January 13, 2023

 

ADDCON and Esseco Group: A synergy to drive "Green Chemistry"

 

 

 

ADDCON's product portfolio caters to various industrial applications, including those for animal feed use. The Esseco Group has a long history of creating innovations and production capacities for the fields of inorganic chemistry and oenology.

 

As a result of ADDCON's incorporation, both entities tap into each other's strengths, pushing product innovation and extending their reach in regional markets.

 

Together with Christian Lückstädt, technical director of ADDCON,  Andrea Mangiarotti, chief executive officer of ADDCON and marketing director of the Esseco Industrial Group, reveals more about the positive impact of this synergy.

    

What are the synergies that have been achieved with ADDCON as a member of the group?

 

Andrea Mangiarotti: As a group, Esseco is contributing to ADDCON's idea of "Green Chemistry" [which is rooted in providing products that are "simultaneously efficient, economical and sustainable"]. Right now, we are supplying raw materials to ADDCON, and some of these raw materials, like potassium nitrogen oxide, are produced using 'green' electrical power.  

 

We have also entered into a long-term investment to produce electricity from solar energy. We have invested millions of euros in an Italian company to create solar cell farms, and will be producing nearly 80% of our electricity using renewable sources.  

 

We plan to change our approach to production for creating potassium-based products and FORMI (a product based on ADDCON's EU-registered potassium diformate technology) which will not be a problem for the environment.

 

Christian Lückstädt: When we look from ADDCON's perspective and examine the list of products available at Esseco, several ideas can be considered for our feed business. With Esseco's incorporation of ADDCON, there will be new ideas and innovations by us going forward.

  

The Esseco Group, together with ADDCON, recently organised the Asian Distributor Summit in Bangkok, Thailand. Please describe the role of the distribution network in the marketing, servicing and sales of ADDCON's solutions and products in the Asia Pacific.

 

Andrea Mangiarotti: ADDCON is operating within Esseco's business, and this provides more structured attention to distributors. While Esseco has several direct client accounts, ADDCON is more focused on the feed and food businesses, and this enables the company to have close contact with distributors.

 

The cultural diversity of Southeast Asia requires us to have local representatives on the ground. Compared to distributors in Europe, Far Eastern distributors are much more engaged with ADDCON. Indeed, we need to continue forming relations with our distributors, who are part of our growth. 

 

Hence, what ADDCON and Esseco can provide in terms of support to the distributor chain is a sense of proximity when it comes to introducing new products (in respective markets).  

 

Additionally, ADDCON's competitive advantage is its integration with Esseco, which has been active in the Asia-Pacific for many years. This advantage entails the synergy between the R&D capabilities that are already present in ADDCON with those of the Esseco Group. This would help us to not only produce more new products but also be close, particularly, to the Southeast Asian market.

 

With the impact of the pandemic, how have Addcon's operations been affected?

 

Andrea Mangiarotti: The pandemic has been a big challenge for ADDCON's operations. However, a major advantage of the Esseco Group is our connection to our distributors and customers. Thus, we are in a good position to maintain such relationships.

 

The group has already put into action certain procedures in case another major situation like the pandemic occurs. These will enable us to continue our business.

 

Overall, we have been able to operate in a mostly normal situation (akin to pre-pandemic times).  

 

During the Bangkok summit, you revealed Esseco Group is "planning more than one investment to be realised either in our production sites in Porsgrunn, Norway, and Bitterfeld, Germany, to increase our production capacity (and) develop our feed industry worldwide." Can you tell us more about the investments that the group is involved in?

 

Andrea Mangiarotti: The Esseco Group is going to reach global sales of more than €1 billion this year. And this has been achieved through acquisitions and direct investments. When we take over a company, we take over a global business.

 

One investment that we will be making is related to the production of basic feedstock through our "Green Chemistry" approach. This is going to be quite a significant investment — we are talking about €‎7 million. We also have a potential project to double the production of ammonium bicarbonate; this will be decided soon.

 

Additionally, KDF (ADDCON's potassium diformate product) is one part of our business that we would like to grow, and we are ready to expand our activities in this area. 

 

At the same event, ADDCON announced the launch of the new products, ProFeed and pwrPlanz. Please share more about the launch and these new products.

 

Christian Lückstädt: The launch is one of the early steps that involved the incorporation of  ADDCON into the Esseco Group, and we see good growth opportunities for both ProFeed and pwrPlanz.

 

The development of ProFeed combines ideas from two innovation teams from both ADDCON and Esseco. Esseco is one of the largest producers of sodium metabisulfite, which is used worldwide in the food industry. There is a much research that suggests this chemical can also be used in mycotoxin deactivation within feed.

 

We believe the ProFeed concept is a holistic way to approach feed hygiene when it comes to mycotoxin binding and deactivation, as well as inhibiting the growth of fungi.

 

ADDCON is always working to stop the growth of bacteria and fungi, but we cannot do much to prevent the occurrence of mycotoxins that come from the field. With the ProFeed concept, we are now able to target such mycotoxins as well. It is also one of the first products that came out of Esseco's incorporation of ADDCON.

 

As for PwrPlanz, the idea behind it started as ADDCON seeks to complement its product portfolio with some plant extract-based products, which can be researched at Esseco laboratories that are focused on the food business.

 

We understand FORMI has been marketed as an alternative to antibiotics for the feeding of pigs. What is your view on the continuing use of antibiotics in livestock production even when such alternatives are available?

 

Christian Lückstädt: We believe that, in countries where there is no legislation to stop the use of antibiotics like it is in the United States and some parts of Asia, there is still enough consumer perceptions that demand, for example, chicken to be produced without antibiotic use.

 

Consumer perception is the driver of the market. If ADDCON can supply solutions in the field of antibiotic-free livestock production, this will help us to gain more market share in Asia, as we have seen in the last few years.

 

When antibiotics were banned as in-feed products in 2006, ADDCON's potassium diformate was already registered as a non-antibiotic growth promoter that is available worldwide.

 

We were able to expand our FORMI range for poultry and swine and so, we could help farmers in Europe from the start. Since 2009, we had also helped farmers in Asia to work on antibiotic-free feeding solutions.

 

- Terry Tan, eFeedLink