Cyanotech counts on China for astaxanthin expansion

By Jess Halliday

- Last updated on GMT

Related tags Astaxanthin China Cyanotech Japan

Cyanotech has signed a deal with a distribution company in China
that will see its astaxanthin ingredient sold in the promising
market for the first time - for both human nutrition and

Small quantities of the antioxidant, cultivated at the company's facility in Hawaii, have already shipped but although the regulatory procedures for the aquaculture side are complete, for human nutrition they are still in progress.

Although he was unable to speculate on the precise quantities that may be sold nor disclose the distributor, president Gerald Cysweski told "China is the most populous nation in the world, and the economy is growing. With acceptance of supplements increasing, there is great potential."

Astaxanthin is produced by the haematacoccus pluvialis​ algae when water supplies in its habitat dry up to protect itself against the effects of UV radiation. Research has shown it to have a similar structure to lutein and zeaxanthin, but there are indications that it has an even stronger antioxidant activity.

This is the first time Cyanotech has sold astaxanthin into China, although in the 1990s it did sell spirulina pacifica through a multilevel marketer now known as Health and Beauty Holdings.

This activity was curtailed when the Chinese government introduced restrictions on multi-level marketing. But Cysewski met with the company on a business development trip to Asia in November and, following the relaxation of direct selling regulations, is "cautiously optimistic that business will increase again"​.

Out of all the Asian countries, the northeast (China, Korea, Taiwan and Japan) is currently showing the most potential.

"The type of products we sell tend to sell better in developed nations as people have more disposable income,"​ said Cysewski. Around 50 percent of the company's overall sales are to clients in the US.

As for astaxanthin, he said that he expects the market to grow steadily over the next five to 10 years, as more people around the world become aware of its benefits and uses.

In Japan, where the company already works with a distributor for its human nutrition product, BioAstin, he said sales could double this year over 2005.

Europe, however, is three or four years behind the US and Japan; although it is growing, there is not so much awareness at both customer and retailer level.

Last year the company completed a conversion of 10 of its pools to make a switch from spirulina to astaxanthin production possible within just a couple weeks. The reasoning behind increasing its potential astaxanthin capacity by 70 percent was primarily to meet demand from the aquaculture market in Japan, however because this market has suffered a setback due to the effects of adverse weather, it is not yet utilizing the added capacity.

Cyanotech is aiming to move as much astaxanthin to the human nutrition market as possible, but aquaculture remains a very important part of the business. The NatuRose aquaculture product allows it to maintain high production capacity, which means it can keep costs down across the board.

At present, more revenue is generated from sales of astaxanthin to the human market than aquaculture, but because humans take much smaller doses (an average of 4mg per day) the majority of production capacity is still devoted to aquaculture.

In recent years, the astaxanthin market has become increasingly competitive, with five or six companies now competing for a share.

For example, the Yamaha motor company announced in July that it is entering the astaxanthin market after having developed a bioreactor system to mass-produce it using artificial light and fluid control. Its product is expected to reach the market in October 2006.

Last July Fuji Health Science, the US subsidiary of Japan's Fuji Chemical Industry Co, announced that its AstaREAL biomass astaxanthin, produced at its facility in Gustavsberg, Sweden, is now registered as a new dietary ingredient (NDI) for use in dietary supplements in the US.

This followed just one month after the notification of Valensa International's Zanthin astaxanthin, also a 10 percent extract, as a NDI.

However Cyanotech believes it bodes well for the ingredient that other companies are seeing the potential. Moreover with more parties conducting clinical trials, the science base behind astaxanthin is growing.

Although it does not reveal precise volumes, Cyanotech claims to have been the leader in astaxanthin since it started commercial production in 1996, with 50 percent of human nutrition and 100 percent of the aquaculture market.

Its product is a supercritical CO2 extract oleoresin that comes in five and seven percent levels, as well as a microencapsulated, tablet-grade beadlet product. It does not include other carotenoids such as lutein, beta-carotene and canthaxanthin in its titer percentage.

Around 15 different applications of astaxanthin have so far been documented, and Cysewski believes there is plenty of room for competitors to carve out a niche.

Cyanotech holds three usage patents, for carpal tunnel syndrome, for cold and canker sores, and as an internal and topical sunblock to prevent skin damage from UV radiation.

Valensa holds both US and world patents for the use of astaxanthin in retarding and ameliorating central nervous system and eye damage, and Fuji has world patents for its use in physical and muscle endurance, gastric health, fertility and for the immune system disorder Crohn's disease.

Fuji also has a patent pending for eye fatigue and visual acuity.

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