27 May 2019 – With the increased pressure to end the use of antibiotic growth promoters and preserve the efficacy of antibiotics, countries around the world are moving fast to find suitable alternatives. And as the world’s biggest producer and consumer of animal products, the Asia Pacific region is uniquely positioned to lead the global fight against antibiotic resistance.
Probiotics – preparations using live bacteria and yeasts that can balance out gut microflora in animals resulting in improved overall health and well-being – are fast becoming the antibiotic alternative which growers in a lot of countries are turning to. Claiming to be the oldest and largest producer of specialised bacteria in the world, Chr. Hansen is in a prime position to make this worldwide undertaking work in its favour, especially in the Asia Pacific region.
Probiotics in animal feed globally is likely to reach the value of USD 7 billion by 2025, MarketsandMartkets says in a recent report. “And Asia Pacific is expected to drive the demand for probiotics,” Glenda Leong, Chr. Hansen’s Director of Animal Health for the region told Feedinfo. “Primarily, we see curbing antibiotics as the main growth driver, as the presence or risk of developing antibiotic resistance has led governments across Asia to increase the speed of phasing out antibiotic growth promoters. At the same time, consumer awareness and activism are putting the spotlight on the use of antibiotics in livestock which ends up on the table as food.”
This trend represents quite the opportunity for the company. The Asia Pacific region is home to over half of humanity, and accounts for 36% of worldwide feed production according to the 2018 Alltech annual feed survey. As major production countries such as China, Thailand, Indonesia, and Vietnam are implementing recently drafted National Action Plans to reduce antimicrobial resistance, huge markets are opening up for those looking to provide the natural antibiotic alternatives that the Asian animal agriculture industry and governments are increasingly looking for.
“Two years ago Chr. Hansen made the strategic decision to establish our own distribution network within Asia Pacific”, explained Ms. Leong. “It is with the recognition that Asia Pacific is one of the fastest growing regions for feed additives and that the market will be seeking alternatives to antibiotics with the increasing demand from governments and consumers.”
The decision paid off in double-digit growth for many of the products and solutions the company currently markets in Asia Pacific—and this in spite of the fact that Chr. Hansen currently does not have any production facilities in the region.
“In Asia Pacific we are present in more than 10 countries,” said Henrik Joerck Nielsen, Chr. Hansen’s Senior Vice President of Animal Health. “We tap on the different plants we have across the world to ensure that our customers will have supplies of the probiotics that they need. Our global operations and logistics team ensures that our customers receive their orders the fastest possible.”
Currently the company has plants in Germany, Denmark, the Czech Republic, the United States and Brazil, and it is not ruling out the possibility of establishing a production facility in Asia Pacific in the future.
For now it is focussing on further establishing itself in the region. According to the company, only 10-15% of industrially produced livestock in the world consume probiotics at some point in their lives. And with Asia Pacific representing a significant portion of that number, the company thinks there is room for growth.
It is an optimistic view of a probiotics market that has quite a few players already, including major rivals. The competition is especially fierce when it comes to the poultry segment due to probiotics for chickens being much simpler to manufacture than those for ruminants. Chicken is also one of the most popular proteins in Asia Pacific, which makes it a large potential market for probiotics. But Chr. Hansen is confident on its presence in the poultry sector and how it plans to service it.
“Every segment has its own opportunities and challenges,” Ms. Leong revealed to Feedinfo. “At Chr. Hansen we are fortunate that we have a wide range of solutions for the poultry segment and strong scientific and technical teams to support our customers when required.”
“Poultry is after all the second most consumed protein in Asia after pork. It is and it will continue to be an important segment,” she continued.
The company is also clear on how it plans to contend with the rapid spread of African swine fever in the region. According to a report by Rabobank, China, the world’s biggest producer and consumer of pork, will lose around 200 million pigs to the disease in 2019; roughly 30% of its hog herd. Chr. Hansen, like many feed additive producers active in the region, is keeping a close eye on developments and putting in place strategies to combat the effects of the disease on the business.
“There is no denying that African swine flu is a major concern. The impact is not just felt by the farmers, feed producers or feed additives companies, it is also a major concern for food manufacturers and consumers,” said Ms Leong. “Across the board, for companies supplying swine related products, there will be some impact felt. At Chr. Hansen the impact has been somewhat negated by the fact that we do have a wide range of solutions covering almost all the segments.”
Looking past China’s continued struggles with the hog disease, Chr. Hansen is positive about the future of probiotics in the Asia Pacific region as a whole. The company is betting on the growing demand for natural alternatives in animal feed to drive demand there and secure future prospects, and is studying very carefully the possibility of applying probiotics in aquaculture.
“The use of probiotics as a supplement to livestock is an effective, sustainable, natural alternative to antibiotics,” added Dr Joerck Nielsen. “As the Asia Pacific region continues to move away from the use of antibiotic growth promoters, we expect to see growing demand for probiotics.”
As for how the company’s plans to cater to and adequately service this projected growth in demand, considering its short history in the region, Dr Joerck Nielsen reassured Feedinfo that it will be relying on information from its teams on the ground to develop strategies.
“We have in place a dedicated regional technical, commercial and marketing team that allows us to listen and understand our Asia Pacific customers in their local context much better and bring Chr. Hansen’s global technology resources closer to them,” he went on to say. “We will continue to grow this team to ensure our customers experience a high [level] of service and support.”
It is clear Chr. Hansen is playing its cards close to its chest when it comes to specifics about future probiotic production plans in the Asia Pacific region. What can be said for certain is that it is looking at the ever-increasing global move towards antibiotic alternatives in animal feed as a golden opportunity to further establish itself a major player in feed probiotics. And the Asia Pacific region will be one of the most important stages that move will play out on.