The company said the new plant will allow it respond to customer demands more efficiently, whilst providing total accuracy and consistency. It also intends to offer bottling services to other companies.
We spoke to Anpario chief executive, Richard Edwards, to hear more.
“Primarily, we made the investment because we have our own volume in three [liquid product] areas – one is our oregano essential oil liquid, Orego-Stim Liquid, which we provide to both small farmers and some larger ones, where it goes into the drinkers, and we also have organic acid products going into 0.5L and 1L bottles, and we have an omega-3 formulation for dairy cow fertility and egg enrichment as well.
“We were previously outsourcing that volume, but, with toll manufacturing, the lead times were becoming unpredictable or it was just taking too long; we decided we needed a quicker turnaround to grow that part of the business.
“Moreover, the savings that we could make on efficiencies by bringing that production in-house meant the payback was around four years … so the capital investment made sense, [in terms of] the return.”
The bottling plant, the result of a two-year project, has quite a significant production rate, and it is state of the art, continued Edwards.
It has a throughput of over 2,000 bottles per hour.
“We are quite happy to work with other companies and offer that bottling service to get a quicker return on the plant. We will look to work with the right kind of company and the right kind of product, in the area of animal health or related businesses.”
The feed additive supplier also reported that its sales for the six months to 30 June 2019 were in line with the equivalent period in 2018, while profit before tax for the period rose to £2.3m from £2.2m.
There were a couple of reasons for the lackluster growth. The US-China trade dispute and the ASF outbreak in China and surrounding regions meant trading conditions were more challenging than the prior year period.
“Asia has been quite tough for us this year. It is not so much ASF, that has impacted, but the bigger issue is the US-China trade dispute.
"What has been happening in Asia is that there has been quite of lot of frozen chicken and pork from the US that used to go into China but because the tariffs have been increased and the Chinese are not buying US meat, those frozen products are [ending up] in some other markets in the Asian region. We see the Korean swine sector is struggling quite significantly because of cheap American exports.”
Edwards is somewhat optimistic, though, of there being a resolution of the tariff war between China and the US in the not too distance future as Trump’s US presidential campaign gets underway.
Lower sales growth for Anpario in Asia was offset by strong recovery in the Latin American and Middle East markets, said the CEO.
“There is always turbulence in different regions at various times of the year, and we just have to work around it and keep going. The beauty of Anpario is that it is diverse geographically so whereby, last year, we had a very poor Latin American business due to various geopolitical issues and the strengthening of the dollar, we are having a very strong Latin American business this year, partly due to some of the business development work we have been doing, but also [down to the fact that] quite a lot of the exports from Latin American are going into China, as Latin American farmers are not subject to the same tariffs as US meat producers are.”
And Anpario has had its best six months ever in the Middle East, said Edwards.
“There are still a few disruptions in the Middle East. But some of those markets have done well. Iraq has now started to come back, it is doing more of its own production, and we have been benefitting from that.”
The company is also seeing continuing progress in the US, with it achieving 14% sales growth compared with the same period last year. Orego-Stim contributed significantly to the performance, it said.
“Orego-Stim Liquid is recognized as a leading product in the essential oil area in the US now. We are working with some of the big integrators; it is being used in some of the antibiotic-free and organic programs. We have also done quite a lot of work on the layer side. We are able to get extra eggs and better size distribution of eggs, so we have been picking up quite a lot of layer business because of the returns they are getting from using the product.”
Laying hen trial results are also supporting Anpario's sales in the US. The company has kicked off a study with Ken Anderson at North Carolina State University, a leading institution in rearing and egg laying research.
“We are pleased with the progress to date in the US, but there is more to come,” added the CEO.
Online sales channel
The feed additive producer also recently launched Anpario Direct, a new online platform, initially only for the UK market. The platform is targeting smaller professional dairy or pig farmers that home mix and do not need a ton of products at a time. It also sees online business coming from niche segments such as equine and game birds.
Organic layer farmers would also be ideal customers for the online channel, with products available in both liquid and powder form.
“We now have all our products online, net priced. We are bringing products that have been tested and used by the big integrators globally to the smaller customers.
“We will be looking at launching [the platform] into the Northern European markets next year.”
The platform includes lots of technical data and a chatroom to address farmer queries, he said.