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CJ CheilJedang dominates the nucleotide market and now aims for the top of global green biotechnology

2019.02.13

- Maintains No. 1 global nucleotide market share for 8 years based on the biggest market of China

- Achieves 60% market share by securing differentiated R&D and production capability, obtaining competitiveness that overwhelms competitors

 

CJ CheilJedang has dominated China, the world’s biggest nucleotide market, and is now picking up speed to become global leading company in green biotechnology. CJ CheilJedang has secured the leading supplier status in the market based on its overwhelming competitiveness in China, which takes up approximately two-thirds of the global nucleotide market and is estimated to be more than 400 billion won a year, while also staying at the top of the market share (in terms of production) with at least 60% of the global market.

 

CJ CheilJedang announced that its total nucleotide sales last year increased by approximately 20% based on its growth in China, and sales also increased year on year by 20% in the first quarter of this year. The company has been regularly targeting the global market since 1977 when it first produced and released nucleotide. Currently, it has three global nucleotide production bases in Indonesia and China, two of which are operated in Liaocheng and Shenyang, China.

 

Nucleotide is a flavoring agent that enhances the flavor of food and is used as a key ingredient that adds flavor to seasoning, soy sauce, sauces and various processed foods. It has received relatively little attention compared to amino acids for livestock such as lysine or tryptophan among various items that belong to the global green biotechnology market, but recently it is receiving much attention as a sought-after product with high growth and profitability.

 

CJ CheilJedang was able to become No. 1 in the global nucleotide market thanks to its quality and cost competitiveness based on advanced R&D capabilities attained by constant and preemptive investments. The nucleotide products of CJ CheilJedang in the Chinese nucleotide market not only possess differentiated product competitiveness but also provide ‘customized solutions’ considering that most deals are business to business (B2B) deals. Unlike other nucleotide companies in China that focus on ‘product marketing’ that provides only nucleotide products, CJ CheilJedang is increasing demand and sales through ‘technology marketing’ in which it provides not only the nucleotide products desired by local clients but also appropriate uses and recipes for each product.

 

“The key factor that has led us to become No. 1 in the global nucleotide market is our unrivaled technological competitiveness, which meets and exceeds the quality level sought by customers,” said an official at CJ CheilJedang. “We will keep making efforts so that the nucleotide business contributes to making CJ CheilJedang the world’s leading bio company.”

 

Meanwhile, the local food industry is becoming broader and more advanced in step with the economic recovery of China, which suggests that the demand for nucleotide as the key ingredient will continue to increase. Moreover, with the increased demand for nucleotides from big food companies, the market is changing from the price-oriented market from the past to a market in which stable production and supply capabilities are deemed important, which will make CJ CheilJedang’s role as the biggest global nucleotide supplier much more vital. CJ CheilJedang plans to focus on maximizing market influence by expanding the production base and reinforcing cost competitiveness by keeping pace with such market changes. (The end)

  

[Reference] What is green biotechnology?

- The biotechnology business is categorized into red, white and green biotechnology. Red biotechnology indicates the biopharmaceutical (technology) business as implied by the color of blood. This includes diagnosis and treatment of diseases, hormone therapy, development of new biotech drugs, and stem-cell therapy. White biotechnology, which implies turning the black smoke from factory chimneys white, refers to bioenergy and bioprocesses as well as eco-friendly materials. It does not account for a significant part of the entire bio-industry yet, but the scope of application in industries and environment is expanding. In particular, the development of white biotechnology in Korea where resources are insufficient is expected to produce economic effects like reduced importing of fossil fuels. Green biotechnology is an industry that industrially produces various useful substances using functions and information of organisms, and refers to the industrial field that creates new functional materials, plant seeds and additives based on microorganisms and plants such as food biotechnology and agricultural biotechnology.

- The global green biotechnology market is composed of amino acids for livestock that help animal growth such as lysine, methionine and threonine, and food flavoring agents that enhance the taste and flavor of food such as nucleotide or MSG. In addition, functional amino acids that have specific effects and can be used in health foods such as arginine are also receiving attention. With the market size worth hundreds of billions to even trillions of won depending on the item where global companies like Evonik (Germany) and Ajinomoto (Japan) are engaged in fierce competition, CJ CheilJedang is at the top of the market in terms of market share for four items such as lysine,tryptophan, nucleotide and valine. CJ CheilJedang is proving its differentiated competency by exporting finished goods to over 80 countries worldwide in the green biotechnology business based on microorganism fermentation.

- According to the industry, the global green biotechnology market size is worth approximately 190 trillion won, recently showing an annual average growth of 8%. It is considered to have more growth potential than the white biotechnology (environment and energy; market size of 40 trillion won/annual average growth of around 4%) or red biotechnology (medicine and pharmaceuticals; market size of 1,100 trillion won/annual average growth of around 5%), thereby receiving much fanfare as the next-generation growth engine of global companies.