Feed Business Worldwide - April, 2012
Xingjia Bio-Engineering: Sustainable value creation and R&D driven innovation
by David LIN
While China's feed industry is growing steadily but more slowly after double digit growth in past decades, the pace for innovation has not caught up. Imitative products are a faster route many companies take, and it comes with a downside that includes a lack of competitiveness.
Xingjia Bio-Engineering Co., Ltd, for one, does not believe in taking shortcuts and continues to place great emphasis on product development and innovation. Based in the city of Changsha in China's Hunan province, Xingjia Bio-Engineering Co., Ltd specialises in the research and development of trace elements feed additives. Having outgrown its large domestic market in China itself, Xingjia's products are exported to Europe, North America, the Middle East, and Southeast Asia.
China's trace element industry blossoms
China has always been self-sufficient in its domestic supplies of trace element feed additives, including copper sulphate, zinc sulphate and ferrous sulphate. In fact, many countries depend on China's exports of trace elements to make their own feed additives. Huang Yiqiang, Xingjia Bio-Engineering's board chairman, pointed out that there are many Chinese companies specialising in trace elements feed additives, but most are small-scale subsidiaries set up by large smelters to process industrial waste.
"As these companies are not professional feed additive companies, they think little of quality control and do not have a product development department. Hence, quality and safety are not guaranteed," he said.
"The advantage of these companies is their low cost of raw materials. However, since they are the support arm for smelter companies, this makes them highly polluting," Huang noted.
In recent years, as China's government strengthens its environmental protection measures, these companies are under great pressure to restructure. To comply with new, strict new anti-pollution laws, all companies across entire industry lines have to invest in new pollution control equipment and in some cases, entirely new production lines.
By law, many trace element suppliers were required to upgrade their equipment and technology to deal with industrial waste and toxic residue. Due to a lack of capital, these companies often have few options but to shut down, suspend operations, or switch to other lines of production. A large number of companies in the trace element industry are believed to have partly or completely ceased production, as they were unable to afford the cost of complying with the government's anti-pollution legislation.
"Another problem these small and non-professional trace element producers pose is the product quality issue," Huang said. "As these companies are small-scale, they do not have control over exports.
In the past, Chinese trace elements producers export their products through trading companies instead of directly exporting. Each trading company may be liaising with dozens of producers at the same time. They frequently affix their own brand name (rather than that of the actual trace element supplier) on to the products for export.
"The products are of varying quality, as they are produced by different companies. In fact, many of the trace elements are of industrial grade, containing impurities which are harmful to both humans and animals. This has had a negative impact on China's export, causing the trace element industry to remain stagnant," Huang explained.
Xingjia a leader in trace element industry
First set up in 1999, Xingjia Bio-Engineering is a company dedicated to the development of trace element products, including organic, inorganic and composite trace elements. What sets Xingjia apart from other trace element companies is that it focuses on trace elements in feed additives, Huang said.
The company's products, which come from its very own research and development laboratories, adhere to stringent and high standards of quality control, he added. "Xingjia's deeply-entrenched expertise in R&D allows it to identify problems that many large feed companies tend to neglect."
Part of the R&D effort is devoted to making sure that suppliers provide trace element feedstock that does not contain other toxic heavy metals or industrial contaminants.
Besides helping to solve the inherent problems clients might face, the company often goes the extra mile by pre-empting potential risks and safety threats and thereby eliminating remediation costs for the customers.
In addition to a vigorous quality control systems and a strong R&D team, Xingjia has invested several millions of US dollars in an animal laboratory to ensure that its trace elements products are safe to use. All these efforts help Xingjia remain highly competitive in the market, Huang said.
Sustainable salt and chelate based trace elements
But there is more to trace element safety than making sure it is free of contamination from other elements or toxic compounds. Trace elements, much like amino acids and vitamins are all necessary for animal growth. However, trace elements differ from the other two in a way that the former has the opposing characteristics of nutritional benefit and toxicity. Improper use of trace elements will affect the efficacy and utilisation of vitamins, enzymes, lipids and other nutrients in feed, Huang explained.
It is hard to capture the optimal balance point of trace elements, he pointed out. Excess dosage may cause damage to the animal's liver and kidney, resulting in slower growth, declining immune system effectiveness, inferior meat quality, or even death of the animal. Hence, it is crucial to ensure that the amount of trace elements added into feed is exact and accurate, Huang said.
Currently, most trace elements available in the market are mainly in the chemical form of sulphates (eg. copper sulphate, zinc sulphate, etc). When a sulphate comes into contact with moisture, sulphate ions will be released, affecting the use of vitamins and amino acids in feed. Rather than coming in the form of sulphate compounds, the trace elements Xingjia produces are chelates, which have greater stability and efficacy in feed.
According to Huang, chelates can be categorised into two types - protein complexes and amino acid complexes. The composition and quality of protein-based chelates are difficult to control, and there is possible risk of contamination, such as melamine contamination. By comparison, raw materials of amino acid-based chelates can be tracked more easily, thus allowing for better quality control. This is why Xingjia has opted to produce amino acid chelates, Huang said.
Specifically, due to its stable acidic structure, Xingjia uses liquid methionine in the production of amino acid based chelates. Huang also notes that methionine has a significant advantage over other amino acids with respect to ruminant and broiler performance.
Besides amino acid chelates, Xingjia has also developed basic salt products to satisfy different levels of customers' needs. Its current basic salt product line includes basic cupric chloride and basic zinc chloride.
While slightly more expensive, basic salt products are generally safer than sulphate products, which have higher moisture absorption rates and a stronger oxidising effect. In addition, basic salt helps retain nutritional values in feed, since it does not break down in feed, making it a stable and cost-effective feed additive.
To ensure product quality, Xingjia has collaborated with China's major upstream ingredient firms to secure raw material supplies that comply with Xingjia's processing technology and quality requirements. This enabled Xingjia's products to meet HACCP and FAMI-QS quality standards, Huang said.
To date, Xingjia has organised four annual training courses for quality control personnel in large-scale feed companies, many of which are not familiar with trace elements testing, he added.
A total solution provider of trace elements
But Xingjia is about more than providing safe, high quality products. Its products and distribution is also evolving with the vast changes currently reinventing China's feed and livestock sectors.
Over the past two years, China's feed and livestock industry has gone through rapid development and consolidation. Based on past experiences in other countries, the integration of the feed and livestock industry is inevitable and the demand for quality will become increasingly stricter. In the future, there will be fewer feed and livestock clients but each one will require much more trace elements than the earlier generation of customers.
Therefore, Huang believed there is a need to adapt to these trends by providing customers with an integrated solution which customises product, quality, formulation, and production according to particular needs.
Trace elements are not expensive but pose possible threats to feed safety, Huang said. Xingjia's major strength lies in helping customers resolve safety and quality issues in trace elements. While this means higher costs for customers, they stand to benefit from increased efficiency in the long run, thus reducing the overall costs.
Environmental issues are an opportunity
According to Huang, the main problems facing China's feed additive industry today are environmental pollution from industrial processes and feed quality issues. Indeed, as the government moves to tighten environmental protection regulations in recent years, the trace elements industry begins to face mounting cost pressure.
Foreseeing the growing importance of environmental protection, Xingjia made it a top priority right from the day when the company was first set up. Besides having its own laboratory for analysing trace elements found in animal faeces, the company actively participates in various symposiums and regulation-formulation meetings on animal waste management organised by China's ministry of agriculture.
Just recently, Huang attended an expert meeting and was taken aback by the revelation that more than 60% of China's land pollution is caused by the animal husbandry sector. Major livestock waste contaminants include excreted antibiotics, chemical compounds and trace elements.
He felt that there is a need to implement a series of policies and measures to control pollution and protect land resources so as to ensure sustainable development of the industry.
In that respect, Xingjia is already ahead of the curve: The more efficient the trace element, the less gets excreted by the animal. It is a scientific fact that a far lower proportion of chelate-based traced elements are excreted than the traditional, sulphate-based varieties. This makes it possible for livestock to receive the same trace element quantity from a lower supplement dose, thereby reducing the toxic impact of livestock waste.
In this respect, Xingjia prides itself for its early adoption of environmental protection measures, which have turned out to be a strong support for the company's development. Under Huang's helm, the company will continue to strengthen its R&D pipeline with product innovation that will improve animal production efficiency and nutritional values, while minimising environmental pollution by cutting the emission of trace elements in animal waste.
Innovation is the company's driving force
Xingjia's heavy investment in product development and innovation was partly rooted in Huang's background in research before joining the trace element industry. He pointed out that one of the most pressing problems facing China's feed industry is the lack of innovation.
Many companies choose to imitate existing products, thus rendering them uncompetitive in the market. "The key to a company's success is creating values for customers and the society at large through innovation, as opposed to mere imitation," Huang opined.
Currently, Xingjia has 40 patented technologies and a strong 30-member research team, where Huang is the head of R&D department. In addition, Xingjia plays host to an annual international trace elements symposium held in Changsha, China, where experts from Europe, the United States and China gather to discuss product safety, the latest technologies and other feed industry-related developments.
With safety issues being a perennial concern for the feed sector, industry stakeholders need a reliable supplier committed in ensuring the quality of ingredients. They can count on Xingjia's enduring steadfastness as an ecologically sustainable trace element specialist. With products that are as well equally well known both in China and around the world, this dynamic company is well on its way to becoming global innovator and supplier of premium trace elements feed additives.
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