On March 2, 2016, Longlive Bio-technology announced to put its XOS into the European feed market in order to promote XOS in overseas feed markets.
Also, its performance is being negatively affected by low fuel ethanol prices.
On 2 March, 2016, Shandong
Longlive Bio-technology Co., Ltd. (Longlive Bio-technology) announced on the
Investor Relation Management platform that it has put xylo oligosaccharide
(XOS) into the European feed market, and that it is partnering with an Italian
pet food giant for raw material supply.
At the same time, Longlive
Bio-technology pointed out that Herbalife International of America, Inc., one
of its clients, has imported Longlive Bio-technology's XOS and has successfully
put the XOS nutrients project into trial production, which helps Longlive
Bio-technology to lay a foundation for promoting XOS in overseas additives
markets.
Longlive Bio-technology
signed a supply contract with Wm Wrigley Jr Company (Wrigley) in 2015, becoming
the largest xylitol supplier to Wrigley in Europe. This move also helped
Longlive Bio-technology to set foot in the European food additive market.
Longlive Bio-technology
has a promising future in the feed industry. China's consumption of XOS used
for feed additives approached 1,600 tonnes in 2015, and is estimated to grow by
5% in the future. XOS can effectively enhance the growth of intestine bacteria,
and improve body immunity. Since 2003, the Ministry of Agriculture of the
People's Republic of China started to approve XOS to be used as a feed additive
in the livestock industry. As China further promotes feed without antibiotics,
substitutes for antibiotics will enjoy bright market prospects.
Longlive Bio-technology is
China's largest XOS producer, with a capacity of 4,000 t/a. Another production
line for XOS (6,000 t/a) is under construction. According to the original plan,
this production line should have been put into operation in Dec. 2015.
Market price of XOS in China, Jan. 2015-Feb. 2016
Source: CCM
Longlive Bio-technology
also released the 2015 performance briefing when it proclaimed to put XOS into
the European market. However, the performance was unsatisfactory.
-
Revenue:
USD122.04 million (RMB776 million), up by 2.54% YoY
-
Operating
profit: USD5.92 million (RMB37.65 million), down by 1.79% YoY
-
Total
profits: USD10.08 million (RMB64.10 million), down by 38.5% YoY
-
Net
profit: USD7.75 million (RMB49.29 million), down by 42.61% YoY
Fuel ethanol is the main
reason for the poor performance.
-
Longlive
Bio-technolog's fuel ethanol which is transported to China's oil system is
priced at USD0.14 (RMB0.91) * the price of No.93 gasoline. Affected by the
international crude oil price slump, the sales price and sales volume of fuel
ethanol declined. Data from the New York Mercantile Exchange shows that the
price of Brent crude oil averaged USD54.4/bbl in 2015, down by 47% YoY and
hitting a record low of the past 10 years.
-
The
Chinese government reduced the subsidies on processing fuel ethanol from
USD125.81/t (RMB800/t) in 2014 to USD94.36/t (RMB600/t) in 2015.
As the Chinese government
promotes the policy on de-stocking of old corn, it is expected to increase the
subsidies on processing fuel ethanol, which is good for the development of
Longlive Bio-technology.
Longlive Bio-technology's financial performance, 2010-2015
Source: Longlive Bio-technology
About CCM:
CCM is the leading market intelligence provider for China's agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.
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Tag: Longlive Bio-technology, feed