9 February 2021 - M&A activity in the animal nutrition market continues to grow. For businesses looking to broaden their portfolios, this activity can allow them to partner with organisations that reflect their values while helping to achieve growth targets.
For Arvesta, and more specifically for its brand AVEVE Biochem, it has been an exciting few months. Known for being experts in the enzymes market, the acquisition of Palital has allowed them to expand their product offering. Their first step into new markets is Rumen-Ready, a magnesium butyrate product they are patenting for dairy cows for use in the dry period, but they also continue to invest in development of their enzyme portfolio. We spoke to Dr Hans Christoph Wagner, Sales Director from Aveve Biochem and Mr Henry Van den Bighelaar, Founder of Palital to understand more about what this acquisition means for these businesses.
[Feedinfo] Firstly can you tell us about AVEVE Biochem and what recent developments the company has experienced?
[Hans Christoph Wagner] Although AVEVE Biochem was created in 1987, we are part of Arvesta which has 120 years of experience in agricultural markets and feed. It is this experience that guides us in everything we do in our business. We at AVEVE Biochem are the feed additives arm of the organisation and we have over 30 years of enzyme experience.
For us, our success lies in investing in research, which has led us to develop our products range. Recently this has driven us to acquire the business of Palital which is advantageous because of how well their products complement our existing feed additives portfolio, while also allowing us to reach our goals. We want to be experts in a specialized area of feed additives and the acquisition has meant we are in the best position to excel in these specific segments worldwide.
Dr Hans Christoph Wagner
[Feedinfo] With AVEVE Biochem being part of the full-service partner for farmers and growers Arvesta, can you tell us what this structure has meant for your business model and place in the industry?
[Hans Christoph Wagner] Being part of Arvesta, we have visibility of many different food value chains and this knowledge is something that we use to develop products that meet the needs of our customers. Being linked so closely to such a large feed producer has enabled our business to have direct access to production, meaning we can gather comprehensive feedback on how our products perform in both feed and animals. This additional expertise and knowledge gained in understanding how feed additives work, helps us to develop more effective products. It allows us to benefit from reliable technical information and animal performance data in real time and means we can fine tune our products in development.
Another key benefit is that our business gets to sit at the same table as other companies further down the value chain, so we can really understand the problems these organisations are facing and ensure we are aligned in our shared goals for food and agriculture. All of this knowledge is important as we can use it to develop products that meet the needs of our customers more effectively.
[Feedinfo] At AVEVE Biochem you are known for your NSP-enzyme products, so can you tell us what makes these unique in the market?
[Hans Christoph Wagner] Our AveMix NSP-enzymes are developed and produced by us and we pride ourselves on ensuring our products have high enzyme activity. We own a specialised Feed Enzyme Laboratory, where we can conduct research with around 30 approved enzyme activity analytical methods that we have developed internally. These are essential for research and product development, but also are vital as we have a strict quality control policy for our AveMix NSP-enzymes. We have also conducted efficacy evidence research in more than 100 trials in more than 35 different countries for all monogastric animal species, to ensure our products work effectively in every situation.
As functional multi-enzymes their composition is quite unique. This allows formulators to apply these enzymes with all commonly used raw materials in feed formulation worldwide, so we have created one product that can be used with over 100 different feed ingredients. Our product AveMix O2CS is also the only NSP-enzyme which is registered in EU, having a guaranteed specific pectinase activity, which we believe makes it distinctive in the market.
[Feedinfo] What are the biggest challenges that feed formulators face when using NSP-enzymes?
[Hans Christoph Wagner] There is a broad spectrum of different NSP-enzymes available in the market, which makes it difficult for feed producers to select the right product related to the feed formulation need. Furthermore, the nutrient matrix value database of each enzyme is not standardized as it is with phytase, meaning the matrix values of different products are difficult to compare to each other.
This is why it is so important that NSP-enzyme producers support their customers effectively and offer proper guidance on how to use the products most effectively. With our AveMix NSP-enzymes, we offer an approved technical service and support package of different matrix value application systems. Our system was developed in house and is continuously optimised to ensure it can be easily integrated into any feed formulation system.
[Feedinfo] Can you tell us more about your acquisition of Palital and why your business took this step?
[Hans Christoph Wagner] Acquiring Palital was a key strategic development for our business. Palital is a feed additives company that has “clean growth” as a baseline which really reflects our vision for the livestock industry. Like Palital, our products have sustainability at their core with a focus on reducing the usage of antibiotics, improving feed conversion efficiency, and decreasing pressure for deforestation by replacing soya with slow-release urea. Palital’s products we think are innovative and exciting to add to our business and Rumen-Ready is a clear example of this.
Henry Van den Bighelaar
[Feedinfo] Can you share with us information about Rumen-Ready, the magnesium butyrate product you are patenting?
[Henry Van den Bighelaar] Rumen-Ready is our newest offering and is a magnesium butyrate product that is fed to dairy cows during the dry period. Rumen-Ready increases the length of the rumen papillae, resulting in decreased rumen acidosis or ketosis during the transition phase and early lactation. The result is an increase in the milk production of up to 3.5 litres per day of milk during the first 60 days in milk. The product also leads to colostrum containing up to 60% more immunoglobulins (IgG).
During the dry period (6-8 weeks prior to calving), the rumen papillae will shrink by up to 50%. If the total surface area of the rumen papillae is limited after calving, it can lead to rumen acidosis. The reason for this is that if the formed short chain fatty acids in the rumen can’t be absorbed in time, the pH in the rumen will drop to a harmful level. Since the cow has already reached sodium and calcium limits in the dry period, neither sodium nor calcium butyrate should be used. However as the the cow has a deficit of magnesium, we have chosen to develop a magnesium butyrate solution specifically for transition dairy cows. Butyric acid is a unique energy source for the rumen papillae of the dairy cow, as well as other ruminants. The magnesium in magnesium butyrate is also 100% bioavailable, in contrast to magnesium oxide that has limited bioavailability. As well as the extra milk which is so important for farmers, we mentioned colostrum yield is also increased (up to 60%) and our pending patent is based on this colostrum effect.
[Feedinfo] What are your plans for the business following the acquisition?
[Hans Christoph Wagner] As mentioned the acquisition of Palital was the right decision as our product groups are complementary and this move supports our plan for growth. Combined, AVEVE Biochem and Palital realize an annual turnover of 20 million euros and this acquisition has allowed us to grow our brand. Moving forward we have a strong ambition to increase our commercial presence via the synergies in the distributor network, and we also want to keep an eye on potential new M&A projects that would fit our strategy. The acquisition of Palital has given us new in-house production facilities, novel and innovative products and a worldwide sales network and this makes us very excited for the future.
Published in association with AVEVE Biochem