Controlling 60% of Global Market
CJ CheilJedang Corp., a key subsidiary of South Korea's food and entertainment conglomerate CJ Group, is leading the global nucleic acid market.
The company maintains a “super gap” in global market share with Japan’s Ajinomoto Co., the second largest producer in the world. In particular, there are expectations that the gap between the two companies will widen even further as CJ CheilJedang has recently made an additional investment in facilities.
The global market of nucleic acids, which are food additives that enrich the flavor and add a special taste, is worth 600 billion won (US$519.48 million) a year, according to CJ CheilJedang on April 24. The market has recorded an average annual growth rate of some 6 percent over the past four years and it is expected to grow to 1 trillion won (US$865.80 million) within four to five years. Nucleic acids attracted relatively less attention compared to amino acids for livestock such as lysine and tryptophan but they have recently become a favored product with high potential for growth and profitability.
CJ CheilJedang has risen to first place with more than 50 percent of the global market share in 2016. With the economic growth of China, which accounts for two thirds of the global nucleic acid consumption, demand for nucleic acids is on a rapid increase. This is because Chinese food firms are becoming bigger and more advanced and the dining market is growing as well.
An official from CJ CheilJedang said, “The market is growing by 6 percent a year on average but the company’s sales have been growing by a double digit. The gap with the second biggest company is getting wider.” CJ CheilJedang has a nearly 60 percent share of the nucleic acid market, while Ajinomoto's share is less than 20 percent.
Despite its overwhelming market share, CJ CheilJedang is making an aggressive investment in facilities. The company beefed up its production capacity by 10,000 tons a year at its three production bases, two in China and one in Indonesia, at the end of 2018. In addition, it has recently started work to expand its production capacity by an additional 10,000 tons. This is part of its plan to widen the gap to a level that does not alloq its competitors to catch up.