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Executive Talk
    
October 4, 2013
 
BIOMIN: Animal nutrition meets economics and environmental sustainability
 
Rising to Asia's challenges based on NutriEconomics®, with principals rooted in nutrition, economics and environmental sustainability, Dr Jan Vanbrabant, CEO of BIOMIN Asia Pacific, tells eFeedLink how the company rides on Asia's growth with natural solutions.
       
by Geraldine EE
  
An eFeedLink Executive
  
 
Natural solutions are fast replacing antibiotic growth promoters (AGPs) these days, a trend that confirms the vision of Erich Erber, BIOMIN's founder, who established the company in 1983 to provide natural, non-antibiotic solutions to animal nutrition. Back then, Erber decided that probiotics could be applied successfully and effectively in animal production. This was decades before natural feed additive alternatives were embraced by mainstream animal nutritionists.
       
Today, products from BIOMIN are built on the foundation of healthy animal nutrition, including mycotoxin deactivation, natural growth promotion, and functional feeds. Based in Herzogenburg, Austria, BIOMIN is widely recognised as the market leader in mycotoxin control and risk management, with equally strong product portfolios in acidifiers, probiotics, phytogenics, preservation, enzymes and yeast derivatives.
  
  
A natural extension of the product line
 
More recently, BIOMIN acquired German phytogenic feed additive and flavouring company, Micro-Plus, which had accumulated over 25 years of experience in phytogenics. This further boosted the position of BIOMIN as a global phytogenics provider.
 
Phytogenics are functional feed additives of plant origin, derived from herbs and spices, essential oils, essential oil compounds or plant extracts. Interestingly, herbs have traditionally been used as animal health solutions in some Asian markets, such as Ayurveda in India and traditional Chinese medicine (TCM) in China. However, the art and science of phytogenic formulation requires a deeper understanding of the flavouring properties and the biological effects of plant compounds in the animal.
 
By leveraging Micro-Plus's acquisition in 2012, BIOMIN can combine its research and development capabilities with this acquired firm's extensive know-how in functional plant ingredients and essential oils. Its existing phytogenic product portfolio has since widened to include flavourings and species-specific products.
 
For instance, the species-specific Digestarom® product line, based on a standardised blend of essential oils, maintains a stable digestive system, with specialised solutions adapted to the needs, taste and flavouring preferences of different species and cutsomised to the different growth stages of pigs and cattle.
 
Globally, the restriction on the use of in-feed antibiotics in many countries has fuelled interest in alternative products, such as phytogenics. In Asia, while some countries still favour probiotics, others are starting to embrace the use of phytogenics.
 
"AGP replacers have been in Europe for many years and we are seeing an increase in demand in Asia. Now that China is starting to reduce the use of antibiotics, it will be a boost to our business," says Dr Jan Vanbrabant, CEO of BIOMIN Asia Pacific. "We are starting to see it already."
 
He believes the recent case of the excessive use of antibiotics in poultry raised by contract farmers supplying chicken to Yum! Brands in China will accelerate the reduction of AGP use in livestock production. Even in South Korea, where AGPs were banned in July 2011, demand for phytogenics is taking off, even though the country has been using probiotics for years.
 
"Phytogenics have huge potential, on the one hand, as AGP replacers; and on the other hand, for performance enhancement. There is a big market for that," says Vanbrabant.
  
        
Tapping into Asia's aquaculture industry
 
Among various protein lines, shrimp is one of the species for which antibiotics was banned years ago. Aquatic species, as the fastest-growing protein line and with lower, more efficient feed conversion ratios (FCRs) than other protein lines, is gaining importance worldwide as a vital source of food supply. 80% of farmed fish and shrimp is grown in Asia, of which China contributes a large proportion. This makes Asia's aquaculture sector a very attractive growth segment.
 
Backed by a science-based focus and reputation for providing natural-based solutions, BIOMIN's aquaculture team is able to effectively translate the company's competence in animal nutrition for terrestrial species into aquaculture and aqua feed research.
  
In 2007, the BIOMIN Aquaculture Centre for Applied Nutrition (ACAN) was established in Thailand. Since that time, this R&D center has played a key role in the development of science-based aquaculture solutions. Feeding trials for various aquatic species are conducted at the ACAN, from which new findings have been translated into innovative aqua feed solutions based on phytogenics, acidifiers and probiotics.
 
Digestarom® P.E.P. MGE is one such product for fish and shrimp which is known to enhance ingredient bioavailability, and therefore, efficacy. A series of trials in Thailand, Vietnam, China, the United States, Greece and Portugal on various aquatic species such as tilapia, pangasius, trout and channel catfish show that application of the phytogenic product reduces feed conversion ratios by by 2.4% to 13.7%.
 
"We see a lot of potential in the aqua line and will continue R&D on our existing products to develop them further," states Vanbrabant, re-affirming his company's commitment to this protein line.
      
        
Seeing double in Asia
 
Given the Pacific Rim's tremendous potential, BIOMIN has designed ambitious plans to double its business in Asia every five years. In fact, in recent years, it took BIOMIN only three years to double its Asian business. This was driven by the region's increase in animal protein consumption, which is as a result of Asia's expanding population and growing affluence.
 
In Asia, the growth of BIOMIN is led by three key markets; China, Vietnam and Thailand. The company is also seeing healthy growth in emerging Asian countries including Myanmar, Cambodia, Indonesia and Bangladesh.
 
In 1995, BIOMIN Vietnam was established as a 100% foreign-invested company to produce feed additives and premixes for the country's domestic market. Production at its Asian premix plant in Hanoi, northern Vietnam, soon fell behind demand, which grew exceptionally fast.
 
Hence, this year's opening of a new four-hectare, fully-automated premix plant in southern Vietnam's Binh Duong province was timely. The second plant boosted BIOMIN's total Vietnamese production capacity to five times that of the first plant.
   
"Although the market has dipped and livestock production is decreasing this year, we still believe in Vietnam. There is still very good potential, because of the growing population in the country and the mind-set of the people," Vanbrabant reaffirms, adding that, "Vietnam will grow."
 
The majority of premix produced in Vietnam will be supplied to the local market, with a smaller percentage exported to neighbouring nations including Cambodia and Myanmar. With the establishment of a new sales office in Yangon earlier this year, BIOMIN is poised to further expand its business in the Indochina.
 
In addition, BIOMIN recently invested in the expansion of its production capacity in China, and is presently constructing a fully-automated plant in Wuxi. When completed in 2015, the new facility will replace its existing China plant, effectively tripling its current production capacity of acidifiers, including the recently-launched Biotronic® Top3.
 
With its increased capacity, not only will the Wuxi plant supply to acidifiers to China and the Asian region, but also to the global market. The opening of the new plant will also be timely in reducing import dependence to meet local demand for other BIOMIN products, amid mounting challenges associated with importing products into China.
 
In Singapore, where Mycofix® and other products for the Asian market are produced, operations have been partly-automated to increase efficiency and warehouse space was increased. This expansion tripled the warehouse and production floor surface area of its Singapore facility.
 
"If you want to double your business every five years, you need to increase your production capacity every five years, or even more because of the variation in demand," Vanbrabant explains.
 
In tandem with the growth in production within Vietnam and China, BIOMIN is expanding its sales teams in these regions. It will also be expanding its aquaculture sales team in Vietnam.
 
"We make a difference, not only with products of excellent quality, but also with customer service, nutritionists, sales and technical people close to our customers," Vanbrabant explains.
 
In response to increasing legislation on antibiotics and their contamination of meat with residues, BIOMIN also expanded its global and Asia regulatory affairs team. Vanbrabant believes that getting a product to the market sooner also gives the company a competitive advantage.
     
         
The way forward, naturally
 
BIOMIN's longstanding ability to develop a holistic approach to animal nutrition is undoubtedly another source of its competitive advantage. The company's NutriEconomics® concept, which was launched in 2010, brings about the convergence of nutrition, economics and environmental sustainability.
 
True to its tagline 'Naturally Ahead', BIOMIN products are designed to improve the health of animal, and to improve its performance in a natural way, while ensuring environmental sustainability. In 2011, the ISO 14040 certification was awarded to BIOMIN in recognition of the eco balance of the company and its sustainable products.
 
The life cycle assessment considers carbon dioxide (CO2) emission at all stages of its business processes. It encompasses all production phases from the technical and biotechnological processes undertaken during raw material production to completion and delivery of its products.
 
The assessment reveals that by optimising feed use and improving animal performance, emissions from livestock operation can be reduced. Studies show that 1 tonne of CO2 invested in a BIOMIN product reduced CO2 equivalent emissions in broiler production by up to 128 tonnes.

Moreover, with market forces confirming that BIOMIN is heading in the right direction, the company will continue to strengthen its current product portfolio.
 
Currently,  mycotoxin solutions is the biggest product group in the product portfolio of BIOMIN and is expected to reap the largest growth in revenue, given the high incidence of mycotoxins in Asia, coupled with the recent launch of FUMzyme®, a unique enzyme against fumonisins. Apart from that, the phytogenics and probiotics product groups will see the strongest percentage growth.
 
Moving forward, R&D efforts will continue to be based on BIOMIN's core competency in fermentation to produce enzymes and yeast products. It will also create innovative new products based on old product groups such as acidifiers, just as it did with the launch of natural growth promoter, Biotronic® Top3 last year.
 
Vanbrabant says, "It is a good thing that customers are still willing to look at innovation. It is very encouraging for us."
 
He adds, "We will keep on investing in R&D in Austria and other parts of the world to stay ahead".
 

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