Pieter Nuboer, Vice-President, Animal Nutrition and Health, and President – DSM Nutritional Products, Asia Pacific visited India in the month of April to interact with customers to understand their challenges. In an interaction with Think Grain Think Feed, Mr. Nuboer further shares the company initiatives for sustainable product development, its expansion plans for India and much more. His leadership roles across different manufacturing and service industries in Asia have provided valuable insights into the fast-changing dynamics specific to this region. Below are the excerpts.
How do you compare the livestock market of the developed world to that of developing economies?
There are many differences between livestock markets in the developed world and those in developing economies. The scale of the industry certainly happens to be much bigger for the developed markets. Arguably, the concept of sustainability in developed markets is more about traceability and adoption of environmentally friendly processes often due to consumer and retailer pressures, whereas in developing markets it is more about survival & better profitability for the farmers. Moreover, consolidation is a feature of developed markets where we see many large integrators, while developing markets such as India do have massive market fragmentation.
What are the key trends emerging in the global feed industry?
Traceability is the key trend that is likely to have major impact on the way livestock production as a business is being carried out. An increasing consumer awareness leads to an increased demand for quality, brand equity and perceived naturalness in foods of animal origin. Today’s consumers are keen to know about the products that they are consuming and are looking for products that they can trust. Increasing consumer awareness through social media in developing markets will lead the push for sustainability in product quality.
In the ‘Change the World’ list by Fortune Magazine, DSM has recently been recognized as one of the top 50 companies worldwide whose businesses do well by driving social impacts. The company’s purpose of ‘doing well by doing good’ has gained worldwide recognition – which we are very proud off.
Digitization and “Big data” will have major impact in terms of farm management. To give you an example already available in the poultry segment; ‘multiple imaging’, which can recognize the birds’ behavior and therefore can identify diseases at an early stage, so that intervention can be carried out in time.
The key to all of this is how will we increase efficiencies to feed the projected 9 billion population within 30 years. Increasing feed to food yield is part of the puzzle. Reducing feed and food waste is priority. A recent study by the UN’s Food and Agriculture Organization shows we can and must reduce to need to raise more food by as much as a massive 60 % by limiting food waste. As we know, this is a topic dire for the developing world, where much losses occur from farm to shelf, as it equally is in the developed world where we have excessive consumer waste.
How does the outside world look at India as the market for the feed additive industry?
We will see the poultry, cattle and aqua livestock continue to take off in an organized way in India. If we consider increases in consumer discretionary spending power to be the key driver then India will represent around 15 % of all growth in the region for the foreseeable future. ASEAN as a block will be at least as important in terms of growth. China will continue to be the dominant growth engine. So, the strategic rationale of India is very clear, and it stands to reason why DSM continues to invest with a second plant opening in May of this year.
How do you define sustainability in context of livestock production? Please share the initiatives taken by DSM ANH in this regard.
As mentioned, improving feed conversion ratios and reducing environmental impact through science is paramount. Our innovation efforts focus on these two elements. Ongoing innovations in feed enzymes improve digestibility and significantly reduce environmental footprint. Besides the enzyme space, other breakthrough DSM Innovations that are coming to market include Omega oils from Algae, and methane reduction solutions.
What is DSMs ANH approach to meet diverse needs of customers across the Asia pacific region with its multiple species, diverse geographies & having reached different levels of development in the feed industry?
Because there is a lot more diversity in several aspects for the Asia–Pacific region, markets too have very different philosophies, and it goes back to DSMs’ motto of ‘Global products with local solutions’. We have local teams, local systems in place, local facilities, local networks and collaborations which give us the right insights to innovate global molecules for relevant applications in different markets, specific to geography, species and even size of the farms.
Please update us about DSMs ANH innovations in last few years and about any new product or technology that is expected to reach the market in near future.
Though I mentioned earlier about it in a brief manner, I would still like to add few more details on this subject. Extracting DHA-EPA from algae in a sustainable way has been a proven formula for DSM in human industry. This is likely to have leverage for the animal industry as well. To start with, we will initially target the salmon industry but with time we are likely to plan its implementation in the poultry and swine industry also. The innovative proven approach in humans needs to be applied on a large scale to make it relevant to the animal industry.
Another product is a specialized type of ingredient to tackle methane emission, especially in ruminants. This feed additive is expected to reach market in another few months. Various reports suggest that most of the additives in the market can reduce methane emission up to 15-30%. I would like to emphasize that bringing such innovations to farmers also needs government support.
What are DSM ANH investments plan for Asia Pacific Region? What is its market share and expansion plan for Indian animal industry?
Instead of mentioning numbers, I would like to say that DSM is one of the leaders in the industry & we shall continue to invest and serve customers faster & better than the competition. Designing & delivering of local solutions will continue to be our investment focus. Just 5 years ago, DSM had 7 micronutrients customization plants; today it has 11 in the APAC region not including China. We continue to invest in scale and reach for leading edge customer experience, in terms of serving better, faster and most cost efficient.
What kind of thrust in R&D in Asia pacific, also various companies are introducing digital technology into the feed additive market. Does your company also have plans to go digital?
Digitization will no doubt be a transformative force for the industry, if not already disruptive. Our industry leadership as a science-based company implies we explore all avenues to increase feed conversion and reduce environmental footprints. Collaboration and open innovation are key.
There are tremendous amounts of data available from vast amounts of clinical trials. Digitization, in principle, has the power to pool data and enhance global accessibility to help diagnose on the farm and provide proven solutions faster. Precision nutrition is another novel approach and is gaining much importance now, having the advantage of providing a particular nutrient at the right time in the right proportion. It only results in increasing the efficiency of the utilization of that nutrient in the animal’s body, and simultaneously, it also ensures that there is no wastage of that nutrient and thus, is used economically.
Collaboration between Evonik & DSM for production of algal oil intends to target 15% of total demand for salmon production. What are the company’s plans for Asia-Pacific in this regard?
In terms of salmon production in Asia Pacific, Oceania represents the most significant. We equally see opportunities in the poultry industry and are conducting relevant research.
Please share your personal experiences with DSM, also about your evolvement with the company’s growth.
As illustrated by the ‘Change the World’ list published by Fortune Magazine, DSM is unique place to thrive. Collaborating with highly talented and diverse teams across the globe and bring science-based solutions to the market for societal impact is a privilege.
Over the last thirty years, the last ten of which with DSM, I have had the pleasure of working with wonderful teams dedicated to growing the regions health and nutrition sector.
In the process DSM has certainly reached critical scale in this part of the world and, learning to lead for both results and purpose has been truly rewarding for our teams in the region.
We will certainly not cling on to any past achievements, we are clear that continuous transformation is inevitable considering the speed of innovation coming our way.