Company invests heavily in R&D and core technologies
Source: Chemical Market Reporter
New York-based Kyowa Hakko USA, Inc. is profiting from strong demand in the amino acids market, which reflects the vigorous performance of the US health food, nutrition, pharmaceuticals and fine chemicals industries. Kyowa Hakko USA, the marketing arm of Tokyo, Japan based Kyowa Kogyo Company Ltd., is supplying an increasing range of its amino acid products to the US pharmaceuticals and fine chemicals market.
The strength of the chirals market is another driving force in the growth of amino acids, which are themselves chiral compounds. Falls Church, Va. based Technology Catalysts International Corporation estimates a 7.6 percent annual growth rate for the chirals market.
Kyowa Hakko USA rates worldwide demand for amino acids in pharmaceutical intermediates to be 1,500 metric tons annually. Some amino acids it supplies to this field include arginine, glutathione, proline, valine, hydroxy proline and glutamine.
Worldwide demand in dietary supplements is also roughly 1,500 metric tons annually. The company supplies glutamine, lysine, arginine, isoleucine, leucine, valine, glurathione and other products to this field.
Kyowa Hakko is also one of the largest suppliers of injectable amino acids, along with its main competitor Ajinomoto, according to Toshifumi Asada, president and CEO of Kyowa Hakko USA. Injectable amino acids, which is a 5,000-metric-ton-per-year market worldwide, require very high purity product.
Other fields the company supplies include seasoning, feed additives and flavors.
Kyowa Hakko USA projects its total US sales will reach roughly $70 million by the end of this year. Current US sales are just under $60 million, according to Donald Blaine, general manager of Kyowa Hakko USA's West Coast office.
Kyowa Hakko's core technologies are fermentation and chemical synthesis, which it uses to produce a range of products, including a variety of amino acids such as L-amino acids, D-amino acids, DL-amino acids, and amino acid derivatives.
Kyowa Hakko USA imports these amino acid products from its parent company in Japan and sells mainly to the US pharmaceuticals and fine chemicals market.
Kyowa Hakko is currently developing new products using its innovative fermentation and biochemical synthesis technologies. Some of these new products include 4-hydroxy-L-proline (pharmaceutical intermediate, cosmetics), citicoline (neurological treatment), inosinic acid (flavor enhancer) and D-proline (pharmaceutical intermediate).
Kyowa Hakko's technologies claim several advantages, including high product yield, purity, and simple processes, according to Mr. Asada. In addition, there is no risk of contracting Bovine Spongiform Encephalopathy (BSE) in producing 4-hydroxy-L-proline by fermentation compared to the conventional method of cow skin extraction.
Kyowa Hakko USA's other key products include Coenzyme Q10 (dietary supplement), mitomycin-C (anti-cancer), olopatadine (anti-allergy), dacarbazine (for treatment of melanoma), and minocycline HCI (antibiotics).
Kyowa Hakko is a research and development oriented company, says Mr. Asada. "A unique point about Kyowa Hakko is that of its 6,000 employees, about one-fourth, or 1,400, are involved in R&D work."
In 1997, the company's research and development expenses totaled ¥22.9 billion ($184 million), or 5.8 percent of consolidated net sales.
Kyowa Hakko USA's strategy for its amino acids business includes supplying all types of amino acids, supplying only high quality products with its innovative technology and committing to the market through new product development.
The parent company also has three overseas plants - in Cape Girardeau, Mo.; Veracruz, Mexico; and Budapest, Hungary - that produce the amino acid lysine for the feed additives industry.