Chr. Hansen looks to pack a mightier punch with probiotics in APAC

By Jane Byrne

- Last updated on GMT

'Around 10 to 15% of all production animals in the APAC region have come in contact with a probiotic' © istock/gabriel_bostan
'Around 10 to 15% of all production animals in the APAC region have come in contact with a probiotic' © istock/gabriel_bostan

Related tags Livestock

Chr. Hansen is looking to expand its animal nutrition portfolio in Asia Pacific (APAC) markets. 

Chr. Hansen reported strong performance in the APAC region in its recently released Q1 2016/2017 results; it recorded an 18% increase in revenue, and 16% organic growth overall in those markets, driven primarily, it said, by a good performance in the fermented milk segment including probiotics, cheese, human health and animal health.

We spoke to Gorm Bang Madsen, senior director, commercial development, animal health and nutrition at Chr. Hansen to hear more about the Danish company’s Asian growth strategy:

“APAC is an important region for us in terms of animal health. Certain countries like South Korea and Australia are more mature than others when it comes to the use of probiotics in feed - there is a lot of momentum in those markets - but we also see plenty of opportunities in China and Southeast Asia,”​ he said.

The legislation and the commercial environment in South Korea and Australia has been conducive to good take up of feed probiotics, but as policymakers and producers in the rest of APAC begin to question the use of antibiotics in livestock production, demand for alternatives will grow in other countries, said Bang Madsen.  

poultry_barn_22
'You definitely want to be a big player in the poultry segment to grow in APAC' © istock

In terms of current feed market penetration, he reckons 10 to 15% of all production animals in the APAC region have “come in contact with a probiotic” ​so there is all to gain.

Poultry and swine​ 

Poultry and swine are the main livestock sectors on the Danish company’s radar as it looks to build its presence in the APAC region: “Poultry is by far the biggest market in Asia by size and by growth rate; you definitely want to be a big player in the poultry segment to grow in APAC.

“But we also have a lot of expertise in swine applications, so we want to capitalize on that as well, particularly in China, which has one of the biggest swine sectors globally,​” said the commercial director.

And, with the acquisition of NPC​ he said the company now has a broader portfolio in terms of ruminant probiotics that it can offer in certain countries. As it already has a strong foothold in the Chinese fermented milk segment, Bang Madsen sees potential for probiotics in dairy feed in that market as well.

In addition, the company is looking to push its silage inoculants for use in forages in some countries in the region, he said.

Chr. Hansen is targeting feed mills, premix manufacturers, and integrators of meaningful scale in Asia. “You have to focus on applications for feed for swine operations with a minimum of 1,000 pigs, or poultry barns with 100,000 birds in China, Thailand and Vietnam, to ensure a certain sophistication in feed formulation.”

He said the company wants to ensure producers and feed manufacturers in China and Southeast Asia are aware of its science and research based approach to product development.

“A critical part of our APAC expansion plan lies in getting more Chr. Hansen employees on the ground, so that we can get closer to our customer base.

“And we want to create more awareness about our 25 years of R&D work in microbial applications in this space​, particularly our experience in strain selection and inclusion levels​," he said.

Distribution model 

However, the distribution model used is central to expansion plans:

“The technical nature of probiotic applications and the discussions required around the ‘value proposition’ with end users narrows the type of distributors we can work with,”​ explained Bang Madsen.

Chr. Hansen’s long standing alliance with distributors in South Korea - EasyBio - and in Australia - Nutriment Health – has greatly facilitated market penetration of the company’s probiotics in those countries in recent years, he explained.

Its poultry and swine feed probiotics distribution tie-up with Evonik, set up in 2012, was fundamental to Chr. Hansen establishing itself in certain APAC countries. However, the German chemical company recently dissolved that alliance​ ​to avoid a conflict of interest due to their new ambitions to be active in the probiotics market with their own products in the future. “There are regulatory and technical challenges arising out of that dissolution - in some countries, product registration is linked to the importer, while, in others, it is linked to the manufacturer - but we are managing the transition quite well,”​ confirmed Bang Madsen.

Chr. Hansen rates LinkAsia Partners as a great resource in terms of gaining greater market access in APAC; the agency helps with setting up scientific seminars and training, said Bang Madsen.

“There is still a lot of room for productivity gains in many markets in the APAC region, and, in terms of trends, we see a lot of industry consolidation occurring. [Ultimately], we are looking to improve efficiency of production and help producers overcome operational challenges,” ​added Bang Masden.

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