By Vice Chairman Song Na-ra, Managing Editor Kevin Lee
“Neo Cremar is the world’s first organic galactooligosaccharide manufacturer, leading the organic market,” said CEO Han Ki-soo of Neo Cremar, which boasts of the world’s fourth-largest organic milk powder market share.
In an exclusive interview with The Korea Post, CEO Han said, "The premium market-leading Europe and Oceania are the major export markets of Neo Cremar. They account for more than 60 percent of our exports and the United States and Asia account for the remaining 40 percent. In addition, Neo Cremar is expected to increase its sales of galactooligosaccharide, a related material, along with the expansion of the microbiome market, and expects steady growth as a leading company in plant-based meat substitute and cultured meat, a future food in the field of research on new materials.
Neo Cremar is distributing finished products and supplying raw materials to OEM/ODM companies based on food raw material manufacturing in Korea (approximately 400 places), and is also expanding consulting service and production of finished products to expand the market recently. In addition, as a general food company, it supplies raw materials to powdered milk and beverage manufacturers.
Overseas, it boasts of the world's fourth largest organic milk powder market share and uses its flagship product, organic galactooligosaccharide, as a raw material for powdered milk.
In addition, as a distributor of health functional food ingredients, it supplies organic galactooligosaccharide and DNF-10 (diet materials) to manufacturers throughout Europe and the Americas.
The following are excerpts from an interview with CEO Han Ki-soo of Neo Cremar.
Question: Please explain the background of Neo Cremar's establishment.
Answer: Neo Cremar is a young company with the motto of 'human-like company', which contributes to human health by giving functionality to food and established it to achieve the goal of development of domestic food industry.
We started research and development in 2007 in keeping with its transition to a corporation. In 2012, we established the "Functional Food Research Institute" to accelerate the development of functional new materials. Based on these technologies and sales, we pioneered overseas markets such as Australia, Japan, Taiwan, USA, Europe, China, New Zealand and Thailand, creating profits.
Q: What is your management philosophy?
A: Neo Cremar seeks to develop the domestic functional food industry, maintain ethical values, and take a leap forward as a global company based on our technology and sales.
We aim to revitalize the local economy and grow together with our partners, and we want to grow into the world's best global food materials company and practice a human-centered management philosophy that grows together with society.
With the aim of becoming a ‘human-like company’, our company was selected as a Seoul-type small and medium-sized company that is good for young people to work in 2017 and is making active efforts to create new jobs.
Due to the nature of the food manufacturing industry, we aim to grow into a global functional food material company leader by boldly excluding business management centered on orders from outsourced companies with fewer manpower and automated equipment, and to contribute to the development of the local economy by building a large-scale new factory.
Q: Please tell us in detail about the company's business and current status.
A: As a functional food material company, our main business is to manufacture functional sugar and peptide products and distribute products such as food additives.
Sugar generally refers to general sugar, but chemically, it is also referred to collectively among sugars that taste sweet when dissolved in water.
According to the Ministry of Food and Drug Safety, they are classified as food sugars, and among them, we produce oligosaccharides, processed oligosaccharide products, and processed sugar products.
Based on interest in alternative sweeteners that can be consumed in a healthy way from the beginning of the company's establishment, we have developed various alternative sweeteners that can replace sugar and starch sugar.
In particular, we are making efforts to reduce sugar worldwide, and recently, the increase in the intake of carbohydrates such as added sugar is being discussed as a cause of obesity, one of the diseases that threaten humanity.
In line with this trend, our products are applied to powdered milk, food and beverages, and functional foods, serving as an alternative sugar. Beyond simply replacing sugars such as simple sugar, we have developed a product lineup that has functions such as improving the intestinal environment and suppressing blood sugar rise and applying them to commercial products.
In addition, we launched the world's first organic galacto oligosaccharide to cope with the growing interest in Clean Label foods (products that contain ingredients in the product accurately and easily understood by consumers, produced with raw materials that minimized processing without adding artificial colors or various food additives) and the growth of the organic market.
Our company is currently the world's No. 1 organic galactooligosaccharide manufacturer, and this product is being applied to and sold by famous domestic and overseas milk powder manufacturers. It is the first product in the world to acquire Chinese organic certification, and we are targeting the global market including China.
Peptide products are products that are produced by separating and producing only the low-molecular fraction of the yeast hydrolyzate through our own enzyme and separation technology. It is a product that has an appetite suppressant effect by regulating hormones.
In particular, the products are sold as a raw material for diet-related products in Japan.
In addition, we are planning to expand our business further through intensive research and government tasks on alternative meat/age-friendly foods considering the environmental industry.
Based on work experience in food and related industries, the company started a private business in 1999 to import and distribute sugar-related functional food materials.
Since then, through the transformation of a corporation in 2007, we have grown from a simple distributor to a company specializing in functional food materials that develops, manufactures, and sells products.
In the course of this business, our company has accumulated know-how such as understanding of functional materials and overseas marketing. In order to develop our own differentiated materials and grow the company, we formed our own research organization in 2008 and are pursuing independent product development research by registering as a research center in 2012.
Through research activities, we developed yeast peptide products in 2010 and completed the development of functional sugar products such as galactooligosaccharide and palatinose in sequence.
In addition, in 2016, organic galactooligosaccharide was launched and applied to famous domestic and foreign milk powder manufacturers. In 2018, its galactooligosaccharide product obtained the GRAS (Generally Recognized as Safe) certification from the US FDA to prove the stability of the product and to establish a bridgehead for advancing into the US market.
Recently, it has been clinically confirmed that its prebiotics (high purity galactooligosaccharide), known as microbiome, are the world's first to help skin health, and has been registered as a functional food in the Korean Ministry of Food and Drug Safety (KFDA), the Japanese Ministry of Health, Labor and Welfare, and NPN of Canada.
For product production, we established a factory in Seongnam, Gyeonggi-do, and additionally established a second factory (Jangseong Nano Technology Industrial Complex) in Jangseong, Jeollanam-do to increase sales and produce new products.
Afterwards, to expand production, in April 2018, a new integrated factory with an annual production capacity of 10,000 tons was established at the National Food Cluster in Iksan, Jeollabuk-do, securing the foundation for business expansion.
The company obtained GMP / HACCP / organic certification / Halal certification, etc. to establish a foundation for production from raw materials to final finished products.
As a company that has specialized in R&D and manufacturing only functional food materials for more than 10 years, our company has secured our own differentiated product lineup and has continued to generate profits through a number of customers such as domestic and foreign dairy processing companies, health functional food companies, and beverage/food companies.
In addition, we have been continuously conducting research and development on product functionality such as oligosaccharides and yeast peptides.
In addition to functional food, our company is also expanding the application fields to cosmetics and pharmaceutical materials, and is expected to achieve stable and continuous growth in the future.
Q: Please introduce your company's main products in detail.
A: Our main products are galactooligosaccharide and DNF-10.
The main functions of galactooligosaccharides are skin health, improvement of the intestinal environment, improvement of immunity, and containing milk ingredients.
It is a main product for export to domestic and European and Oceania countries, and can be applied to all general and health functional foods.
In particular, as one of the ingredients of breast milk, it is the product with the greatest influence in the powdered milk market. Recently, it acquired the world's first certification for the function to help skin health, and it was introduced into the world's market for the first time with a premium of organic, giving it differentiation from similar products.
This product can be applied to general and health functional foods, and the profit has been increasing due to the expansion of the galactooligosaccharide market over the past three years, but new product development and quality improvement are required due to excessive competition.
The main function of DNF-10 is to suppress appetite through hormone regulation as a diet material.
As a main product for export to domestic and European and Asian countries, it can be applied to diet food, and thus its diet market share is continuously expanding.
As a diet food, profitability is improving due to the expansion of the diet market over the past three years, and a larger expansion is predicted due to the continued interest from global companies.
Q: Please introduce your core technology retention status.
A: Above all, we have technology for producing oligosaccharides and peptides through enzyme engineering technology.
We have high-purity and high-quality technology through fermentation engineering technology and manufacturing process improvement, and we are researching the development of high-purity organic galactooligosaccharide using fermentation engineering technology.
We have already developed a technology to remove odors during fermentation, which is essential for the development of organic high-purity galactooligosaccharides through yeast fermentation.
We have completed the development of galactooligosaccharides with a stronger content than previously developed high-purity products using separation and purification technology.
We have developed a 90% galactooligosaccharide product through separation method development and are preparing for mass production of 90% galactooligosaccharide using NF separation method.
In addition, we have secured technological competitiveness in the market by publishing a thesis that proves the effects of human clinical trials and skin care through the ingestion of galactooligosaccharide.
In order to secure competitiveness by proving the diet functionality of our product, yeast peptide, a total of 12 papers were presented, including clinical papers.
We secured competitiveness by giving physiological functionality to palatinose produced using our enzyme engineering.
Q: Please tell us about the export status of your products and major markets.
A: Europe and Oceania are the main exporting countries of our products, accounting for more than 60% of our exports. The US and Asia account for the remaining 40% of the exports.
As the exhibition disappears due to COVID-19 pandemic, we are conducting online seminars and online exhibitions with the appearance of webinars.
The demand for diet materials has decreased due to the contraction of the diet product market due to the corona virus, but it is predicted that the latent consumer sentiment will increase explosively if the corona issue disappears.
As of 2020, we are exporting to 13 countries, with an export value of $3.13 million in 2021.
By country, our exports to Australia came to $1.17 million, followed by the United States at $848,755 and Japan at $387,997.
Q: Please tell us about your company's future growth strategy.
A: Under the slogan of “a company that designs a healthy future,” we aim to become a leading company in healthy and delicious food through continuous R&D and commercialization.
We provide customized services by expanding joint research along with proposing needs suitable for the market by conducting a study of local competitors, and writing a market research report using our current network of agents (agents in 13 countries and networks in 56 countries).
We are securing the reliability of our products through advertisements and publicity related to articles in international academic journals about Neo Cremar's steady research results (government tasks and additional research on its own items).
Through online exhibitions and webinars due to the corona virus, our company plans to target major markets such as the US, Canada, UK, Japan, China and Thailand.
We are preparing a bridgehead for market expansion through the application and registration of trademarks and patents in the target markets.
As a strategy for securing technology, we established a strategy by overcoming the limitations of galactooligosaccharide products manufactured by enzyme conversion that are currently in circulation.
Using optimal enzyme selection and fermentation engineering, we have developed high-purity galactooligosaccharides with maximum fortification of breast milk ingredients.
As a promotion strategy through the expansion of various product certifications, we will acquire US GRAS, Halal, and Kosher certifications, grant physiological functionality to secure competitiveness, and secure intellectual property rights.
We promoted the publication of papers related to the grant of physiological functionality and applied for domestic and foreign patents related to manufacturing technology, and obtained a skin health claim for the first time in the world.
Through the world's first organic galactooligosaccharide development strategy, we are pursuing a strategy to preoccupy the premium market.
We are supplying galactooligosaccharides to infant formula manufacturers around the world by providing premium value-added.
Through thorough quality control of yeast peptide products (Eatless), we have gained trust from overseas markets such as Shiseido in Japan, Life Extension and Swanson in the US.
In order to differentiate our goods from other products, we are focusing on technology development through enzyme engineering and fermentation engineering.
We developed low-molecular materials or highly purified materials through UF (Ultra Filtration) and NF (Nano Filtration) separation technologies, and recovered by-products using production centrifuges and decanters.
In order to strengthen market competitiveness through product certification, certification time has been shortened through various certification experiences according to products such as GRAS, halal, and organic processing certification, and technology and market competitiveness have been strengthened by granting physiological functionality.
In addition, we applied for a patent using the secured physiological functionality and manufacturing method to strengthen market competitiveness by securing intellectual property rights.