EuroTier: Jefo inaugurates production plant in Quebec, sets sights on AI in agriculture
At EuroTier in Germany last week, Emilie Fontaine, Brand and Product Vice President for Jefo, announced the inauguration of the company’s production plant in Saint-Hyacinthe, Quebec, Canada.
In an interview with Expana, Fontaine revealed that the facility, now re-valued at C$62 million, will produce 90,000 tonnes/year of micro-encapsulated animal nutrition products. The investment will enable Jefo to boost its current production capacity by up to 400%.
Fontaine also pointed to artificial intelligence (AI) as a transformative trend for the Ai in agriculture industry. “AI is going to be the next big trend,” she said. However, she acknowledged the significant barrier posed by the high cost of implementation, particularly for farmers. Despite this, “Over time, this trend will become undeniable (unignorable),” she predicted.
Jefo plans to implement AI technology with the construction of a new poultry research center in Canada. “All the plans are in place, and we are ready for construction. We hope to begin building in the next two years (by 2026),” Fontaine stated.
Fontaine addressed the challenge of integrating sustainable practices and new technologies while managing costs. She emphasized that manufacturers must respond to customer demands, even if it means higher expenses. “We (producers) will always respond to the demand of our customers,” she said, adding that consumer-driven sustainability could ultimately benefit all stakeholders.
“Unhappy animals are unprofitable,” Fontaine explained, underscoring the importance of animal welfare in agri-business. “It is in everyone’s interest to respect the animals.” Fontaine noted a stark contrast in priorities between developed and developing markets. “In developing countries, there is more of a push for affordable protein, while in developed markets, the push is for sustainability,” she said.
Jefo, which operates in over 60 regions worldwide, continues to adapt its strategies to local markets. “We have long-term relationships with local distributors,” Fontaine said. While no new collaborations are currently planned, the company is eyeing further international expansion in the future, said Fontaine.
Europe lysine sources report mounting concern over EU antidumping probe – EuroTier
The EU’s ongoing antidumping investigation into imports of Chinese-origin lysine has been the number one topic at the industry event EuroTier in Hannover this week, with hesitant buyers, widespread concerns over stock levels and Q1 lysine coverage in Europe, and wide price offer ranges having been reported.
In May 2024, the European Commission (EC) initiated an anti-dumping investigation into Chinese lysine imports into the EU following a complaint from METEX NOOVISTAGO (now Eurolysine), the EU’s sole producer of lysine.
Several market sources have speculated about the possible percentage increase that could be applied to the price of lysine HCl imported into the EU. However, there is still no concrete answer from the EC, with updates expected on December 20 and January 21.
“We are fed up with the antidumping [investigation uncertainty] … it’s taking too long,” said one source on the selling side. It added that the big question now was how well traders in Europe had stocked up for Q1, acknowledging that market coverage was rather good for January, but less so beyond that month.
A reseller said that fixed-price offers for Q1 deliveries varied between €1.78-1.86/kg, going up to €1.90/kg and “increasing every day”.
Meanwhile, offers that include an antidumping clause vary between €1.68-1.69/kg, said the same source. “For us not being well covered for Q1 would have been dangerous. Waiting too long is not the safest option… buyers are looking into the fixed price offers and… running out of time,” said the reseller.
A feed manufacturer said it had “close to zero sales” for Q1, due to the antidumping investigation, with buyers remaining hesitant.
One producer also said that buyers were running out of time, while a second expected tight supply until April. It added that the market was now driven by non-Chinese producers that were able to offer material.
A trader said that a wider range of €1.65-1.90/kg would be a good reflection of the current market, considering the antidumping clause discussions.
DDP Europe lysine HCl spot prices were last assessed at €1.68-1.73/kg on 12 November, their highest so far this month.
Sources have previously said that regulatory uncertainties could support prices in the short to medium term.
EuroTier: Leading German feed producer DTC investing for 2025 after stable 2024
Deutsche Tiernahrung Cremer (DTC), Germany’s largest private manufacturer of compound feed expects to produce 2.25 million tonnes of compound/mineral/special feed in 2024 – a slight decline from 2.3 million tonnes of feed products produced in 2023. The company operates 15 locations, including two mineral and specialty feed factories in Wildeshausen and Memmingen.
Putting these figures into context, German compound feed production in 2023 amounted to around 21.7 million tonnes, representing a 1.6% y-o-y decline, according to March 2024 data from the national feed association Deutscher Verband Tiernahrung (DVT). This decline was attributed to the contraction in pig feed production, which fell by around 500,000 tonnes, or 5.8% year on year. Swine feed dominates the German market, representing around 8 million tonnes or 37% of the total feed production in 2023.
Speaking to Expana at last week’s EuroTier trade show in Hannover, Germany, Dr. Heinrich Kleine Klausing, Managing Director at DTC said a decline in pig feed production at his company’s factories, in line with the drop in pork production in Germany, can be expected for 2024, but piglet feed production will be relatively stable. He noted that the smaller farms in South Germany are growing, and the overall technical knowledge of pig farmers related to feed efficiencies is improving.
Christoph Klöpper, CEO of DTC, further explained that 2024 will be a year of stability in terms of organic growth for the company’s compound feed and companion animal feed operations. This follows a year of high-level strategy review in 2023.
Klöpper said that his firm is planning a double digit million-euro investment in 2025 to continue to modernize its operational footprint and realize energy savings.
Commenting on this, Kleine Klausing added that energy costs in Germany are high compared to other countries. “Energy prices won’t decrease but we have factored that in. It’s the spikes which are of more concern,” he said.
Volatility in raw material costs remains a key concern, they said, mentioning that DTC purchases approximately 2 million tonnes of grain per year. However, Klöpper stressed that political risks are increasingly becoming a major factor in risk management strategies. In Germany, the company will keep an eye on the upcoming election. On the international level, the business expects more and more protectionist measures, notably from the US in the wake of Donald Trump’s US election victory.
Klöpper and Kleine Klausing went on to say that DTC will also be investing in the digitalization of its processes. Any new investments and replacement investments will be measured on their sustainability criteria.
DTC, a wholly owned subsidiary of Cremer Holding, employs approximately 800 staff.
EuroTier: Alltech discusses growth and market challenges in Europe
Patrick Charlton, Vice President for Europe at Alltech, outlined the company’s ongoing focus on acquisitions and organic expansion during an interview with Expana at EuroTier in Germany last week. “We are absolutely still in the acquisitional marketplace,” Charlton stated, “Organic growth has always been a significant part of the company’s plan, which was further enhanced by acquisitions and mergers… we see no reason why this won’t continue into 2025.”
Alltech’s latest acquisitions include a majority stake in Swiss phytogenic company Agolin in May 2023 and the Raisioaqua fish feed production facility in Finland in February 2023.
Charlton addressed the ongoing effects of African Swine Fever (ASF) and avian influenza on the industry: “I talk to any customer, and they all say that ASF and bird flu have impacted their business. I think that will continue to be the case. There are a number of technologies being explored, but they are currently very new.”
Charlton highlighted regional differences in protein consumption trends. He noted that Latin America and Asia are expected to drive global protein consumption growth, while Europe may see a decrease. “There is an expectation for meat consumption to increase in growing wealth regions such as Asia and Africa. In Europe, however, we anticipate a slight rise in vegetarianism and veganism. This isn’t anything to worry about; we do not see alternative meat producers as competition,” Charlton said.
Charlton noted that European AI in agriculture has experienced increased unpredictability in recent years, influenced by events such as COVID-19, Brexit, and the Ukraine conflict. “Up until COVID-19, European agriculture was pretty stable – low interest rates, consistent raw material prices, and steady supply chains. Now, Europe mirrors the unpredictability more commonly seen in Latin America,” he said.
Despite these challenges, 2024 has been less difficult than anticipated. Charlton cited factors such as increased competition in shipping, stabilized transport costs, and improved logistics as contributing to a less challenging year. “There are more boats on the water, which has created competition, driving down transport costs and freight rates. Fuel charges haven’t risen as much as anticipated, though we’ve seen significant toll increases, particularly in Germany,” he noted.
Charlton also highlighted the adjustments made by UK exporters to post-Brexit challenges, stating that these issues are unlikely to persist into 2025.
Charlton concluded by noting that while supply challenges remain, they may encourage innovation within the industry. “These challenges will positively impact the industry by driving creativity among players. There will be winners and losers, but the industry is adapting,” he said.
EuroTier: European Protein on track with Malaysian factory; doubling South Dakota capacity
European Protein, a Danish family-owned protein producer, confirmed that its first YH European Protein Asia Sdn. Bhd joint venture factory (with Malaysia’s Yenher Holdings), which required a €13.5 million investment, is on track to be completed by Q4 2025.
Speaking to Expana at EuroTier in Germany, Jens Legarth, CEO of European Protein, said that the first Malaysian factory will be built in three phases, with initial production capacity targeted at 25,000 tonnes/year, and with an aim to raise capacity further from then onwards. A second manufacturing plant in Malaysia is also planned but timing is not yet finalized.
The two feed protein fermentation plants will supply the Southeast Asian markets and use European Protein’s biotechnological fermentation process to transform plant proteins and byproducts into high-value feed ingredients.
Legarth also said that European Protein is currently doubling its production capacity at its US fermentation factory in Sioux Falls, South Dakota. It will mainly use soya as a raw material, but also rapeseed.
“This project will be completed by mid-2025 and we may even treble capacity in 2026,” he commented.
CJ says reviewing plans as bio division rumored to be for sale
A CJ Bio spokesperson told Expana today that “CJ is reviewing various strategic plans for the bio business, but no specific decisions have been made yet.”
This follows industry speculation that CJ Group is in confidential negotiations with several global private equity funds to sell its bio business division, aiming to secure funds for new venture investments, reports Mael Business Newspaper, a Korean economic and financial newswire. The CJ Bio division oversees the animal nutrition & health business.
The division saw a 75% profit surge in Q3, the company cited “stable demand for feed amino acids, with strategies to expand key products and identify new demand opportunities.”
Local media also speculates that the funds from the sale could be used for a merger or acquisition, mirroring the group’s move in 2018 when it sold CJ HealthCare, its health functional food division, for ₩1.3 trillion (approximately $932 million at today’s exchange rates) and used the funds to acquire the US frozen food firm Schwan’s Company the following year.
It is understood that Morgan Stanley is managing the sales with formal bidding expected to commence Fas early as next month, reports Mael Business Newspaper.
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