July 10, 2007

Global feed additives market to hike by US$14.5 billion in 2010

Increasing population, rising standards of living, intensified consumption of meat and meat products in developing countries and continuous demand from developed nations will hike the global market for animal feed additives market by US$15.4 billion by 2010. Europe, Asia and North America, particularly the US, is expected to lead the booming market with its strong demand influence for meat and meat products.

Pork will be the biggest meat produced followed by chicken meat. Interestingly, disease outbreaks such as avian flu, mad cow or foot and mouth disease will have little impact on global demand since consumption does not stop but will only shift from one meat variety to another.

The feed additives industry has been in the limelight in the recent years for its use of antibiotics as growth promoters in the rearing process of livestock. The sector further garnered more attention from consumers and governments resulting in the EU's decision to completely ban the use of Antibiotic Growth Promoters or AGPs effective January 2006 due to growing concerns on drug-resistant "superbugs" in humans and animals over indiscriminate use of antibiotics. Restricted use of antibiotics has spurred growth in alternatives such as feed acidifiers and probiotics. Enzymes are among other substitutes as they reduce phosphorous content in manure.

United States, Europe and Asia are the three largest animal feed additive markets, collectively accounting for about 75 percent of the worldwide share. The US market is estimated at US$3.9 billion in 2007, while Asia is expected to grow at a CAGR (Compound Annual Growth Rate) of 4.6 percent through 2010. The animal feed antibiotics market is projected to reach US$4.2 billion by 2010 despite a dented market due to ban on the use of growth promoters. Growth in that area is expected to come from therapeutic use. The animal feed amino acids market is estimated at US$3.4 billion in 2007, and is projected to record the fastest CAGR through 2010. In terms of production, the industry is dominated by the US followed by Japan, Mexico, Brazil and China.

The market is relatively concentrated with the top ten companies accounting for about 60 percent of total output. In the US, segments such as feed antibiotics, vitamins, and enzymes are dominated by leading five players. The global landscape is characterized by a number of regional and international players including Adisseo, Ajinomoto, Alpharma, Alltech, Archer Daniels Midland, BASF, Cargill, Chr. Hansen A/S, CJ Corporation, Danisco A/S, Degussa Feed Additives, DSM Nutritional Products, Eli Lilly's Elanco Animal Health, Evialis, Kemin Industries, Kyowa Hakko Kogyo Co, Lallemand, Lesaffre Yeast, Novozymes, Novus, Nutreco, Phibro, Provimi Holding and Tessenderlo.