March 31, 2023

 

Alltech's Dr. Mark Lyons and Jonathan Forrest Wilson: A bigger purpose for agriculture sustainability

Each decision by Alltech is a chess move with a potentially strong impact on how the livestock and feed markets play out in the coming years. 

 

Some of these decisive developments are shared by Dr. Mark Lyons, Alltech's president and chief executive officer, during VIV Asia 2023 in Bangkok, Thailand. Along with Jonathan Forrest Wilson, the company's president of Asia Pacific, he presents Alltech as a versatile solution provider for agriculture during a meeting with journalists from various organisations, including eFeedLink.

 

A commitment to sustainable agriculture production through sustainable means undergirds that public image. This aspiration characterises Alltech's recent activities, as both Dr. Lyons and Wilson would later reveal.

 

 
Jonathan Forrest Wilson (left), Alttech's president of Asia Pacific, and Dr. Mark Lyons, Alltech's president and chief executive officer.

  

Dr. Lyons is also cognisant of the headwinds in the global sustainability journey. One hurdle is regionalisation: as it becomes more acute, each nation "faces unique circumstances and will need to make different decisions regarding sustainability," he says. Polarisation in politics and a "volatile material crisis" have only exacerbated the challenges.

 

"Focusing on profitability often makes companies reluctant to invest in sustainability," Dr. Lyons says. "However, I believe that this is a time when we need to be brave and continue discussing these issues. If we don't take action, we may regret it in the future and miss out on important opportunities."

 

He believes the feed additives sector should now take advantage of opportunities for progress and demonstrate its "positive" environmental impact.

 

"We have several promising initiatives in which we are (becoming) potentially carbon negative while producing meat products," Dr. Lyons says. "I believe that these initiatives will be a part of the future."

  

Enzymes can be the answer to sustainability

 

Among the multiple solutions for agriculture's sustainability, one of the answers can be found in enzymes, a key Alltech expertise.

 

"We find ourselves in a market where raw material expenses are very high and imports are insufficient," Dr. Lyons says. He believes more can be extracted from animal feed, thus leading to better cost management. By meeting this demand, the enzyme market has an impetus for continuous growth.

 

"This market could potentially grow three to four times bigger in the next 20 years," Dr. Lyons predicts. At hand to tap into this opportunity is Alltech's solid-state fermentation technology which is based on producing multiple enzymes with a single organism. 

 

"Through this process, we can extract a greater amount of nutrients, particularly from by-products that contain a high concentration of cellulose," Dr. Lyons explains. "There is a huge amount of cellulose in the world that remains underutilised."

 

To further develop Alltech's enzyme-based solutions, the company has established a new innovation department. The new vice president of innovation,  Dr. Kyle McKinney, most recently served as the head of the Alltech Enzyme Management global platform. The innovation platform will expedite the advancement of enzyme technology and other nutritional technologies to introduce "innovative solutions" to producers, Dr. Lyons says.

  

Alltech's Bioplex and the steady shift to organic minerals

 

Organic minerals are another major segment of Alltech. On this subject, eFeedLink inquires about the market impact that the November 2022 opening of the company's Bioplex plant (the first organic production facility in Vietnam) would bring. The Bioplex brand consists of trace minerals bound to amino acids and a range of peptides.

 

"We plan to establish more Bioplex plants in the future, and Vietnam is a potential location due to its growing feed industry," Dr. Lyons reveals.

 

He sees Bioplex as part of a critical transition in how animals would be fed. Highlighting that the company currently operates eight such plants — with four located in Asia — he envisions that organic minerals will completely supplant inorganic types in "two to three years."

 

"Organic minerals do not have the negative impact on other materials like inorganic minerals do, making them an essential component of farm nutrition and sustainability strategies," Dr. Lyons notes. "Through scientific research, we are discovering more and more negative impacts associated with inorganic minerals, including their impact on antimicrobial resistance and soil quality. It is known that many inorganic minerals contain contaminants such as heavy metals, PCP (pentachlorophenol) and dioxins."

 

eFeedLink also questions the obstacles that may arise in getting livestock producers in the Asia-Pacific to switch from using inorganic minerals to organic ones. A majority of the adoption of organic minerals, Dr. Lyons opines, would be driven by agriculture integrators.

 

"(Integrated businesses) can capture the value of technology, (but) they need more technical support," he says. "As integration becomes more common, the adoption of technologies, such as organic minerals, is likely to increase at a faster pace."

 

Dr. Lyons refers to China, whose integration efforts have made significant strides.

 

"The potential for growth is greater for integrated companies because when selling feed, the focus is primarily on the price and convincing customers of the value of the feed," he points out. It is an area in which Alltech's "strong marketing capability" engages.

 

"We (aim) to convince feed (producers) that our product is valuable. We showed them, for example, how Sel-Plex (Alltech's proprietary organic form of selenium yeast) could improve their businesses," says Dr. Lyons.

 

However, he notes that the adoption of modern technology in the animal feed sector "is still quite low."

 

"We conducted a study that showed that globally, only about 50% of feed (production) uses (modern) technology," he says. "In more developed markets, such as those in Europe and North America, this figure is closer to 70-80%. Many of the Asian markets are still below the 50% mark."

 

Reflective of the lower percentage in Asia, inefficiency remains the bane of livestock and feed industries in some parts of the world, Jonathan Forrest Wilson concurs.

 

"Despite the rapid growth of these markets in recent years, improving efficiency is important regardless of the price of feed components," Wilson reasons. "That's why we're having discussions about organic minerals and enzymes and combining multiple products and solutions while bringing in our experts to help.

 

"Sometimes, the lowest-cost feed formulation isn't the best for the animal, and that's what we're trying to improve: optimising the animal's efficiency over time.

 

In terms of market potential, feed additives hold many possibilities for growth.

 

"...during times of high feed prices, technologies like ours become more relevant, especially considering the importance of the FCR (feed conversion ratio) in converting feed (inputs) into meat (production)," Dr. Lyons says.

 

On the sidelines of innovating feed solutions, Alltech is also developing programmes to "remove antibiotics in response to new legislation" from governments. Still, ending antibiotic use may not mitigate antimicrobial resistance, Dr. Lyons cautions. 

 

"With our programmes, we are changing the competitive landscape and we are able to (demonstrate) heightening sensitivity to antibiotics from the bacteria, reversing antimicrobial resistance," he elaborates. "It's an incredibly exciting space, with animal agriculture having a positive impact on human health beyond just nutrition."

  

An active role in aquaculture

 

Concerning Alltech's competitive edge in the aquaculture segment, Dr. Lyons lists its global feed production capability and specialised industry knowledge as its chief strengths.

 

For the production of high-quality fish feed, Alltech subsidiary Alltech Coppens occupies this role. "At Alltech Coppens, through research and product development, we have launched specific products for high-risk diets such as pangasius and compound feed for carp, which often use older or lower quality ingredients," Wilson states.

 

Additionally, Alltech provides "various technologies and solutions instead of just a product with a price " he remarks. "We can address concerns related to water quality, feed pellet quality, nutrition and other related aspects all at once."

 

As for specialised industry knowledge, Dr. Lyons considers it a strong advantage in engaging parties in the fish industry. This manner of approaching customers "is a notable change that has taken place over the last decade," he says. "We're competing with other companies that only have a product to offer, and they may have product knowledge, but that's the extent of their focus."

 

What sets Alltech apart from other companies in that regard is its preoccupation with problem-solving.

 

"The question is whether we can leverage this advantage to expand our business in Asia," Dr. Lyons says. "This could be a significant opportunity for us."

  

Activities in Thailand

 

In Thailand, Alltech is now exploring the field of alternative raw materials, Wilson shares.

 

"We are currently under (a non-disclosure agreement) with a company in Thailand where we are developing a product using waste materials from cassava," he says. A major crop in the country, cassava can create excessive waste from its production.

 

"We are collaborating… to create a feed ingredient from cassava waste," Wilson explains. "Our approach involves incorporating our enzyme technology, particularly NSP (non-starch polysaccharides), along with other additives into the waste product. This way, we can use it in feed formulations, (thus) reducing reliance on imported ingredients."

 

Dr. Lyons also notes that Alltech has signed a memorandum of understanding with Thailand's Dairy Farming Promotion Organization to focus on dairy and beef development in the country.

 

"This partnership was established to improve the capabilities of the 24,000 dairy and beef farmers in the country," he explains. "We aim to provide them with training and knowledge, and share our technical expertise from around the world to boost productivity."

  

Presenting solutions at VIV Asia

 

So what are the solutions Alltech is presenting in Bangkok at this year's VIV Asia trade show?

 

One of these products is Egalis, a range of high-quality silage inoculants that help maintain optimal animal performance. 

 

"(Poor silage quality) is one of the biggest problems in ruminants, and dairy ruminants in this part of the world," Wilson says. "...when the silage is of good quality, it means that the animals don't need to be overfed additional ingredients to compensate. High-quality silage provides optimal nutrition for the animals, reducing the need for other supplements."

 

Another product is Guardicate, a new Alltech solution that aims to improve the safety of pig feed and its components. "This is a new product that belongs to the second generation of Alltech's viral mitigation line," Wilson explains. "Guardicate was previously launched in China, but we are relaunching it (in Thailand) where ASF (African swine fever) continues"

 

The product is described as a "viral mitigant" developed for the swine industry. "Guardicate can help mitigate the viral load in feed — whether it's ASF or PRRS (porcine reproductive and respiratory syndrome) — in swine feed," Wilson says.

 

"We believe (Guardicate) can have a significant impact in the (swine) industry," he remarks, recalling a testimony of a company that managed to avoid PRRS infections at its farms.

  

ONE Conference outside the US

 

Other than its array of agriculture solutions, Alltech is also notable for its annual ONE conference which is traditionally held in Lexington, Kentucky, the United States.

 

This year, the company plans for a different take on the conference: it will be a world tour of events held in other countries including Brazil, Canada and Indonesia. Through this format, more participants can — on a more international scale — hear from experts on global, regional and local market trends in agriculture, business, health and nutrition.

Asked about this new execution of the ONE Conference, Dr. Lyons says the themes of each ONE event "may vary, with a focus on local topics and the inclusion of more local speakers."

 

The reception toward a more globalised conference has been very positive, he adds, as this arrangement can deliver "a fresh perspective" on relevant issues. 

 

"While we explore new possibilities, the main theme… will remain prominent: setting a path towards the sustainability of our planet," Dr. Lyons highlights.

 

"How can we balance political stress, inflationary stress and sustainability stress? This will likely be one of the key themes… it's exciting to approach it in a new way, somewhere between the lecture tours of the past and the ONE Conference."

 

Dr. Lyons says Alltech may continue with the new format of the ONE Conference if it proves to be successful.

  

Food security and the future for Alltech and global agriculture

 

Food security is one of the world's top concerns, but it is also sharing a tight spotlight with sustainability and climate change.

 

In Alltech's perspective on those matters, "the future of agriculture is not only protein production and nutrition, but also energy production and capturing carbon," Dr. Lyons says.

 

"...we need to develop new business models to address these concerns," he emphasises, hinting at the next evolution of Alltech. "Our focus now is on anaerobic digesters, which enable us to convert waste into energy, eventually addressing issues of food waste as well.

 

"In essence, we're using fermentation to create products that can enhance efficiency and restore balance. This is a completely novel business model that bridges the animal and crop sectors."

 

As for the Asian region, Dr. Lyons perceives "a big opportunity" for food security.

 

"Most countries rely heavily on food imports, and this trend is likely to continue, presenting ample growth potential for local markets," he says. "This is particularly important given the current need for increased food production. Should this trend persist, it could significantly alter global trade flows."

 

Furthermore, the potential for drastic market changes and the "presence of negative actors in the industry" add to a very complex environment for the livestock and feed industries.

 

Dr. Lyon's advice to industry players? Prepare accordingly.

 

Food security and sustainability are, after all, extremely arduous goals; they have been set back by multiple challenges, especially those of a more political nature.

   

"This may be a harsh reality, but it's one that we all need to acknowledge," Dr. Lyons says.

 

"Food production is a fundamental necessity, and local markets should explore more effective ways of achieving it."

 

- Terry Tan and Nicholas Yong, eFeedLink