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    Home > Biochemistry News > Amino Acids Research > In 2019, the output of Meihua Bio-feed-grade amino acids increased by 50% year-on-year, and the market share of lysine increased to 30%

    In 2019, the output of Meihua Bio-feed-grade amino acids increased by 50% year-on-year, and the market share of lysine increased to 30%

    • Last Update: 2021-10-12
    • Source: Internet
    • Author: User
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       Recently, the annual reports of listed companies have been released.
    In 2019, the production capacity of the supply side was expanded, and the demand side was affected by the non-plague epidemic.
    The market prices of lysine and threonine fell to historical lows, and some companies suffered losses.
    How can Meihua companies maintain profit? How do you view the amino acid market? Let's go to the annual report of Meihua Biology with the editor

    .
    During the reporting period, Meihua Company achieved operating income of 14.
    554 billion yuan, an increase of 15.
    07 percentage points over the same period last year; net profit attributable to shareholders of listed companies was 989 million yuan, a decrease of 1.
    29% compared with last year; attribution after deducting non-recurring gains and losses The net profit of shareholders of listed companies was 856 million yuan, a decrease of 4.
    03% over the same period

    .
    During the reporting period, the animal nutrition amino acid sector faced a huge test of the industry downturn, but the company made full use of the opportunity of rising prices of superior products such as sodium glutamate and disodium glutamate by improving internal management, reducing costs and increasing efficiency, and expanding Sales, thereby reducing the negative impact of the animal nutrition sector on profitability and ensuring the company’s profitability

    .
    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      The company's three existing production bases are located in Tongliao, Inner Mongolia, Wujiaqu, Xinjiang, and Baicheng, Jilin, all of which are the main producing areas of steam coal and corn in China
    .
    The company consumes about 4 million tons of corn each year, and corn accounts for about 50% of the total cost.
    In order to minimize the impact of corn price fluctuations on costs, the company adopts collection and storage, market acquisition, participation in state-owned grain depot auctions, and direct purchase Farmers purchase corn in a variety of ways

    .
    According to technical relevance, market relevance, plant environment and other considerations, the production line of idle MSG, amino acid and other large products can be transformed to produce relatively small amino acid products such as valine and tryptophan to reduce capital expenditure

    .
    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      The supply of lysine and threonine is dominated by domestic sources, and the decline in prices has led to further squeezing of profit marginswRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      The supply of lysine and threonine is dominated by domestic sources, and the decline in prices has led to further squeezing of profit margins

      In 2019, the revenue from the amino acid segment of animal nutrition increased by 25.
    19% year-on-year to RMB 6.
    57 billion, and the gross profit margin decreased by 11.
    25% year-on-year to 12.
    16%.
    The increase in production and sales increased by 77.
    51% year-on-year, which led to an increase in revenue; on the other hand, due to the continued African swine fever epidemic, the number of live pigs fell sharply, which dragged down the market demand for feed and increased supply pressure.
    The company's lysine and threonine prices respectively decreased year-on-year 8.
    29%, 17.
    18%, resulting in a decrease in gross profit margin

    .
    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      In 2019, the global lysine production capacity continued to expand, mainly at home.
    As the largest producer, China's oversupply situation is severe

    .
    Therefore, domestic companies mainly used exports to ease supply pressure.
    In 2019, the domestic production of lysine was 1.
    73 million tons, of which exports were 895,900 tons, accounting for 52% of the total output, a year-on-year increase of 39%

    .
    Due to the impact of the African swine fever epidemic, the number of live pigs has fallen sharply, which has dragged down the market demand for feed, and the consumption of lysine has also weakened, and the overall lysine has remained weak

    .
    During the reporting period, the average price of 98% lysine decreased by 14% year-on-year, and the average price of 70% lysine decreased by 9% year-on-year.
    Product profits were greatly squeezed, and manufacturers experienced periodic losses

    .
    (Data source: Zhuo Chuang Information, Boya Hexun)
    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      In terms of threonine, global threonine production in 2019 was 706,000 tons, and China's threonine production was 636,000 tons, accounting for 90.
    1% of global threonine production

    .
    The weak fundamentals of the domestic market continued, and product prices fluctuated and fell.
    In the first half of 2019, manufacturers' production remained stable.
    In the second half of the year, due to rising costs, product prices fell, and some companies closed or reduced operating rates.
    The industry's top four supply concentration was as high as 91%.

    .
    Industry concentration has further increased, and manufacturers have increased their voice.
    However, limited by the lack of downstream demand, the supply is still loose

    .
    During the reporting period, the price of threonine products dropped and the industry's profit margin was further compressed.
    In 2019, the average market price of threonine was 7.
    4 yuan/kg, a year-on-year decrease of 15%

    .
    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      In 2019, the Baicheng project with an annual output of 400,000 tons of lysine was fully put into operation, and the market share of lysine increased to 30%wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

    In 2019, the Baicheng project with an annual output of 400,000 tons of lysine was fully put into operation, and the market share of lysine increased to 30%

      The first phase of the 400,000 tons of lysine project and its supporting projects invested by the company in Baicheng, Jilin, have been put into trial operation at the end of 2018
    .
    During the reporting period, after repeated equipment debugging and capacity ramping, the capacity utilization rate reached more than 90% in the fourth quarter of 2019

    .
    After Baicheng was put into production, the company's overall lysine production capacity reached 700,000 tons.
    Excluding the impact of capacity ramping, the average lysine capacity utilization rate was above 90%, and the company's new capacity has been completely absorbed by the market.
    Although the gross profit margin of a single product has decreased year-on-year, the 2019 Annual Report 15/207 is basically in line with the company's expectations

    .
    Due to the increase in lysine production, the overall market share of lysine at the end of the reporting period has increased to about 30%

    .
    At the end of 2019, the company's 98% lysine content became one of the first few companies in the world to pass the EU 1831 regulatory certification, laying the foundation for increasing its export share in the EU in the future

    .
    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      From the perspective of comprehensive production capacity, the company has become one of the largest feed amino acid manufacturers in the world, benefiting from the growth of downstream demand.
    Based on the company’s strict internal decision-making procedures, accurate judgments of the industry and efficient execution, , Threonine, tryptophan, feed-grade valine, supplemented by starch by-products, the proportion of the main business income of animal nutrition increased from 42.
    02% in 2018 to 45.
    41%

    .
    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      During the reporting period, the company hosted two low-protein diet amino acid promotion forums in Baicheng and Chengdu.
    At the forum, a number of industry experts were invited to share special topics, in-depth analysis of the scientific research and application progress of amino acids in low-protein diets.
    Customers provide a communication platform

    .
    Low-protein diet is a precision nutrition technology that reduces dietary protein levels and carbon emissions by adding appropriate types and quantities of feed amino acids without affecting livestock and poultry production performance and product quality.
    This technology can to a certain extent Reduce the amount of soybean meal added

    .
    As competition in the amino acid industry is intensifying, the company hosts low-protein diet promotion conferences, provides a platform, and promotes scientific research and consultation to the industry, so that peers or downstream customers have increased their understanding of the company

    .
    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      In 2019, the output of feed-grade amino acids increased by 50% year-on-year, and the animal nutrition industry tends to be standardizedwRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      In 2019, the output of feed-grade amino acids increased by 50% year-on-year, and the animal nutrition industry tends to be standardized

      During the reporting period, the company's feed amino acid (including lysine, threonine, tryptophan, etc.
    ) output was 878,924 tons, a year-on-year increase of 50.
    48%; sales volume was 866,069 tons, a year-on-year increase of 49.
    15%; inventory was 30,753 tons, a year-on-year increase of 71.
    82%

    .
    Among them, the changes in the production and sales of feed amino acid products are mainly due to the release of lysine production capacity at the Baicheng base in this period, the increase in lysine production, and the increase in sales and inventory at the same time

    .
    The operating income of feed amino acid was 4.
    611 billion yuan, the operating cost was 4.
    419 billion yuan, an increase of 46.
    78% year-on-year, and the gross profit margin was 4.
    15%, a year-on-year decrease of 14.
    81%

    .
    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      With the increasing maturity of production technology and the reduction of production costs, the market competition of amino acid products continues from the domestic market to the international market, and the export market share continues to expand.
    However, in view of the fact that exports to the EU must pass the EU Food Safety Agency (EFSA) safety certification and Authorization, as far as fermented amino acid companies are concerned, whether they can be approved for the first time is bound to affect the next step of the company's development

    .
    In 2019, the company's 98% lysine content became one of the first few products in the world that passed the EU 1831 regulatory certification, laying the foundation for increasing EU market share in the future

    .
    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      In April 2019, the National Development and Reform Commission and relevant departments revised the industrial structure adjustment guidance catalogue and solicited opinions to encourage the production of small varieties of amino acids by fermentation.
    The research and development and production of varieties of amino acids are more in line with changes in industry and market demand

    .
    In December, the National Standardization Management Committee approved and issued a number of national feed additives standards such as "Feed Additives Part 1-Amino Acids, Amino Acid Salts and Their Analogs L-Threonine", and the industry is becoming more and more standardized

    .
    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      Industry concentration will further increase in 2019, and it is expected that the oversupply of amino acids in 2020 may easewRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      Industry concentration will further increase in 2019, and it is expected that the oversupply of amino acids in 2020 may ease

      In March 2019, the Ministry of Ecology and Environment stated that the central environmental protection inspection work will continue to deepen in the future, and it will take about three years to complete the second round of central environmental protection inspections
    .
    As the central environmental inspection work continues to deepen, the overall investment in the industry in environmental protection will be greatly increased in the later period, and the barriers to entry into the industry will become higher and higher.
    However, if the price of finished products cannot reach the appropriate price, the profit margin of enterprises in the industry will gradually shrink

    .
    In terms of supply, as the expanded production capacity has been put into production one after another, the supply of the industry has increased.
    In order to seize the market in the short term, the profit of the industry has been continuously squeezed, which is beneficial to the development of leading enterprises in the long run

    .
    In terms of demand, feed production has increased year by year in recent years, and the demand for feed amino acids has also increased.
    During the reporting period, the industry has begun to promote low-protein diet technology.
    In the future, the demand for feed amino acids may continue to grow

    .
    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

      In 2019, global amino acid production capacity continued to shift to China.
    Affected by factors such as industry capacity increase and sluggish downstream demand, the gross profit margin of fermented amino acids has dropped significantly, some inefficient production capacity has accelerated withdrawn or production suspended, and industry concentration has further increased

    .
    It is expected that the production capacity of live pigs is expected to rebound in 2020, and the demand for pig feed will gradually pick up.
    By then, the oversupply of amino acids may ease

    .
    wRR China Feed Industry Information Network-Based on feed, serving animal husbandry

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