14 May 2019 – In recent months, Cargill Animal Nutrition has opened a premix plant in Jordan and announced investments in other premix facilities in Ohio, India and China. The plants in Ohio, China and India will all be in construction in 2019 and 2020. And there are a few others in the works, but details on these have yet to be disclosed.

Feedinfo News Service was able to talk to Chuck Warta, President, Cargill Premix and Nutrition about the rationale behind these investments in the company’s global premix foothold.

But before discussing these investments, Warta provided his view of the global premix market and how it will bounce back from the ongoing African swine fever situation.

“Given the tremendous size and scope of the African swine fever outbreaks and the number of animals that have been lost, for we’ll certainly see a short-term decline in demand for feed and feed ingredients,” he said. “But the world will respond and adapt. Pork prices are rising around the world and there will be increased opportunities for production.”

Cargill’s President of Premix and Nutrition argued that the outlook for the global premix market remains positive and growing, estimating current growth at slightly under 3% – closer to 2.5%.

“We expect the rate of growth for protein demand to begin to slow due to factors such as demographics and consumer preferences, which vary geographically. Then you can add on the impact of African swine fever,” he commented.

Chuck Warta
President
Cargill Premix and Nutrition

Fragmented Markets

According to Warta, the global premix landscape has changed in the way that customers are increasingly seeking more technical and specialised products.

“Globally, there are some major players who are present everywhere, but markets are actually very fragmented. It’s rare to see a market where one company has a 40 or 50% market share—25 or 30 is more likely. We also see very strong regional brands in a lot of the largest premix markets, and we do not expect that to change dramatically,” he said.

He added: “I think the way that we talk about premixes today is very different than how we used to. Our current-day premixes are highly concentrated and include multiple additives and technical dietary components. So rather than a ‘vitamin premix’, they are complex nutritional offerings with enzymes, phytogenics, probiotics… and vitamins. I think this trend will continue.”

However, as premix solutions become more technical and specialised, Warta is of the opinion that the fragmentation may increase.

“People will want new technologies in their premix and new players will be able to survive with a smaller market share. There will be many disruptors to the traditional players, and that will keep things competitive,” Warta added, saying that value can be generated by companies when taking a more customised approach to formulation.

Cargill’s premix capacity expansion projects are therefore seen to be in line with the growth recorded in specific customer segments – rather than meeting general demand.

“For Cargill’s premix and nutrition business, capacity expansions are primarily about new capabilities that will meet customer needs in a growing segment,” he commented. “We have approximately 50 plants in 22 countries around the world, but not all are premix-only plants. We have several facilities that specialise in serving a specific set of customers or have technical capabilities, like young animal nutrition or Diamond V, our animal health and well-being brand.”

Jordan

In mid-April, Cargill Animal Nutrition, via Provimi Jordan, opened a new premix facility in Amman, Jordan – a move seen in line with the firm’s commitment to the Middle East’s livestock and nutrition industry. The plant, which required an investment of USD 35 million, will have a production capacity of approximately 65,000 metric tonnes per year, nearly double the capacity of Provimi Jordan’s first plant. It produces a range of products under its Provimi brand, including premixes, concentrates and health additives.

Commenting on this plant, Warta said: “It will serve 20 countries in the Middle East and Africa region. In addition to the plant we opened a world-class laboratory there last fall. The facility’s lab allows us to back up our premix solutions with scientific, fact-based data to meet our customers’ needs.”

Ohio

In February, Cargill Animal Nutrition said its USD 50 million antibiotic-free premix and animal nutrition plant in Lewisburg, Ohio was expected to be fully operational in autumn 2020. Initially projected for 2019, the completion of the plant was pushed back after site engineers ran into a few, unforeseen obstacles such as the wet summer and a harsh winter in Ohio that caused a variety of delays both in working days and arrivals of shipments.

The new Lewisburg plant will include four production lines and it will manufacture 86,000 tonnes of non-medicated animal nutrition products per year, including specialty and custom blends, additives and Provimi-branded premixes. It will also have dedicated lines for pet food, poultry and ruminant feed. It will be Cargill Animal Nutrition’s seventh premix and nutrition facility in the US, alongside plants in Guymon (OK), Hereford (TX), Weatherford (TX), Fremont (NE), as well as in Lewisburg itself.

“We’re blessed that our customer based in the U.S. includes a set of highly technical, highly specialised and high-profile branded companies. These firms work closely with our team on both their current needs and anticipated future requirements to support their brands. Each of our plants in the U.S. has a unique set of capabilities: Weatherford, TX is a free-choice mineral plant; Guymon, OK and Hereford, TX are supplying primarily the feed yards in Oklahoma and the Texas panhandle; and Fremont, NE is a premix plant, like Lewisburg, OH. We work really closely with our customers—and our Lewisburg plant is a testament to that,” Warta commented.

India

In February, Cargill India has announced plans to invest USD 20 million in a premix plant in Kota, Rajasthan State. The investment is part of the company’s USD 240 million commitment made in November 2017 through a Memorandum of Understanding with the Indian Ministry of Food Processing Industries. The new plant will have a monthly manufacturing capacity of 7,500 tonnes, and will serve customers in the state, North India as well as export markets.

At the time, Imre Havasi, Managing Director for Cargill’s animal nutrition business in India, commented: “India is an important and fast-growing compound feed market. We are very thankful to the Rajasthan government for pledging their support to help us bring our technical know-how in the animal nutrition space to the state by setting up this premix plant. We are very positive that this investment will help customers, industry and community in the region.”

China

In April, Cargill Animal Nutrition shared its plans to build a new 120,000 tonnes-per-annum premix plant in Yichun, in the Chinese province of Jiangxi. The 48,000 square metre plant is expected to come online by December 2020. Among the plant’s features will be a special production line for AGP-free solutions, as well as advanced processing technology for young animal nutrition diets intended to enhance protein digestibility, improving feed intake and daily weight gain.

“The Yichun premix plant is actually a relocation of an existing plant in Nanjing. We took the opportunity to add premix capacity and a world-class young animal nutrition capability as part of the move. We know that China has 50% of the world’s pigs, so young animal nutrition can make a big difference here. There’s probably no place in the world where our work can have a bigger impact on the sustainability, performance and well-being of an animal per kilo of pork production,” Warta said.

“The demand for protein is increasing in Asia, driven by rising GDP, a growing middle class and population growth trends. We’ll continue to invest strategically in this region. India and China are two great, recent examples of how we’re investing to keep pace with our customers’ growth,” he added.