The world agricultural market holds countless opportunities for Belgium-headquartered multinational feed additive producer Nutriad, despite economic uncertainties and political problems in some key markets.
On feed, livestock, meat and aquaculture productions, the most promising of these markets is Asia-Pacific. Nutriad CEO Erik Visser shares with Livestock and Feed Business his views on this region and the company's progress in China.
What opportunities and challenges does Nutriad see in its markets around the world?
Erik Visser: Nutriad offers animal nutrition and health solutions in 80 countries spread over Europe, the Middle East, Africa, North America, South America and Asia-Pacific. Our key platforms -- Mycotoxin Management, Digestive Performance and Palatability -- offer feed and livestock producers practical solutions with proven track record.
Although the industry faces similar challenges around the world, producing more with less and doing so in a sustainable manner, the impact of these challenges varies, depending on the market's maturity, livestock species and government regulations prevailing in each market. There's potential in Latin America, for example, but the region is rocked by political instability and unstable exchange rates. Venezuela faces economic and political turmoil while Argentina is in the midst of recovery.
South America is an emerging market where support producers with technical support and knowledge sharing. Brazil, a major beef and poultry exporter market, has seen strong consolidation in the past years. Benefiting from our local presence we see opportunities across species.
Nutriad has a strong presence in northern Africa, and the company sees opportunities in the southern part of the continent. Market conditions there are bound to improve. But, currently, the region still reels from political instabilities and local conflicts.
North America and Europe are two very important markets for us, but feed volumes in these mature markets are somewhat under pressure or in decline.
In North America, the key challenge currently lies in the impact of the recently introduced Veterinary Feed Directive, which regulates antibiotics use. A certain level of uncertainty hangs over the region, following lack of clarity on policies of the new Trump administration and potential trade conflicts as a consequence thereof.
We consider Western Europe a mature market while Eastern and Southern Europe are growing. Economic sanctions have made Russia more self-reliant and more determined to invest in local animal protein production.
Of all these regions, Asia-Pacific has the biggest potential for growth, specifically in the feed industry, due to rising income and an expanding middle class. Multinational companies are investing in local productions and the aquaculture industry is growing strongly in the region.
We expect China to rebound from its swine crisis, which led to a fall in hog numbers in the past two years.
What can Asia-Pacific expect as Nutriad expands its activities in the region?
We started to increase our focus on Asia-Pacific five years ago. Year-on-year we expanded our staff in different countries to increase local technical support for specific species or programmes.
Initially, we focused on poultry and swine. Later, we added aquaculture and are now introducing a ruminant-specific product portfolio.
Asia-Pacific has the highest year-on-year percentage growth globally, and Nutriad has been producing double-digit growth in the region over the last three years.
Obviously, we will step up our presence in this part of the world. We truly believe the future of feed is here in Asia-Pacific.
What have been Nutriad's milestones in China?
China is the world's biggest feed market, and also the biggest swine market. We used to focus on swine and poultry in the country, but are now ready to go into the ruminant and aquaculture sectors.
Our local partners help us understand the local dynamics and build relations. We engage in many cross-cultural exchanges in which we take Chinese customers to our sites in Europe and North America. We also invite their staff to take part in technical trainings abroad to keep themselves abreast of the latest feed formulation trends in the US and western Europe.
We share information with local producers, explaining to them how our products work and how they should be applied in the field. The relations we have built with our customers over the years are strong, as shown by their continued loyalty to Nutriad. These close partnerships are built on trust and commitment - and mutual benefit. That, in gist, is the secret to our success. As I always like to say, "We are big enough to cover the world, but small enough to care."
In China, have there been any changes in customer concerns over these years?
What you see in China is a shift from backyard farming to massive, highly industrialised animal production. Companies are consolidating, creating businesses that are investing more in technical knowledge.
Additionally, we see the number of feed mills declining and the size of the remaining feed mills growing. These developments have led to a change in requirements and a desire for enhanced technical support.
Modern feed mills in China now need highly skilled specialists. And we assist these specialists with nutrition and health information.
In the areas of feed management, farm hygiene standards, and production efficiency, there are still many Chinese companies that can learn from their counterparts overseas.
If you examine key performance indicators among producers around the world, you will find for example that China's feed conversions and piglet-per-sow ratios pale in comparison.
So Nutriad is doing all it can to share and apply its expertise towards improving production results for Chinese producers. In making its production processes more transparent, Chinese producers hope not just to raise the quality of its protein products but also to be able export them. Here, Nutriad does its share by helping the industry adopt international standards.
In addition, Nutriad also promotes the responsible use of antibiotics. Although we don't see an end to antibiotics use, we find a new level of interest among Chinese companies in producing healthy animals without too much dependence on antibiotics.
Consolidations in China's swine farms have escalated. What does this mean to Nutriad and the Chinese feed industry as a whole?
Growth is good but its pace should jive with production expectations and product quality standards. As consolidation means expanding the size of a company, producers have to be able to manage the expanded scope of their operations to ensure production efficiency.
Managing supply chains is very important because if you have growing demands to attend to, it is crucial that quality products are delivered on time and in line with specifications agreed upon.
Chinese companies also seek the services of world-class players like Nutriad. But while we engage with major organisations, we also attend to the needs of backyard farmers through our distributors.
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