Re-entry of Guangji Pharma's VB2 into EU market to be benefited by European Commission's new regulation 04-12-2023

Summary: Issued by European Commission, the Commission Implementing Regulation (EU) 2023/651, which concerns the authorisation of riboflavin (vitamin B2) produced by Bacillus subtilis KCCM 10445 and a preparation of riboflavin produced by B. subtilis KCCM 10445 as feed additives for all animal species, has come into effect since 11 April. This regulation will benefit the re-entry of Guangji Pharma's VB2 products into EU market.

According to an announcement released by Hubei Guangji Pharmaceutical Co., Ltd. (Guangji Pharma) on 23 March, European Commission issued the Commission Implementing Regulation (EU) 2023/651 concerning the authorisation of riboflavin (vitamin B2) produced by Bacillus subtilis KCCM 10445 and a preparation of riboflavin produced by B. subtilis KCCM 10445 as feed additives for all animal species on 20 March. The said regulation has come into effect since 11 April.

European Food Safety Authority (EFSA) pointed out that viable cells and recombinant DNA from B. subtilis KCCM 10445 were not detected in the riboflavin and in the preparation of riboflavin subject to this regulation; therefore, those additives do not pose any safety concern associated with the genetic modification of the production strain. Such assessment shows that the conditions for authorisation, as provided for in Article 5 of EU Regulation (EC) No 1831/2003, are satisfied. Accordingly, the use of the substance and of the preparation should be authorised, said EFSA.

Guangji Pharma added that the new regulation issued by European Commission would have a positive influence on the re-entry of the company's VB2 products into EU market.

Currently, Guangji Pharma's production capacity for vitamin B2 accounts for 40% of the world's total VB2 capacity. 47% of the company's VB2 output are exported, taking up more than 75% of China's VB2 exports.

Previously on 20 Sept., 2018, the European Commission issued the Regulation (EU) 2018/1254 concerning the denial of riboflavin (80%) produced by B. subtilis KCCM 10445, which stipulated that existing stocks of that additive and feed containing were to be withdrawn from the EU market.

Guangji Pharma had immediately recalled relevant products from the EU market. Also, the company revealed the Regulation (EU) 2018/1254 only had effects on the entry of its vitamin B2 (80% feed grade) into EU market, and some of the products that were recalled had already been transported to markets of other regions for sale.

Over the recent years, Guangji Pharma has been actively pushing forward the progress of return of its VB2 products to the EU market. On 22 Jan., 2019, Guangji Pharma established a Belgium-based company, Guangji Pharmaceutical Belgium SA., in order to re-submit the VB2 new sample for registration in the EU. On 13 Oct., 2022, Guangji Pharma revealed that the company was speeding up advancement of the registration process for the "1831" product (non-genetically modified riboflavin produced by fermentation with GJ-2 strain) in the EU, so as to start the sale of high-quality VB2 in the EU market as soon as possible.

Statistics from Guangji Pharma's annual report indicate that the company's export business during 2018–2021 was little affected by the Regulation (EU) 2018/1254; Guangji Pharma's yearly revenues from exports in 2018, 2020, and 2021 went up by 18.90%, 2.31%, and 13.11% YoY respectively, and only reported a year-on-year decrease in 2019.

Figure Guangji Pharma's yearly operating revenue from exports and gross margin of its exports during 2017–2021

Source: Guangji Pharma's annual reports of financial results


More information can be found at CCM Vitamin China Monthly Report.

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