China ingredients JV for Cargill
arachidonic acid (ARA) business through a new joint venture
agreement with Wuhan Alking Bioengineering, the leading ARA
producer in China serving the Chinese infant formula business.
ARA is an essential fatty acid that, in conjunction with DHA, an omega-3 essential fatty acid, is recognised as important in infant nutrition, including promoting the growth of organs and tissues. Found naturally in breast milk, ARA and DHA are thought to support the development of infants' brains and eyes. The nutrients are becoming an important ingredient in infant formula globally.
"We see the opportunity to serve our global customers in China and select geographies with their increasing needs for ARA," said Ted Ziemann, president, Cargill Health & Food Technologies. "We view Alking as a great partner to aid in serving our customers with the high quality ARA oil and powder products that they demand."
Commenting on the joint venture Mr. Yi, chairman of Wuhan Alking said, "We believe the combination of Alking's ARA technology and process capability coupled with Cargill's global presence will allow us to serve infant formula companies on a much broader basis."
The companies said that they both expect the joint venture to be up and operating within the next 30 to 120 days, depending on approval from authorities.
Rising incomes and the Chinese government's one child per family policy have all led to increasing expenditure on baby care products. Currently the world market for infant formula is said to be growing at approximately 4 per cent per annum, whereas in China that figure is estimated at 9 per cent. But following on from this rapid growth, companies involved in baby food production have had to cope with the increasing problem of food piracy.
Earlier this year there were several cases of fake baby food discovered in China. The most serious came in April when a scandal in Anhui province came to light in which babies were being fed fake milk formula which was shown to have very limited nutritional content. This led to a number of cases of malnutrition and is believed to have led to the deaths of at least 12 babies.
Because the fake formulas were poorly formulated they lacked a number basic vitamins and nutrients essential to a young child's development, which in turn led to these tragic consequences. However, the upstart of this is that it has bought greater recognition to the importance of nutritional contents in baby food formula, something that is likely to benefit the production of nutritional-rich ingredients such as ARA.
