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The demand of Vitamin has made steady growth. Vitamin is one of the main products for the international market of feed, medicine and health care products. According to the study on the global potential demand on Vitamin, conducted by professor Philip M. Parker from the university of INSEAD, he forecasted that from 2009 to 2011, the market demand of Vitamin will make 2.84% average annual growth rate, and the total demand in the global market of feed, medicine, nutrition and health care products, food as well as cosmetics in 2011 will reach 3.15 billion dollars. As 70% of vitamin is used for the feed additives, the demand of vitamins is impacted greatly by the downstream cyclical changes in feed industry and animal husbandry. From 2000 -2008, the global demand for feed has an average annual growth rate of 2.2%, and in 2008, feed production growth rate reached 2.9%. The strong demand growth in the markets in China, Brazil and other emerging markets effectively compensate the decline in demand in the mature markets of the feed industry and animal husbandry. Therefore, it is a reasonable expectation that we judge from the growth of the demand in the lower that the average annual growth rate of the future needs of vitamins is close to 3%.
Vitamin E has the most investment value. In the Vitamin family, vitamin C, vitamin E and vitamin A have become the three pillars of products in the international vitamin market, and the total annual sale is about 2 billion U.S. dollars. While the supply and demand of vitamin E is balanced with technical barriers as well as highest industry concentration, it has the best investment value.
As the expansion of production capacity is limited, the supply of vitamin E is still tight. Production and marketing of vitamin E is mainly controlled by four oligopolistic suppliers such as DSM, BASF, Zhejiang Medicine and Zhejiang NHU with a total design capacity of about 6.7 million tons. In 2008, the total output of vitamin E is about 5 million tons, affected by facility overhaul, environmental and other factors, and the capacity utilization was 75%, so there is a gap with 15% of the supply and demand, which is the root cause of rapidly rising price of vitamin E in 2008. If the needs of Vitamin E makes growth rate of 3% in the future and there is no more capacity expansion in 2009 and 2010, the capacity utilization should rise to 95%, 98% in order to reach a balance of supply and demand, and the theoretical value is very difficult to achieve in the production process. Therefore, in the next two years the supply of vitamin E will remain tight. The high technical barriers, the key intermediates difficult to obtain, the heavy investment of new capacity and no possible for the existing manufacturers of vitamin E significantly increase capacity in the short term are all the key factors affecting the supple of vitamin E.
The market demand of Vitamin E will maintain high prosperous cycle in the next two years. The Comparing of supply and demand, industry concentration and other changeable parameters indicates that in the next 2-3 years, vitamin E will maintain a high level of profitability, and it is possible to return to the high-boom cycle for a long time in the 90s.
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