Rising costs push up Kyowa amino acid prices again
percent on the back of spiraling energy and raw material costs and
a continuing increase in demand.
The Japanese-owned company is one of the world's top two amino acid suppliers (the other being Ajinamoto), and deals with all 20 of the common L-amino acids for pharmaceutical and nutraceutical uses. The announcement comes exactly a year after the company hiked up its prices for amino acids by 10 percent worldwide, again in an effort to stave off margin deterioration amid increasing production costs that were degrading margins, and also to ensure long-term availability of the ingredients. "Recent increases in costs for energy and raw materials along with the ongoing investment necessary to keep pace with the growing demand to produce top quality ingredients require us to increase prices," said Chikakui Kotani, president of Kyowa Hakko USA. Price increases The effects of the soaring cost of oil, which has recently risen to a record $107 per barrel, poor weather conditions, and the competition for raw materials from the increasing demand for biofuels, has meant costs have been experienced across the food and neutraceuticals industry. Leo Collins, vice president for sales and marketing, told NutraIngredients-USA.com, that this is not the only method the company has taken to counter rising costs. He said: "We have also initiated process improvement projects to keep costs down, and have increased capacity at our new amino acid production facility in Shanghai." Collins added that he expects other suppliers of amino acids are having to take similar actions in these current conditions. Amino acids L-amino acids are usually produced by fermentation, and raw materials include a carbon source (usually glucose from corn starch or sugar beet); bacteria; and solvents for the downstream process. Amino acids used in pharmaceutical drugs, as well used in functional foods, infant nutrition products and food supplements. Increasing demand for amino acids also has a small part to play in the need for rising process, said Collins.