Jean-Pierre Paillot, CEO of MiXscience, told FeedNavigator it is taking a majority share, through a capital increase, in the Brazilian company, which was founded in 2011. “Salus founders remain significant shareholders,” he said.
MiXscience had screened potential investment opportunities in Brazil, describing it as a target country for the company and the third most dynamic feed additive market globally:
“Thanks to our local network, we quickly identified Salus as a highly reputable player. First contacts confirmed that we share common values and vision. We are long term investors and believe in the future of this company,” said Paillot.
He said the goal of the partnership, which is subject to approval by competition authorities, is to capitalize on both companies’ knowledge and expertise to serve the needs of farmed animal producers in Brazil as regards both feed inputs and analytical services.
Demedicalization of livestock units including disease prevention, control of the environment and the enhanced immune status of animals is said to be a fundamental objective of the alignment.
The partners said they want the alliance to be recognized in Brazil as leading the charge when it comes to innovative and sustainable feed additive and premix R&D.
MiXscience said the deal represents a major step in its international development, shortly after it established subsidiaries in Poland and Turkey.
“We have no plans to aggressively expand Salus beyond Brazil,” added Paillot.
Brazil's feed additives market outlook
According to a report by Transparency Market Research, published in June 2015, the Brazilian feed additives market, was set to post a compound annual growth rate (CAGR) of 5.6% over five years, kicking off in 2013, to touch US$1,941.6m by 2018 from a base of US$1,334.8m in 2011.
The poultry segment, which tends to be dominated by large integrators, occupied a 50.1% share of the market in 2011. The swine and beef segments trailed the market leader.
But the reported noted headwinds such as the increasing cost of raw materials like corn on the Brazilian market and how that might play out in terms of feed additive usage,a development we reported on last month.
And, last month, Rabobank told uswhile the long term perspective on corn prices in Brazil is bearish, the poultry industry has to be proactive: “Poultry producers in Brazil will have to exercise some discipline and produce less than planned to allow for market recovery.”