July 26, 2011
Executive Talk: Alltech - Keeping pace with higher receptivity for natural solutions
An eFeedLink Exclusive
Last year was the 30th anniversary of Alltech. Since its establishment, Alltech has focused on improving feed nutritional value to enhance animal health and production. Alltech's business and its development in East Asia entered a new phase when Jiang Nan was appointed the East Asia General Manager in 2006. In an exclusive interview conducted with Jiang Nan at the Ninth World Dairy Expo & Summit in Hefei, she shared how Alltech keeps pace with the Chinese industry's higher receptivity towards natural solutions.
We notice that Alltech is increasing its investment in China. There are projects such as the construction of a production plant in Tianjin, producing Bioplex range of organic trace minerals. How is the progress of the construction? Has it started operation?
From a global strategic viewpoint, China has always been the most important sector contributing to Alltech's growth. Alltech, being committed to the development of China's market, will continue to invest and plan for the construction of major facilities in China. The Tianjin-based plant is one of the major facilities, invested in 2009, registered by 2010 and became ISO20002 certified in 2011. It has gone into operation and will produce the entire Bioplex range of organic trace minerals.
Looking at the products on Alltech's catalog, there are many similar types of products available in the market. What differentiates Alltech's products from those in the market?
Alltech's core technology focuses on three types of products: yeast - a product which the company started with - and its derivatives, such as probiotic yeast which is used to regulate the rumen of ruminant animals; a range of organic trace minerals; and mycotoxin adsorbent, produced with solid-state fermentation technology.
How do you regard and respond to market competition?
Firstly, from the perspective of business operations, while undergoing positioning, the company must be clearly aware of its own competencies and be an innovator who initiates changes to the game rules and makes use of all resources to make the changes. Secondly, the company should constantly enhance and refine its products in order to stay ahead of others. Otherwise, one can only be a follower forever. Therefore, there is a need to adapt to the market needs, make use of the advantage in resources, and constantly update and change. In general, the only key to success is to initiate changes, be updated and be a leader in one's field.
We are aware that China's food safety has been a worrying issue for both the Chinese government and people. As a US-based company, what is Alltech's approach towards food safety?
For Alltech, we have always been concerned about the food safety issue and have taken relevant measures. David Byrne, former EU Health and Consumer Protection Committee Member, is currently appointed as Alltech's Consultant. Therefore, the greatest crisis is not associated with the breeding quantity and improvement of production efficiency but with the confidence of consumers. When consumers start to avoid the food products, the entire industry will be faced with a major crisis even if it is only temporary or short-term. It will be disastrous for the industry if food safety scandals constantly emerge, dampening the consumers' confidence. In addressing food safety issues, Alltech first starts from internal quality control, accrediting suppliers by conducting checks on the factory from time to time. Knowing the sources of raw materials in the market allows the tracing back of raw materials for the product. As for the end products, with the bar-code, they can be traced back within 48 hours. Furthermore, Alltech conducts specialised training for its crisis management team on a regular basis. When encountered with an emergency a crisis, the team will be activated, recalling all products in 72 hours.
Given the current status of China's livestock industry, are there more challenges than opportunities or do the opportunities outweigh the challenges for Alltech?
Undoubtedly, the opportunities outweigh the challenges for Alltech. China is a country with a large population and places strong emphasis on the livestock industry. China's past livestock industry only focused on quantity but not quality, causing great harm to the environment, and the importance of food safety was disregarded in the process of rapid development with a short-term aim of sustaining basic needs. The current slow development of livestock is an inevitable trend due to objective reasons:
First, urbanisation has resulted in difficulty to sustain the farming methods and scale in China.
Second, diseases due to high farming density and the lack of a strong national industry management lead to market and price volatility, increasing the risk farmers face.
Third, because of industrial consolidation, the livestock sector places increasing emphasis on quality development and a more scientific scale of farming is more recognised now. Furthermore, as company's operation scale expands, control and management of food safety will be easier. Alltech's products are made based on the concept of being natural and healthy. As an increasing number of customers are receptive to such a concept, Alltech still has substantial room for development.
What is Alltech's main purpose for attending the World Dairy Expo & Summit in Hefei this year?
This is the first time Alltech is attending the World Dairy Expo & Summit. This year, having been through the industry consolidation in March, China's dairy industry is now in a stage of healthy and rapid development. After 7-8 years of development, Alltech's ruminant division has achieved substantial results in China's market. Through this exhibition, we hope to engage in direct face-to-face exchanges with our existing clients as well as potential clients, and share with them Alltech's natural, green, environmentally-friendly ideas in order to attain greater development.
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