Novus CEO: Shift to indirect business model in China is economically sound

By Jane Byrne

- Last updated on GMT

© GettyImages/Klaus Vedfelt
© GettyImages/Klaus Vedfelt

Related tags China Novus

Novus International, Inc has announced plans to change to an indirect business model in China.

The company said the shift away from a direct sales operation in China is in keeping with its strategy to simplify operations and invest in markets that are aligned with its core strengths for driving sustainable growth.  

This critical decision allows us to focus on the expansion of our business in Asia and focus our direct investment where we have tremendous growth potential,”​ said Dan Meagher, Novus CEO and president. 

Novus’ three core operating areas are in the Americas, Europe, Middle East and Africa (EMEA), and in certain markets in Asia. The Indian market, in particular, is one that offers significant growth opportunities for the US headquartered feed additive supplier. 

“We have invested in India, to expand beyond monogastric, and develop our presence in the dairy sector there. We are also extremely strong in countries such as Thailand and the Philippines and we have a growing presence in Japan. EMEA continues to be a core focus market for us, across monogastrics, and we are looking to expand our presence in dairy in that region as well," ​continued the CEO.

Collaborative approach 

Novus has several options that it is evaluating, both with potential strategic partners and/or distributors, in terms of its new business model for the Chinese market, he said.

“I have a high degree of confidence that we will continue to maintain our presence there with some of our core brands but just taking a more indirect approach to the marketplace, through partners or distributors,” ​continued Meagher.

The move will allow the company to be more effective in terms of product registrations, the ability to do business in China, and moving its technologies into the marketplace, he told FeedNavigator.  “It will be a win-win for us and our partners. It is a difficult decision as it relates to our employees [in China], but it is a mechanism by which we can more effectively compete, it is a more financially viable solution.”   

Novus, he added, expects interest from other companies in acquiring its blending facility in China, potentially creating opportunities for its employees, its sales and technical staff, who have extensive market knowledge.

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