June 17, 2016
Nuscience Group commits to localising foreign advanced technology in China
Headquartered in Belgium, Nuscience Group is a key player in premixes, concentrates, nutritional concepts and feed additives in the animal nutrition industry. In 1994, its subsidiary, Vitamex Shanghai Ltd, invested and established Guangxi Dikaiwei Animal Nutrition Co., Ltd in Guangxi, China, to further promote Nuscience Group's range of animal feed products and its animal nutrition expertise.
To better adapt to the development and demands of China's animal husbandry, Vitamex has since shifted the focus of the company's development further north in China, with two new subsidiaries set up in Suzhou and Tianjin.
LIVESTOCK and FEED Business (LFB) interviewed the management of Nuscience recently to find out more about the developments of its two new subsidiaries - Suzhou DKVE and Tianjin DKVE.
LFB: When were Suzhou DKVE and Tianjin DKVE established, and what are their latest developments?
We started the construction for Suzhou DKVE in 1999, and completed it in just one year. It was up and running in 2000, then we started a second production line in 2012. In short, Suzhou DKVE has two premix feed production lines currently.
Tianjin DKVE was also established in 2000. In fact, we bought over a feed enterprise in Singapore and used it as our new company's office. The original plant was built in 1994 and had an annual premix feed capacity of 8,000 to 10,000 tonnes. After Vitamex bought it, we upgraded the equipment and transformed it from an ordinary premix feed mill to the advanced feed mill it is today. It now mainly produces and sells feed products for piglets and sows. The company's best seller is its weaning feed.
Since 2015, the global livestock market, including China, has suffered a reduced demand caused by the recession in the agriculture industry. As such, how is Nuscience helping farms to increase their profits?
Regardless of the economic situation, we are always here to support our clients with quality products and services. We attempt to help our customers minimise their losses through our technical services such as providing customised feed, and improving their production standards and PSY figure (pigs per sow per year).
Nuscience has been in China for close to twenty years, and we understand the need to show greater support for our customers in difficult financial times like now. Hence, we had specially invited experts from Holland to provide technical services to large swine breeding enterprises last year.
The better you are at managing the sow farms, the higher the PSY figures you will enjoy, which translates to lower cost per piglet. Currently, Denmark's average PSY is about 28 or 29, while China's average PSY is only 18 or 19. In other words, China still has nearly a one-third room for improvement. If we can empower our customers to increase their PSY to 22 or 23, their productivity will be increased by 30%, leading to higher profits.
China is already a major player in the global feed industry, and as such, what do you think will be China's motivation to further develop its feed industry in the near future?
China is undoubtedly a major feed producer in terms of quantity, but when we compare its technological standards to other countries, China is still lacking behind as most enterprises are still relying on marketing methods and price wars to push forward their development instead of using technology and R&D to increase their growth. As such, there is no real, sustainable growth in the industry. If we want to further develop the domestic feed industry, we must embrace technology, and this is exactly what Nuscience is doing by bringing in foreign advanced technology into China to raise the overall standard of the industry.
China's feed industry has been undergoing intense consolidation in recent years. How will such changes impact Nuscience?
As the standard of a country's feed industry rises, its total number of feed producers will decrease - this is simply how the industry works. Besides changes in the number of feed enterprises, changes are also been made to product structure. The focus is now shifting from feed concentrates to complete feed, with the latter taking up more market share in recent years.
It does have a negative impact on our company with the number of feed enterprises reducing over the years. However, there are always two sides to every story. It is not just the feed industry that is undergoing changes, the farming industry is also transforming. As the farming industry becomes more integrated, Nuscience stands to benefit as well, as larger-scale farms means more customers for us. For example, a majority of Suzhou DKVE's customers are large-scale pig farms, each with at least 500 sows.
Is Nuscience planning to further invest and expand in China?
As of now, we do not have any expansion plan as we have not fully optimised our current resources. For example, the second production line in Suzhou was only completed and in production a few years ago. Our current focus is on business development, especially in the remote southwest (Chongqing/Sichuan/Guizhou) regions where their breeding philosophy is very different from those in coastal areas. Our approach in those areas is to educate and empower the local farmers with up-to-date farming knowledge through our technical seminars, again in turn helping them to increase their profits.
In addition, we are also giving attention to the northern region, where the farming environment is not as favourable as the southern region, resulting in relatively small-scale farms. We hope to find and work with suitable agents in those areas. In fact, we plan to let the agents handle all requests from farms with less than 200 head, so as to achieve a win-win situation for both parties without over-stretching resources on our side.
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