Daesang to resume lysine production in Gunsan in May; pursues diversification strategy

Production of lysine at Daesang’s factory in Gunsan, South Korea, is set to resume in May after a four-month shutdown, the company told Feedinfo at VIV Asia.

According to Mr. Su Young Son, Team Leader Animal Nutrition Department at Daesang, the restart will be in May and full capacity will be reached in May/June.

At full capacity, the plant can produce 10,000 tonnes/month of lysine HCl and 7,000 tonnes/month of liquid lysine, he said.

Commenting on China’s reopening and its impact on the lysine market, Mr. Son said the lysine price could decrease further, adding that producers in China have increased capacity. He also predicted that demand will likely pick up at the end of 2023.

As for Daesang’s lysine offers, he said that on the one hand his company is telling customers that this year it will be “tough to match Chinese prices”, but on the other hand, to offset this, Daesang is selling Chengfu’s lysine sulphate to its customers — excluding the EU market, where the Chengfu lysine sulphate product currently isn’t authorised.

“We also have a competitive advantage with liquid lysine as Chinese companies are not present in this segment,” he added.

Mr. Son also disclosed that Daesang has plans to produce arginine, valine, isoleucine and tryptophan in China in the future. The production would take place at a factory owned by Heilongjiang Chengfu Food Group, the company with which Daesang signed a contract in August 2021 to produce amino acids in China.

The original intention was to start in 2024, Mr. Son said, but the project has since been delayed.

“June is when we’re hoping our negotiations with Chengfu will be done. So far, the news is good. We will know more in June,” Mr. Son said.

From 2025, in line with the incentive to continue diversifying the business beyond animal nutrition, Daesang also plans to start producing more biobased alternative solutions to products used in other industries.

“The plan is to progressively replace the production of lysine in our own factories by these new products,” he explained.

By Simon Duke, editor-in-chief; Assistance by Lydia Ma, senior analyst