Solbar's China factory, located in the Ningbo Free Trade Zone, southeast of Shanghai, was the company's first production base outside its home country of Israel. At the time, the Chinese soy market was said to be growing at around 10 per cent per year, while global growth lagged behind at five to six per cent. But Gary Brenner, VP marketing and sales at Solbar, told FoodNavigator.com that competition in China has been stiff. "About the time we were building a factory in China, 31 companies had the same idea," he said. "This created chaos and overproduction." While there was no slowdown in use, Brenner compared the situation to "a Wild West show", saying that all the players ended up in a state of depression over costs and price. However he believes that the situation has started to resolve itself, estimating that the 32 factories have now shrunk to around 20 as a result of consolidation or failure to survive in the tough market. By 2009-10 Brenner expects only about five to remain, creating a "healthier environment". Chinese production - not just for soy proteins, but for food ingredients in general - has soared partly because of the lower costs of production. However soy plays a important role in the traditional Chinese diet, and Solbar said that its non-GMO IP functional soy concentrate Solcon S-110 (for meat, fish and vegetarian applications) was already selling in large volumes in China prior to the opening of the factory. Solbar is not the only one of the global soy protein players to establish a presence in China. For instance Solae announced in summer 2005 that it had extended its partnership with Henan Luohe Shineway Industry Group, China's largest meat processing company, to facilitate the construction of an isolated soy protein plant. Brenner's positive outlook on the Chinese soy market is in keeping with Solbar's general optimism following the acquisition of a 51 per cent stake in the share capital of the company, which is expected to improve its financial position and balance sheet. Solbar, which started out as a kibbutz-run business, experienced a turbulent two years following its initial public offering to the Israeli Stock Exchange in 2004. In 2005 the company was dealt a severe blow by several batches of sub-standard beans sourced from Brazil. It subsequently took the strategic decision to source all its non-GMO, identity preserved soybeans for specialty isoflavone products from the US on the grounds of better quality and yield. "Overnight this put us in a better position in the market," said Brenner last November, adding that growth has rebounded to the pre-IPO rate of around 30 per cent. "In 2006 the market and our customers have been good to us. We have regained market share in almost every market." However although Solbar's business is back on a firm footing, there are some heavy clouds looming on the horizon of the soy market in general. Firstly, soybean prices have skyrocketed by more than 37 per cent since September 2006, closing around the $850 mark at close of business yesterday, according to the Chicago Board of Trade. Brenner said that the sharp increase is down to farmers, who are now preferring to use their fields to grow corn for biofuels. This factor is not only having an impact on the soy crop, but on grains altogether. "Whole supply chain of food is being affected," said Brenner. The second issue, he said, is that farmers get better prices for GM soy, so there is less non-GM or IP soy available. Until this year Brazilian farmers were not taking premiums for non-GMO soy, said Brenner. "Now they realise they can." Moreover cross-contamination with GM soy is a fear factor in both the US and Brazil. And in Brazil, supply can be affected by issues such as humidity, heat, and labour and strike issues.