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Predicted Xylitol Market Risk Has Worked

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Predicted Xylitol Market Risk Has Worked

Xylitol - a sugar substitute obtained from natural raw materials. The advantage of xylitol over other sweeteners is the preventive anti-caries effect.

In Finland, the use of xylitol-containing chewing gums is included in the state dental care program. As a result, Finland has become the country with the lowest incidence of caries. 

World consumption of xylitol has increased from 10 thousand tons to 100 thousand in 10 years, the growth in unit capacity of new plants has led to a threefold drop in prices.

In 2007, a Russian businessman who owns a logging company turned to  Industrial Information Agency to test the investment idea of organizing the production of xylitol from birch sawdust and to conduct a study of the Russian and world market.

The study determined that 90% of the demand in the Russian market falls on two manufacturers of chewing gum. In the report, we indicated that such a dependency is a risk for the project, so the Customer decided not to invest  the project.

After updating the report in 2012, it turned out that purchases of xylitol in Russia decreased several times. The reason is a change in the chewing gum formulation due to the replacement of part of the xylitol with maltitol:

maltitol is 1.5 times cheaper than xylitol, and Russian legislation does not encourage the use of xylitol.

Thus, the likely risk worked, the entrepreneur's timely refusal to invest allowed him to avoid multimillion-dollar losses.