FERMENTATION ECONOMICS

Fermentation Economics:

The objective of any successful fermenttaion process is the ability to produce  a fermentation product. Thus the product must be sold to recover all the costs along with desired profit. But manufacturing should be done in accordance with the market demand. So there could be 2 possibilities:

First possibilty is : That the market for so called product already exist because the same or similar product has previously been sold by others.

Second possibilty is : a newly manufactured or discovered product e.g. a new antibiotic  will require a market to be established.

This might include the approval by FDA ( food and drug adminstration)

There are certain obstacles regarding the marketing of a certain product like the semand of the product is low or it has relatively very few uses.so its quite obvious that for a product lke this it could be challenging to get patent coverage because of lack of utility.

for the products which are already in the market , there could be a fierce competition. so to succed in the competition the product must be cheap enough that it can be sold at or slightly less than the already existing selling price. So, in the nutshell, the whole fermentation process and its product  must be able to compete on an economically sound basis with the similar products in the market.

The economic position of  a fermentation product is closely tied to the costs associated with its production and distribution. These costs can be categorised into several classes as follows:

Media components:

The competitive postion and expected profits from a fermentation product are closely tied to the costs of the various components of the production medium. usually inoculum medium is less expensive because it is required to provide rapid cell growth only and not for converting large amount of carbon substarte into a fermentation product. However any medium component may be subject to fluctuations in context to availabilty and costs. so it is always advantageous to have a alternative medium for use if any unusual situation happens.

Labor Costs:

labor costs involve technical ad non technical trained personnel at all levels of competence. This includes handling of cultures, inoculum, production, product recovery and purification, packaging, cleaning and adminstartion and so forth. Labor costs vary from fermentation to fermentation.

Contamination and sterlization: 

Contamination always add  costs to any fermentation process. most fermentations cannot survive serious conmtaminations so the medium must be discardedmodertae fermentations does not require the medium to be discarded but it might affect the yields. Certain fermentations are more prone to contamination than others. This involves cases in which foaming is a problem. some are more sensitive to phage infections like bacterial fermentations. So there has to be an alternate method for the contaminant growth. Such methods include low pH of the medium, partial heat treatment of the medium and inclusion of certain chemicals so a sto retad contaminant growth.

Yield and Product Recovery:

Product Yield and Recovery are the prime considertaions of fermentation economics and in that context yield and recovery must be considered together, since high yield id of little value if the product cannot be recovered  properly for sale. 

Product Purity:

At one end of the scale some products, like antibiotic preprations must be sterile and free from pyrogens. In contrast other antibiotic preprations  are sold in crude form for mixture with animal feeds. Thus the purity level required for the marketing of  a fermentation product has  a major effect on the costs associated with the product.Specific fermentation products can also be marketed at more than one concentartion as level of purity. For example, lactic acid is sold at strengths ranging from approx 20 - 85% and its purity levels range from crude technical grade to high purity edible  and U.s.P. grades. Each of these grades of lactic acid has a place on the market.

Waste Disposal:

Costs attributed to waste disposal vary from minimal to maximal factor in fermentation process. A critical consideration is the acceptance of waste by Municipal's STW (Sewage Treatment Works); as they might want pre treatment of wastes before the acceptance. In the altter case the fermentation company must have its own waste treatment plant. Disposal of wastes is no longer simple in contrsat to historical disposal in the rivers, streams or other water bodies. Certain fermentations require the waste to be sterlized before disposal.

Research Costs:

Fermentation process must include those expenses incurred in the research that actually discovered the process nad developed it. These costs can be considerable for those fermentations where they provide new products .there are less tangible research costs that must also be considered in the overall cost of fermentation. This type of reserach is pursued in teh hope that teh resulting basic information obtained on the growth and synthetic activities of microbes will be of later value in defining areas of exploration and approaches for discovering new fermentation processed and bettering old processes.

An appraisal of the economic potential is required for the fermentation process which evaluate all the above categories under present and future market protential. but evaluation must be made as early  as possible during process development. Also process must be evaluated at later stages during actual production. It is also important to consider present and future costs and  a selling price for the product that market can bear.. All these points must be evaluated and then decide whether the fermentation product can be sold at an acceptable level of profit or not? If the decisons are negative then the alternatives are to abandon the whole process and carry out further reesarch on the product recovery. After all a great deal of money is at stake in these decisons!!!

Reference: Casida, L.E. Industrial Microbiology