Feedinfo News Service (www.feedinfo.com) have recently published an interview with Richard Edwards, Anpario's CEO. You can read the interview in full below.
INTERVIEW: Natural Feed Additive Producer Anpario Explains Growth Strategy. Source: Feedinfo News Service (dated 24/11/2016)
23 November 2016 - In October Anpario announced a further GBP 1 million investment in the upgrade of its Nottinghamshire production plant where the firm manufactures natural feed additives geared at improving animal and intestinal health.
Thanks to this latest investment Anpario will be able to keep up with the growing demand from customers, meeting large orders at short notice, with a faster turnaround time.
Feedinfo News Service spoke to Anpario’s CEO, Richard Edwards, to obtain some additional insight into the company’s global strategic objectives and to find out what’s in store on the natural feed additive innovation front.
[Feedinfo News Service] Mr. Edwards, how will the latest upgrades in your Nottinghamshire manufacturing facility help Anpario keep up better with the growing demand from customers around the globe?
[Richard Edwards] Our production facility has always manufactured products of the highest standard, but we recognized that we could improve our efficiency in regard to our bag filling and palletization process. We have three dry powder production lines in addition to liquid mixing capabilities. The new investment has enabled us to eliminate operator variances with bags now collected, filled, check-weighed, and sealed automatically at much greater speeds than before. We make to order, because of the international nature of our business, and therefore the investment in automation in recent years has helped to increase throughput speeds by up to 200% on some products. This increase significantly reduces order turnaround time, especially during peak demand periods. With higher throughput and a consistent tonnage output being achieved, production planning is now much easier and has led to huge benefits when managing the raw material supply into the production plant; this streamlining is also beneficial to our suppliers too. Finally, Anpario’s new enterprise resource planning (ERP) system processes new orders and generates a production instruction in the factory in real time, resulting in new orders getting into production quicker.
[Feedinfo News Service] Anpario chairman Richard Rose Anpario said the efficiency improvements in the Nottinghamshire manufacturing plant played a significant part in the company's resilient profit performance for the six months to 30 June 2016. What kind of market opportunities will the improved plant unlock in H2 and in 2017?
[Richard Edwards] We are experiencing strong growth in a number of our products following specific sales and marketing initiatives. The improved production plant enables us to respond more quickly to increasing demand, from both our distributors and subsidiaries so they have stock readily available to deliver to the end customer. Furthermore, one aspect of the investment was that the payback was around four years; compare that to the return on cash from bank interest rates, and this was a very sensible use of shareholder funds.
[Feedinfo News Service] What is your outlook for the US market now that Orego-Stim is being used by a major US integrator for antibiotic free chicken and that you have launched Ultrabond for the US dairy sector?
Richard Edwards Anpario CEO[Richard Edwards] There are a number of US customers currently using Orego-Stim and others that are evaluating the product for use in their production systems, including the organic market. We are very encouraged by the US market because the quality and consistency of our products in addition to the benefits they bring customers, have been well received. The US market is huge and many customers are starting to embrace the use of specialist feed additives to improve gut health and help meet the challenge of antibiotic reduction. As such, we have recently increased our recruitment of techical sales people to support our growth there.
In relation to our Ultrabond feed safety product, we are very encouraged by the feedback from US dairy farmers and the nutritionists who advise them. Customers are telling us that it is helping with poor gut health and Hemorrhagic Bowel Syndrome (HBS). In addition, they have been able to remove other additive products which have been less effective and more expensive and simply replace with Ultrabond (Anpro-UB) resulting in hard costs savings and an improvement in many health situations of herds, at a time of low global milk prices.
We are a small entrepreneurial company which means we are able to respond and make decisions quickly to ensure the customer receives the best support and service possible. In a country where customer service is very much part of the culture, Anpario will go that extra mile to ensure we give the customer the best possible service, which includes resolving problems quickly and efficiently. We believe this helps to differentiate Anpario as not only having first class technological products, but also a responsive and proactive customer care ethos. I’ve always believed in making it easy for the customer to do business with us.
[Feedinfo News Service] Are you able to disclose more about Anpario's dispute with a local distributor regarding ownership of the Orego-Stim trademark in China?
[Richard Edwards] It is simply that the trademark for Orego-Stim in China was registered by the Meriden distributor who had been distributing Orego-Stim in China. We are now attempting to recover the trademark through a legal process. However, we no longer supply the Chinese distributor with Orego-Stim and so we have transferred the distribution of the Orego-Stim product to our Chinese subsidiary - Anpario Shanghai. In order to comply with the Chinese laws, it has been necessary to rebrand the product to Meriden-Stim purely for the China market. It is important to be clear that any product in China with the Orego-Stim name on it, may not be the genuine product as new supply to China is now branded Meriden-Stim. We have launched a local communication campaign to raise the awareness of the situation. The situation has impacted our growth plans in China because we no longer supply the previous distributor of Orego-Stim which means some business was disrupted. However, we are encouraged by the response from both new and previous users of Orego-Stim (now rebranded Meriden-Stim for China only) who are happy to buy the market leading product under the new brand name Meriden-Stim (for China only) from Anpario directly.
[Feedinfo News Service] Anpario has appointed new regional commercial directors and opened an office in Dubai. How are these changes expected to stimulate Anpario's growth in the Middle East where the company is faced with challenging economic and political factors?
[Richard Edwards] Firstly, by having a local senior team which understands the specific business and cultural requirements of customers across the Middle East region, we are better able to match our product offering and service level to meet their needs as well as identify product opportunities that may be relevant to the region. Our commercial directors are very much empowered to make decisions and build close relationships with customers because we believe decisions are best made by those closest to the customer, where their needs and specific constaints are fully understood by our staff rather than in our head office thousands of miles away.
[Feedinfo News Service] You may have surely noticed Biomin's claims about wanting to become phytogenic market leader by 2020. Anpario's own Orego-Stim has been in the market for several years and is a leading phytogenic feed additive brand. What are your plans to maintain this position?
[Richard Edwards] Anpario’s philosophy has always been to focus on the customer and tries to add value to their business by providing the best product or service which meets the customers’ needs, rather than looking at what competitors are doing. We strive to be an innovative leader rather than a follower.
Orego-Stim is a leading phytogenic feed additive product and we have significant experience and success with customers across the world who have benefited from its capabilities as a natural performance and animal health product. There is a perception with natural plant products that variation in plant species, growing conditions, climate, etc., all contribute to seasonal or batch-to-batch variation in the consistency of phytogenics feed additives, which will ultimately determine the consistency of animal responses to these additives. The unique Orego-Stim production process means that these variations are overcome to produce a product within very narrow tolerances, which ensure a consistent product and predictable animal responses. In addition, our packaging is specifically designed to ensure we can offer a minimum two year shelf-life without compromising product quality. Orego-Stim has been extremely successful over the years and the drive to reduce antibiotic use in animal production is accelerating this success. Once animal producers become familiar with Orego-Stim and experience the consistent animal responses it delivers, they become extremely loyal to the product.
More recent research with Orego-Stim has demonstrated positive effects on intestinal health in poultry, and also on the potential to reduce rumen protozoa and methane production. In other recent trials, Orego-Stim has proven its potential for broiler chickens coccidiosis management and compatibility with vaccines, including performance enhancement following vaccination. Orego-Stim offers numerous benefits across species meaning that there is huge growth potential with the product and opportunities to maintain its leading position. In addition, combining the benefits of Orego-Stim with Anpario’s other (e.g. organic acid based) products, for either additive or synergistic effects on animal health and performance, offers further, significant market growth potential.
[Feedinfo News Service] Does Anpario have more products in the R&D pipeline? What are your innovation objectives for 2017?
[Richard Edwards] Anpario is committed to both developing new products as well as improving existing ones and we have an extensive research and development program focusing on a number of areas. One such improvement is to our omega 3 product called Optomega, which uses sustainable marine oils to achieve high EPA and DHA levels. Optomega has been successfully sold in the UK for a number of years for enriching eggs with Omega 3 as well as other meat and dairy products. It was never sold further afield to regions such as Asia or Latin America due to the short shelf-life of the product. However, we have recently innovated the carrier system and the packaging enabling us to extend the shelf-life comfortably to 12 months, and thereby making it possible to sell further afield. The new version of Optomega is currently being launched to customers, and a siginificant Asian egg producer has recently decided to use the product.
Another innovation to an existing product is with our water disinfection and sterilant product, called Credence, which is used to clean the drinking water on farm for all species. Credence is highly effective and kills Clostridium Difficile in 4 minutes. In tablet form this product has historically been applied in the header tanks on farm or in troughs to cleanse and protect the water from bacteria and vegetation growth such as algae. However, we have recently developed an inline dosing system which can be very simply fixed into the farm’s water supply system and by using a special cartridge, incorporating the Credence tablets, will dispense the correct amount of active necessary to protect the water from undesirable organisms. The system is easy to use, maintenance free, cost effective and one cartridge of Credence can do one flock through to slaughter. In the battle to combat enteropathogens and reduce the use of antibiotics, protecting the water supply through a simple sterilising system with Credence and this innovative inline dosing system makes life much easier for the farmer. We are anticipating to launch the technology during 2017.
[Feedinfo News Service] Anpario is experiencing organic growth and the company has a strong balance sheet - what Richard Rose describes as a "sound platform". However, what are the company's intentions on the M&A front?
[Richard Edwards] We continually look for earnings enhancing acquisitions which sensibly fit with our strategy. Our criteria is typically to look at companies which might help us to add a specific product group to Anpario’s current broad range of products or some new technology which could benefit from our sales and distribution network. The company’s current strategic emphasis is to strengthen our sales and distribution channels by working closely with our distributors and the end users; hence the recent recruitment of regional commercial teams. In 2017 we will be launching our new Anpario branding and gradually phasing out the three trading brands (Kiotechagil, Optivite and Meriden) we acquired over the last few years. Consolidating to a single company brand will enable the Company to communicate more effectively and clearly in terms of our corporate vision, philosophy and values, as well as concentrating more marketing and R&D spend behind one brand rather than three. So, look out for the new Anpario corporate branding as we enter 2017.