August 16, 2012

Exclusive Talk: Ajinomoto Animal Nutrition Group: A leading amino acid supplier
An eFeedLink Exclusive
This innovative company has long dominated amino acid markets for lysine, tryptophan and threonine. Masaya Sugimori, Ajinomoto Animal Nutrition's managing director and general manager for Business Strategy & Planning explains his company's aspirations.
How does Ajinimoto Animal Nutrition maintain market shares of 60% for tryptophan, 20% for lysine and 30% for threonine?
Amino acid nutrition, which started from the barrel theory, is progressing, with newer genetics, target species, researches on protein, on energy and on the environment, etc. In general, animal nutrition is a dynamic and fast-growing field where extensive expertise on market and product potential is required on one hand, and innovative production technology to realise that potential is needed on the other. We approach this change at a faster, bigger and creative dimension. Ajinomoto Animal Nutrition Group, Inc. was established to build on our values and global strength.
Why is Ajinomoto boosting capacity for making L-lysine, L-threonine and L-tryptophan by 150,000 tonnes, 80,000 tonnes and 7,000 tonnes respectively?
Growth in markets with faster growth in meat consumption is surely the locomotive, but we are also excited to see steady market growth in markets that are considered matured. We expect demand for lysine to grow by about 6-8% and threonine to grow by 11-13%, with demand driven by Asia, including China. A larger growth in demand of 15-20% is expected for tryptophan in all regions, mainly driven by the European market.
What drives amino acid consumption?
Feed cost reduction, better animal performance, healthier animals and total environmental solutions are key drivers for market growth. The market is becoming bigger and is still growing steadily. We are here to contribute and accelerate this growth by providing innovative solutions at affordable prices.
Are you adapting to China's lysine overcapacity and falling prices?
In China, we are looking at all sorts of options to stay in the market. For example, in November 2010, we formed an agreement with Fufeng Group to sell its entire output of feed-use threonine under the Ajinomoto brand from March 2011. This is an exciting collaboration for both companies to achieve a win-win situation in many ways. Outside China, we are reinforcing our supply ability both in quantity and cost competitiveness by introducing cutting-edge new technologies for on-going expansions. We are also mobilising our nutrition expertise in each market to accelerate market growth in all regions.
Did North America and South America's market growth meet your expectations?
Yes, definitely. Realising rapid growth of the market and securing a sustainable supply of the needed product have to go hand in hand. Extensive development in nutrition and its application in the market is one field, and the relentless pursuit for cost reduction is the other, which we put a lot of resources in. Both North and South America are good examples of this.
China's threonine export prices are approaching record lows. Is this amino acid oversupplied?
Yes, there is an oversupply in China. With increasing raw material prices, additional environment protection costs etc., it becomes highly risky for Chinese producers to rely heavily on exporting. The long-term im-pact of oversupply in China on the global market will be mitigated by this economic framework and the fast growth of the Chinese domestic market. We think the growth potential of threonine is still high in all regions of the world, especially China.
Did tryptophan demand change after Ajinimoto established a French production facility in 2000?
The market grew steadily over the years, but growth was limited to high-value niches due to limited supply. However, supply has increased over the last year or so due to the entry of new players, bringing prices to more economical levels that are accessible to more feed segments. Ajinomoto is reinforcing our technical services to the market to further enhance economic values in utilising Tryptophan. Our new generation of production technology is ready in France. Tryptophan will enter a new and exciting stage of growth, as lysine and threonine had seen in earlier years.
How is the tryptophan market evolving?
We have seen several players enter and exit the arena over the past years. At the current stage of market and product development, relentless development of production technologies to achieve higher efficiency and lower cost is a key prerequisite to remain in the market.
Are customers receptive to Ajinimoto's concept of optimally balancing these three key amino acids?
In the current world where demand of grains is exploding and arable land is limited, grain resources need to be used in the most industrially meaningful and economically sustainable manner. Amino acids offer solutions for higher efficiency for both protein and energy resources. This makes the market all the more welcoming to this concept.
Can amino acids' ability to minimise livestock pollution be used for their marketing in developing countries?
The ability of amino acids to reduce detrimental effects on the environment is scientifically proven and is gradually being implemented in the European feed industry. We are confident that this will catch on in other parts of the world. However, sensitivity and priority differ by region. We are collaborating with international organisations and corporations in order to prepare the solutions to be ready when the need arises.
What innovations is Ajinimoto currently working on?
High efficiency microorganisms are the growth driver for our amino acid business. Our technical R&D labs in Japan, equipped with modernised bench plant facilities and with multiple teams of scientists developing cutting edge technology, are our key locomotive to developing future technology.
They also participate actively in research collaboration with Ajinomoto-Genetika Research Institute, which was awarded the 2011 Russian Federation Government Prize in Science and Technology.
In addition, the concept of 'fermentation with less resource consumption' focuses on minimising or sometimes totally eliminating certain raw materials for production. We are also exploring "non-food starch based fermentation", using sugar sources that were previously not used as food. These will reduce costs and at the same time contribute to ethical sourcing, while maintaining quality of the products.
Is Ajinimoto expanding its amino acid product line?
Pursuit for essential amino acids after tryptophan is one line. Although the potential quantity of such amino acids are much smaller than upper limiting amino acids like lysine or threonine, these new amino acids will have a leverage effect to further enhance the upper limiting amino acids.
Another line is "conditionally essential amino acids" - AminoGut® for weaning pigs, which is gaining momentum after half a decade of scientific research and marketing. Last but not least, AjiPro™-L, a rumen protected amino acid for cows was introduced in the US in April 2011. Our scientifically-proven data behind the product is steadily gaining confidence from customers in the US. We are confident its acceptance will spread globally.
What core values motivate Ajinomoto Animal Nutrition as an organisation?
As the pioneer and global leader of amino acids, we are constantly channelling our efforts to create new values, and developing high quality products which benefit our customers, through our technology, in-house development and open innovation. We aim to support the growth of our customers, and at the same time contribute to global sustainability of food and the environment.

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