1. Introduction to the Project

1.1 Project background

1.1.1 Product introduction

Food additives refer to chemically synthesized or natural substances added to food to improve its quality, color, aroma, and to meet the needs of preservation and processing techniques. These additives may be artificially synthesized or naturally occurring, and their main function is to enhance the appearance, taste, nutritional value, or extend the shelf life of food.

This project relies on the rich plant resources and traditional medicinal and edible origin of Tongyu County to develop various natural food additives and ingredients such as sweeteners and antioxidants, which will be applied in diet, cooking, and food processing.

1.1.2 Market prospect

1. Analysis of the current situation of the food additive industry

Food additives are known as the soul of modern food industry and can bring many benefits to the industry, such as preservatives that can prevent food spoilage caused by microorganisms and extend the shelf life of food; antioxidants can prevent or delay the oxidation and spoilage of food, providing stability and shelf life; colorants, essence and spices can significantly improve the sensory quality of food and meet people’s different needs. With these advantages, the application of food additives in the food industry is becoming increasingly widespread and has become one of the most active and rapidly developing industries in the food industry. Data shows that from 2015 to 2022, the production of major varieties of food additives in China maintained a continuous growth trend, and the production increased to 16.11 million tons in 2023.

In recent years, with the development of the economy and the improvement of consumption levels, consumers’ requirements for food quality, taste, nutrition, and other aspects have been continuously increasing. This has prompted food production enterprises to use more food additives to enhance the market competitiveness of their products, thereby driving the growth of sales in the food additive industry. According to statistics, the sales revenue of major types of food additives in China in 2023 is about 147.7 billion yuan, a year-on-year increase of 5.35%.

(1) Segments in the market

1) Sweetener

Sweetener refers to a food additive that can impart sweetness to food. There are currently dozens of sweeteners widely used worldwide, including those from natural sources and those synthesized artificially. The twenty types of sweeteners approved for use in China are all approved for use in most countries and regions around the world, such as aspartame, acesulfame, saccharin, and saccharin, all of which have a long history of safe use. In recent years, with the improvement of people’s health awareness and the increasing demand for low sugar and sugar free foods, the development momentum of China’s sweetener industry has been strong. According to statistics, the size of China’s sweetener market will increase from 20 billion yuan in 2019 to 22.569 billion yuan in 2023, and will grow by 3.16% year-on-year to 11.641 billion yuan in the first half of 2024. From the perspective of segmented markets, synthetic sweeteners accounted for 52.02% of the market share in 2022, followed closely by natural sweeteners with 31.73% and sugar alcohol sweeteners with 16.25% of the market share, respectively. Although synthetic sweeteners still dominate the market, with the popularization of healthy eating concepts, natural sweeteners are increasingly favored by consumers due to their natural sources and minimal health impact. It is expected that the market share of natural sweeteners will continue to rise in the future, becoming an important growth point in the sweetener market.

2) Antioxidants

Antioxidants, as a special chemical substance that can resist the adverse effects of oxygen, have a wide range of applications in various fields such as food, medicine, cosmetics, etc. Especially in the food industry, antioxidants have become indispensable food additives due to their unique function of preventing or delaying food oxidation, greatly improving the shelf life and stability of food. In recent years, the market size of China’s antioxidant industry has shown certain volatility. Affected by factors such as changes in the domestic and international economic situation, intensified industry competition, and changes in consumer demand in 2022, the year-on-year decrease was 4.38% to 3.165 billion yuan. But with the recovery of domestic and international market demand in 2023, the size of the antioxidant market is gradually increasing, with a year-on-year growth of 8.69% to 3.44 billion yuan.

(2) Analysis of brand competition in the food additive market

At present, there are over 2400 types of food additives allowed to be used in China, and various types of food additives vary greatly in terms of raw materials, technology, and processes. The market size of each food additive is relatively small. Therefore, most of the competing enterprises in the industry are small enterprises, and each enterprise is involved in the production of one or a few products with similar processes or uses. The overall concentration of the industry is low. For a single product, due to the usually small market size, the industry concentration is high. Therefore, the food additive industry in China presents a relatively scattered market pattern with many small and medium-sized enterprises, but some segmented varieties and industries have high concentration.

2. Future development trends of the food additive industry

With the popularization of scientific knowledge and the deepening of health education, consumers are increasingly concerned about the impact of food ingredients on health. They tend to choose food that does not contain harmful additives, preservatives, artificial colors and essence to reduce potential health risks. In this context, natural green food additives have been widely favored by consumers due to their natural sources, environmentally friendly production processes, and harmless effects on human health and the environment. It is expected that in the future, with the improvement of people's health awareness, the food additive market will develop towards natural ingredients.

The global food additive market is expected to grow at an annual rate of around 3% in the coming years, having reached around $40 billion by 2025. Among them, the scale of China’s food additive market is growing rapidly, expected to increase from 22 billion US dollars in 2019 to 30 billion US dollars in 2025, with an average annual growth rate of over 10%. This indicates that the demand for food additives in the market is steadily increasing and has a broad market prospect.

1.1.3 Technical analysis

Natural food additives come from natural substances, mainly extracted from animal and plant tissues and microorganisms. The extraction methods include drying, crushing, separation, precipitation, extraction, decomposition, heating, distillation, fermentation, enzyme treatment, etc.

1.1.4 Advantageous conditions of project construction

(1) Policy advantages

The Guiding Catalogue for Industrial Structure Adjustment (2024 Edition) released by the National Development and Reform Commission lists “the development of high-quality, safe, and environmentally friendly agricultural inputs such as feed, feed additives, fertilizers, pesticides, veterinary drugs, and food additives allowed for green food production that meet the requirements of green and low-carbon recycling; the development and production of new technologies for natural food additives and natural flavors” as encouraged products by the state.

The State Administration for Market Regulation and other departments have issued a notice on strengthening the supervision of pre-packaged food safety and promoting high-quality development of the industry, proposing to establish and improve a food safety management system, strengthen risk control in food production and operation, strictly control the quality of raw materials, legally inspect the commitment and compliance certificates of edible agricultural product raw materials and other product quality certificates, strictly use food additives, and effectively ensure the food safety of pre-packaged food products.

The National Food Safety Standard for the Use of Food Additives proposes to further regulate the use of food additives.

The Measures for the Administration of Food Production License (2020) proposes to standardize the production license activities of food and food additives, strengthen the supervision and management of food production, and ensure food safety.

(2) Resource advantages

Agricultural product resources: Tongyu is a famous “hometown of miscellaneous grains and beans” and “hometown of red and dried pepper”, with high-quality and abundant agricultural products such as weak alkali millet, mung beans, sorghum, quinoa, and chili pepper. The highest annual output of sunflowers in Tongyu County is 120000 tons. The maximum annual production of mung beans and melon seeds is 80000 tons and 50000 tons respectively. The highest annual output of corn is 1.932 million tons, the highest annual output of sorghum is 238000 tons, the highest annual output of millet is 163000 tons, the highest annual output of miscellaneous grains and beans is 12000 tons, the highest annual output of vegetables is 50000 tons, the highest annual output of chili is 140000 tons, and the highest annual output of sweet corn is 20000 tons.

Land resources: The total cultivated land area of Tongyu County is 6.619 million mu, the total grassland area is 1.6945 million mu, and the total wetland area is 485600 mu. The unused land area is 145600 hectares. Adequate industrial and construction land.

Water resources: The pH value of water in Tongyu County is 7.20-7.80, which is the best weak alkaline water quality and the best water source for human consumption. Huolin River, Ermutai River (tributary), and Wenniugechi River flow through the territory, with three large and medium-sized reservoirs built in Xianghai, Xinglong, and Shengli, as well as over a hundred natural marshes scattered throughout. In recent years, by fully implementing the river lake connectivity project, the surface water in the entire county has been enriched, with a total storage capacity of 445 million cubic meters.

Clean energy: By the end of 2023, Tongyu County has had a clean energy grid connected installed capacity of 5.01 million kilowatts, a cumulative power generation of 10.722 billion kilowatt hours, and a total output value of 3.098 billion yuan. Among them, the installed capacity of wind power projects is 4.4 million kilowatts, with a power generation of 9.805 billion kilowatt hours; the installed capacity of the photovoltaic power generation project is 580000 kilowatts, with a power generation of 747 million kilowatt hours; the biomass cogeneration project has an installed capacity of 30000 kilowatts and a power generation capacity of 169 million kilowatt hours.

(3) Industrial advantages

Based on Tongyu’s agricultural resource advantages and production strengths, Tongyu County adheres to the principles of “grain at first, food at last” and “agriculture at first, work at last”, and strives to promote the high-quality development of the agricultural product processing industry. In 2022, the Agriculture and Rural Bureau of Tongyu County was awarded the title of “Advanced Collective of Jilin Province Agricultural Product Processing Industry Development Contribution Award” by the Provincial Government. In 2023, there was 3 national level leading enterprises, 8 provincial-level leading enterprises, 15 city level leading enterprises, and 13 county-level leading enterprises in the entire county. There were three provincial-level agricultural industrialization consortia. In 2022, the number of large-scale agricultural product processing enterprises in the county increased to 3, with an output value of 496 million yuan. In 2023, the area of miscellaneous grains and beans was 749600 mu, and the area of chili peppers was 102000 mu (including 54000 mu of large fields and 48000 mu of courtyards). There are 15 enterprises engaged in the processing and production of miscellaneous grains and beans in the county, including 4 provincial leading enterprises, 5 municipal leading enterprises, and 6 county-level leading enterprises. In 2022, the total assets of 15 enterprises engaged in the production of miscellaneous grains and beans were 1.367 billion yuan, with an output value of 1.2 billion yuan and a sales revenue of 700 million yuan. Jilin Tongyu Economic Development Zone has been promoted to a provincial-level agricultural product processing demonstration park in 2023.

(4) Talent advantages

Baicheng City has several colleges and universities, including Baicheng Normal University, Baicheng Medical College, and Baicheng Vocational and Technical College. It is actively introducing Baicheng Industrial Vocational and Technical College. After the college is completed, it plans to recruit more than 2000 undergraduate students annually from the whole province and the country, and reach a scale of 10000 students in 4-5 years. At that time, a “university city” with a total of nearly 50000 teachers and students will be formed together with Baicheng Normal University and Baicheng Medical College, which can provide professional technical talents for the project.

(5) Location advantages

Tongyu County has a superior transportation location. In terms of highways, 100% of towns and villages in the county have access to graded highways, and all administrative villages and natural settlements with more than 20 households have access to hardened roads. No. G334, No. G231, and No. G503 National Highways intersect and pass through the county town. The intersection of Tieli–Horqin Right Middle Banner Expressway and Nenjiang-Shuang Expressway in Tongyu has effectively driven the rapid development of Tongyu. In terms of railways, the railway transportation network is constantly improving, and the Siping-Qiqihar Railway runs north-south. The Qiqihar-Tongliao High-speed Railway and Tongyu General Airport have been included in the 14th Five-Year Plan. Tongyu County will gradually build a convenient and efficient transportation network with railways, highways, high-speed trains, and expressways running parallel in all directions.

1.2 Contents and scale of project construction

1.2.1 Construction scale

After the project reaches production capacity, it will produce 1000 tons of natural sweeteners and antioxidant series food additives annually.

1.2.2 Construction contents

The planned land area for the project is 15000 square meters, with the purchase of production line equipment and the construction of other facilities such as production workshops, office buildings, research and development centers, and warehouses.

1.3 Total investment of the project and capital raising

1.3.1 Total investment of the project

The total investment of the project is 80 million yuan, including the construction investment of 64 million yuan and current funds of 16 million yuan.

1.3.2 Capital raising

Self-financing by the enterprise

1.4 Financial analysis and social evaluation

1.4.1 Main financial indexes

After the project reaches the production capacity, its annual sales income will be 67 million yuan, its profit will be 10 million yuan, its investment payback period will be 10 years (after the tax, including the construction period of 2 years) and its return on investment will be 12.5%.

Note: “10 thousand yuan” in the table is in RMB.

1.4.2 Social evaluation

The construction of the project conforms to the development strategy of the Provincial Party Committee and Government to turn resource advantages into economic advantages. It can promote the formation of a virtuous cycle of integrated planting, processing, and sales in the local area, transform agricultural products into high value-added industrial products, form industrial linkage, and promote the economic development of Tongyu County.

1.5 Cooperative way

Joint venture, cooperation or sole proprietorship, and other methods are negotiable.

1.6 What to be invested by the foreign party

Funds, and other methods can be discussed face-to-face.

1.7 Construction site of the project

Tongyu County, Baicheng City

1.8 Progress of the project

It is attracting foreign investment.

2. Introduction to the Partner

2.1 Basic information

Name: Tongyu Economic Development Zone

Address: 50m of northeast of the intersection of Fengdian Road and Xinfa Street, Tongyu County, Baicheng City

2.2 Overview

Tongyu Economic Development Zone was established in July, 2005 and was promoted to a provincial-level development zone in January, 2012. The total area of the development zone is 34.41 million square meters, divided into one main park and three outer parks. The main park covers an area of 21.94 million square meters, Tiexi Industrial Park covers an area of 7.3 million square meters, Yingxin Industrial Park covers an area of 3.46 million square meters, and Hujiadian Industrial Park covers an area of 1.71 million square meters. The built-up area accounts for 10.49 million square meters, the area outside the built-up area accounts for 23.92 million square meters, and there is still a usable land area of 20.93 million square meters. With the continuous promotion of investment attraction and project construction, state-owned enterprises such as China Shipbuilding Industry Corporation, Dongfang Electric Co., Ltd., Shandong Shuifa, a state-owned enterprise, Muyuan Group, a well-known private enterprise, Tongyu Sany Wind Power Intelligent Manufacturing Industrial Park (Phase II) Project, Yuanjing Energy Co., Ltd., Tianneng Tower Tube Co., Ltd., Fanrui Heavy Industry Co., Ltd., and Jilin Chemical Fiber Co., Ltd. have successively settled in the development zone. As of now, there are a total of 54 enterprises in the development zone, including 14 enterprises above designated size (Sany, Huishang, Tianyi, Dadi Gas, Jiayi Technology Co., Ltd., Wanjia Heating Co., Ltd., Xinyangfeng, Yuanjing, Fuhao Cement Co., Ltd., Qianyu Concrete Co., Ltd., Yifahe, Tianneng, Shanneng New Energy Co., Ltd., Muyuan Meat Co., Ltd.), and 40 enterprises below the designated size and under construction. The enterprises in the development zone are mainly in the secondary and tertiary industries, and the enterprises in the zone have driven employment of about 4300 people.

In recent years, Tongyu Party Committee and Government have attached great importance to the construction of a business environment. In order to fully serve project construction, Tongyu County has established a project center to provide comprehensive and full process services for investment projects, achieving “zero visit” for enterprises. In 2018, 2020, and 2022, it stood out among 60 counties (cities, districts) in the province and was awarded the title of Model County for Business Environment Construction. It is also the only county in Baicheng City to receive this honor.

2.3 Contact method

Postal code: 137200

Contact person: Xi Xuehui

Tel: +86-13596824167

Contact method of the city (prefecture) where the project is located:

Contact person: Xu Zengchun

Tel: +86-436-3203010  +86-13894682986

Fax: +86-436-3224565

E-mail: bcjhj07@126.com