Yesterday saw InVivo NSA sign a contract that will see it continue to provide knowledge, assistance and technical support to the feed producer Jeil Feed, which is a division of the Harim group, a significant South Korean poultry production player.
Jeil Feed is said to produce around 1.4 million tons of feed per year with a turnover of USD $535 million.
The alliance with the French firm focuses on the feed formulation, characterization of raw materials, zootechnical assistance, trend forecasting and the implementation of R&D trials.
When asked what the benefits of such a partnership were for InVivo NSA beyond the financial gain, a company spokesperson told us it would help the French firm “better understand the South Korean market, how it could adapt its products accordingly and guide it on where future expansion opportunities might lie.”
She said such alliances were real growth levers for InVivo NSA – it previously had a similar tie-up with the Japanese livestock and aqua feed group, Nosan Corporation, which ended last year. And 2013 saw it begin a partnership agreement with Finnish agribusiness group, Hankkija Oy, for knowledge transfer and consultancy. That company produces feed under the Suomen Rehu brand.
In December last year, the French animal nutrition player told us: “We have a strong focus on Asia in our strategy for the coming decade. We plan to invest heavily in developing our complete feed and premix businesses there."
The InVivo NSA spokesperson said its Asian business currently accounts for 11% of the group’s €1.5 billion ($1.86bn) turnover.
Whilst much of the projected growth will be organic, the spokesperson revealed then that growth through acquisition would also form part of the mix.
Finding a point of difference
She described the feed market in Asia as “highly competitive and fragmented”, dominated by strong regional players such as CP, New Hope, Zennoh, Proconco and Japfa.
In order to build its share of the market, the representative said InVivo’s strategy would be one of differentiation through niche offerings such as BernAqua shrimp feeds and 100% vegetable-source feeds for panga fish, as well as R&D, for example through its genetics partnership with Grimaud and experimental farms in aqua, swine, poultry and duck.
“The aim is for InVivo to provide its customers with a differentiated and high value added offer, based on customer profile and target countries, instead of only selling commodities,” she said.
Another aspect of this approach is developing its services offer, so that customers are not just buying premixes, but also services such as product analysis, formulation and training – an approach that contrasts strongly with that of local manufacturers, who are focused solely on selling product.
“The ‘products and packaged services offers’ are a key differentiation element with regards to most local or regional competitors and should generate strong growth in the coming years, particularly given the context of the global health crisis and changes in food safety and traceability regulations,” said the spokesperson.