The announcement was made today, 3 August 2017.
Under the deal, Meihua will produce feed grade lysine and feed grade threonine. Ajinomoto subsidiary, Ajinomoto Animal Nutrition Group, will market the two products internationally, from next year.
Ajinomoto predicts that demand for amino acids and animal feed will remain firm on the back of growing meat consumption globally.
The Japan headquartered company said its strategy to develop its specialty animal nutrition business remains on course; it said it was accelerating its shift into that area through the instigation of structural reforms.
Ajinomoto reported net sales of US$10.07bn for its fiscal year 2016.
Market projections
The global feed amino acids market is expected to register a CAGR of 6.07% during 2017-2022, according to a report by Mordor Intelligence.
The analysts said amino acids are one of the fastest growing and the largest revenue-generating segments in the animal feed additives market. The end consumers of feed amino acids are compound feed manufacturers, integrators, farmers, home-mixers, livestock, and the aquaculture industry.
“The population growth among developing countries, accompanied by the increasing per-capita consumption of meat, is expected to drive the amino acids market.
“Moreover, amino acids help in reducing the consumption of other crude proteins, thereby, significantly reducing the feed costs and improve farm productivity, profitability, and competitiveness,” concluded the analysts.
Threats
The authors of that report noted, though, that a major obstacle for the growth of feed amino acids market is the price volatility associated with raw materials and the changing regulations among regions. In addition, the development of other sources of protein is pressurizing the market growth, they said.