ADM closes citric acid plant as Chinese competition bites
citric acid bites into European suppliers, with producer ADM
announcing plans to close its Irish plant.
150 jobs will go at the plant based in Ringaskiddy, which manufactures citric acid, an acidulant and antioxidant, for the soft drinks and food industries.
"Local management at its facility in Ringaskiddy, Cork has entered into negotiations with the local unions regarding the discontinuation of its operation," the firm said yesterday.
For several years the plant had been under intense pressure, culminating in its closure for five months in 2003 due to a dispute with the Services Industrial Professional and Technical Union over new shift arrangements.
Despite bright growth prospects for citric acid due to its numerous applications in food and beverages, suppliers are facing tough competition from Asia, notably Chinese manufacturers.
The Chinese companies are propelling price erosion, as they push ever more competitive prices onto the market place.
According to market researchers Business Communications Company, the Chinese have about 30 to 40 per cent of the citric acid market. ADM, DSM Nutritional Products, Tate & Lyle, Jungbunzlauer and Cargill dominate the rest.
Cheap, at about $1 to $1.3 a kilo, citric acid dominates the category of organic acids, with production estimated at 1.4 million tons in 2004. On the back of numerous applications for the ingredient, consumption is expected to grow strongly until 2009, with the market value exceeding $2 billion (€1.53bn).
Closure of the Irish ADM plant will begin immediately and will take over a month to complete.
