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BEC Feed Solutions Counting on Wider Opportunities with New Premix Plant - INDUSTRY PERSPECTIVES


Source: BEC Feed Solutions via Feedinfo

8 April 2021 –Australia-based BEC Feed Solutions is going to open its new premix production facility located in Carole Park, Brisbane, Queensland, at the end of the month.

According to BEC Feed Solutions, the new facility features manufacturing space equipped with integrated technology, as well as a new warehouse and a two-storey office block. The new plant allows the company to improve production capacity, accuracy, efficiency, traceability and hygiene standards.

The new Carole Park facility completion comes about 1.5 years after BEC Feed Solutions opened a premix plant in the Pasuruan Industrial Estate in East Java. This plant in Indonesia is the first manufacturing facility outside of Australia for BEC Feed Solutions.

We recently spoke with BEC Feed Solutions’ Mark Fitzgerald, who is General Manager of Premix and Feed Additives Australia & New Zealand, about his company’s busy expansion history and the opportunities he sees for BEC Feed Solutions both in Australia and New Zealand, and in other international markets.

[Feedinfo] Mr. Fitzgerald, until recent years, BEC Feed Solutions Australia was mainly known as a distributor of premixes, feed ingredients and feed commodities to the Australian and international stock feed industry. With the opening of a premix plant in Indonesia, and now with the new Queensland factory, the company has invested in its own manufacturing operations. What were the main reasons for doing so?

[Mark Fitzgerald] The BEC Group business has a strategy for growth and the investment in new infrastructure and facilities in Queensland is aligned with this strategy. BEC has been a key player in the Australia, New Zealand, and Pacific Islands premix sectors for more than 30 years, operating from two separate plants in Brisbane, on two different sites. Our new plant is the result of “rationalising” the two existing plants, and sites, onto one standalone operation – gaining obvious efficiencies by not having duplication.

Our strategy is about upgrading technology, to cement our place in this market for the long term, and to be able to meet the changes in requirements of our customers – from a quality, traceability, and hygiene perspective. Our strategy also involves the ability to diversify both the products that we manufacture, and the markets that we participate in – this new plant assists with this objective.

 

Mark Fitzgerald
General Manager of Premix & Feed Additives - Australia & New Zealand
BEC Feed Solutions

BEC Feed Solutions will also remain an exclusive distributor for international feed additive brands. This is an area of our business that we are continually developing, with some very strong, long term relationships in place with international feed additive manufacturers. Premix is a very efficient “vehicle” to get some of these feed additives to the feed milling end-user. We have a well-developed model in place for how these exclusive distribution partnerships operate.

[Feedinfo] What are the current challenges of the Australia and New Zealand premix markets, and why don’t the international feed additive/premix producers have more of a direct presence?

[Mark Fitzgerald] Historically many global premix and feed additive producers have indeed had a premix manufacturing presence in this market, but the majority ceased to manufacture here. Surprisingly, this market is very cost competitive, and this has meant that these global producers I believe struggled to achieve either satisfactory market share, or profitability objectives. The geography of this market is also challenging to service, and so established distribution channels and relationships are a key to success. This applies to both premix manufacturing, and feed additive representation – this leads to distribution partnerships between international suppliers, and local businesses, such as BEC. There are currently two global producers still manufacturing premixes in this market.

The two major challenges we are currently facing would be: 1) Importation standards, essentially driven by African Swine Fever (ASF). BEC is a large importer of ingredients, commodities and feed additives, and our plant and animal health regulators are making life extremely difficult for businesses like us. For very good reason Australia is determined to remain ASF-free, but the importation of any product, particularly of “plant’ origin, is under ever increasing scrutiny. This is driven by country of origin, with Asia and Europe being a major concern from an ASF perspective. At best this leads to dramatic delays in having Import Permits approved and only after an exhaustive process, and at worst, some products not being granted import approval at all.

2) International freight, logistics, container availability. This is ongoing and as a major importer, this is having a significant impact on our business. It started with shipping delays and disruptions, and for some months now is also involving dramatic container freight/surcharges/levies/etc. cost impacts.

[Feedinfo] How has BEC Feed Solutions experienced the COVID-19 challenge?

[Mark Fitzgerald] In terms of challenges, clearly COVID-19 has been a challenge for everyone, and BEC has been no different. Although I would have to say that we are actually very pleased, and proud of how well our staff and business have managed through the pandemic. We had no staff get sick with COVID 19, and we have been able to maintain supply to all our customers, with very little disruption.

The completion of our new facility in Brisbane [initially scheduled for December 2020] was delayed. This is also a direct result of COVID-19. Australia has a strict limit on international arrivals still in place, and in fact are only allowing Australian citizens to travel to Australia – and in very low numbers. This means we had to find alternate ways to get the installation and commission stages completed. Key manufacturing and packing line equipment for our new Brisbane plant was all sourced from specific suppliers in Europe, and the shipping, installation and commissioning of this equipment has had to be done during COVID-19, and all while we contend with international travel bans that are in place particularly in Australia. Fortunately, we had quite a lot of flexibility built into our original project plan, but we did not plan for COVID-19.

[Feedinfo] In July 2019, BEC opened a 15,000 tonnes/year premix factory in East Java, Indonesia. What lessons did you learn from that opening and how did you apply the experience to this new factory in Queensland?

[Mark Fitzgerald] We are very pleased with the progress of our new plant in the Indonesian market. However, the new facility in Brisbane is very different to the Pasuruan plant. Different processes, different equipment, different staffing approach and different products and markets. Another key difference was that our plant in Indonesia was constructed prior to COVID-19.

[Feedinfo] What makes the new Queensland plant so unique in Australia? How flexible and fast will you be to meet specific, tailored customer demands?

[Mark Fitzgerald] The level of automation, traceability, and method of weighing is quite unique, and different to traditional premix plants in this part of the world. The approach, technology and process is something that I have seen in Europe, and also recently in a couple of plants in Asia, however it is very unique for Australia.

Our capacity will far exceed our two current plants combined. Considering also that we scoped this plant initially at only 1 shift per day – so we expect significant increases in volumes into the future, and the opportunity to leverage the new plant across other products. We are confident that this increase in capacity will allow us to meet our customers supply expectations much more efficiently, and perhaps provide a marketing advantage as a result.

[Feedinfo] The new Queensland factory will provide opportunities for growth into new products and new markets, both domestically and internationally. What are your short-term targets and after 2021?

[Mark Fitzgerald] Our short-term objective is to get our new plant operational, achieve the throughput, traceability, and hygiene design targets, achieve the necessary quality accreditations, and “learn how to drive it”. I believe this is a realistic approach, and the training in the new technology and processes will take some time. We do have the flexibility of being able to continue operating our existing plants concurrently with this new plant, and then do a gradual changeover to ensure our success. Once we are comfortable with performance, we will then embark on realising the full benefits of the new plant, by expansion into new products and importantly new channels and markets, both domestic and international.


Published in association with BEC Feed Solutions