January 25, 2013
 
Adisseo: Innovative, focussed and sustainable
 
An eFeedLink Exclusive
 
 
Founded in 1939, Adisseo remains a world leading manufacturer of nutritional solutions. Now a subsidiary of China National Bluestar, CEO Jean-Marc Dublanc explains how high quality supplements, innovative manufacturing methods, strategic marketing, and ecological imperatives sustain this 73 year old company's dynamic traditions.
 
by Geraldine EE
  
 
Adisseo CEO Jean-Marc Dublanc
  
Since 2008 and even more so today, the high cost of raw materials and energy is challenging the profit feed and livestock's profit margins. Faced with this reality, feed and meat producers have no choice but to accept this new paradigm and find ways to restore their margins through optimum usage of ingredients and additives.
 
"Without a doubt, skyrocketing costs of feedstuffs is the most pressing concerns of our customers all over the world," says Adisseo CEO Jean-Marc Dublanc. Adisseo's answer to this: lower production costs by precisely evaluating the nutritional value of raw materials used in feed and extracting all of it in optimised feed formulations.
 
"As most of our products and services facilitate better feed conversion and minimise the environmental impact of meat production, their relative value is increasing. We are proud to be providing a better contribution to feed, food production and to the environment," says Dublanc.
 
Founded in Commentry, France in 1939, Adisseo, then known as Alimentation Equilibrée, quickly acquired a reputation for the high quality of its methionine and vitamin A. Even though the company has seen many changes since it was founded over 73 years ago, it has remains focussed on supplying nutritional feed additives and related services to improve animal performance.
 
As one of the world's largest manufacturers of nutritional solutions, Adisseo's portfolio includes methionine (Rhodimet®), rumen protected methionine (MetaSmart® and Smartamine® M), vitamins (Microvit®) and enzymes (Rovabio®).

The increasing need for safe, affordable, high quality meat in emerging countries is moving the growth in demand to fast growing economies such as China. Demand growth is also accelerating the pace of their agribusiness sector's consolidation, thereby driving their growing usage of methionine, vitamins and enzymes products. In view of these trends, demand growth for Adisseo's products remains rapid and this rapid pace will be sustained for years to come.
  

methionine demand expanding rapidly in developing countries
 
Adisseo sees potential in regions where poultry production is growing fast, particularly in developing countries, where poultry is the fastest growing meat line. The amount of methionine required in poultry diets is extremely high and there is no substitute for this critical amino acid. This makes methionine supplementation one of the poultry sector's key productivity boosting technologies, particularly in fast growing developing countries where livestock supplements are underused.
 
Containing half the world's population, Asia Pacific is experiencing the fastest poultry demand growth of any region. With China and ASEAN acting as twin motors of growth, their rapid economic growth owes much to their ongoing industrialisation of meat production. The latter leads to the inclusion of amino acids and their optimisation, rather than the use of excessive raw material and protein inputs.
 
Further south, Latin America is also growing quickly due to growing domestic demand for poultry products and their production costs, which are the lowest in the world. The latter enables Latin America to export poultry far beyond its borders, boosting its demand for livestock supplements. While poultry production continues to grow at a slow pace in the mature markets of Europe and North America, India, the Middle East and Africa are emerging as strong growth region for the next decades. 
 
Today, Adisseo's top markets for methionine are China, the United States and Brazil. "Although the US market is rather flat, it is clear that China and Brazil are still growing at strong rates," elaborates Dublanc. "Russia and India, although still far behind the top three today, are growing very fast and will become strong contributors in the future."
 
Methionine is principally used by the poultry industry and this will remain true in the future. However, in an environment of high feed prices, the resulting cost pressures are boosting methionine supplementation in other meat lines, including swine, aquaculture and ruminants. The latter, due to their unique digestive system, require a protected form that will survive the unique features of their intestinal tracts.
 
 
Building capacity for tomorrow's needs
   
With poultry consumption growing consistently in both exporting and importing nations, all the above mentioned economic growth centers and cost pressures has created an environment conducive to strong and sustained 6% annual growth in world methionine demand. With current world methionine consumption at approximately 950,000 tonnes, this translates into an annual growth of 50,000 to 60,000 tonnes per year.
 
Until now, most of Adisseo's developments involved the expansion of existing methionine production units, mainly in Europe. In fact, it recently boosted production capacity and lowered unit costs at its EU methionine making facilities. These are located in the French cities of Commentry, Les Roches de Condrieu and Roussillon, along with another plant in Burgos, Spain. Using crude oil as an essential input, the need to boost methionine making efficiency is driven by skyrocketing petroleum prices. 
 
Nevertheless upgrading existing facilities has its limitations, particularly when they are geographically disconnected from Asia's fast growing markets, leading to higher transport costs. Despite the heavy investment made at existing sites, Rhodimet and Smartamine® M, demand can outrace Adissseo's manufacturing capabilities.
 
Consequently, the industry needs new, large methionine making plants to meet consumption growth. With world methionine demand growing by 50,000 to 60,000 tonnes annually and a new plant typically having the capacity to produce 150,000 tonnes, global agribusiness requires a new methionine plant every three years in order to satisfy demand growth. And Adisseo has responded to the call.
 
Construction of Adisseo's fully-integrated plant at Nanjing Chemical Industrial Park in China's Jiangsu province is well underway. When it becomes operational in April 2013, it will produce 70,000 tonnes of Rhodimet® AT 88 --a concentrated liquid source of methionine--annually. Subsequently, its second development phase will see its annual capacity doubled to 140,000 tonnes.
 
In a similar vein, at Commnentry, France, a new plant for the production of rumen-protected Smartamine® M methionine will become operational by mid-2014. In keeping with Adisseo's history of leading edge manufacturing technologies, the new Smartamine® M plant will incorporate exclusive patented process innovations.
 
Naturally, other industry players have also responded to the market's call for increased methionine making capacity, particularly in Asia. Despite the large increase in world methionine manufacturing capacity expected over the coming years, Adisseo remains unfazed. "The value created by methionine inclusion for end-users is still sufficient to justify the benefits, allowing meat producers to stay competitive and methionine producers to keep investing in production capacities in the long run."
 
Moreover, Dublanc expects that the increase in supply to be gradual. "We will increase capacity by 70,000 tonnes, but this capacity will not be operational in year one. It will ramp up gradually." He believes it will be the same for the other players.
 
Dublanc believes that ultimately, success depends on the methionine's quality, product positioning and the cost competitiveness of its production process. Dublanc is confident that, "Adisseo's unique positioning on all key segments of the methionine market - the powder segment with Rhodimet® NP99, the liquid segment with Rhodimet® AT88, and the specialty segment with the Rumen protected methionine sources Smartamine® and Metasmart® - will allow us to continue to play a leading role in the development of this market."
   
   
Eye on China
 
Standing out among all the rapidly developing economies, Adisseo recognises that China is a growing market in terms of growth in meat production, meat consumption and feed manufacturing. More than any other nation, it drives the growth in demand for Adisseo's products, particularly methionine.
 
Having said that, the cost of servicing China's very large but fragmented market is high. The costs of shipping the products from its manufacturing plant in Europe to China, the setting up and operating of multiple warehouses to service the large region and the 5% customs import duties add up to significant figures.
 
Fortunately, once the plant in Nanjing is operational, a large part of the transport costs will vanish and the import duty's non-application to China produced methionine cuts its cost a further 5%. The new facility will also bring Adisseo closer to its fast growing Chinese customer base, allowing it to be more cost effective and more flexible in effectively supporting their needs. "Our China plant will be focussed first to service our Chinese customers and second, to service our Asia Pacific customers; while our European plants will primarily service our customers in Europe and the Americas," explains Dublanc. 
 
Dublanc recognises that movements in China's methionine prices are very different from those in the rest of the world, with its own dynamics and local influencing factors. However, in spite of declining methionine prices in China since late 2011, Chinese prices remain marginally stronger when compared to other areas. This is principally due to the fact that China's demand for methionine is still growing much faster than in the rest of the world.
     
  
Backed with a range of specialty products 
 
But Adisseo's ongoing success story is a much larger story than world poultry demand or the rapid expansion of China's market. Its ability to keep expanding strongly more than 73 years after its founding is due to its ability to continually develop a widening range of specialty products developed to meet specific needs of the industry. This means going beyond large markets like China or transcending methionine's traditional, poultry-based demand fundamentals.
 
In that vein, Adisseo's line of rumen protected methionine - MetaSmart® and Smartamine® M continues to expand along with worldwide growth in demand for milk and cheese amid volatile milk pricing and raw material costs. "The unmatched 80% methionine combined rumen protection and true bioavailability of Smartamine® M is unanimously recognised by dairy producers as the best available technology in the market," says Dublanc.
 
Smartamine® M and MetaSmart® provide bio-available methionine for dairy cows, which is necessary since conventional raw materials like corn silage, wheat, soy, rapeseed do not contain enough native methionine to optimise milk protein content. Aside from lowering its overall nutritional content, lower protein levels can also lower the quality of cheeses made from such milk.
 
Moreover, the increasing use of non-conventional feed ingredients makes the optimising of milk protein content more problematic than before, thereby boosting the need for methionine supplementation in dairy cattle. This is especially true in fast growing nations like China, which have lower milk protein content than what is found in western nations.
 
Through optimised amino acid balances in feed formulation, dairy cows will increase production, particularly of milk protein content, and use their diet more efficiently, thus improving animal health and fertility. Through methionine supplementation, milk can also be produced with lower crude protein levels in feed. In this way, producers are able to realise costs savings and environmental benefits from reduced emissions.

In addition, Adisseo's enzyme product Rovabio®, which is produced from non-GMO fungus, contains more than 200 proteins, with 19 identified as NSP (non-starch polysaccharides) degrading enzymes. Although animals naturally produce enough endogenous proteases to degrade soymeal proteins, these endogenous proteases have difficult access to proteins when encapsulated by NSPs. The inclusion of Rovabio® helps to enhance access of proteases to soy proteins. This leads to higher feed protein availability improves soymeal's feed conversion efficiency.
 
Going forward, Adisseo aims to identify the full value of Rovabio® when associated with various feed ingredients, with the aid of Adisseo's near infrared spectroscopy (NIR) service for precise nutrition evaluation (PNE).
  
  
Cutting edge technology
 
Through its years of dedicated research and the commitment to continually improve its core products, Adisseo has been able to file numerous patents under its name. Its ongoing R&D programme allows it to develop numerous innovations to improve cost effectiveness and safety while reducing its methionine production process's carbon footprint.
 
Adisseo's patented technology for producing Smartamine® M and MetaSmart® gives it a unique ability to make methionine suitable for dairy cows - yet another unique innovation made only by Adisseo. 
 
Smartamine® M encapsulation technology protects methionine from rumen degradation, yet allows it to be released and absorbed at the intestinal level, ensuring that 80% of the methionine is bioavailable. Smartamine® M is suited for non-pelleted protein and feed supplements and mineral and premix operations.
 
Similarly, MetaSmart®, the active ingredient in HMBi, is the result of esterification of an analogue of methionine. Its unique properties allow the HMBi molecule to be absorbed directly across the rumen wall. Since it does not have a physical coating, MetaSmart® can be used in high-temperature, abrasive feed mixing conditions. It can be used to make pelleted feeds and also survives its inclusion into liquid feed solutions.
 
Going forwards, Adisseo has also intensified its R&D programme for improving its Rovabio®, Rhodimet®, and Microvit® making processes, and has already implemented some recent discoveries into their making. It is also working on product line extension through its innovation programmes.
 
Apart from organic growth in R&D, the acquisition of Innov'ia in 2011 allowed Adisseo to acquire unique expertise in the drying, coating and formulation of feed and food products. The acquisition of these techniques will improve the quality of existing Adisseo products and play a part in the development of new products.
 
And the drive for innovation does not end here. Recently, Adisseo invested €2 million (US$2.63 million) to modernise its facilities and analytical technologies at its Carat Laboratory in Commentry, France. The 1,800-square meter laboratory includes 25 physical-chemical analysis centres with 20 High Performance Liquid Chromatograph (HPLC) machines and 26 gaseous phase chromatographs (GPC). Some 50 scientists, engineers and technicians in the fields of biochemistry, physics and biology are based at the laboratory, where more than 100,000 analyses on vitamins, amino acids and enzymes are done annually.
 
"We have also reinforced the role of our laboratory in our Research and Development programmes, specifically in the subjects of feed additive formulation, vitamin bioavailability and stability, amino acids and thermo stable enzymes," explains Jean-Marie Dollat, senior chemistry and formulation manager.
   
        
Precision is the new buzzword
 
After 15 years and over 300 trials, today, Adisseo can quantify precise values on the more costly nutrients used in monogastric diets, including total and digestible amino acids, metabolisable energy and total and phytic phosphorus.
 
Precise nutrition evaluation (PNE) is a tool which combines near infrared spectroscopy (NIR) and "in vivo" digestibility tests. It is the only such test in the world based on individual data. After measuring the nutritional quality and components of feed, it provides nutritional recommendations based on the feed's quality, feed milling processes used and nutritional formula. With the aid of the tool, Adisseo's customers are able to improve formulation and boost animal performance while reducing both costs and their carbon footprints.
 
Today, it is an online service and customers can obtain their NIR prediction results within seconds upon posting their scans. This allows more accurate raw material sourcing for feed compounders. They can use it to fine-tune their feed formulation matrix in real time, which translates into cost savings.
 
"In Europe, we used to say that with our system PNE, we can save up to €8 to €10 [US$10.47 to US$13.09] per tonne of feed, which is very significant," says Dublanc, although the figure may vary on a case-by-case basis. Without a doubt, high feed costs has made the tool more relevant and boosted interest in using this service.
 
With the increased use of non-conventional raw materials, such as DDGS, feed formulation are also changing. Given DDGS's highly inconsistent quality, using PNE enables customers to evaluate a DDGS batch's amino acid digestibility. That allows them to readjust feed formulations so as to optimise their use of DDGS.
  
    
The road ahead
 
Over the next two years, Adisseo and its customers have much to look forward to. Not only will it start manufacturing Rhodimet® AT 88 at its Nanjing plant and Smartamine® M plant in France, it will also launch several new products.
 
First, Adisseo will grow the product lines and markets where it operates today with existing products and on existing customer base. Even in the mature markets of Europe and North America, Adisseo has been able to grow its business, owing to the growth of its existing customers. In Europe, improved manufacturing techniques, demand growth and the reinforcement of its technical support team will boost its bottom line.
 
By leveraging acquisitions, in-house innovations or a combination of both, Adisseo intends to introduce new products, further reinforcing its portfolio. "We plan on a larger parameter, in terms of application of products to the same customer base," explains Dublanc.
 
As for emerging countries, particularly China and Asia Pacific, Adisseo will accelerate its development with existing and new products. In addition, it will continue to develop its presence in South America, Eastern Europe, the Middle East and Africa.
 
Interestingly, all these recent successes, market expansions and product rollouts are deeply rooted in Adisseo's past. From its founding 73 years ago, Adisseo has consistently innovated productivity boosting feed additives. And this has always has been done within a framework of strategic marketing, of balancing innovation with sustainability, so as to minimise environmental impact.
 
"We have been in this industry since 1939 and we are here to stay for the long term, providing better products and services to our customers in the industry," says Dublanc.
 

Adisseo's methionine intermediate facility at Les Roches de Condrieu, France 
 

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