FEED Business Worldwide - October / November, 2011
Evonik focuses on Asia for methionine
According to consulting firm Fountain Agricounsel, the world methionine market is worth more than US$2 billion per year. Moreover, in a recent report by Global Industry Analysts, Inc., the global methionine revenues are expected to reach US$3 billion by 2015. With methionine consumption rising by approximately 50% in just five years, fast growing regions like Asia Pacific need to upgrade their capacity for producing this essential amino acid. With expansion projects and new investments under way, Evonik expects to capture a substantial share of this unprecedented rise in methionine demand.
Evonik is focused on providing a broad portfolio of feed grade amino acids to the markets. Currently, MetAMINO® (DL-methionine) is globally marketed, whereas ThreAMINO® (L-threonine), TrypAMINO® (L-tryptophan) and Biolys® (L-lysine sulphate) are available in selected regions of the world.
In addition, at a recent VIV Asia 2011 exhibition in Bangkok, Evonik launched the AMINO® product line to complete its existing brand concept.
 All these methionine products are typically marketed alongside a broad, feed-related service portfolio which compliments specific client needs with targeted, value-added services.
Having made several timely capacity expansions that anticipated market growth since 2005, Evonik is among the world's leading methionine suppliers. The current annual combined production capacity of the company's four sites is at about 360,000 tonnes DL-Methionine. This total will rise to around 430,000 tonnes by 2013. A planned, new DL-Methionine in Singapore is expected to come on stream by 2014 and will raise Evonik's total production capacity for this product to 580,000 tonnes. (see box article)
The company has positioned itself with what they see as the best methionine source for its customers now and in the future: DL-Methionine. "The current market of powder and liquid methionine sources provides proof that DL-Methionine is the No.1 methionine source in the world, and we want to further develop our strong market position with MetAMINO®, i.e. with DL-Methionine, 99% pure," Evonik's regional sales director, Dr Torben Madsen, stated.
Singapore selected for new methionine plant
The main reason for selecting Singapore as a site for its fifth methionine plant is to make Evonik even more global, not merely in its marketing of MetAMINO®, but also in its production. With this step, a production site will be put up in a region with a substantial current demand and large future growth potential. With Asia's demand for feed supplements growing faster than that of any other region, a large-scale production facility was required to serve large neighbouring markets in China, Vietnam, Indonesia and India.
In the selection process for the new site, Evonik had defined three groups of potential locations: existing sites, sites with low cost raw materials and sites located in big customer markets. In this context, the preference for Singapore had been the result of a comprehensive evaluation of the three potential alternatives.
"Singapore has toll-free agreements with many important markets in Asia, such as China, Thailand and India. Thus, from this point of view, there are comparable conditions compared to local production in these markets," said Dr Madsen. "Moreover, Singapore provides an excellent basis for a sustainable supply with the key raw materials used in the methionine production process." By this, he refers to Singapore's extensive petrochemical refining facilities, which provide ample supplies of methionine manufacturing inputs.
Singapore's ideal manufacturing characteristics compliments its central location within Asia, where fast rising meat and egg consumption is coinciding with the continuous development of modern feed formulation systems. This creates dynamic growth opportunities in the region's emerging markets.
That said, significant effort is underway to expand manufacturing capacity for the company's other amino acid lines at various facilities around the world. Evonik recently announced plans to significantly expand its capacity for making Biolys® (L-lysine sulfate) in Blair, Nebraska and TrypAMINO® (L-trytophan) in Slovenska Lupca, Slovakia. In addition to those investments, there are also other projects currently ongoing which will complement its strong position in the methionine markets.
Evonik's marketing approach has always been focused to its customers as being in the centre of its efforts. Its business approach not only ends with being able to provide products but also a broad portfolio of services to its customers.
Issues and challenges
However, there are other issues besides livestock productivity or its own bottom line that are of high importance to the company. As Evonik sees it, two of the most burning issues in Asia Pacific and other fast growing economies are the conservation of resources and limiting the negative impacts of animal production on health and environment.
Dr. Madsen explains that, "We have started providing a lot of services and consulting information around this topic. For example, in our recent Bangkok Pre VIV Symposium we introduced our new AMINOFootprint service tool, dedicated to help feed producers to manage the 'carbon footprint' of their feed formulations. Other, additional services are under development, all targeting at the same goal: to support the long-term sustainability of increasing animal production."
Evonik believes that global methionine markets will show consistent growth in the years ahead, with increasing world population and growing affluence associated with an increasing demand for meat and eggs as major growth drivers.
Evonik sees the need for sustainable, eco-friendly feed formulation as another big driver for more amino acids in feeds. The expected growth may not be covered by one player alone due to the high specific capital expenditure needed in this business. Several companies will probably invest, and that is exactly what is currently happening. In consequence, there might be temporary imbalances in the markets depending on when the respective facilities come on stream.
Aquaculture is another growth area for amino acid usage in animal nutrition, and Evonik has been exploring the potentials for DL-Methionine and other methionine sources in this new market for years. According to them, the problem with leaching is much lower for DL-Methionine than for MHA-Calcium salt as DL-Methionine solubility in water is only 30 g/l at 20℃, but 74 g/l at 25℃ for MHA-Calcium salt.
Thus, DL-Methionine is seen as the optimum product to balance methionine deficits in aqua diets for fast eaters like salmon, sea bass and pangasius. To fulfil the specific requirements of aqua feed producers in terms of physical product quality, Evonik is currently introducing a special quality called "DL-Methionine for Aquaculture" into the markets. For all slow eaters like shrimps and prawns, the company is currently researching new optimised product forms.
"Compared with methionine, feed formulation penetration rates of threonine and tryptophan in developing markets are still moderate, whereas inclusion of supplemental methionine sources is more or less global standard, at least in poultry diets," said Dr Madsen. "As for lysine, considering the growth potential of the Chinese and other lysine markets, Evonik will continue to evaluate opportunities to re-enter those markets with its L-lysine product Biolys®." Overall, Evonik is convinced that it has a good understanding of the markets and a corresponding capacity expansion strategy.
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