Vitamin market drastic changes in prices

Business Club April 7 News March International pharmaceutical giant Dutch DSM (DSM) announced that the company increased the price of vitamin products worldwide, all new business VB2 and B6 price increase of 15%, all new orders VA, VE and calcium pantothenate increase by 10%. This news has brought good news for industries that have been suffering from domestic production and export of vitamins, excess production, expansion, overproduction, and price competition. Domestic vitamins and pharmaceutical companies have risen, and Xinfu Pharmaceutical has risen more than 6%. %, Guangji Pharmaceuticals and New Hecheng rose more than 5%.

Supply of VE and VA intermediates is tight

DSM decided to adjust the price of this series of products, saying that in recent months raw material prices and exchange rate changes, affected by the earthquake in Japan, VE, VA intermediate supply and other factors. It is reported that this is DSM's second price increase within one month. In early March, DSM raised the VA price to 135 yuan (kilogram price, the same below), and the price increase was 10%.

It is understood that Japan's Honshu Chemicals is one of the sources of procurement for VE manufacturers. Among them, about one-half of m-cresol is purchased by DSM from this company, and domestic companies also purchase some of them from this company.

Experts analyzed the reporters that raw material medicine companies in China were also affected by this, and the opportunity for product escalation and price increase was increased. According to sources familiar with the company, Xinhecheng may increase the price of VE by 10% from RMB 120 to RMB 132.

According to analysis, the stocks of several large enterprises producing VE in the world are not in stock and will soon be consumed. The shortage of intermediates will boost the price increase of VE. The latest information is that the earthquake in Japan led to the suspension of production of Honshu Chemical and Kuraray Corporation. It takes two to three months for chemical companies to resume production. During this period, the supply of some vitamin intermediates will be very tight and companies will continue to increase their prices. This time, prices will affect almost all of the vitamin product line.

Domestic "four big families" or profitable

Analyst Guo Fanli, a research analyst at China Investment Group, told reporters that the price increase of DSM will start the price increase cycle led by the “four big families” in the domestic vitamin industry.

It is understood that the first good for the domestic industry is a small raw material vitamin products. DSM's price increase products such as VB5, VB2, etc., domestic Xinfu Pharmaceutical, Guangji Pharmaceutical have production.

When a reporter telephoned a person in charge of the Shijiazhuang Group, the other party stated that Shijiao had given serious attention to DSM's price increase. Previously, it was reported that pharmaceutical companies such as Xinhecheng and Zhejiang Pharmaceutical circumvented media inquiries on price hikes.

Industry analysts said that at this stage, the VE gross margin is about 40%-50%, which is monopolistic excess return for bulk API manufacturers, and the profitability is far higher than that of other companies. Companies such as DSM, BASF, and Hexincheng have an impulse to monopolize the market for raw material VE intermediates. The “reasonable reason” for this price increase provides them with an opportunity to strive for greater monopoly advantages.

The data shows that Zhejiang Pharmaceuticals, a domestic company, engages in the production of intermediates and another part comes from the international market; it has newly synthesized two production lines. Zhejiang Pharmaceuticals and New Synthesis, the two companies accounted for 40% of the world's production, DSM, BASF held a 60% monopoly share.

In 2010, the VE market price was as low as 110 yuan per kilogram and the highest price was close to 140 yuan. The annual average price is around 120 yuan. Take Zhejiang Pharmaceutical as an example. This business contributes more than 90% of the company's profits.

"The VC market will get a ride from other prices in this category," analysts said. Northeast Pharmaceuticals, North China Pharmaceuticals, Shijiazhuang Pharmaceutical Group and Jiangshan Pharmaceutical, which enjoy the title of “Four Big Family” in VC production, accounted for 80% of the global VC market share. The market share in China is more than 90%.

The annual production capacity of CS VC is about 35,000 tons, which accounts for about 21% of the domestic production capacity; followed by Northeast Pharmaceuticals, its VC production capacity is about 25,000 tons, which accounts for about 18% of domestic VC production capacity.

The main companies that produce VCs in the international market include DSM and BASF. Together with China’s “four big families”, these six companies share 90% of the global VC market share.