July & August 2003

Continuous changes throughout the fermentation and biotechnology sectors are the norm. Corporate takeovers have resulted in ownership changes subsequently reflected in product diversification in existing plants are closures of plants. The antibiotics sector has been most affected by corporate changes and plant closures, especially in Europe where small producers have virtually disappeared leaving behind only the majors: DSM, Novartis and Edisson. Only 3 U.S. producers are still in antibiotics: Abbott, Bristol-Myers Squibb and Lilly. The same applied to the sector of organic acids [citric, lactic] where 4 producers in the U.S. and Europe dominate: ADM, Cargill, Jungbunzlauer, Purac, and Tate & Lyle. In amino acids the Japanese company Ajinomoto as well as ADM dominate the lysine area. In vitamins Roche [soon to be part of DSM] is virtually sole producer. Enzymes are dominated by Novozymes and Genencor.

This still leaves many Chinese and Indian companies involved in the production of these products. They have been responsible for disposing of their output at depressed prices often below manufacturing cost. It is hoped that eventually Chinese companies will be subjected to the rigors of WTO anti-dumping legislation. After all why do they belong to a club without heeding its ground rules?

The situation is different in the biotechnology area where many large and small companies operate bacterial and mammalian cell plants for the production of a wide range of proteins: insulin, interferon, EPO, and monoclonal antibodies. Most producers are in Europe and the U.s. - a virtual absence of Chinese and Indians has ensured price stability. But with the lapse of patents for many of these proteins by 2010 Chinese competition is likely to emerge.

For the latest information concerning fermentation and biotechnology plants and their capacities see our survey: The Fermentation and Biotechnology Industry - Current Capacity and Capacity Requirements by 2010.