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COMPANY

Background and principal activity

Linyi Van Science and Technique Co., Ltd (“LVST”), was founded in July 2001 as a private company from a previously state owned enterprise in Shandong Province, PRC. LVST’s principal activity is the production and sale of the food preservatives Sorbic Acid and Potassium Sorbate from its 33,000 m² production facility in Linyi City, Shandong Province, PRC. LVST currently produces for sale approximately 3,000 metric tonnes of Sorbic Acid and 5,000 metric tonnes of Potassium Sorbate per year.

Industry Overview

With the steady growth of the global population, increased production of agricultural products has become essential to ensure adequate food supply. This has led to a corresponding increase in the demand for food preservatives. In the 1940’s, Sorbates were found to be effective antimicrobial agents and have since then been used as preservatives in a wide range of foodstuffs and drinks.

From 1970 to 1996, six companies produced nearly all Sorbates sold worldwide. However, a number of these left the Sorbate industry in the late 1990’s. Those that remained moved their operations to China, attracted by its relaxed regulatory regime and lower cost of production as a result of cheaper energy costs and lower wages.

Global Demand and Supply of Sorbic Acid and Potassium Sorbate

Global demand for Sorbic Acid and Potassium Sorbate has increased as a result of the increase in the world’s population and higher demand for food. According to the Food and Agriculture Organization of the United Nations, global population increased by over 74.8 per cent. between 1970 and 2005, and is expected to reach 8.3 billion by 2030. With the steady growth of the global population, increased production of food products is essential to ensure adequate food supply. The continuous increase in food production has significantly increased the importance of, and demand for, food preservatives.

Last updated 07 Jun 2010