35Dou learned that recently, the listing of Shandong Sanyuan Biotechnology Co., Ltd. (hereinafter referred to as "Sanyuan Biotechnology") on the GEM has been registered and effective. It plans to raise 900 million yuan, and CICC Securities is its sponsor. The raised funds were 770 million yuan for the annual output of 50,000 tons of erythritol and the technology center project, and 130 million yuan was used to supplement working capital.
Figure 1: This fundraising will be used for projects, source: Sanyuan Biotechnology Prospectus
Sanyuan Biotechnology was formerly "Binzhou Sanyuan Biotechnology Co., Ltd.", and was established on January 26, 2007. It was established by Sanyuan Home Textiles in currency investment, with a registered capital of 1.5 million yuan. On November 23, 2012, the Shandong Binzhou Industry and Commerce Bureau was officially changed to "Sanyuan Biotechnology Co., Ltd. Salary", and Nie Zaijian was the controlling shareholder and actual controller of the company.
focuses on the production of erythritol for more than ten years, and has a wide range of applications
Sanyuan Biotechnology is a professional manufacturer in China that began industrial production of erythritol earlier. It focuses on providing consumers with healthier new sweeteners, and is committed to serving consumers with "sweet and no burden" high-quality sweeteners, reducing obesity caused by excessive sugar intake, diabetes and other health problems.
Since its establishment, Sanyuan Biotechnology has focused on deeply cultivating erythritol products for more than ten years, and has successively overcome the process problems of bacterial breeding, formula optimization, fermentation control, crystallization extraction and other links, and has become the world's largest erythritol manufacturer.
Its main business revenue in 2018, 2019, 2020, and January-June 2021 was RMB 292 million, RMB 477 million, RMB 783 million and RMB 789 million, respectively; net profit was RMB 68.0885 million, RMB 136 million, RMB 233 million and RMB 243 million, respectively. The gross profit margins from 2018 to 2020 were 36.86%, 43.63% and 42.16% in turn.
Table 1: Sanyuan Biotechnology's operating income in the first half of 2018-2021, data source: Sanyuan Biotechnology prospectus
The company's main products are erythritol and compound sugar. Erythritol is a tetracarbon sugar alcohol with a molecular formula of C4H10O4. It is a sugar alcohol sweetener substance that is widely present in nature. Common fermented foods such as soy sauce, wine, etc. contain erythritol.
The main production methods include biological extraction method, chemical synthesis method and microbial fermentation method. Currently, the industrial large-scale production of erythritol uses microbial fermentation method, using glucose as raw material and hypertonic resistant yeast as fermentation bacteria. It is produced using fermentation technology and is generally considered a "natural" sweetener.
is different from other sugar alcohols. Erythritol has extremely low calories. Since there is no enzyme system that metabolizes erythritol in the human body, after erythritol enters the human body, it does not participate in sugar metabolism. Most of it is excreted from the body with urine, and it will hardly produce calories and cause changes in blood sugar. Therefore, erythritol is widely considered a "zero calorie" sweetener.
Figure 2: Comparison of metabolic pathways between erythritol and other sugar alcohol products, source: "Food Safety Guide" 2014 Issue 24
Erythritol has good physical properties and has a broad range of applications. At present, Sanyuan Biotech covers seven major business areas: table sugar, seasoning sugar, beverages; candy and chocolate foods; baked foods; health foods; pharmaceutical products; cosmetics products; chemical products. Complex sugar products can be divided into different types according to the high-value sweeteners used. The complex sugars sold by Sanyuan Biotech include Luohan Fruit Complex sugar, stevia compound sugar, and sucralose compound sugar.
erythritol and compound sugar industry chain mainly includes: upstream production of corn starch sugar, ammonium salt , yeast extract, rohan fruit sweetener and other main and auxiliary materials; midstream production of erythritol and compound sugar products; downstream processing and consumption of erythritol and compound sugar, and its product applications have reached 51 types.
Consumers' sugar awareness changes, sugar-free market is growing explosively
At present, health problems caused by excessive sugar intake are emerging worldwide, increasing the risk of consumers suffering from chronic diseases and endangering their health.The concept of healthy sugar consumption of "reducing sugar" and "lowering sugar" is becoming a social consensus. Many governments have introduced collection policies to impose " sugar tax " to curb consumers' excessive intake of added sugar. In addition, consumers' awareness of sugar content and calorie value when purchasing beverages and food is also increasing. Food and beverage manufacturers use sweeteners to replace traditional added sugars such as sucrose to launch "zero-calorie" and "sugar-free" products is becoming a craze.
The competitive advantage of erythritol lies in its pure and coordinated sweetness, and the "natural" fermentation production method is more in line with consumers' consumption concept of pursuing natural health.
In addition, the combination of erythritol and high-power sweetener can not only greatly improve the convenience of downstream use, but also effectively cover up the bad aftertastes such as metallic flavor and Chinese herbal flavor that exists in some high-power sweeteners, better simulate the flavor of sucrose and increase consumer acceptance.
In recent years, high-power sweeteners and erythritol are compounded and added to food and beverages or eaten directly, and are increasingly common in the sugar substitute market. According to research data from Global Industry Analysts, the global artificial high-power sweetener market size is about US$2 billion in 2020, and the compound growth rate is predicted to be about 2.9% from 2020 to 2027. The growth of the high-power sweetener market and the promotion of compounding methods will also promote the rapid growth of the erythritol market.
Since 2017, the erythritol industry has grown rapidly, with global output growing from 51,000 tons in 2017 to 85,000 tons in 2019, an increase of up to 66.67%. According to research data from LP Information, Inc., the global erythritol market size in 2019 was approximately US$225.6 million, or approximately RMB 1.579 billion.
According to China Industry Information Network statistics, from 2015 to 2019, the global sucrose consumption increased from 169 million tons to 175 million tons, with an average annual compound growth rate of only 0.8%. The total consumption scale of the global sucrose market is one trillion-level. In comparison, the overall scale of the current market is still small, and the sugar-free market development potential is huge.
At present, the domestic market has entered a period of explosive growth, and the domestic and foreign dual-wheel drive has enhanced the expansion momentum of the erythritol market. Whether it is a leading beverage company such as Master Kong, Tongyi, Nongfu Spring , Nestle , or a new domestic beverage company such as Yuanqi Forest , Heytea , they are actively planning the low-sugar sugar-free track. Low sugar and sugar-free are becoming one of the core selling points for beverage companies to promote new products and are gradually becoming an important focus of consumers. As consumers and manufacturers gradually deepen their understanding of erythritol, it is expected that the degree of substitution of erythritol and its compound products in the domestic market to add sugars such as sucrose, fructose syrup, , etc. will be further deepened in the future.
Since 2020, new beverages that add erythritol to replace sucrose and focus on "0 sugar, 0 calories" have shown explosive growth trend.
Table 2: New beverage products added to erythritol in China in 2020 (partial). Data source: Sanyuan Biotechnology Prospectus
Erythritol Industry concentration high, Sanyuan Biotechnology has obvious core advantages
Entering the erythritol industry has three high barriers to scale, technology and qualification. At this stage, the global erythritol industry production center is in China, mainly including Sanyuan Biotechnology, Bowling and Zhucheng Dongxiao, and are all located in Shandong Province. Mainly foreign countries are Cargill Company and JBL Company.
Table 3: Comparison of major erythritol industry enterprises, data source: According to Sanyuan Biotech's prospectus and the above-mentioned company's official website
In 2021, Yuanqi Forest became Sanyuan Biotech's largest customer, followed by well-known companies such as Hhoya B.V., Sharoya, ADM (Shanghai, the United States, Europe), and Nongfu Spring, providing strong impetus for the growth of its operating income.
Table 4: Sanyuan Biotech's top five customers in 2021, data source: Sanyuan Biotech's prospectus
Before this, Yuanqi Forest also cooperated with Sanyuan Biotech, from the third largest customer in 2020 to the largest customer in 2021, which is the reflection of the rapid growth of the sugar-free beverage market.
Yuanqi Forest, under the wind of "healthy diet", focuses on "0 sugar, 0 calories, 0 fat, 0 trans fatty acid " beverage products, opening up a new track among a number of well-known brands. It has been established for five years and has a valuation of nearly 100 billion yuan.
With the popularity and hot sales of Yuanqi Forest, many new and old beverage brands have successively launched sugar-free beverages, including Coca-Cola , Nongfu Spring, Tongyi, Master Kong, Wanglaoji , Heytea and other brands, ultimately promoting the significant growth of the upstream erythritol industry.
As of the end of June 2021, Sanyuan Biotechnology has 285,000 tons of erythritol production capacity, becoming the company with the largest production capacity and output and the highest market share in the global erythritol industry.
Major manufacturers in the same industry at home and abroad are developing a variety of sugar alcohol and fermentation products while getting involved in erythritol production. In comparison, since its establishment in 2007, Sanyuan Biotechnology has always focused on the production of erythritol products, with five core advantages: fermentation strains, fermentation medium formula, unique mother liquor recycling technology, control technology and process level, and location.
The technological innovation of Sanyuan Biotechnology is concentrated in two aspects: First, through formula improvement, technology research and development, process optimization, scientific research cooperation, etc., we will continuously improve the level of erythritol conversion and extraction, improve the efficiency of energy power use, and reduce pollutant emissions, so as to promote the continuous improvement of the quality and economicality of erythritol products.
Second, closely track the cutting-edge trends in the world's new sweetener industry development, and actively explore methods for industrialization, large-scale and economical production of new healthy sweeteners.
As a replacement product for traditional added sugars such as sucrose, the change in consumers' sugar concepts is the core driving force for the development of the erythritol industry. In recent years, diabetes has occurred in my country, and domestic consumers are becoming more and more aware of health, and their awareness of reducing sugar and controlling sugar has been widely increased. This has led to the rapid development of the domestic sugar-free beverage industry and the demand for erythritol market is strong.
According to Sullivan's research data, China's annual erythritol production increased from 18,000 tons in 2015 to 51,000 tons in 2019, with an annual compound growth rate of 29.9%. The output value of erythritol accounts for the total output value of China's sweetener market from 4.0% in 2015 to 6.4% in 2019.
Since 2019, erythritol manufacturers such as Sanyuan Biotechnology, Zhucheng Dongxiao, and Baobao have successively implemented capacity expansion. New investors represented by Fengyuan Pharmaceutical , Yuxing Bio, and Zhejiang Huakang have planned or implemented a new erythritol capacity plan. Erythritol has grown into an important category for the rapid development of the current sweetener industry.
In the next five years, Sanyuan Biotechnology will further expand its erythritol production capacity and consolidate its dominant position in the global erythritol industry; based on erythritol, it will actively promote cooperation with leading domestic food fermentation research institutions to develop new functional sugar products with market competitiveness; and build it into a nationally renowned brand in the functional sugar industry.
Reference : Sanyuan Biotechnology Prospectus
The concept of healthy sugar consumption of "reducing sugar" and "lowering sugar" is becoming a social consensus. Many governments have introduced collection policies to impose " sugar tax " to curb consumers' excessive intake of added sugar. In addition, consumers' awareness of sugar content and calorie value when purchasing beverages and food is also increasing. Food and beverage manufacturers use sweeteners to replace traditional added sugars such as sucrose to launch "zero-calorie" and "sugar-free" products is becoming a craze.The competitive advantage of erythritol lies in its pure and coordinated sweetness, and the "natural" fermentation production method is more in line with consumers' consumption concept of pursuing natural health.
In addition, the combination of erythritol and high-power sweetener can not only greatly improve the convenience of downstream use, but also effectively cover up the bad aftertastes such as metallic flavor and Chinese herbal flavor that exists in some high-power sweeteners, better simulate the flavor of sucrose and increase consumer acceptance.
In recent years, high-power sweeteners and erythritol are compounded and added to food and beverages or eaten directly, and are increasingly common in the sugar substitute market. According to research data from Global Industry Analysts, the global artificial high-power sweetener market size is about US$2 billion in 2020, and the compound growth rate is predicted to be about 2.9% from 2020 to 2027. The growth of the high-power sweetener market and the promotion of compounding methods will also promote the rapid growth of the erythritol market.
Since 2017, the erythritol industry has grown rapidly, with global output growing from 51,000 tons in 2017 to 85,000 tons in 2019, an increase of up to 66.67%. According to research data from LP Information, Inc., the global erythritol market size in 2019 was approximately US$225.6 million, or approximately RMB 1.579 billion.
According to China Industry Information Network statistics, from 2015 to 2019, the global sucrose consumption increased from 169 million tons to 175 million tons, with an average annual compound growth rate of only 0.8%. The total consumption scale of the global sucrose market is one trillion-level. In comparison, the overall scale of the current market is still small, and the sugar-free market development potential is huge.
At present, the domestic market has entered a period of explosive growth, and the domestic and foreign dual-wheel drive has enhanced the expansion momentum of the erythritol market. Whether it is a leading beverage company such as Master Kong, Tongyi, Nongfu Spring , Nestle , or a new domestic beverage company such as Yuanqi Forest , Heytea , they are actively planning the low-sugar sugar-free track. Low sugar and sugar-free are becoming one of the core selling points for beverage companies to promote new products and are gradually becoming an important focus of consumers. As consumers and manufacturers gradually deepen their understanding of erythritol, it is expected that the degree of substitution of erythritol and its compound products in the domestic market to add sugars such as sucrose, fructose syrup, , etc. will be further deepened in the future.
Since 2020, new beverages that add erythritol to replace sucrose and focus on "0 sugar, 0 calories" have shown explosive growth trend.
Table 2: New beverage products added to erythritol in China in 2020 (partial). Data source: Sanyuan Biotechnology Prospectus
Erythritol Industry concentration high, Sanyuan Biotechnology has obvious core advantages
Entering the erythritol industry has three high barriers to scale, technology and qualification. At this stage, the global erythritol industry production center is in China, mainly including Sanyuan Biotechnology, Bowling and Zhucheng Dongxiao, and are all located in Shandong Province. Mainly foreign countries are Cargill Company and JBL Company.
Table 3: Comparison of major erythritol industry enterprises, data source: According to Sanyuan Biotech's prospectus and the above-mentioned company's official website
In 2021, Yuanqi Forest became Sanyuan Biotech's largest customer, followed by well-known companies such as Hhoya B.V., Sharoya, ADM (Shanghai, the United States, Europe), and Nongfu Spring, providing strong impetus for the growth of its operating income.
Table 4: Sanyuan Biotech's top five customers in 2021, data source: Sanyuan Biotech's prospectus
Before this, Yuanqi Forest also cooperated with Sanyuan Biotech, from the third largest customer in 2020 to the largest customer in 2021, which is the reflection of the rapid growth of the sugar-free beverage market.
Yuanqi Forest, under the wind of "healthy diet", focuses on "0 sugar, 0 calories, 0 fat, 0 trans fatty acid " beverage products, opening up a new track among a number of well-known brands. It has been established for five years and has a valuation of nearly 100 billion yuan.
With the popularity and hot sales of Yuanqi Forest, many new and old beverage brands have successively launched sugar-free beverages, including Coca-Cola , Nongfu Spring, Tongyi, Master Kong, Wanglaoji , Heytea and other brands, ultimately promoting the significant growth of the upstream erythritol industry.
As of the end of June 2021, Sanyuan Biotechnology has 285,000 tons of erythritol production capacity, becoming the company with the largest production capacity and output and the highest market share in the global erythritol industry.
Major manufacturers in the same industry at home and abroad are developing a variety of sugar alcohol and fermentation products while getting involved in erythritol production. In comparison, since its establishment in 2007, Sanyuan Biotechnology has always focused on the production of erythritol products, with five core advantages: fermentation strains, fermentation medium formula, unique mother liquor recycling technology, control technology and process level, and location.
The technological innovation of Sanyuan Biotechnology is concentrated in two aspects: First, through formula improvement, technology research and development, process optimization, scientific research cooperation, etc., we will continuously improve the level of erythritol conversion and extraction, improve the efficiency of energy power use, and reduce pollutant emissions, so as to promote the continuous improvement of the quality and economicality of erythritol products.
Second, closely track the cutting-edge trends in the world's new sweetener industry development, and actively explore methods for industrialization, large-scale and economical production of new healthy sweeteners.
As a replacement product for traditional added sugars such as sucrose, the change in consumers' sugar concepts is the core driving force for the development of the erythritol industry. In recent years, diabetes has occurred in my country, and domestic consumers are becoming more and more aware of health, and their awareness of reducing sugar and controlling sugar has been widely increased. This has led to the rapid development of the domestic sugar-free beverage industry and the demand for erythritol market is strong.
According to Sullivan's research data, China's annual erythritol production increased from 18,000 tons in 2015 to 51,000 tons in 2019, with an annual compound growth rate of 29.9%. The output value of erythritol accounts for the total output value of China's sweetener market from 4.0% in 2015 to 6.4% in 2019.
Since 2019, erythritol manufacturers such as Sanyuan Biotechnology, Zhucheng Dongxiao, and Baobao have successively implemented capacity expansion. New investors represented by Fengyuan Pharmaceutical , Yuxing Bio, and Zhejiang Huakang have planned or implemented a new erythritol capacity plan. Erythritol has grown into an important category for the rapid development of the current sweetener industry.
In the next five years, Sanyuan Biotechnology will further expand its erythritol production capacity and consolidate its dominant position in the global erythritol industry; based on erythritol, it will actively promote cooperation with leading domestic food fermentation research institutions to develop new functional sugar products with market competitiveness; and build it into a nationally renowned brand in the functional sugar industry.
Reference : Sanyuan Biotechnology Prospectus
