According to the Ajinomoto Amino Science division, specializing in the development of amino acids, there has been an increase in raw material prices, increase in transportation and energy costs.
Mike Lish, senior VP at Ajinomoto Amino Science division, told us, “This price increase will help defray some of the cost increases we are experiencing while remaining committed to providing our customers the highest quality – in purity and efficacy – amino acids on the market.”
Lish said that the cost of raw materials, like silica gel and amino acids, which the company imports from China, has significantly increased.
China produces nearly all of the world’s silica gel, which is used in pharmaceutical packaging, therefore the country’s shortage of silica gel has caused a dramatic increase in price. There has also been a global shortage of high-end amino acids, which Ajinomoto uses as essential compounds in its pharmaceutical production.
There are also new quality and elemental impurity guidelines that are in a state of flux. In addition, new testing methods in the US and China have led to an increase in necessary experimenting to meet regulatory requirements, contributing to higher costs.
He further explained that there has already been a price increase for amino acids across the protein market and further price increases will result from changes to Chinese tariffs that are expected to go into effect soon.
Ajinomoto has not prepared for further price increases in anticipation of the new tariffs, though Lish told us some companies have.
He also noted that increased transportation regulations have caused transportation costs to almost triple.
