ALLTECH COPPENS TAKES THE LEAD


IN FEED FORMULATION Aqua nutrition specialist Alltech Coppens is now offering customers a feed formulation service to boost the consistent performance of feed and support farmers and producers to take control of their profitability. Alltech Coppens is the first aquafeed producer to consider net energy in its formulation of aquafeed, going the extra step in order to ensure dependable feed performance. The formulation not only neutralises the natural variation of the raw materials in the feed, but also focuses on the differences in the efficiency of the different macronutrients. Most aquafeed companies formulate


their feed based on fixed digestible protein and energy levels, which can in part impact the variation in quality of raw materials when fish feeds are formulated in a flexible way. This means that although the crude nutrients (e.g., protein, fat) might differ slightly between batches of feed, the digestible energy on which the feed is formulated will stay the same between batches. However, recent research from the


Alltech Coppens Aqua Centre (ACAC) and associated universities have shown that not all forms of the digestible energy are available to use for growth with the same efficiency. By formulating feeds based on net energy, Alltech Coppens not only looks at digestible energy, but also takes into account the differences in efficiency of the different forms of digestible energy. This will ensure consistent performance between batches of feed. All raw materials used by Alltech


Coppens are always intensively screened at the ACAC. Only raw materials with the highest digestibility are selected. “By implementing this net energy concept, we can better take into account differences in the quality of raw materials throughout the year and therefore ensure more consistent feed quality,” said Patrick Charlton, CEO of Alltech Coppens. Al l tech Coppens has created a


selection of feeds that are suitable for the implementation of the net energy concept. More feeds will soon follow. For more information, visit


www.alltechcoppens.com/net-energy. FORFARMERS UNITED KINGDOM 2018 RESULTS


Market and sector developments Rising milk prices and weather conditions – a cold spring and a hot and dry summer – led to higher demand for both compound feeds and straights in the ruminant sector. Despite the potential growth opportunity for pig farmers to improve the self-sufficiency ratio in the UK through herd expansion, the swine sector remained stable due to competitively priced continental pig meat imports and Brexit uncertainty. Consolidation of larger players continued to take place in this sector, impacting on market dynamics. Consumer demand for poultry products is growing, fuelling growth of this sector.


Results Total Feed volume in the United Kingdom remained stable (-0.1%) at 2.9 million tonnes. This included the net effect of a small acquisition in May 2017 and a slight like for like decline. Total Feed volumes in the UK declined in the first six months (-1.8% YoY) but grew in the second half of the year (+1.6% YoY). Compound feed volume rose, driven by higher demand in the


dairy, beef and sheep sectors in particular. This was due to the dry summer and the resulting shortage of forage home-grown by farmers. Volumes in the swine sector decreased due to the margin improvement stance taken with the larger producers. Volumes in DML reduced due to discontinuing some loss-making activities. Total Feed volumes in the poultry sector grew following the successful introduction of the new Apollo programme. Gross profit rose by €6.2 million (5.1%) with the increase being


partly due to an improved product mix including more compound feed products and a higher contribution from strategic partners. As a result of the enhanced product proposition to larger pig farmers, gross profit in this sector improved. Operating expenses increased by €4.0 million (3.4%). Besides


the higher energy and fuel prices, outbound logistics costs increased due to training of new drivers. Extra expenses were made to improve the delivery service levels. They are now at a high level. The increase in operating expenses also included an incidental net amount of €1.1 million relating to pension equalisation following a generic UK court ruling and redundancy costs. The allocated overhead costs from the group increased by €0.5 million which were


MARINE BIOTECHNOLOGY


COMPANY IRISH LAUNCH Olmix-Micromix announced its entrance to the Irish market at the New Ag International Conference and Exhibition on Wednesday, 27 March. The business specialises in using marine biotechnology and algae to improve plant, animal and human health. The company’s animal care manager


Robert Hamilton said, “Olmix has a complete range of natural products which are scientifically proven to aid digestion, st rengthen immuni ty, and improve hygiene.” A French-based firm, Olmix acquired


British-based Micromix last year, and is spending €8-9m (£7-7.9m) a year on research and development, translating cutting-edge science into practical benefits on farm.


more than offset by lower local overhead costs. Depreciation and amortisation costs were €0.7 million higher


than in 2017 (excluding the incidental impairment of €1.9 million in 2017 relating to one of the factories), mainly driven by the switch from leased to owned trucks and the full-year effect of the depreciation of the Exeter mill. Underlying EBITDA increased by 10.3% to €20.5 million. The


underlying EBITDA/gross profit ratio increased to 16.1% from 15.3% in 2017. ROACE (based on underlying EBITDA) increased to 12.6% in 2018 (2017: 10.5%) thanks to the higher EBITDA and despite a rise in average capital employed. Capital employed increased due to the increase in fixed assets, which was larger than the improvement in working capital.


Progress of the UK business transformation project The merger of the ruminant sales teams to create a single commercial organisation was completed and work is ongoing to build a clear market proposition. In addition, two trading desks were merged into a single Total Feed support desk. Steps to reduce supply chain costs were delayed due to the need to focus on improving the reliability of customer deliveries first. Steps have been taken to upgrade a number of mills and to rationalise the manufacturing footprint.


… AND FIRST QUARTER 2019 TRADING UPDATE Total Feed volume declined when compared to Q1 2018. Less feed was sold in the ruminant sector, particularly to sheep farmers whilst volumes in the dairy sector remained stable. Contrary to last year when sheep were kept inside because of the cold weather and there was consequently demand for (compound) feed, the animals generally went to pasture in the relatively warm winter months of 2018/2019. Volumes in the swine sector declined further because a larger customer sold fewer pigs in the value chain and due to the sharpened commercial proposition in which margin improvement is an important element. Volume growth in the poultry sector continued, especially in the broiler sector as a result of increased focus in this sector. Compound feed volumes declined more than Total Feed (measured in terms of percentage).


FEED COMPOUNDER MAY/JUNE 2019 PAGE 59


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