30 November 2007 - As part of its Chinese expansion plans, Vedan is reportedly planning to acquire local MSG plants.
CEO Yang Kun-Hsiang, cited by the Taiwanese financial press, indicated that currently the MSG market in China is quite competitive and unstable and only those that are strong enough are able to survive with the paper-thin margins resulting from underselling.
Skyrocketing raw material prices have forced quite a few small-sized MSG plants to close, added the CEO.
In 2006, the number of MSG manufacturers in China was around 40. The number is expected to drop to 20 before the end of this year; and the figure might even go down to 10 within 2 or 3 years, Yang predicted.
In September this year, Vedan, anticipated that its Chinese MSG business would pick up again in the second half of this year.
FLEXNEWS reported that the company’s Chinese joint venture Shangdong Vedan Snowflake had commenced the installation of production facilities, which were acquired from Mao Tai factory. The plant has an additional annual production capacity of 24,000 tons and has normally begun production this month, bringing the company’s total capacity of MSG production to 45,000 to 50,000 tons annually.
“Expanding business in China is still a major task of the Group. The GA and MSG segments in China are going through transformation and consolidation. The Group will actively look for and evaluate possible strategic alliances to expand business in China. Expanding and strengthening the foothold of modified starch for food applications in the China market is another major focus of the Group”, Vedan said at the time.