Jungbunzlauer to up citric acid, xanthum gum capacity

The company, which has its headquarters in Basel, specialises in natural and nature identical ingredients.

It was founded in 1867.

All of its four plants are to be recipients of the money earmarked for investment, extending the volumes of xanthan gum, citric acid, calcium citrate, and gluci-delta-lactone.

The aim, it says, is to be able to " better serve the growing needs of its customers" - as well as strengthen its position in the bio-ingredient sector.

However the company would not give any further comment on the rationale behind the move, or any precise indication of the level of the capacity increases.

Citric acid

The company is planning to install new, cutting-edge equipment for fermentation, separation, and purification at its citric acid plant in Austria, which will also reduce consumption of resources and improve environmental impact of the production.

Citric acid is used as a flavouring and a preservative, especially in the beverage sector.

Demand has been increasing in recent years as a result of new applications and markets.

Between 2004 and 2007 consumption in Europe increase by around 15 per cent to 440,000 tonnes.

According to a recent report from Leatherhead Food International, global demand was 1.4m tonnes in 2007.

However while European production of the ingredient has increased slightly to meet new demand, its overall market share has shrunk by nine per cent.

This is because European citric acid producers have been under significant price pressure recently as a result of cheaper material entering the market from Chinese suppliers.

However a complaint brought by producers including Jungbunzlauer to European authorities resulted in the imposition of anti-dumping tariffs against Chinese suppliers.

Although Jungbunglauer has not issued comment on the competition authorities' findings in its favour, the plan to increase capacity would indicate an expectation that equilibrium will be restored.

In this context, Jungbunzlauer is in a relatively strong position since a number of other European producers have recently closed facillities or bowed out of the market entirely.

These include major players ADM and Tate & Lyle.

Xanthan gum Jungbunzlauer says that xanthan gum is experiencing "robust growth" in all market segments - house and beauty care and oildrilling, as well as food uses.

The hydrocolloid by used in the food sector as a thickener and stabiliser in products like sauces and dressings.

It is said to have "exceptional rheological behaviour produced by the bacterium Xanthomonas campestris ".

According to Leatherhead, sales of hydrocolloids increase from US$635m in 2004 to $760m in 2007.

Xanthan gum is the third biggest hydrocolloid seller, after locust bean gum and gum arabic.

There have been some predictions that prices for xanthan gum will increase this year due to a shift in market conditions - namely, raw material costs, and the likelihood that Chinese material will become more expensive due to tax issues.

Danisco said last year that it did not believe the market situation justifies reinvestment.

Both Danisco and market leader CP Kelco closed some xanthan production in 2007, in China and the UK respectively.

Calcium citrate The German firm said it is seeing growing demand for its calcium citrate, produced out of its plant in Ladenburg, Germany, as a result of its use in the mineral fortification and supplement market.

Here, it did give an indication of the planned level of capacity increase - it will double.

The mineral salts made in Ladenburg are derived from organic acids.

Glucono-delta-lactone Used as a mild acidifier, sequestrant and leavening agent, Jungbunzlauer's Glucono-delta-lactone is produced at its plant in Marckolsheim, France.

While is has been stated that production will be increase, no spokesperson was prepared to answer questions about the company's experiences of the market for this ingredient.

Jungbunzlauer does not release any financial results.