Economic Aspects of Amino Acids Production

Abstract

Amino acids represent basic elements of proteins, which as a main source of nutrition themselves serve as a major reserve for maintaining essential functions of humans as well as animals. Taking the recent state of scientific knowledge into account, the industrial sector of amino acids is a priori “suitable” to a specific kind of an ecologically sound way of production, which is based on biotechnology. The following article may point out characteristics of this particular industrial sector and illustrates the applicability of the latest economic methods, founded on development of the discipline of bionics in order to describe economic aspects of amino acids markets. The several biochemical and technological fields of application of amino acids lead to specific market structures in high developed and permanently evolving systems. The Harvard tradition of industrial economics explains how market structures mould the behaviour of the participants and influences market results beyond that. A global increase in intensity of competition confirms the notion that the supply-side is characterised by asymmetric information in contrast to Kantzenbachs concept of “narrow oligopoly” with symmetrical shared knowledge about market information. Departing from this point, certain strategies of companies in this market form shall be derived. The importance of Research and Development increases rapidly and leads to innovative manufacturing methods which replace more polluting manufacturing processes like acid hydrolysis. In addition to these modifications within the production processes the article deals furthermore with the pricing based on product life cycle concept and introduces specific applications of tools like activity based costing and target costing to the field of amino acid production. The authors come to the conclusion that based on a good transferability of latest findings in bionics and ecological compatibility competitors in amino acids manufacturing are well advised to exercise concepts of the management of complex systems in order to choose the right strategy towards gaining market leadership.