Galactic raises global lactic acid prices

By Anthony Fletcher

- Last updated on GMT

Related tags: Lactic acid

Lactic acid producer Galactic has announced a round of price
increases designed to cope with rocketing production costs.

The company said that the increases would be implemented in January, or as contracts expire.

The price adjustment will be applied throughout the world except in China where prices have already been increased by 10 per cent in August this year.

"During 2006, in the fermentation industry, all production costs have significantly increased,"​ said the company in a statement. "Indeed, energy costs, and specifically oil costs, have doubled during the last 20 months with direct impact on processing, packaging and transport."

In addition the European fermentation industry has had to deal with the rising cost of sugar due to the implementation of the new EU regime. Implemented in July, the immediate effect of the regime has been to push down local sugar production and push up the price of carbohydrate raw materials.

Growing demand for ethanol production has also induced price increases for sugar, corn and wheat in the rest of the world.

"At the same time, lactic acid and lactates average prices have decreased on the world market,"​ said Galactic. "The strong impact of this situation on production forces."

Galactic said that despite the challenging situation, it would keep working to improve its lactic acid and lactates production process in order to offer quality products at competitive prices.

Lactic acid is used extensively by the food industry as a flavour agent, preservative, and acidity adjuster in foods. Sodium lactate, a humectant, is used in cakes to produce a tender crumb and to reduce staling.

This non-meat ingredient is also absorbed into meat formulations for specific flavour, shelf-life and safety applications.

Belgium-based Galactic belongs to Finasucre, one of the top ten sugar producers. The company now boasts a lactic acid and lactates production capacity of more than 18,000 tons.

A few years ago Galactic signed a joint venture agreement with the BBCA Biochemical Company for the erection of a lactic acid and derivatives manufacturing unit in China. The joint venture will operate under the name of B&G.

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