Summary:Amino Acids as Soybean Meal Substitutes to Enhance Food Security and Synthetic Biology to Help Reduce Costs, Improve Efficiency and Expand Capacity
Amino acids are the basic building blocks of proteins, which are crucial to human and animal nutrition and health, and are widely used in many fields such as feed, food, pharmaceuticals and daily-use chemicals. First of all, from the demand side, domestic attention to the security of food supply for feed continues to increase, and actively promote the reduction of soybean meal substitution measures to promote the growth of amino acid demand for animal nutrition. With the continuous expansion of amino acid applications, the global demand for amino acids and market size is expected to continue to grow. Secondly, from the supply side, the industry pattern of major amino acids such as lysine, threonine, methionine, etc. is being optimized, while the production process of small varieties of amino acids such as valine, tryptophan, arginine, etc. is also improving, and the production capacity is steadily increasing. China is a major producer and exporter of amino acids, and industry enterprises have shown the development trend of "integration + scale', while deep plowing into synthetic biology and bio-fermentation technology, which provides a guarantee for low-cost and efficient production of bulk amino acids and cost reduction of small varieties of high value-added amino acids, as well as market development.
The feed amino acid market is expanding steadily, the market pattern of large varieties continues to be optimized, and the development prospects of small varieties are promising.In 2023, the total global output of feed amino acids (including lysine, methionine, threonine, tryptophan) will be about 6.15 million tons, with a CAGR of 4.9% during 2016-2023; and the output of feed amino acids in China will be about 4.33 million tons, with a CAGR of 12.1%. Among them, lysine, methionine, threonine and tryptophan accounted for 81.6%, 34.6%, 94.7% and 41.4% of the global market, respectively. Specifically:
1. Lysine and Threonine: currently there are 10 domestic lysine producers with an annual capacity of 3.88 million tons and a CR3 capacity share of 59%; there are 7 threonine producers with an annual capacity of 1.27 million tons and a CR3 capacity share of 76%. The price of these two in the short term is mainly affected by fluctuations in supply and demand, and in the long term is similar to the price trend of raw materials corn, threonine production capacity is more concentrated, the bargaining power of enterprises may be enhanced.
2. Methionine: There are eight global producers with a total capacity of 2.42 million tons, of which China's capacity is 820,000 tons (33.9%). The production capacity of the top three global enterprises accounts for 70.5%. The future new production capacity mainly comes from domestic enterprises such as Xinhecheng and Andisu, and the biological methionine production process represented by Huaheng Biological is also worth looking forward to.
3. Small varieties of amino acids: synthetic biology technology can help reduce costs and expand production capacity, valine, tryptophan, arginine and isoleucine and other small varieties of amino acids are expected to accelerate the scale of application.
Beneficiary companies include:
- Plum Bio: focus on "amino acid +' strategy, threonine and lysine production capacity ranks first in China, at the same time valine and tryptophan and other small varieties of technological transformation and expansion continues.
- Fu half set round: in the monosodium glutamate and xanthan gum production capacity ranks first in China, amino acid production capacity and categories are also expanding simultaneously.
- Star Lake Technology: With the successful acquisition of Ipin Biologicals in 2022, the capacity of lysine and threonine ranks second in China, and the expansion of small varieties of amino acids and bio-based nylon materials.
- Huaheng Bio: as a leader in synthetic biology, L-alanine has the largest market share in the world, and will continue to expand the capacity of small varieties of amino acids and bio-based materials.
- Xinhecheng: a leading fine chemical company focusing on "Chemical+' and "Biological+', with the production capacity of vitamins and flavors and fragrances ranking top in the industry, and the production capacity of methionine and new materials continuing to expand.
- Andisol: a global leader in animal nutrition and health industry, with dual platforms in Europe and China, and balanced development of methionine and specialty products in two pillars, with the world's No. 1 production capacity of liquid methionine and the world's No. 2 production capacity of methionine.