Chr. Hansen: Adapting to become Nature's No. 1
In 2013, microbial specialist Chr. Hansen introduced its current strategy "Nature's No. 1". CEO Cees de Jong said then that their new strategy "builds on (their) core competences and is about evolution rather than revolution." In their recent trip to Singapore, LIVESTOCK and FEED Business caught up with Vilson Simon, Senior Vice President of Animal Health, and Glenda Leong, Asia Pacific Sales Director of Animal Health, who both recently joined Chr. Hansen this year, to find out more about their latest plans for the company.
Vilson (left) and Glenda
LFB: Vilson, with more than 25 years' experience in the animal health industry, what attracts you to Chr. Hansen?
Chr. Hansen's vision is to improve food and health. This resonates very well with me.
How many companies have operated under the same name, in a specialised business area, for more than 140 years? Chr. Hansen has successfully done so with natural, microbial-based solutions, and its strong reputation in this regard attracts me to the company.
Because of my background in science, I was looking for a role in a science-based organisation, which Chr. Hansen is a very good example of.
And I was looking for a stronger leadership role on a global scale, and my current role provides me opportunities to lead teams and build strong businesses around the world for Chr. Hansen.
Vilson, what are your growth plans for Chr. Hansen?
I would first like to say that since the 1970s when Chr. Hansen started its animal health business, animal health has become a priority rather than an opportunistic business for the company, and we have moved on from having an opportunistic to a strategic view of the sector.
There are five pillars to my agenda. One is to maximise our 2016 acquisition of United States-based Nutrition Physiology Corporation, the largest acquisition for Chr. Hansen to date at nearly US$200 million, which gives us very strategic access to the US cattle market. A second pillar is the setting of our route-to-market priorities in two emerging markets for Chr. Hansen - Asia Pacific and Latin America. A third pillar is the setting of our people strategies, which I believe should be guided by the leadership ability to place "right people on the right seats in a bus", according to author Jim Collins. Fourth, we would translate science into business, and we have plans to expand our product pipeline in the next five years. The fifth pillar is about creating themes connected to our routes to market, and that would involve changing parts of our business model, and putting more people on the ground, for example technical staff to provide support and generate demand.
Vilson, could you share with us more about "translating science into business", and how would strategies evolve in the near future?
In particular, we are revisiting our entire poultry and swine portfolios. We have traditionally been oriented towards the nursery stage in swine, but the growth-finisher stage also involves many challenges and provides us many opportunities. We would also accelerate innovation and product development relating to how the early feeding of microbial solutions can help colonise the gut with good bugs and provide a healthy, balanced microbiome at an early stage. Healthy sows would have better productivity and milk quality, and their immunity would be enhanced and potentially be transferred to piglets through their milk.
We are also interested in what academia is doing, and they in turn are interested in our capabilities and facilities which could help in the successful completion of their postgraduate theses. Chr. Hansen has 50 ongoing research projects within animal health in cooperation with universities (we provide some names *below).
Today, we have the world's largest fermentation plant in Denmark, and our manufacturing processes are totally based on science from end to end.
Vilson and Glenda, what is Chr. Hansen doing to help farmers reduce their use of antibiotics, both globally and within Asia?
Vilson: When we talk about natural alternative solutions to antibiotics, live cultures such as yeast and probiotics stand out. Chr. Hansen is a leading company for the latter category. For our two big brands for poultry and swine, respectively GalliPro® and BioPlus®, we will continue to expand our product lines with different combination of bacterial strains and different formulations.
In 2016, we introduced a concept which addresses the core producer concern of increasing profitability - Flexible Feed Formulation - through a proven mode of action of saving energy in diets.
While we have been acting more through distributors in the past, we are now hiring more of our own people with experience in the field and in production. In short, we are not just selling products but providing complete support to the nutrition matrix of diets.
Glenda: In Asia, while the push for the reduction of antibiotics has so far been largely driven top-down, people are becoming more educated and getting greater access to relevant information available on the Internet. The media is supporting such a bottom-up initiative, and we at Chr. Hansen are happy that the media is giving us opportunities to convey our messages regarding the discussion on antibiotic use. In fact, in Asian countries like China, we see that the government has already been making changes arising from consumer activism.
Vilson: Speaking of China, on a related subject, following the country's ban on imported pork from swine raised with ractopamine, US producers had to remove ractopamine from production if they wanted to export to China. It was amazing to see how a developing Asian country had led the ban on ractopamine, and in future the consumer push will make fewer options on antibiotic use available for producers.
Glenda, one of the themes of Chr. Hansen's Nature's No. 1 strategy is to develop a stronger presence in emerging markets, particularly Asia. Could you share with us more about your plans for the Asia region?
Regarding our route to market priorities for the Asia region, we are moving away from having a single distributor for the entire region. As the sales leader of the region, I would be building teams to generate demand, improve our presence in the field, and better customise our solutions to meet local needs. To penetrate different markets we would need to apply different strategies and provide customised solutions. We would also be strengthening our relationships with key accounts that prefer to work directly with their principals, and partnering with distributors who speak the local language of exporters.
Specifically with regard to Nature's No. 1 strategy, the requirements of 'nature' are different in different Asian markets, and we implement strategies which adapt to the local environment. Local differences include the industry base, the level of affluence and purchasing power, and the different regulatory phases on antibiotics which are implemented. While we have strong technologies, the knowhow and the expertise in innovating and developing the best bacterial solutions for poultry, swine, cattle and silage, we pay close attention to the nuances in the different markets in Asia. This is Chr. Hansen's approach towards "thinking global and acting local".
Chr. Hansen, with its wealth of knowledge and expertise, is privileged to be in a position to support developing markets in Asia with our technologies, and how to apply them to their local production conditions. For swine, BioPlus® and poultry, Gallipro®, both have been particularly successful in Australia, China, Vietnam and Thailand; in Australia and China we have a very strong presence for ruminant and silage; Indonesia has a significant poultry sector and that would be one of next priorities for the Asia region.
*Chr. Hansen collaborates with some of the best universities, national and private organisations in research and related trials. Some of these universities and organisations in the United States and Europe are:
University of California - Davis (US)
Wageningen University and Research Centre (the Netherlands)
University of Copenhagen (Denmark)
Michigan State University (US)
Southern Poultry Research (US)
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