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Continuous growth of feed additive business

"The role of feed additives will increase in the years to come. The growing demand and consumption of animal protein will take every ounce of efficiency we can squeeze out of animal production’’, says Novus President and CEO Francois Fraudeau at the companies 25th anniversary celebration.

Since the Japanese investment house and global trading company Mitsui and Nippon Soda acquired the former Monsanto feed additive business, now known as Novus, the company has come a long way. In 1991 we couldn't have envisioned today's scope of our business and our extensive product portfolio’’, said Koichiro Tago, member of the board of Mitsui. That said, the investors see tremendous opportunities for the future, signing in into extra stock for Novus' future growth. At this moment in time the St. Charles Missouri based company is working out the last details for a billion dollar build of a new methionine plant in Texas, USA. Novus President and CEO Francois Fraudeau: "This will be an investment over the next 5 years, because of the complexity of the facility. It will add a capacity of 120 thousand metric tons of methionine to our production. That sounds like a huge increase, but the worlds need for methionine grows with 6% or 60 thousand tons a year. By the time our plant will come online, the demand will soak up production. To meet future demand I expect that over the next 15-20 years 7 of these facilities should be built around the world between us and our competitors.’’

The molecule explained
Methionine is an amino acid that is found naturally in eggs, meat, nuts and fish. It is an essential amino acid for protein syntheses in the body. In its synthetic form methionine has been included in chicken feed for years. Traditionally the powder form of DL-methionine was added in low concentrations to improve nutritional values. Later the molecule HMTBa (2-hydroxy4-(methylthio) butanoic acid) was developed in a liquid form. Chemically there is a slight difference between DL-methionine and HMTBa, the first being methionine, the last a precursor to methionine to become methionine whilst digested. Nowadays about 75% of all 6 billion broilers in the US consume feed with HMTBa, the rest DL-methionine. 5 years' worth of data shows that HMTBa results in better meat yield, lower condemnations at slaughter and a better feed conversion rate. All in all leading to a gain of about $0.06 per broiler, $300 million dollar US industry wide.

$17 billion dollar market

Despite the opportunities Fraudeau sees for the continuous growth of the feed additive business and the part Novus plays in it, he states that the business isn’t that huge. "The whole feed additive business in the world only encompassed around US$17 billion dollars, $3,5 billion being methionine and $800 million in enzymes. We are operating in a relative small market segment with on the other hand huge costs of innovation.’’ Novus’ annual sales amount to roughly $1+ billion. A large part of this business is methionine, however: "What we did 25 years ago has nothing to do with what we do now. We are far more than just a methionine business. In the last decade alone we brought more than 100 product to market in 5 business categories, methionine solutions, trace mineral solutions, enzyme solutions, eubiotics solutions and feed quality solutions.’’

More technology

The future challenge in animal protein production lies in increasing efficiency. "Providing food for a growing number of people and a growing demand within the population due to an increase in wealth with limited resources is said to be an almost impossible task by some. In my opinion we face the same challenge as our ancestors did more than a 100 years ago. At that time meeting the demand of a growth in population from 1,6 billion to 2,6 billion seemed impossible. Agricultural mechanisation and efficiency solved that and went beyond. The ‘problem’ of feeding the world was solved then, and we will solve it now as well.’’ Fraudeau believes there will be more technology involved in farming, on every level. Monitoring animals in farms through big data, feed technology and also the further acceptance of genetically modified organisms, are just some examples. "It is our commitment to invest in technologies to reduce the cost of animal production and preserve the world's resources to make feed ingredients maximum available to the animal. We will do that through our methionine business as well as other business units. For instance via our protease enzyme products that enhances the usage of non-digestible proteins, but also by carrying out the message of sustainable food production with emphasis on reducing losses and waste in the whole food chain.’’

Innovations for the future
With feed additives becoming more and more important, the research involved to create the next generation of products is expensive. It is so costly that many pharmaceutical companies previously involved in this field gave up. Novus chief innovations officer Scott Hine on the subject: "Some argue that the era of blockbuster innovations has past and we are beyond the peak of innovations. Well, I’d have to disagree with that.’’ He sees the number of patents increase by 5% per year over the last 20 years. "Biotechnology accounts for a part of today's and tomorrows innovations.’’
Hine continues: "Of course we have to prioritise where to spend our R&D dollars, but there are plenty relevant solutions for our customers problems still to be discovered.’’ During the anniversary celebrations one of Novus’ innovations delivered as the European Unions EFSA approved the Cibenza EP 150 enzyme feed additive. The registration allows Novus to launch its first enzyme product in the EU. The product, a preparation of Bacillus licheniformis and protease, sets itself apart from other proteases in the market due to its specific composition and additional support in ensuring optimal gut health and is recommended for use in protein-reduced diets. In times of volatile raw material prices and amino acid digestibility variability, it offers a solution to optimise feed formulation and manage variability in bird performance. Hine: "This is what innovation is all about.’’

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