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Price hike for CP Kelco xanthan gum

30-Jun-2003

World leader in high-end hydrocolloid products CP Kelco has lifted the price of xanthan gum in response to market conditions.

Starting from August 2003, the increase will affect the Keltrol food grade product supplied by the biogums business unit of the company. Prices are expected to rise by up to 10 per cent, depending on volume and grade of material. Customers affected will be primarily those who buy standard grades at volume discounted pricing. CP Kelco stressed that the changes will not impact prices fixed for current contracts and agreements.

Merged in 2000 between the Copenhagen Pectin/Food Gums division ofHercules and the Kelco Biopolymers business of Monsanto, CP Kelco recently implemented a plan to boost production capabilities and reinforce its position as the number one supplier in the biogums marketplace.

Major components of the plan include the expansion of xanthan gum production in its Knowsley, United Kingdom facility and the termination of a xanthan gum contract manufacturing agreement.

Primary raw materials used by CP Kelco are corn or wheat syrup, available from several sources, and citrus peels and seaweed that the company sources from key suppliers. But, the seasonality of raw materials can cause raw material price fluctuations, and lead to price increases such as those announced by CP Kelco this week.

Xanthan gum is not only a powerful thickener and stabiliser used throughout the food processing industry but it imparts food texture and structure, as well as playing a role in flavour release, appearance and shelf stability.

Demand for CP Kelco's principal products - xanthan gum 48 per cent of 1999 sales, pectin 34 per cent, and carrageenan 10 per cent - is projected to grow annually over the next several years.

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