CEO of Biomar, Torben Svejgaard, elaborates on the history and the future of salmon feed production and development.

1. Feed Suppliers and Product Innovation
Nordea Salmon Summit, November 2013
Torben Svejgard
Group CEO BioMar
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2. BioMar key figures 2013
• Turnover up towards 9 billion DKK (2013 guidance)
• EBIT 330-370 m DKK (2013 guidance)
• Production volume approx. 1 million tons (2012)
• Approx. 1,000 employees (including JV’s)
• Production in Norway, Scotland, Denmark, France, Spain,
Greece, Chile, and Costa Rica
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3. Owned by industrial conglomerate Schouw & Co.
THE PORTFOLIO
AT A GLANCE
 135 years of history
125 years in packaging
BIOMAR
The World’s third largest
manufacturer of quality feed
for industrialised fish farming
 25 years as conglomerate
5 core businesses today
 2,900 employees in
more than 20 countries
 Listed on Nasdaq OMX
Copenhagen since 1954
FIBERTEX PERSONAL CARE
The World’s fifths largest producer of
spunbond for hygiene
1.4bn
FIBERTEX NONWOVENS
Leading European manufacturer of
nonwovens for industrial applications
HYDRA-GRENE
Leading in Denmark within
hydraulic components and solutions
 BioMar 70% of revenue
and 55% of EBIT
0.9bn
0.5bn
KRAMP (20%)
The absolute largest supplier
in Europe of accessories and
parts for farming
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www.biomar.com
2012 revenue in DKK
 2012 revenue DKK 12.5bn
EBIT DKK 772m
8.2bn
C l a s s
F i s h
4.3bn
F e e d
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4. Ambitions over the next 4 years
Volume
in tons
1 800 000
•
1 600 000
1 400 000
•
•
Sales of approx. 1.7 m tons in 2017
• Approx. half through organic growth
• The other half in new markets (acquisitions/JV’s/green fields)
5-6% EBIT margin
ROIC > 15%
1 200 000
1 000 000
800 000
600 000
400 000
200 000
0
2002
2003
2004
2005
2006
BioMar group strategy:
www.biomar.com
2007
2008
2009
2010
2011
2012
2013
‘Going for
‘Going for Profitable
Global d C l
W o r l Growth’ a s Global iGrowth’ e e d
s F s h F
2014
2015
2016
2017
‘Beyond the limits’
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5. Product Innovation
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6. Looking back
•
•
Total industry R&D spend on this task: up
towards 1 billion NOK +/- (?)
Price in NOK for a typical
Norwegian Salmon feed
Late 90’es to late 00’es: High focus on
fishmeal and fish oil replacement
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12
10
•
•
•
Result: Norwegian salmon farming saves
3½ billion NOK in 2013 (not only related
to fishmeal/oil replacement work, but also
generally increased nutritional
knowledge)
Much higher fishmeal prices if no
reduction in usage, so added value much
higher
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6
4
2
0
1998 Knowledge 2013 Knowledge
Late 00’es: Increased focus on – and
R&D resources allocated to – health and
nutrition interaction
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7. Fish feed still early on learning curve
Knowledge /
sophistication
Pig feed
Poultry feed
Fish feed
Time
Salmon/fish nutrition R&D probably more complex than for terrestrial
animals
• Variation in water temperatures and thereby fish body temperatures
• Fresh water and sea water stage
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8. Future feed product innovation
•
Of course still focus on feed performance
• Extend raw material basket
•
Increasingly new focuses, more sophisticated and specialised feed, e.g.
• Preventive health
• Further focus on needs in different life stages of the fish
• Feeds adjusted to biological environment and production technologies (e.g.
recirculation)
• Feeds optimised to salmon market situation (growth versus costs)
• Utilisation of new technologies increasing digestibility (enzymes)
70
SRS
Cumulative mortality (%)
60
50
40
30
20
10
Control diet
Previous Plus
Plus 3
0
0
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15
20
25
30
35
F Days post challenge
e e d
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9. Future feed product innovation
•
Process technology innovation an essential discipline including the link between
physical quality and nutrition
•
Feed product innovation obviously to some/a large extend directed by new needs and
challenges in salmon/fish farming
•
Consequences for feed producers
• Need for continued significant R&D costs increases (BioMar has almost
doubled R&D spend last 4 years)
• More challenging production/logistics environment with considerably more raw
materials and more SKU’s
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10. A few examples from the BioMar world
•
Bactocell (probiotics) for preventive health and thereby increased disease
resistance, etc.
•
ORBIT product range with specific attributes for recirculation systems
•
“Performance 3” concept with varying protein/energy composition, but optimised
towards potential performance based on relative raw material prices
•
QUICK product range with special focus on growth
•
Triploid feed
•
Expect during 2014 a break-through with product addressing important cardiac
health issues
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11. Usage of fish oil 2012
Other
4%
Human
Cons.
22 %
Salmon
46 %
Other Aqua
28 %
Total fish oil market around 1 million tons
Source: IFFO Estimates
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12. New DHA/EPA sources?
•
More efficient use of fish waste and discards? – potential probably limited
•
Fermented heterotrophic algae – price maybe 3-4 times higher than today
•
Phototrophic algae utilising CO2 and sun – will take many years to develop
•
GMO vegetable oils – 5-7 years from now until commercialisation/ availability. And
consumer/industry acceptance?
•
(Absolutely) no quick fix!
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13. In conclusion
• Feed product innovation instrumental to bring salmon farming to where we
are today
• We still have a lot to do
• Further substantial increase in R&D investment needed
• Feed product innovation will also in the future be instrumental for developing
our industry
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www.biomar.com
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14. THANKS FOR YOUR ATTENTION!
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