feed enzyme preparations have also been in the hottest in the past two years. The prototype of the status of domestic mainstream manufacturers has been shown, but facing such a big cake in China, foreign mainstream manufacturers such as Novixun will not give up easily. Do they still have a chance?
China feed enzyme market are booming in recently two years with many strong local companies, while international companies like the DSM/Novozymes Alliance (Alliance) will not give up on this big potential. Do they have any chance?
Text/Photo Frontiers of Agriculture and Animal Husbandry How big is the market for feed enzyme preparations? Just look at the manufacturer's booth, you will know that at the Animal Husbandry Expo, the enzymatic preparation exhibition areas are more beautiful and exquisite than the other; how popular are feed enzyme preparations? Just look at the forum for feeding enzyme preparations, you will know that the forum that started at 8 o'clock and the seats for the first half were already full at 7:30. China is a traditional major livestock and poultry breeding and aquaculture country, and its feed enzyme preparation market potential is huge. In feed enzyme preparations, they have been deeply engaged in many years and have become the world's first feed enzyme preparation DSM -Novi Xin Feed Enzyme Preparation Alliance naturally does not want to lose such a prosperous market in China.
How big is the China feed energy market? You can tell by watching energy companies’ amazing booth in feed exposure. How hot is the China feed energy market? You can tell by counting how many attendees in feed energy conference. China is a traditional big livestock and aqua production country with a great potential on feed energy. Not a surprise, the global feed energy leader Alliance do not like to lose China feed enzyme market with such potential.
DSM-Novixin Feed Enzyme Preparation Alliance (hereinafter referred to as the "Alliance") was established in 1998. It can also be called the exclusive global cooperation. Its purpose is to cooperate with the two companies in the feed enzyme preparation section.Novixin focuses on the research and development and production improvement of enzyme preparations, and DSM focuses on product applications, market sales and technical support.
The Alliance was found on 1998 with exclusive collaboration between two leading companies in their own area. Novozymes are focusing on energy RD and production optimization, while DSM are focusing on product application, sales and direct customer facing activities.
Picture left: Mads Brøgger Pedersen
Picture right: Robert, Director of Alliance Vergo
In the second half of 2018, the alliance adjusted its strategy and formed a special team to explore the Chinese market. In October, Robert Vergo, the Alliance Director, and Mads Brøgger Pedersen, senior scientist in the Danish Feed Application and Science Support Department, attended the second Feed Enzyme Preparation Technology and Industry Development Conference as the DSM Novice Preparation Alliance.
The Alliance made a strategic adjustment and built a dedicated team to developing China feed enzyme market in late 2018. Both Robert Vergo (Robert), the Director of Alliance, and Mads Brøgger Pedersen (Mads), the Sr. Scientist of Novozymes Feed Application, attended 2nd China Feed Enzyme and Technology Conference on behalf of the Alliance.
Why can DSM Novian feed enzyme preparations be the world's number one in sales? How do you view the role of enzyme preparations in irresistible substitution? What are the new research and development directions for foreign feed enzyme preparations? Regarding these issues, Agriculture and Animal Husbandry Brief conducted an exclusive interview with Robert Vergo and Mads before the meeting.
Why are the Alliance the top one feed energy company in the world? How do they see the position of energy in anti-biotic free production system? What is the future direction of global feed energy RD?TheAgriculture FrontierinterviewedRobertandMadsbefore the conference for above questions.
R&D!R&D!R&D!
RD!
DSM-Novi News Feeding Enzyme Preparation Alliance has a share of 28-30% of global feeding enzyme preparations, far ahead of second place. Why can the alliance's market share of feed enzyme preparations be ranked first in the world? Robert and Mads have repeatedly mentioned R&D.According to Robert, Novixon's R&D is divided into two parts, one is basic R&D. It does not target the industry, but only conducts the most basic R&D innovation; the second part is the application R&D department where Mads is located, which is a relatively large R&D department. Mads' main work is to screen the feed enzyme preparation industry. "We cover R&D from basics to applications," Robert said.
The Alliance holds 28-30% market share of global feed energy industry and far above other companies. Why are the Alliance the top one feed energy company in the world? Both Robert and Mads were mentioned about RD capacity. Robert mentioned about that Novozymes RD is dividing by two parts: the 1st part is basic RD which is not specific for any industry; the 2nd part is application RD which Mads located. The major responsibility of Mads is to screen specialized energy for feed industry. “We have covered from basic to application RD”, Robert mentioned.
How strong is Novixin’s research and development? First of all, in terms of R&D capital investment, Novixon invests 13-14% of its annual turnover in R&D; secondly, in terms of the company's employees, the total number of people in the world is 6,500, and its R&D team has 1,400 personnel, accounting for more than 20%. So much personnel and funds have made the alliance maintain its position as a leader in feed enzyme preparations. “This is also the fundamental reason why we can continue to inject new products and provide new biological solutions,” Robert said. It is worth mentioning that Novixun established a R&D center in China as early as 1997, involving new enzyme screening and industry applications, and expanded to 10 business departments such as product optimization, regulations, and intellectual property rights. There are more than 150 scientific researchers.
How strong is Novozymes RD? First, Novozymes are dedicated 13-14% of total revenue to RD. Second, Novozymes has 6500 employees in total with 1400 RD employees which is more than 20%. That is why the Alliance can keep leading the global feed energys industry. “That is why we can keep developing new products and providing new biological solution to our customers”, Robert said. It is worth mentioning that Novozymes was established their China RD center in 1997, which involves new energy selection, industrial application, production optimization, etc. This RD center has more than 150 scientists now. They are making the Alliance stronger within China by expanding their team with the best local scientists.
When we further understand Novozyme's R&D process, we know where they are strong. "Novixin is not like its competitors who screen enzymes from hundreds of microorganisms and . Novixin screens from millions of microorganisms. First, a batch is screened out by specific conditions, then a batch is screened out by application conditions, and then a batch is screened out by animal conditions, and finally a product is produced." Mads introduced that in this process, it is precisely because Novixin's strong R&D strength can allow them to screen from millions of microorganisms that the enzyme preparation products have the best performance performance and the best economic benefits in the expansion and development process. "In addition to the screening of enzymes, we also have the best scientists engaged in protein engineering, able to transform the screened enzymes and make some upgrades based on the best enzymes," Mads added.
We can consider their RD process and know how strong is the Novozymes RD. “Not like other competitors who are selecting their energy from few hundred microbials, we are selecting enzyme from millions microbials. We started our selection under certain conditions. Then we are keeping section under feed industry condition. The final step of selection is animal trials.” Introduction by Mads. During this process, they can screen and select target microbial with best production economy and energy product from millions of options. “Other than energy selection, we have the best scientist for protein engineering who can do further upgrade for our energy”, Mads said.
In addition, DSM will also use their three global animal R&D platforms (France, China, and the United States) to carry out application R&D, and study the application solutions for products under different formulas and breeding conditions in response to the problems in the breeding industry. It is understood that the DSM China Animal R&D Center, established in 2014, focuses on the development and support of DSM global products and local solutions in China.
In addition, DSM will use their top three global animal nutrition and health RD centers (France, China, U.S.) to do application RD which focusing on feed and livestock in order to find different solution on different diets and raising conditions. The DSM China RD center was founded in 2014 and ready to offer varies local solutions to the customers in China.
From left to right: Robert Vergo, Mads, China Regional Heads Luo Zhaohui, Dr. Guo, Agricultural and Animal Husbandry Frontiers Luodan
Value of Enzymes
MuYong questioned that the products of the DSM Novi Trust Feeding Enzyme Preparation Alliance are outstanding, and they have achieved remarkable leading positions in Europe, Africa, Middle East , Latin America, etc. However, in China, a fast-growing market for feed enzyme preparations, they are still looking for opportunities.
Without a doubt, The Alliance feed energy is remarkable. They have already made significant progress in Europe, Africa, The Middle East, Latin America. However, they are looking for opportunity in China, the fast-growing market for feed energy.
The first problem that lies in front of the alliance is price. The prices of similar enzyme preparations in China are generally lower than those of foreign manufacturers. How can feed factories facing huge cost pressure choose higher-priced products? Robert admitted: "We have always defined value!" Robert believes that value can be defined in many aspects, and price is only one aspect. The value can range from the alliance research and development to screening the best enzymes, to ensure the quality of the enzyme, performance performance, product batch stability, usage effect, etc., including accumulating a lot of animal experiments. “The input-output ratio using our products is the best, so we have always emphasized value rather than simple price comparisons,” Robert stressed.
The first challenge is the price. Local companies can offer feed energy with relative low price. How to convince feed mills with cost pressure to choose high price enhance product? Robert said, “We are always defining value!” He believes that the value can be defined by many areas, the price is only one of them. The value of Alliance can be seen from microbial screening, quality assurance, batch stability and Enzyme performance, as well as animal trial. “Our product has the best return on investment. So, we are always focusing on value, rather than price comparison.” Robert emphasized.
“High-quality products and excellent performance are the reasons for our prices, but we are by no means devalued. From the perspective of world market share, our market share is the highest in the world, and manufacturers in most countries still choose our products. On the one hand, we are very confident in the value of the product; on the other hand, the high price is also the value brought to the market by our products.” Robert explained that there are pressures on prices worldwide because more and more customers are thinking that it is not just about comparing the price per kilogram of enzyme, but about how much USD you can earn by investing 1 USD per ton of feed.
"The high quality, performance and standards is the reason for our price levels. But we are not saying that our competitors have low quality. We are very confident and have the highest market share in the global feed energy industry because of the high value we can provide to our customer." Robert explained. There is always price pressure in the global feed energy industry. But more and more customers are understanding that they should compare how much more money they can earn by investing one dollar in their feed, rather than focusing on how much money for every kg of enzyme.
can only improve rather than replace
Improvement rather than replacement
China's feed ban has entered the countdown stage. For the hot experience of replacing replacing in China, what experiences can foreign countries learn from?
Antibiotic free production system is a very hot topic in China feed and livestock industry. Is there any advanced experience in other countries we can use for China?
In this regard, Mads said that in terms of the feed additives section, the alliance is a feed additive company, not a veterinary drug company, so they cannot say that they completely replace antibiotics as drugs to add, they can only say that they can improve the corresponding effect. "It's impossible to say it's a replacement," Mads stressed.
Mads mentioned that the Alliance is feed additives company, rather than vegetable medicine company. So, they cannot claim to totally replace antibiotics by using feed additives. They can only provide solution to improve the condition. “Total replacement cannot be claimed”, Mads emphasized.
Faced with the overwhelming domestic irresistible propaganda, Mads believes that commercial propaganda is easy to do, but the alliance is a science-based company. As the irresistible part, feed additives can only be a small part, and many other aspects such as on-site management of the farm, veterinary medicine, etc. are required as a whole. He also believes that one day in the future, he can achieve true resistance, "but only a small part of what feed additives can do."
When talking about many promotions with regarding to antibiotic free in China, Mads believes that any commercial promotion is easy to do, but the Alliance is science based company. Feed additionals is small part of antibiotic free production system. It should combine with farm management, vegetableinary medicine, and many other areas. He believes there is one day that we can realize real antibiotic free production system. “But feed additives are a small part of it”.
Similarly, Robert also believes that resistance is a global problem, not just a problem of feed enterprises, it requires coordination at the government level.
Additionally, Robert believes that antibiotic is not only a feed producer’ issue, but also a global issue. It needs collaboration and support from government.
Postscript
In October, Robert Vergo, director of the DSM Novixin Feed Enzyme Preparation Alliance, and Mads Brøgger Pedersen, senior scientist in the Danish feed application and science support department, attended the feed enzyme preparation conference. I seized the opportunity to interview two big names, and wanted to dig some dry goods for this world's number one feed enzyme preparation. If my English level is not enough, I also found Mr. Luo Zhaohui, the head of Novixin's feed enzyme preparation, to assist in the translation. But after the last two hours of conversation, I felt that I hadn't found any information, and I felt that I was too inferior and planned to leave it alone. Recently, after communicating with a friend from a foreign company, I recalled the exchange with two Novice big names and found that my IQ was a bit urgent, so I came up with this article.
