Summary: In Nov., Huakang Pharma said that its erythritol products were being reviewed by major customers, and due to the supply and demand conditions in the market, it was considering switching some of its erythritol production capacity. It also clarified the focus on its technology, products, and development applications, as well as the industry barriers.  

Zhejiang Huakang Pharmaceutical Co., Ltd. (Huakang Pharma) announced in Nov. 2022 that its erythritol products were being evaluated by significant clients and that it was considering switching part of its erythritol production capacity given the current supply and demand trends in the market. The enterprise also highlighted the focus on its technology, products, and development applications, as well as the obstacles the industry is currently confronting.  

Erythritol products: Huakang Pharma officially put its 30,000 t/a high-purity crystalline erythritol project into operation following the successful production trial at the end of May 2022.

• Huakang Pharma's erythritol is its 1^st product that is mass-produced by biological fermentation, while its traditional products are primarily made by hydrogenation and alcoholization. In the future, the enterprise's Zhoushan Project will use advanced technologies such as synthetic biology green manufacturing, similar to how erythritol is produced through biofermentation, to produce allulose, lactic acid/polylactic acid, amino acids, and the like
• Huakang Pharma said that the supplier audit of its major erythritol customers was time-consuming and relatively strict, with part of them still requiring a review
• Given the current erythritol market's oversupply, a more rational state is expected to occur after some time. To raise the total utilisation rates, Huakang Pharma considered retaining a portion of its erythritol production capacity while technically upgrading and switching the production lines to produce other related products  

 

Technology, product, and application development:

• New process technology: Huakang Pharma has been conducting process research on the preparation of xylose from hemicellulose by two-step hydrolysis with hemicellulose enzymes and low acid, which has helped the company succeed in increasing the quality, stability, and yield of its products 
• New products: Process development and engineering research on crystalline fructose, crystalline mannitol, allulose, crystalline polydextrose, and crystalline isomaltulose/alcohol, etc. have been carried out by Huakang Pharma
• Applications:
• To continuously expand the application areas, Huakang Pharma has explored key technologies for the use of five-carbon sugar alcohols in food (for special medical purposes)
• Based on the existing method for preparing xylose from corncobs, it has developed a comprehensive utilisation process of corncobs
• It has carried out deep processing of production wastes as a result of the research project on the deep utilisation of xylose mother liquor to reduce environmental pressure and increase its sustainable profitability

 

Industry barriers: The three primary products of Huakang Pharma are xylitol, sorbitol, and maltitol. The following are some particular industry barriers:

• Technical barriers:
• The hemicellulose-based xylose extraction technology, hydrogen production process from methanolysis, intermittent hydrogenation reduction technology, simulated moving bed chromatographic separation technology, and vacuum crystallization technology are currently some of the industry's relatively cutting-edge production technologies, necessitating businesses with substantial technical reserves and making it challenging for new entrants to master such technologies quickly
• Technicians with extensive hands-on expertise in production operations and management are required for the production of functional sugar alcohols. After a long period of repeated exploration, they must be able to define the ideal parameters for the production process, including pressure, temperature, and reaction time  
• The financial strength, product quality, product stability, order response time, production capacity, and R&D strength of functional sugar alcohol suppliers are all highly regulated by downstream customers. Before the suppliers can be qualified, they must pass audits from downstream customers and undergo a certain period of assessment. Large downstream customers also prefer purchasing from suppliers with whom they have developed long-term stable relationships since changing suppliers may result in greater uncertain risks given their massive order volumes and stringent quality requirements. This makes it more difficult for new and potential entrants to be recognised and form a constant partnership with large downstream customers within a short period of time. As a result, the collaboration between functional sugar alcohol manufacturers and large downstream customers is usually steadier. These factors have significantly increased the functional sugar alcohol industry's barriers to consumer resources.
• Food-related laws and regulations and regulatory obstacles