as salt, vinegar and baking power. It was first reported in 1968 that a complex of symptoms occurred following ingestion of Chinese meal that was allegedly contained MSG. Such symptoms consisted of numbness at the back of the neck gradually radiating to the arms and the back, general weakness, chest pain and palpitations. MSG, along with cooking wine and high sodium in food, was proposed to trigger these symptoms that are collectively referred to as ''Chinese restaurant syndrome''. In response to these allegations, safety evaluations of MSG were conducted by a joint expert committee of the Food and Agriculture Organisation of the United Nations and the World Health Organisation on food additives in 1971 and 1974. The same committee also conducted a more comprehensive safety evaluation in 1987. In addition, the Scientific Committee for Food of the Commission (''SCF'') of the European Communities reviewed the then available scientific data on the use of MSG in 1991, which was followed by a comprehensive review by the Federation of American Societies for Experimental Biology (''FASEB'') in 1995 on the reported adverse reactions following consumption of MSG.

    The Directors are of the view that the above studies concluded no scientific evidence to support the allegation that MSG was the casual agent in provoking the full range of the Chinese restaurant syndrome. There was no unequivocal relationship between ''Chinese restaurant syndrome'' and consumption of MSG. The SCF reached a similar conclusion and suggested that there is no need to specify the acceptable daily intake level. FASEB also found that there was no scientific evidence linking MSG to any serious long-term medical problems in the general population.

    The Directors consider that household use of MSG is common in developing countries, such as Vietnam, the ASEAN countries, the PRC and Indonesia, whereas MSG is also generally used in food service sectors, such as restaurants and food producers, in developed countries. Amongst the Asian countries and territories, the PRC is one of the major importers of MSG products, and Vietnam, Thailand, Taiwan and Indonesia are the major exporters of MSG products.


    The Directors believe that the consumption of MSG products in the PRC will continue to increase with the continuous improvements in living standards. The following diagram illustrates the per capita consumption of MSG products in certain selected Asian countries and regions in 2001:¡X

    Source:China Fermentation Association

    In addition to its dominance in Asia, MSG is also one of the leading flavour enhancing products in most industrialised regions because it is inexpensive and can provide a distinctive flavour. For example, the U.S. and the Netherlands are amongst the major importers of MSG, and these countries are characterised by growing popularity of ethnic cuisines where MSG is prevalent, and by an increasing number of Asian immigrants who prefer to use food flavour enhancing products as part of their diet.

    Global lysine industry

    Lysine will continue to appeal to livestock farmers for agronomic reasons, particularly as a cost effective additive to soybean feed. In addition, lysine offers farmers opportunities to reduce manure generation whilst increases flexibility in feed formulation, neither of which is available with conventional soybean feed sources.

    In other applications, lysine used as a nutritive agent in human dietary supplements, in certain baking products and as a research reagent; lysine is also used as a flavour mask for offsetting the metallic taste of potassium chloride in salt substitutes. However these products command relatively little of lysine volume vis-a`-vis livestock feed.


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