April 24, 2015


Hypor: Providing 'Total System Profitability'


While some genetic programmes still focus on maximising performance in a single trait or growth phase, Hypor aims to increase total system profitability along the whole pork value chain.


By Ngai Meng CHAN



In the meat production business, "sustainability" is often talked about as if were a newfound faith. Yet, no matter its high-sounding connotation, it actually boils down to one thing - profitability.


"The entire system needs to be profitable to be sustainable," says Raf Beeren, managing director of Hypor. So, at Hypor, the focus is profit. And everything else follows.


He tells FEED Business Worldwide that Hypor tailors its genetic solutions to meet the demands of the entire value chain. "The margins in swine production are small, so efficiency is crucial throughout the entire pork value chain," Beeren explains, before outlining how the company's decades-old approach of "balanced breeding" makes all this possible.


At the outset, "our distribution partners require top quality genetics of high sanitary status, with the right genetic support to select and cross the best animals as they in turn need to deliver top gilts (young sows) and semen to their customers, the producers," he says. "Then the producers want feed-efficient finishers to ensure a predictable pig flow that hits the sweet spot on the market grid of the packers. That means animals that are robust, vital and uniform, with low labour requirements.


For his part, the packer requires pigs with the desired carcass characteristics, low drip-loss, and, right colour and texture, to meet the demands of different consumer markets."


Since "balanced breeding" is applied to the whole pork value chain, the approach is also applicable to Hypor's vertically integrated customers. The balanced approach will be increasingly relevant to developing markets like Vietnam and China, which are moving quicker to an integrated approach compared to traditional farming markets like certain European countries, according to Beeren.


It is perhaps remarkable that Hypor is able to address this apparent complexity of the pork value chain with a genetic programme that consists of only two sow lines and four boar lines. Beeren describes the programme as "a very simple and straightforward product portfolio that guarantees maximum genetic progress".


"We believe we have the world's most balanced sow, the Hypor Libra, an F1 (first generation) cross of the Hypor Landrace and the Hypor Large White. Our sow is universally the same sow."


Hypor, according to him, caters to "different types of customers with our boar portfolio that goes from the extremely lean Hypor Myrus to the top quality, highly marbled Duroc, the Hypor Kanto."


The company's two mainstream boars are a Piétrain boar, the Hypor Maxter, ideal for markets that demand the most meat at the least cost, and a Duroc boar, Hypor Magnus, which meets the needs of markets that demand the best meat at the least cost, Beeren explains.


Establishing a global presence


The number of requirements to being in the top league (of swine breeding companies) has been expanding, says Beeren.


"Genomic selection has become a table stake that smaller players can't fulfil. Having a global presence, as well as the availability of large numbers of breeding stock of high sanitary status, has become crucial for big players."


He adds that "large populations of different lines at strategic positions in the world need to breed efficiently to meet the demands of professional swine producers worldwide."


Yet, according to him, "the biggest uncertainty today is the impact of diseases. Due to the transboundary nature of diseases, the effect can be enormous and upset entire markets, even across continents."


This is where Hypor's broad-based breeding structure can be of help.


"Many swine genetics companies maintain a large breeding base in just one country. This creates certain limitations a customer should be aware of. A breeding programme that incorporates an extensive worldwide network of satellite farms is more robust and offers advantages that are not always apparent," Beeren says.


Hypor's strategic nucleus farms are connected to its satellite farms worldwide that are managed by different partners. The genes of top boars from the nucleus farms are distributed via centrally-located AI (artificial insemination) stations. Exchanging the best genes within this farm network makes the network more efficient and the genetic programme stronger.


Genetic progress is further maximised by the exchange of top quality boars from the satellite farms back to the centrally-located AI stations, for the benefit of all breeding farms. These boars have the highest breeding values and meet various local market specifications, according to Beeren.


While Hypor's genetic network is extensively spread out, the company is still very much in control. Beeren explains: "We have our own nucleus facilities, meaning we are 100% in control of what happens with our lines, which are strategically positioned in bio-secure locations to maintain high sanitary status. Besides, that we work with partners across the continents, operating contracted nucleus facilities and applying exactly the same rules as us, further ensures maximum genetic gain in our programmes."


Focus on product development


Following Hypor's acquisition by world-leading multi-species genetics company Hendrix Genetics in 2007, the company has had the chance to grow its base through the acquisition of several breeding companies such as France Hybrides, Shade Oak Swine and Designed Genetics. The investment in breeding and especially genomic selection seriously went up, enabling Hypor to be first-to-market with routine implementation of genomic selection in its breeding programme, according to Beeren.


"Our Hendrix Genetics Reseach & Technology Centre focuses more on elementary research while Hypor focuses more on research to enhance product development. To stay ahead of the competition, Hypor invests nearly 20% of its total sales revenue in R&D," Beeren points out.


The company is constantly involved in long-running research projects at major animal science universities and research institutes. One of them is Breed4Food, where it partners with Wageningen University and other Dutch-based breeding companies in joint research themes.


Hypor also benefits from the shared Hendrix Genetics Genomics Laboratory in France, which opened several years ago and handles all blood and tissue samples.


"In the next five years, genetic and phenotypic (of characteristics which are observable) progress in improving the efficiency of the entire swine production system will be our research focus. In particular, genomic selection has opened a new world of traits. New genetic markers are discovered every year, so being involved in this area of research is highly important," he notes.


"Hypor is also investing a lot in monitoring on-farm performance as we believe the true value of genetics can only be demonstrated at the barns of our customers. Via our global benchmarking tool that we developed in a strategic partnership we can provide early-warning signals and improve our entire customer base in all aspects of swine production, leading to a better bottom line for them."


Genomic selection, he adds, will allow Hypor to exploit genetic variation in litters. Littermates no longer need to have the same expected breeding value at birth; they will be able to have their own Genomic Breeding Values.


Based on each individual's unique pattern of DNA-markers, the Genomic Breeding Values will be able to predict with higher accuracy the pigs' genes worth in the breeding programme. 


"DNA-based information is the main driving force in the process to further improve Hypor's breeding stock, tailored to our clients' requirements," says Beeren.


Genomic selection can offer anywhere between 20-50% greater genetic progress, according to him.


"Typically, genomic selection is far more effective when used for traits with low heritability, traits that are sex-linked, or the ones that can only be measured at slaughter. Other potential traits for application include those related to genetic defects, health and piglet loss," Beeren says.


Market developments


Hypor has activities in over 30 countries worldwide.


According to Beeren, the company's key markets are in the Americas, the US and Canada. "We are advancing very well in Mexico and are making significant progress in other selected Latin American countries, including Brazil, Ecuador and Colombia," he points out.


"Within Europe we have been the market leader in Spain for decades with our own nucleus farms. In France, we also own two nucleus farms. In Germany, the Netherlands and Belgium we are growing our market share with the Hypor Libra and Hypor Maxter. Through our network of partners we cover all Central Eastern European countries. In Russia we partner with Exima, operating one of the most advanced satellite-nucleus complex worldwide."


Beeren says "Europe will remain a major part of our total revenue with growing importance of the leading countries Germany, France and Spain. Growth in Central Europe will recover but will be slower. Though the Russian ban has changed the whole perspective of that country's market, and we do not know how long the situation will last, Russia still remains an important market for Hypor."


In Asia, Hypor has a joint venture with Japfa Hypor Genetics Company in Vietnam. Since 2012, the partnership has been operating a state-of-the-art nucleus facility, which delivers top quality swine genetics to the local market.


Beeren points out that Hypor tailors the type of meat and carcass characteristics required locally based on the boar type. "In general, Asian countries are better served with Duroc type of finishing pigs as they are more robust to face the challenges of housing, climate and diseases and they deliver better meat quality compared to the lean meat of Piétrain finishers. We will see a shift to more lean meat as it is more efficient and less costly to produce."


Due to its growing populations, rising incomes, and increasing meat consumption, Beeren sees Asia as the most promising region for Hypor. According to him, overall growth in the region will also be highly dependent on the role and situation of the Chinese market, the world's largest for swine.


Since 2007 Hypor has had its own breeding farm in China, which is a joint venture with New Hope Liuhe. The farm is operated with the help of a local team, which has broad expertise in veterinary science, nutrition and production management. With the team Hypor sells its genetic lines from the joint venture and from its nucleus operations in Europe and Canada.


Partnering with leading Chinese companies such as New Hope Liuhe Group is also important in facilitating the right solutions to expedite product registration in China, says Beeren.


Hypor is also making headways in other Asian countries such as Japan (since the early 70's), the Philippines, Korea, Thailand, India and Taiwan.


With profitability virtually written in its DNA, Hypor is on its way to becoming the pig farmer's genetics of choice wherever they may be.

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