Topigs Norsvin: Combining the best of two leading swine genetics suppliers
Two leaders in swine genetics, TOPIGS International and Norsvin International, recently merged their international activities into a new company Topigs Norsvin. Mr. BJARNE HOLM, Chief Development Officer of Topigs Norsvin, shares his insights on the merger, current developments in the industry and the future of the new company.
What industry changes have influenced the development of swine genetics in Europe? And what impact did these changes have on Topigs Norsvin?
There is increasing focus on sustainability and animal welfare in Europe. Producers, and the industry in general, are under financial stress due to a changing European market. It is becoming more difficult to sustain profitable production. Number of producers is going down while farm size is going up.
In several parts of Europe, more integrated systems focus on the entire value chain-- from piglet production to pork processing. Right now feed prices are quite favourable, but energy costs are going to rise in the long run, making total feed efficiency equally important.
Genetic companies like Topigs Norsvin have to develop genetic products attuned to current and future changes. With the technological revolution in genomic selection, the possibilities are huge. But it's well to remember not to go after short-term solutions, and to focus instead on long-term sustainability through a balanced approach, which is to improve the industry's competitiveness without jeopardizing consumer acceptability.
On our part, we do that by investing in research and development to improve total feed efficiency, developing robust products, and having breeding goals focused on the entire value chain.  Goals that cover the whole range from piglet survivability to meat quality.    
How does farmer-owned Topigs Norsvin compete with the conventionally operated companies in Europe? What are the pros and cons of the two different business models?
Topigs Norsvin has a unique position since the mission of the company is to pay dividend back to our shareholders through genetic progress, i.e. through better pigs and not cash. We are set to increase our research and development budget from US$25 million this year to US$29 million in 2018. Through this approach we aim to be the preferred genetic partner for the modern and sustainable industry.
What are the main breeds of Topigs Norsvin that offer specific disease resistance performance? What are the global trends in disease resistance breeds?
Topigs Norsvin's products have been developed and bred in disease challenging environments of Western Europe and the excellent health systems of Scandinavia combined. Results from North and South American, Russia, Asia, etc.  in the last decade have  been included in our database as well.
All this data is taken into consideration when we select animals to contribute to the next generation. Our female and our boar lines are developed to be robust and easy to manage. No specific resistance is being selected for today. Our strategy is more on improving tolerance, i.e. the ability to keep producing even under challenges  involving disease, climate, feed and lack of labour.
Our R&D programme is currently working further on general robustness through structural soundness, sow longevity, low piglet mortality, in addition to climate and environmental tolerance. Our goal is that every pig born should make it to slaughter.
What are some of the biggest concerns of your customers these days? How do solutions provided by Topigs Norsvin address their concerns?
In Europe one of the biggest concerns is the society's acceptance of pig production in general. This and the difficulty of staying profitable in the face of changing market demands and feed costs are some of these concerns. Topigs Norsvin's products and breeding programme are designed toward sustainable and socially acceptable  pig production,  maximising profit for every pig raised, and the production of healthy and quality pork. We are proud of our customers and the efforts they take to produce safe and healthy food.    
In 2012, CRV, Hendrix Genetics, Topigs and Cobb partnered with Wageningen University and Research Centre to reinforce the position of the Netherlands as an innovative livestock breeding country. What has transpired in this partnership since then?
The collaboration has been just excellent. New analytical tools, advances in genomics and a high performance computing system are some of the results so far. The interactions on crossbred data used for selection in cattle, chicken and pig through working with dominance estimations within and between lines and breeds are very promising. This is a cooperation that really sets the stage for future product development and even better balance between efficiency and long-term sustainability.
Does intellectual property issues crop up when two genetics companies like Topigs and Hendrix Genetics come together in a research partnership?
Breed4Food (the two companies' joint project) focuses on pre-competitive research on genomics. The difference in the market will be made on how successful science will be implemented in the practical breeding programme. In case of patents and IP-royalties, there is an agreement between the parties on how these things should be handled.
You  said in your corporate video that, in terms of product portfolio, the merger of Topigs and Norsvin combines the total feed efficiency focus of Topigs with the high maternal capacity, high feed efficiency and high carcass value focus of Norsvin. Could you elaborate more on this?
Historically, TOPIGS has had their main focus on the beginning of the value chain, i.e. piglet production and robustness to handle European environment to optimize total feed efficiency. Norsvin has had their main focus on the other side of the value chain -- high meat and carcass value as well as very high focus on feed efficiency.
The goal of both companies were the same. But since they had different locations in Europe, the paths they had chosen differed somewhat. By bringing together their respective product portfolios and research programmes we are able to strongly  deal in all aspects of the value chain.
Since both companies were focused on piglet survival, the product they now offer jointly is very strong. Both companies have put a lot of resources on developing lines that are able to take care of the piglets that are born. Our goal has been that every piglet born should make it to slaughter. Birth weight and uniformity at birth, piglet mortality, number of functional teats as well as milking ability have been selected for for more than a decade.     
Is Topigs Norsvin venturing into new countries in the coming years, particularly in Asia? How do you view the markets outside Europe?
All growth markets now are more or less outside Europe. With the Topigs Norsvin merger, we are now present in all key markets globally with a value proposition that we strongly believe will fit the different key segments in these markets. We strive to have a leading position in all key markets for the long haul.
What are Topigs Norsvin's plans for the next five years in each of these regions: Europe, Americas, Asia Pacific and Africa?
The plan is to continue to present our value proposition in all these regions through subsidiaries and strategic partnerships.   
What other market and product developments can we expect from Topigs Norsvin in the near future?
We are now testing the idea of combining some of our lines and see how well they would perform. From this, we expect new products to enter the market. We aim to achieve 5% improved margin per year for our partners through genetic improvement within our products.
Total feed efficiency is still a big driver, and we expect further progress here through robust females, uniform pigs with low mortality and high ability to utilize nutrients. In addition, we are continuing the progress we have on AI-technology to be able to present the results from our selection to all our partners through semen. Technology derived from genomic selection will also allow our partners to connect even closer to our genetic improvement programmes.

For his part, MR. GLEN ILLING, Topigs Norsvin regional director for Asia, Pacific and Africa, expounds on the challenges and opportunities the new company has in Asia
What are the significant differences in genomic selection of breeds in the West compared to that in Asia, particularly China, where there is quite a proliferation of native breeds?
There is indeed a vast array of breeds in Asia, particularly in China, and consequently there is a wide range of management practices, production performances and specialised products that evolved. However, native breeds have declined rapidly over the last 30 years. For example, the Wulian Black pig boasted a population of approximately 3 million in the 1980s but this has since declined to less than 1000 sows today. Similar trend is seen in other native breeds.
Nanjing Agricultural University reports that just 5% to 10% of China's approximately 50 million sows are native species and consequently the government has placed 34 native species under state-level protection in an attempt not to lose them to extinction.
The principal species being farmed in China today are the Yorkshire, Berkshire, Landrace and Duroc. But further down south in Asia the more muscular and higher lean Pietrain and Belgian Landrace have a growing following.
The principal differences between choosing to stay with the native breeds and switching to western breeds simply come down to pure economics. They latter grow faster, have better feed efficiencies and produce carcases with higher lean meat. There is also a trend to grow heavier animals which exaggerates the differences. However, there is a glimmer of hope for the native breeds within a niche market of specialised meat products. 
We read that Topigs' breeds have been exported to Asian countries such as China, Japan and the Philippines. What  advantages do Topigs Norvsin's breeds have over local breeds?
A distinction should be made between native, local and recently imported animals. The native breeds are often a class apart by modern standards. They are slow-growing, have small carcasses and poor food conversion rate, and  produce  specialised and often very local products in relatively small numbers.
The local pig population is mainly derived from an eclectic mix of the Western breeds that were imported over many decades, derived from a plethora of sources and bred within a variety of breeding programmes. What is common between them all can be seen in their mediocre production performances and the ceilings they are hitting due to limitations of management techniques, nutrition and genetics. 
Topigs Norsvin's research and breeding programmes are designed to deliver increased production performance every year, and advantages in both reproductive performance and feed efficiencies are evident competitive advantages.
Topigs Norvsin has invested significantly in China, the largest pig producing country in the world. What opportunities and challenges do you see in China?
China is indeed the largest pig producing country in the world and therefore offers significant opportunities. However, there are significant challenges that come with these. The swelling population, increasing urbanisation, lack of suitable arable land and limited water supply sources are challenges China faces but are at the same time opportunities for improved productivity and efficiencies that Topig Norsvin products provide.
Environmental controls, animal movement restrictions and government price controls add another level of challenge. The most important challenge that many companies, particularly agricultural companies, and the pig industry faces is the lack of available skilled human capital. The lure of new opportunities, high paid jobs and dynamic urban companies that a rapidly growing economy enjoys is both a dream and a curse and by far the largest challenge in China today.
In May, animal genetics company Genus called off its joint venture with Chinese pork producer Yunnan Shennong Agricultural Group, citing "adverse market conditions for pig production in China". What market threats does Topigs Norsvin see in China?
China is a very volatile market and operates in boom and bust cycles.  It is a controlled market in the sense that government stocks of meat and grain are increased and decreased to buffer the volatility.
But with such a large market it is often difficult for government to get timing and sufficient volumes involved in the programmes to have the right impact. In addition, there are many new entrants into the pig industry which lay down large amounts of production that is not immediately absorbed by the markets resulting in local oversupply followed by depressed market prices alleviated in part by erratic disease outbreaks affecting supply and fuelling the volatility.
There are subsidies which are made available to new or existing farms that distort the market and although these are designed to move the industry in certain direction they often result in dubious projects and unskilled operations. China is a complex, dynamic and rapidly changing market full of pitfalls. The main threat is not being prepared for them. 
In your experience,  how does the genetics business in Asia differ from that of Europe. Also, are there wide disparities between countries within Asia?
There is a wide disparity between the various countries within Asia and also the various provinces within China. Most farm performances across Asia appear to be similar and generally much lower than in the West for a variety of reasons, although farms using Topigs Norsvin products and techniques are achieving European performances.
All Asian markets have a subsistence farming segment which is similar in each country. However, when looking at the professional industry, there are both differences and similarities. It is always easy to make national generalisations. But the differences are neither so black nor so white.
Nevertheless, compared to other Asian countries, China could be seen as characterized by mega-integrators and neophyte farming groups owned by corporations. It also sees pig meat as a commodity. In contrast, Vietnam has a plethora of small family-owned farms and views pig meat as a basic necessity.
Japan has a number of medium-sized integrators but majority of the industry is made up of medium-sized professional farms and the industry is fixated more on meat quality, although there are signs that productivity will soon be the main driver.
The Philippines too has a number of large integrators but a large percentage of the market is in the hands of large professional privately-owned farms with more of an eye on conformation and supplying pig meat through the wet meat markets and growing small meat shops.
Although there are major differences between all the countries and different types of end products in each market, there is a commonality that Topigs Norsvin focuses upon which is improving farm profitability through increased reproductive performances and improved feed efficiencies.

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