Dalian company plans facility to tap surging demand from developed nations

Jiachem DentBio Co Ltd, a Dalian-based manufacturer producing chewing gum, lozenges, nutritional supplements and over-the-counter (OTC) goods, will add another plant in Dalian this year to meet the strong demand from developed economies.

About 90 percent of its products, especially chewing gum with xylitol and lozenges, are exported to markets in the European Union and the United States. Its products are mainly sold in dental hospitals, private clinics and pharmacies. One of its investors from North America is JCM Canada Inc.

Backed by its patents, over 70 percent of xylitol chewing gum and tablet sugar products sold in North American and European markets are supplied by Jiachem DentBio.

Under the company's plan, its new manufacturing facility will start in the second quarter of this year and is expected to be operational in 2021.

"With the new factory, we will be able to diversify our cooperative categories with foreign partners such as Nestle SA, the Walt Disney Company and Mondelez International Inc," said Jiachem DentBio's general manager Ding Yong, adding once its second plant is completed, the firm's annual sales revenue could reach 1 billion yuan ($145 million).

To further expand its market presence in emerging markets, the company has been working with the customs office of Dayaowan, which is under the jurisdiction of Dalian customs office, to study foreign tariff policies and domestic customs procedures to export its products to economies related to the Belt and Road Initiative.

Apart from growing demand for subway projects, water conservation, railways and highways in those markets, Ding said many of the opportunities also come from the surging need for a healthy lifestyle, better food and healthcare products.

Healthcare products and food consumption is a reflection of economic success, he said, adding oral care and dental product usage is rising.

The types of such products people use are likewise diversifying. They have become more sophisticated and they need to be more convenient. Therefore, the whole market and related industries have been dramatically transformed in China.

Established in 2007, the company's average annual sales revenue has surged by over 30 percent on a year-on-year basis in the past two years. The firm produced 1,000 metric tons of high-end oral health products in 2018. Some 90 percent of them were exported to developed nations, particularly the US, Germany, France and Switzerland.

Ding said the firm is also set to expand its domestic sales channels and deploy more financial resources on research and development of candy made by xylitol to stop smoking and for weight loss. It is also upgrading its technologies and service, as Chinese consumers are paying more attention to oral health the past few years.

Jiachem DentBio predicted that sales for various dental care products will reach 3,000 tons in China alone over the next three years.

"It is a combination of growth and demand that is linked to income and urbanization. Those elements came together to create the sheer size of the market so it has attracted a lot of investment," said Sun Fuquan, a researcher at the Beijing-based Chinese Academy of Science and Technology for Development.

With China's success in e-commerce and mobile payments, consumers in China are trying out new things, while marketing and selling channels on the supply side enjoy lower costs and higher efficiency. This has created more space for domestic and global companies to enlarge their sales, he added.