Sourcing Ingredients from Asia

March 1, 2009



For much of the past two years, consumer worries about the safety of Asian imports have been on the rise. A wave of contaminated products ranging from toothpaste to seafood to infant formula has raised not only suspicions, but also calls for greater FDA involvement overseas.

Last November, FDA opened offices in the Chinese cities of Beijing, Guangzhou, and Shanghai as part of a push to detect tainted goods before they reach U.S. borders. The agency soon plans to open other regional offices in India and the Middle East. While FDA's efforts could have a positive effect in the future, some manufacturers are already looking into ways to reassure consumers and safeguard the purity of their raw materials right now.

One resource is the Natural Products Association (NPA; Washington, DC), which opened an office in Beijing in 2006. In 2007, the NPA China office collaborated with the U.S. Pharmacopeia's (USP; Rockville, MD) Shanghai laboratory to launch a raw-materials verification program for Chinese suppliers. The office also offers a GMP-certification program.

Nutritional Outlook recently asked NPA China office director Jeff Crowther about the programs.

THERMO FISHER PROGRAM COULD AID MELAMINE-DETECTION EFFORTS

THERMO FISHER SCIENTIFIC INC. (SAN JOSE) launched a program in December to supply testing labs with melamine-detection resources. The program is intended to help companies comply with a November 12, 2008, FDA import alert that permits the detention without physical examination of Chinese products that may contain dairy ingredients from entering the United States.

Import Alert #99-30 requires importers to supply FDA with third-party lab results that verify products do not contain melamine or cyanuric acid. As an alternative, importers can also provide documentation that shows the products don't contain milk or milk-derived ingredients. Food safety officials have detected the industrial chemical melamine in a variety of milk-based products as well as eggs and produce.

The program includes sample preparation, instrumentation, consumables, and methods support. Thermo Fisher Scientific said it had developed a testing method based on liquid chromatography/tandem mass spectrometry (LC-MS/MS). The company also offers screening and confirmation techniques that use gas chromatography/mass spectrometry (GC/MS).

"We anticipate a significant increase in demand for testing following the FDA alert on milk-based products imported from China," Stuart Cram, PhD, who leads Thermo Fisher's food safety program, said on December 2. "To help our customers handle this expected increase in volume, we're consulting with testing labs and offering methods and technology support. We will also develop melamine analysis courses that we'll offer at our training centers worldwide and at customer sites. These actions should help our customers improve their sample throughput, which is paramount, given the expected volume of products affected by the alert."

What effect has the recent melamine crisis had on the supplement market in China?

Although the melamine incident did not have a direct effect on the Chinese supplement market, it once again demonstrated to the world's manufacturers and consumers that the "Made in China" brand is in serious trouble. These incidents really damage China's reputation and perpetuate the fears of sourcing in China. Quality domestic companies focusing on the export market must work harder to prove they have quality products.

The indirect effect of these ongoing quality problems is that competent suppliers are beginning to take quality and safety into their own hands by seeking to obtain international certifications such as GMP, TGA, ISO, HACCP, etc.

The incident has also prompted stronger scrutiny of Chinese imports at U.S. ports of entry. And it has forced China to work more closely with its largest trading partner to ensure its regulators are taking the necessary steps to protect consumers and meet U.S. safety standards.

If a manufacturer is considering sourcing materials from China, what steps should it take?

I would say to the manufacturer these four words: due diligence, relationships, and supervision. First, of course, is the due diligence process. Manufacturers should know as much as possible about a potential supplier. Here are some basic questions that should be answered.

Where is the facility? This seems like a no-brainer, but you would be surprised how often small companies use other companies' addresses, information, and sometimes even business licenses. Finding out the real location of where ingredients are coming from could be interesting, to say the least.

How many years has the supplier been in business? The U.S. Commercial Service offices in Beijing have excellent programs to help U.S. companies find partners and also provide backgrounders on many companies. To use these services, start with a local U.S. Commercial Service Export Assistance Center. The centers are located in most large cities throughout the United States, and locations can be found at this Web site: www.export.gov/eac/index.asp.

What domestic and international quality-assurance certifications does the supplier have? China has some of the best and worst manufacturing facilities. Because the United States now has mandatory GMPs for dietary supplements, U.S. manufacturers and brokers should look to find those suppliers that have U.S. GMP certification.

What other goods does the supplier produce? Surprisingly, some suppliers are involved in producing ingredients or products that a U.S. manufacturer would not want handled in the vicinity of its natural ingredients, such as pharmaceuticals, pesticides, and industrial chemicals. The chances of contamination are raised exponentially in these circumstances.

What other industries does the supplier participate in? Most large, state-owned enterprises are involved in a variety of industries. This begs the question: "Is it really focused on long-term sustainable business or just doing this for the short term to make money and add another industry to its roster?" Companies that don't look into this could end up purchasing ingredients from a supplier that produces steel for Chinese battleships and cement for construction.

What is the supplier's business profile? One of the problems of securing the safety of food and ingredients in China is tracing the product back to its source or responsible party. U.S. manufacturers should know whether the company is state owned, privately held, a subsidiary, or publicly listed. A high number of suppliers are subsidiaries of larger firms; it is worth the effort to have a look at their corporate family tree.

Relationships and supervision can be accomplished by scheduling regular trips to visit the supplier. Not only will this strengthen the relationship, it will also allow the U.S. manufacturer to have a look at its supplier's facilities and manufacturing practices as well as confirm that the supplier is keeping its certifications and manufacturing processes up to par.

That said, a high percentage of U.S. manufacturers are purchasing ingredients indirectly from China through a U.S. broker. This doesn't dismiss them from their supply-chain responsibilities. Manufacturers should insist on third-party testing and certifications. NPA is helping the U.S. industry find higher-quality suppliers by offering its ingredient-testing program with its partner, USP, and its GMP certification to Chinese suppliers. NPA also has been holding quality-assurance seminars in China for the last two years to educate manufacturers on third-party testing and GMP certification.

How do the testing and GMP-certification programs work?

NPA and its China office have hosted a total of six seminars on third-party testing and GMP certification. It has taken about two years to get interest to a level where suppliers are beginning to see the benefits of going through the programs.

The ingredient-testing program is made possible by a one-of-a-kind partnership between NPA and USP. USP opened a new state-of-the-art facility in Shanghai, which is where all the testing program samples are sent.

The first step in the testing process is collecting the sample. The Chinese supplier prepares a sample following NPA's standard operating procedures and then ships it to NPA's Beijing office, where it is blinded and subsequently sent to USP's Shanghai laboratory for testing. After tests are finalized, USP will send the report to NPA's headquarters and Beijing office. In the near future, NPA will post the results of the tests on its Web site. Chinese suppliers that choose to participate pay for the testing program, so this is a free service to U.S. manufacturers.

NPA encourages U.S. manufacturers and brokers to get involved. It is essential that the U.S. industry requires its suppliers in China to go through the testing and GMP certification programs. Both programs are designed to safeguard the industry's products and reputation by increasing quality, safety, and consumer confidence. Participation and promotion of these programs is a great marketing tool that demonstrates a company's commitment to producing the highest-quality products.

FDA recently opened an office in China and plans to open others soon. What effect, if any, is this likely to have?

The U.S. Department of Health and Human Services (HHS) and FDA held the opening ceremony for FDA's new offices in China on November 19, 2008, at the newly relocated U.S. Embassy in Beijing. NPA's China office was invited to attend this event and had a chance to discuss the association's supply-chain safety initiatives with FDA's new China director, Christopher Hickey.

During the opening remarks of the ceremony, HHS secretary Mike Leavitt made it clear that the U.S. government is committed to working closely with its Chinese counterparts to increase cooperation and create programs that will benefit both countries. Leavitt continued by saying it wasn't possible to inspect every shipment that entered the U.S. market. FDA is looking to industry to ensure that it is purchasing ingredients and products from Chinese companies that comply with U.S. standards and participate in industry-certification programs.

With this in mind, I would suggest that all manufacturers and brokers in the United States seek out new suppliers that have such certifications or strongly encourage their existing suppliers to obtain them. In the future, this will become an issue for many Chinese suppliers that aren't in compliance with U.S. standards. It could leave U.S. manufacturers scrambling to find new certified suppliers at the last minute. The time is now to begin searching for suppliers that are interested in supplying the U.S. market with quality ingredients and have the qualifications to prove it.

The FDA offices will allow for more frequent discussions on food and drug safety, facilitate training workshops for regulators, and give the U.S. government an on-the-ground team that can react to future issues in a faster and more productive manner. The offices will also be a great resource for U.S. industries in China.