The natural astaxanthin market has had a bit of a shakeup recently, with the announced closure of two production facilities from two different Japanese suppliers.
First, in late December, Yamaha Motor Co. folded its entire Life Science Division and astaxanthin production line. Then, in January, Fuji Chemical Industry Co. announced it was closing its astaxanthin facility in Maui, though it will continue to maintain production at its Sweden locale.
"We are not very surprised about these closures, as we've seen several other companies get into the astaxanthin game over the years and withdraw after finding out that it's not that easy," said Bob Capelli, vice president of sales and marketing for astaxanthin supplier Cyanotech Corp. "The reasons for closures in the past have been mostly because of an inability to produce Haematococcus, the microalgae from which astaxanthin is extracted. It's a very difficult species to produce, particularly in large quantities."
The companies gave different reasons for the closures.
Yamaha expanded beyond its existing motor, vehicle and musical instrument product lines in 2005 when it opened a Life Science Division to produce natural astaxanthin. In 2006, the company created PURESTA astaxanthin ingredient for cosmetics and skin-care products. In 2007, it released ASTIVO, an astaxanthin-based health supplement, to the general market.
Despite the launches, in the three fiscal years between 2007 and 2009, cumulative sales did not exceed 500 million yen ($6.03 million), "proving market demand and growth rate to be far below initial estimates," the company said in a statement. "Future projections indicate that it will be difficult to achieve further growth and improve the business' profitability."
Fuji began operating its Swedish facility in 1994; it was the first in the world to produce commercial natural astaxanthin, sold under the name AstaCarotene. The ingredient is now called AstaREAL, and it was also being produced at a second manufacturing facility in Hawaii.
The AstaREAL brand has the largest market share globally of natural astaxanthin for human consumption, the company said.
Fuji has cast the closure of its Hawaiian facility as a "strategic realignment," which will create "better product uniformity, operational efficiency and ease of expansion" by consolidating operations in Sweden.
"Although both facilities operated fully enclosed biosystems, each equally producing the highest levels of astaxanthin in the world, the two technologies were different," the company said in a statement, issued mid-January. "Consolidating operations into one of the two technologies would avoid duplication of effort and achieve operational efficiency. One of the reasons the Swedish facility was chosen as the surviving technology was because of its ease of expansion. It is modular and can be expanded rapidly."
For its part, competitor Cyanotech is puzzled by Fuji's explanation.
"To be honest, we found Fuji's reason very strange as they built their Hawaiian facility from scratch and were publicly touting their technology as 'a cutting edge BioDome system in Maui' for the last several years," Capelli said. "To put it bluntly, if the technology they developed and invested in to build their Maui facility worked, I can't imagine why they would close it."