producer

VITAMIN PRODUCTION

Anhui Redpont charts a course as a standalone nicotinamide producer

Over the last six years, those following the Chinese vitamins scene have seen a new name emerge: Anhui Redpont Bio. Mere months ago, Redpont split from its parent company to become an independent operation in the vitamin B3 space. However, a closer look at the history of the company reveals that it is not a newcomer to the space, but instead has deep roots in the production chain of nicotinamide (one of the two forms of vitamin B3, along with niacin or nicotinic acid). In this Feedinfo Review exclusive,

Feedinfo goes directly to the source and hears from the company’s chairman Hao Zhou to understand where Redpont comes from and where the market can expect it to go next.

INVOLVEMENT IN NICOTINAMIDE PRODUCTION

Anhui Redpont Bio was established in 2016, as part of Nanjing Red Sun.

Located in Maanshan City, Anhui Province, the company’s footprint covers an area of more than 600 mu (about 40 hectares) in Dangtu County. Zhou claims the company’s entire vitamin B3 production capacity amounts to 20,000 tonnes. “We are ranked second in vitamin B3 capacity globally while Lonza is ranked first. Lonza may have 10,000 tonnes/year in Nansha, 18,000 tonnes/ year in Switzerland, and thus 28,000 tonnes overall. But if we look at a single production line, we believe ours to be the largest nicotinamide production line in the world,” he says.

Today, the company’s portfolio includes two products which it makes itself: cyanopyridine made from 3-methylpyridine, and nicotinamide made from 3-cyanopyridine. Beyond that, the company has a ten-year exclusive distributorship for Nanjing Red Sun’s 3-methylpyridine.

To understand how the company ended up in the nicotinamide production chain in the first place requires some understanding of the production process. Nanjing Red Sun, Redpont’s old parent company, is a manufacturer of pesticides, products whose production requires a chemical known as pyridine. Pyridine production has a byproduct, known as 3-methylpyridine. The output ratio between the two is 2:1; that is, for each unit of pyridine produced, one unit of 3-methylpyridine will also be created.

This meant that, in the process of making pyridine for its pesticide production, Red Sun was left with large quantities of 3-methylpyridine. The initial solution was to sell it to others — namely Lonza, whose Nansha facility used it to make nicotinamide. However, Red Sun eventually decided to bring that transformation step in-house: “Our R&D team invested a lot of manpower and resources in developing a production process from 3-methylpyridine to 3-cyanopyridine to nicotinamide, and in 2016 we built a production line of 10,000 tonnes of 3-cyanopyridine and 10,000 tonnes of nicotinamide, and in 2018 we built an expanded production line to 20,000 tonnes each.”

Still, Zhou stresses that the company is not simply one more undifferentiated nicotinamide producer; instead, it has developed the biotechnical know-how to qualify it as one of the pioneers in this space. “We developed nitrile hydratase

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Anhui Redpont’s 40 hectare site produces around 20,000 tons of vitamin B3 annually.

VITAMIN PRODUCTION

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independently,” he asserts. “[We go] from 3-methylpyridine to 3-cyanopyridine by chemical method, and then from 3-cyanopyridine to nicotinamide by biological method, using biological enzyme catalysis, and then protease catalysis after gene editing of engineering bacteria, and [finally] get nicotinamide. We can say that we have opened up a low-cost, high-efficiency and low-pollution production line in the field of nicotinamide.”

In his words, at least one other mainstream manufacturer of nicotinamide in China continues to rely on fully chemical production, but this is a process which is being “slowly eliminated.”

“The biological method is lower cost, less polluting, safer, and higher quality than the chemical method,” he asserts. “In terms of quality, Redpont is the only company that can reach 99.5% content.”

Moreover, the emphasis placed on research continues. “We have set up four laboratories in the research institute: the first is focused on molecular biology, the second on fermentation control, the third on biocatalysis, and the fourth on separation and purification, which basically involves the core technology of the whole process of biotechnology.” INDEPENDENCE FROM RED SUN

After a few years, though, the decision was taken to separate Anhui Redpont into an entity independent from Red Sun.

It is understood that this was partially in order to present an image of a company fully focused on the nicotinamide market. “Since Nanjing Red Sun is mainly engaged in the pesticides market, having Redpont (an animal nutrition/biological company) under it seems like a poor fit. This led to Redpont losing lots of ground in the animal nutrition market,” Zhou asserts.

Another consideration was that the parent company was encountering what is known in Chinese as a “capital chain crisis,” a sort of working capital crunch. “Under such circumstances the share of our company’s nicotinamide in the market shrank bit by bit from 2019-2021, which resulted in many customers thinking that Redpont had exited from the vitamin B3 business,” he recalls.

Therefore, in July 2021, he was appointed as the chairman of Redpont Bio to lead the company into the next stage of its development, as an independent operation. Currently, Redpont is 77% owned by the State-owned Assets Supervision and Administration Commission of Ganzhou City, Jiangxi Province, while he personally holds 23% of the shares.

“Our independence from Red Sun will allow them to focus more on their main business of pesticide products, and also helps them solve part of their debt and replenish working capital. It is also good for Redpont, because after SASAC (State-owned Assets Supervision and Administration Commission) joined, we have had sufficient funds to fulfil our plans for scientific research.” REDPONT TODAY AND IN THE FUTURE

“In terms of quality, According to Zhou, Redpont’s Q1 operating income was up

Redpont is the only 20% year on year, its output value increased by 30% y-ocompany that can reach y, and nicotinamide sales volume in the first four months, 99.5% content.” amounting to more than 2,000 tonnes, is already equivalent to HAO ZHOU what the company sold in the entire year in 2020. “My goal this year is probably to sell 8,000 tonnes, and next year our goal may be to sell more than 10,000 tonnes, to operate at our full capacity,” he shares. “Now we are still in the process of taking back the market.” While sales last year were largely in the domestic market, he says the company has now strengthened its foreign sales team, and is working more closely with large multinational animal nutrition groups. “They all signed orders with us in Q2, and we are now talking about the usage in the third quarter. I think the quality of our products, technology, industry chain and supply ability have been recognized by them,” he observes. Of course, Redpont’s products are used in applications beyond just animal nutrition. As Zhou tells it, “We intend to fully expand our pharmaceutical, food, and cosmetic products next year. The year after next, we will start to improve the animal nutrition segment.” While nicotinamide will remain the company’s flagship product, he hints that the company may look to enter adjacent products like vitamin A or D-calpan, products with similar production processes to what Redpont already has in place. Meanwhile, he believes that Chinese producers are well-placed to profit from the depreciation of the Chinese yuan’s exchange rate value, which will benefit Chinese exporters. “According to our inquiries, [Chinese enterprises] are still optimistic about vitamin B3, and they are optimistic about the price and [volumes] of meat.” Interview by Lydia Ma, analyst Editing by Shannon Behary, senior editor Photos courtesy Anhui Redpont