Japanese feed market offers significant potential: Nutriad

Nutriad’s sodium butyrate will be the first of its products to get exposure there under this arrangement.

We carried out a Q&A with Erik Visser, CEO of Nutriad, to get the low down on that deal and his perspective on the Japanese market.

FeedNavigator: Can you explain why there is a need to use a distributor in the Japanese market, and why did Nutriad choose this company in particular?​

Erik Visser:​ Around the world, Nutriad works with a mix of distributor and direct sale [approaches] to get to market.

With 24 million metric tons (MT) of annual feed production, Japan [offers] significant potential.

However, the Japanese livestock and feed sectors are traditional and complex and, in our view, best handled by an established Japanese company that can build on an existing network and understanding of the local market and culture. 

Watanabe Chemicals is a recognized and trusted Japanese company with a strong distribution network. It currently manages a portfolio that includes active pharmaceutical ingredients for the feed market. Adding the Nutriad portfolio will allow Watanabe to further penetrate the feed additive segment.

FEN: Does Nutriad have any kind of a presence in Japan currently?​

EV:​ Nutriad introduced APEX, a phytobiotic, 10 years ago, followed by Sanacore GM for aquaculture application last year. These products were introduced with selected direct accounts with whom we have a relationship in various countries. However, Nutriad, did not appoint a fully-fledged distributor before Watanabe Chemicals and we feel that is needed to really realize our ambitions in Japan.

FEN: Will Nutriad’s full product portfolio be marketed in Japan?​

EV:​ Eventually yes. Sodium butyrate in the form of Adimix Precision will be the first to launch in Japan due to the immense level of interest that we perceived from producers and feed mills. Next steps will include [the launch there of] our palatability and mycotoxin management portfolio.

We see Watanabe as our partner for the complete portfolio, but will take a step-by-step approach as introduction of products is concerned.

Japan is an important country for marine fish production, including yellow tail and red seabream. Nutriad has vast experience in health promoting natural additives in Europe, where the Mediterranean region produces over 300,000 MT of seabream and seabass. Natural feed additives have been shown to be crucial to reduce the impact of parasitic and bacterial diseases on marine fish production in Europe and it is very likely the same technology could resolve some disease issues in Japanese aquaculture.

FEN: Nutriad attended a recent trade show in Nagoya.​ What did your conversations with feed millers and producers at that event tell you about the challenges and opportunities in Japan?​

EV:​ Volumes in the Japanese feed market have been flat at best over the past five years. Some 86% of feed production is in the hands of the top seven feed mill companies. Few to no new feed mills entered the market in past years.

Japanese feed millers and producers [already] have a high level of technical knowledge, yet they show interest in having access to the kind of technology and science Nutriad can offer.

In the end Japanese customers face similar challenges [as producers] in other markets: [pressure to] produce more with less; reduce dependency on antibiotic growth promoter (AGPs); [the need for] cost efficiency and proper farm management and feed and food safety.   

FEN: How extensive has been the reliance on AGPs in Japanese farmed animal and aquaculture production, and what limitations are being imposed there in relation to the use of antibiotics in farming?​

EV:​ In Japan, the use of antibiotics for growth promotion is still allowed. There is, however, a trend to reduce and limit the usage of AGPs. For example, a ban on colistin sulphate in feed was recently implemented there. 

As always there are companies that will not wait for government regulations to enter into effect, but actively seek partnerships that allow them to develop their knowledge base and gives them access to products that fit in a non-AGP diet. 

There is more and more [interest] from feed mills and farm producers in antibiotic alternatives because of the concerns over performance and gut health control. 

Specifically in aquaculture, [pressure on] the use of antibiotics has been a big issue for Asian producers that depend heavily on export markets where zero tolerance regulations are in place.  In shrimp production, [which has been] plagued by different bacterial diseases such as the Early Mortality Syndrome (EMS), the use of antibiotics as therapeutics to combat diseases is no longer acceptable. The shrimp industry in Asia is currently adopting novel strategies to prevent diseases, including specific pathogen free post-larvae, biosecurity measures and water remediation. Furthermore, the use of functional feeds based on natural additives with antibacterial and anti-parasitic properties have proven to be an essential component of such prevention strategies.

FEN: What is Nutriad’s long term Asian strategy? ​

EV:​ The Asian market still enjoys the fastest growth globally; Nutriad follows the feed numbers, and continues to aggressively invest in manpower, research and marketing.

Recent bans on the use of AGPs generates additional interest in the products we offer. Throughout Asia, we see pressure on the use of antibiotics in feed and a growing interest in alternative solutions. Our research, scientific data and our experience in markets where the use of AGPs has been banned makes us an interesting partner for producers that are being forced to reduce or eliminate the use of AGPs in their local markets.

We have recently separated China from APAC, treating it as an individual region. In China, were are merging the palatability portfolio (held by FFI and produced in China for the Chinese market) and the non-palatability portfolio (held by NATS (Nutriad Trading Shanghai)) into one single channel to market Nutriad in China.

Traditionally, the focus there was more on monogastrics, we are also [now starting to focus] on ruminants and aquaculture [in China].

We are also promoting our palatability range more actively outside China, supported by a dedicated regional resource.

We are exploring local production of a selected part of our portfolio in either China and/or India. However it is too soon to say any more about that as we are [still at the] investigation stage.

Asia is key in our aqua specialties strategy. We have a dedicated sales team and – in many countries – dedicated distribution partners. Focus markets for aquaculture in APAC are India, Indonesia, Thailand and Vietnam.

Following the acquisition of Nutriad by Adisseo, we are working to convert the Adisseo product portfolio into aqua specific solutions. Not a one-product-for-all-species approach that we see practiced in the market, but combining the strengths of both portfolios into specific aqua programs and within aqua for the specific species - fish and shrimp.