Benchmarking on Chitin Production in China

Publication Date	April 2006
Publisher	CCM International
Product Type	Report
Pages	44
ISBN Number	not applicable
Product Code	CMI00075

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Summary

In order to disclose the production cost structure and the actual profit level of Chinese chitin producers, this report looks at the most popular technology for chitin production, especially analyses the production cost and profit in Chinese enterprises.

In this report, most effort is made to the most popular method for chitin production among the four different technologies for extracting chitin we have found with info from various sources, namely the carapace method, in which shell of shrimp or crab is used as the raw material.

How we work out the production cost and the profit level of China's chitin producers?

Production cost
Production cost= manufacturing costs + management costs

Manufacturing costs

The flow chart of major technology (carapace method), and the theoretical unit consumption and unit cost of each raw material are worked out, based on more than 120 research papers on chitin production published in 1991~2005 and 18 patents about chitin production confirmed in 1997~2005.

The manufacturing cost covers the costs of raw materials, utilities, labor, packaging cost, depreciation and maintenance of equipments. In this report, it also covers the cost for the treatment of waste water.

Shell material, hydrochloric acid and sodium hydroxide are the main materials and they account for more than 90% of raw material costs, so the price fluctuation range of shell material and price difference of HCl/NaOH in different regions are the major work focuses to find the cost of raw materials. Many chitin producers have been contacted to verify the unit consumption of raw material in actual production.

Besides, factors affecting chitin and how they affect chitin production are also explored.

Management cost Usually, we calculate the management cost by integrating the following items:

Salary Cost of Management Staffs and Other Auxiliary Staffs.
Materials Cost for Management
Financial Cost (such as interest on loan)
Transportation Cost
Distribution Cost

Profit

In order to find the profit in Chinese manufacturers, two factories, Zhejiang Aoxig Biotechnology Co., Ltd. (Zhejiang Aoxing) and Jiangsu Lianyungang Keda Biological Products Co., Ltd. (Lianyungang Keda) are chosen for case sturdy, because they adopt different shell materials to produce two grades of chitin products - food grade and industrial grade.

Then a conclusion of profit is drawn based on the comparison between these two producers.

Content

Executive Summary
Introduction And Methodology
I Brief Introduction Of Chitin Industry
- 1 Characters Of Chitin
- 2 International Situation Of Chitin Industry
- 3 Domestic Situation Of Chitin Industry
Ii Brief Introduction To Various Production Methods Of Chitin
Iii Introduction Of The Most Popular Method In Details
- 1 Brief Description Of Production Process
- 2 Flow Chart Of Chitin Production
- 3 Theoretical Model Of Raw Material
- 4 Factors Affecting Production Of Chitin
Iv Estimation On The Cost And Profit Of Chitin Production
- I1 Estimation On Raw Material Cost
- I2 Estimation On Manufacturing Cost
- I3 Estimation On Management Cost
- I4 Estimation On Total Production Cost
- I5 Estimation On Profit In Chinese Manufacturers
  - I5.1 Some Background Information
  - I5.2 Profit Estimation In Zhejiang Aoxing
  - I5.3 Profit Estimation In Lianyungang Keda
  - I5.4 Comparison Between Zhejiang Aoxing And Liayungang Keda
V Findings And Conclusion
Vi Profiles Of Major Manufacturers
- 1 Summary Of Domestic Production Situation Of Chitin
- 2 Profiles Of Manufacturers
  - 2.1 Zhejiang Aoxing Biotechnology Co., Ltd
  - 2.11 Shandong Huantai Goldenlake Carapace Products Co., Ltd
List Of Tables
- Table 1 Estimation On Total Production Cost Of Chitin (Unit: Rmb/Kg Chitin Product; Time: April-06)
- Table 3-1 Theoretical Consumption Of Raw Materials (Food Grade)
- Table 3-2 Theoretical Consumption Of Raw Materials (Industrial Grade)
- Table I1-1 Price Of Naoh In Domestic Marketplace
- Table I1-2 Estimation On The Cost Of Raw Materials (Food Grade, Using Imported Shell Material As Raw Material)
- Table I1-3 Estimation On The Cost Of Raw Materials (Food Grade, Using Homemade Legs Of Shrimp/Crab As Shell Material)
- Table I1-4 Estimation On The Cost Of Raw Materials (Industrial Grade, Using Homemade Shell Materials As Raw Material)
- Table I1-5 Cost Structure Of Raw Materials (Time: April 2006)
- Table I2-1 Estimation On Manufacturing Cost Of Food Grade Chitin (Using Imported Shell Of Crab As Shell Material, Price: Rmb8.0/Kg)
- Table I2-2 Estimation On Manufacturing Cost Of Industrial Grade Chitin (Using Homemade Shell Material, Price: Rmb4.0/Kg)
- Table I4-1 Estimation On Total Production Cost Of Chitin (Unit: Rmb/Kg Chitin Product Time: April-06)
- Table I5.2-1 Estimation On Costs Of Raw Material In Zhejiang Aoxing
- Table I5.2-2 Estimation On Manufacturing Cost Of Chitin In Zhejiang Aoxing
- Table I5.2-3 Profit Estimation On Chitin In Zhejiang Aoxing (Time: April 2006)
- Table I5.3-1 Estimation On Costs Of Raw Material In Lianyungang Keda
- Table I5.3-2 Estimation On Manufacturing Cost Of Chitin In Lianyungang Keda
- Table I5.3-3 Profit Estimation On Chitin In Lianyungang Keda (Time: April 2006)
- Table I5.4-1 Comparison Between Zhejiang Aoxing And Lianyungang Keda (Time:April 2006)
- Table 1-1 Active Chitin Producers