The Japanese company announced it will discontinue coenzyme Q10 production by the end of March 2013. MGC’s Niigata plant currently has a CoQ10 production capacity of 70 MT per year.
According to the company, a feasibility study revealed that Mitsubishi’s CoQ10 business to be loss-making due to excessive supply from overseas manufacturers and increases in production capacity at MGC and other domestic manufacturers.
“Mitsubishi Gas Chemical Company also sees no future prospect for a return to profitability,” it said.
Unsustainably low prices
John Jarmul, U.S. Marketing Manager for Kaneka, told NutraIngredients-USA that CoQ10 bulk prices have been unsustainably low for years, and Mitsubishi’s retreat from the market reinforces that fact.
"We have seen an upward trend in the price of CoQ10 over the past year, and Mitsubishi’s departure will surely continue that movement," he said.
"The Mitsubishi withdrawal from the CoQ10 market will certainly have an effect on supply, especially for those customers that require material is of U.S. or Japanese origin. Kaneka is now the sole CoQ10 manufacturer in both the United States and Japan," he noted.
Other suppliers to benefit…?
The reported 70MT production capacity is about 23% of the total U.S. market of 300MT, explained Sander Krupski, national sales manager for CoQ10 supplier ZMC-USA.
However, Krupski told NutraIngredients-USA that he believed that Mitsubishi imported only 15-20MT into the U.S.
ZMC, ZMC-USA and their competitor Kaneka are reporting significant increase in interest from customers in various markets.
Commenting on the potential impact on supply and pricing, Krupski said: “While price adjustment is driven by a combination of the increased cost of securing raw material supply, inflation and exchange rate developments, supply conditions may create a slight price increase.”