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Leading the world in cassava production

 

With an abundance of natural resources, Thailand has solidified its reputation as the leading global supplier of agricultural products.

 

Cassava, an agro-industrial crop with a well-developed industry and market in the country, is considered one of Thailand’s most important economic crops. Supplying around 67% of the global market, Thailand was ranked as the world’s largest cassava exporter with annual production of 33 million tons in 2016.

 

The industrialization of cassava processing in Thailand has extended from chips and pellets as primary products to high value-added products such as starch and starch derivatives. In 2016, Thailand exported over 4.26 million tons of starch and starch derivatives products, generating THB 62 billion (USD 1.86 billion) for the country. The applications for starch extend to various industries including sweeteners, monosodium glutamate (MSG), modified starch, acid-based products, bioplastic derivatives, and ethanol. Roughly 14% of the root product is used for domestic utilization of cassava starch, while another 4% is used in ethanol production from cassava chips.

 

Growth in sugar substitutes

The largest proportion of cassava starch usage in Thailand, roughly 44%, is used in the production of sweeteners. Cassava starch accounts for about 80% of the raw materials for sweetener products. These products are used in the beverage industry in addition to canned fruits and jams. Most sweeteners offer a significant value proposition giving more sweetness in the same quantity compared to table sugar but in much smaller quantities. Sorbitol is another sugar substitute which offers strong potential for the sweetener industry. Thailand produces 43,000 tons of sorbitol annually. In 2016, the global market for food sweeteners was valued at THB 1.1 trillion (USD 33 billion) and is expected to grow by 5.5% to THB 1.5 trillion (USD 45 billion) in 2022, according to IHS Markit. These sugar substitutes will play an important role as the increase in awareness in consumer health and greater interest in improved lifestyles will further drive demand.

 

Local consumption of sweeteners is also expected to increase. Beverage manufacturers have launched a wide variety of products such as diet and calorie-free energy drinks responding to shifting consumer tastes. The country is well-recognized as the production base of numerous global brands such as PepsiCo, Red Bull and Carabao. Global manufacturers of sweeteners which have already established their plants in Thailand include MC-Towa, UENO and Pure Chem.

 

A leader in MSG production

The MSG industry accounts for 18% of cassava starch utilization in Thailand. MSG is widely used by food processors in convenience foods, snacks, canned soups, instant noodles, seasoning blends, and by restaurants and food service providers. Improvements in living standards, changes in dietary needs, ongoing development of the food processing industry, and an increase in urbanization will drive MSG consumption growth globally.

 

In 2016, the MSG market in Thailand was valued at THB 7 billion (USD 210 million). As the country is rich in cassava which is used as a raw material to process MSG, Ajinomoto and Knorr are two leading manufacturers that are using Thailand as their production base to create increased supply for the global market.

 

Importance of modified starch

Accounting for roughly 10% of cassava starch utilization in Thailand, modified starch is one of the most commonly used starches in food manufacturing. Used as an additive, modified starch is applied to increase strengthening, add viscosity, and concentration in a number of food products. For example, starch is added to ice cream to maintain its strength after being shipped, and is also used to improve the texture of baked goods by enhancing smoothness and creaminess. In 2016, Thailand exported 947,120 tons of modified starch valued at THB 21.2 billion (USD 635 million).

 

Leading companies such as National Starch and Chemical, Siam Modified Starch, and General Starch are the dominant players in this growing sector.

 

Innovation in acid-based products

Plenty of useful acids are derived from cassava starch such as lactic acid, bio-succinic acid and amino acids. In 2016, food and beverage applications accounted for a substantial 45% of global lactic acid consumption. Thailand’s position is sizeable with roughly 330,000 tons of lactic acid produced per year.

 

A major application of bio-succinic acid is the production of butanediol (BDO) which is then used to produce Polybutylene Succinate (PBS), an alternative bio-based plastic. A stronger regulatory framework supporting environmentally friendly products is a key driver in increasing demand for bioplastics. PTTMCC, a joint venture between PTT and Mitsubishi Chemical Corporation (MCC), produces and sells PBS with a total production capacity of 20,000 tons per year, supplying 17% of global production capacity.

 

Amino acids are leading feed additives, accounting for 46% of the world’s market value in 2016. Contributing the largest global amino acid market share at 64%, lysine is an essential amino acid and is used in feed mainly given to swine and poultry as a source of protein. Thailand supplies 47,000 tons per year of lysine led by CPF and Betagro as agro-industrial manufacturers in the domestic market.

 

From cassava to ethanol

Apart from starch production and development, another important application for cassava roots is in the production of ethanol from cassava chips, which accounts for 4% of production in Thailand. Cassava is therefore being developed as an important energy crop, used as a feedstock for producing ethanol, which in turn, is included as an additive with gasoline in a mixture called “gasohol.”

 

Several government measures point to strong growth prospects for the ethanol industry in Thailand. The Ministry of Energy released a 20-year plan called the “Alternative Energy Development Plan: AEDP 2015” which focuses on promoting energy production within the full potential of domestic renewable energy resources. One of the goals is to increase the ethanol production to replace gasoline. The production of cassava, the main raw material for ethanol production, is expected to grow at a rate of around 6% per year, reaching 59.5 million tons per year by 2026 with full capacity of land usage. Increasing by 10 percent per year after 2026, the country is expected to have the potential to produce ethanol from cassava for about 6.5 million liters per day. Therefore, the total ethanol production is projected to reach 11.3 million liters per day by 2036. TPK Ethanol, Sapthip and Ubon Bio Ethanol are the leading corporations in Thailand in this environmentally friendly industry.

 

A crucial resource for Thailand

Given its extensive utilization in creating value-added products, cassava is one of Thailand’s most important and strategic economic crops, contributing a significant share to the country’s economy. And cassava will continue to play an increasingly important role for Thailand as sustained demand for food and non-food end-use sectors continues to drive growth in the global starch market. As Thailand transitions to Thailand 4.0 and smart agriculture, the cassava industry is set to shift as well through strategic collaborations and increasingly innovative uses in the country’s and growing bio-economy.

 

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