DIC Corporation today announced that it has resolved to build a new extraction plant forLinablue natural blue food coloring. The new facility, total investment in which is estimated at approximately US$10 million, will be located on the site of subsidiary Earthrise Nutritionals, LLC, the DIC Group's U.S. Spirulina*production base. This move will position DIC to respond effectively to brisk demand for Spirulina, supported by increasing concern for the health benefits and safety of food, as well as to a rapid global shift toward using natural, rather than synthetic, colorings in food, a trend underscored by the U.S. Food and Drug Administration's decision in September 2013 to approve Spirulina extract for use in food products. Construction of the new plant will begin in May 2014 and is expected to take approximately one year.
The DIC Group began cultivating Spirulina for use in nutritional supplements and natural food coloring in the late 1970s, becoming the world's first successful commercial Spirulina producer. Since then, the Group has built up formidable know-how in the production of high-quality food-grade Spirulina and a superior technological advantage in the area of quality management. The world's largest Spirulina supplier for more than three decades, the DIC Group today provides Spirulina—the raw material for Linablue—produced in the United States and on Hainan Island in the People's Republic of China (PRC) to customers across the globe. The new plant will enable the Group to also supply Linablue manufactured in the United States, as well as in the PRC.
A vivid blue natural food coloring, Linablue is made from phycocyanin, a blue colorant extracted from Spirulina. The DIC Group's integrated production capabilities encompass everything from the cultivation of high-grade Spirulina through to the manufacture of finished products, giving it a distinct advantage. Favored particularly for coloring jellied sweets and ice pops, Linablue is also used widely in gum, candy-coated chocolate and other confections and has benefited from steady growth demand in recent years. DIC estimates that the global market for natural food colorings will approximately double between now and fiscal year 2018, during which time it also expects its global market share to expand from 20% to 50%. The superb quality of Linablue has earned the DIC Group a 90%-plus share of the global market for Spirulina-derived natural blue food colorings, but with that particular market segment expected to expand to between seven and 10 times its present size DIC sees this new investment as crucial to solidifying its dominance.
Leveraging its expertise in the mass cultivation of Spirulina in outdoor raceway ponds, the DIC Group is involved in a project to develop biofuels and other high-value-added algae-based materials. The construction of a new plant is an integral component of this initiative.
