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Regulatory problems in China depress growth of Innophos's nutritional ingredient sales

Innophos supplies specialty phosphates for industrial purposes as well as for nutritional ingredients.

The web of Chinese regulations regarding dietary ingredient import and export reached out to ensnare Innophos, a company that derives a portion of its revenue from selling phosphates and other mineral ingredients for dietary supplements and functional foods. The inability of some of its major customers to deal with exporting into China led to the stunting of the growth of Innophos’s nutritional business. 


 Sales of nutritional ingredients were expected to rise 6% to 8% in the company’s second quarter of 2014 and instead rose only 2% as a result of the problems with Chinese regulations, said CEO  Randy Gress in a earnings call with analysts.

“It just wasn't as great as we expected where we expected some double-digit growth to support our overall growth initiatives there, but we did see some growth within the business and that was due to the headwinds that some of our customers had, with the our overcoming some of the regulations in China for their own supply,” Gress said.

Overall, Innophos recorded net sales of $220 million for the second quarter of 2014 with diliuted earnings per share of 93 cents, compared to 52 cents in the year ago period.

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