1 April 2022 – Livestock industry demand for valine, isoleucine and arginine – specialty amino acids with good sustainability criteria that enable less grain use in diets – is expected to expand.
Today’s very high raw material prices, and trends such as low crude protein diets and the search for soybean meal replacements, make increased use of arginine much more feasible, says CJ Bio, which has been supplying feed-grade arginine to the EU market since 2015.
Arginine has been registered as a feed additive in the EU for several years and has mainly been used in salmon diets. However, the market has been growing at a fast pace, especially in the past 2-3 years, as inclusion in poultry diets is also offering a lot of potential.
Dr. Behnam Saremi, Director of Research Center, CJ Europe GmbH, commented: “About 15% of arginine production is sold to the salmon market in the EU. But inclusion in poultry diets is also increasing due to the low crude protein trend and the reduction of usage of animal raw materials.”
“At the beginning arginine was an unknown amino acid and formulators had to cover arginine requirement as an essential amino acid for broilers either by inclusion of higher amounts of crude protein or they had to reduce the specification artificially which of course had a detrimental impact on poultry growth and wellbeing,” he added. “Currently, arginine has turned into an inevitable part of poultry diets.”
“High prices of raw materials, the low crude protein trend and zero soybean meal diets have become a solution for the poultry industry in part because specialty amino acids like arginine are now available for the industry,” he went on to say.
CJ Bio currently produces feed-grade arginine at its Chinese specialty amino acid plants located in Liaocheng, Shandong province, and Shenyang, Liaoning province. CJ Bio could not disclose production capacities for arginine as the manufacturing of the amino acid – as well as valine and isoleucine – is part of a ‘campaign production structure’ (CJ Bio’s production strategy of switching from one specialty production line to another to better meet evolving customer needs). However, the company is one of the few arginine producers in the world right now.
“We are confident we can cover the whole feed-grade arginine market without any issues at the moment. We have enough capacity right now for the next five years, so we have no plans to invest in more capacities. Our factory in Indonesia can also produce arginine if needed,” Dr. Saremi said.
Despite it being difficult to accurately evaluate the market size of arginine and its trade volumes because of the various grades of arginine that exist (feed, food, industrial, and for refining purposes), CJ Bio estimates its share of the global arginine market at approximately 80% and considers itself as “the most stable supplier in the market”.
“Other suppliers include Ajinomoto Brazil and Daesang, but Daesang’s arginine focus is more on food applications,” Dr. Saremi said. “There is also METEX in France (formerly Ajinomoto Animal Nutrition Europe) and we are wondering if they will continue to buy arginine from Ajinomoto Brazil or if they will start producing the product themselves.”
Arginine’s increased market potential will also depend on its price competitiveness. In this regard, CJ Bio claims it has an advantage, not only by having grown its production scale and using its flexible campaign production structure, but also due to its focus on R&D and technology over the years that has resulted in lower production costs.
Asked about the current raw material challenges, Dr. Saremi said CJ Bio will endeavour to keep supply stable.
“Fermentation technology in the amino acids business uses corn as the main raw material. However, under the current uncertain global circumstances, grain prices have risen sharply, and logistics issues are still tough,” he commented. “Even though there are many difficulties, amino acids continue to be a solution for the livestock industry’s sustainability. CJ Bio will move proactively for stable supply.”
Although he did not disclose any specifics about sales prices, Dr. Saremi argued that the price and value of arginine are naturally determined by the market and supply. “Arginine is currently used by many customers at the current market prices because it enhances the nutritional value of feed and fits well with the scope of low soybean meal feeds,” he said.
Dr. Saremi highlighted another trend which is influencing demand for arginine. This is the gradual switch CJ Bio is seeing among European users of guanidino acetic acid (GAA) to arginine.
“GAA was on the market a long time before arginine was made available for poultry and swine,” he explained. “After arginine became available in 2015, customers had a product available which could cover 100% of arginine requirements without a need to speculate or to make assumptions about how much arginine could be provided, as it was the case with GAA.”
“Inclusion of GAA has also limitations according to the European Food Safety Authority,” Dr. Saremi added. “It needs to be added at a minimum of 600g per tonne of feed and there is a maximum inclusion limit of 1,200g which makes it a less flexible feed additive. With arginine, customers have the possibility to select the inclusion rate depending on the amount of arginine delivered by other raw materials and economics of feed formula (least cost formulation) which is not possible with GAA which can only offer a fixed inclusion level.”
Since 2015, CJ Bio has been ramping up technical marketing activities around this message of lower arginine bioavailability in GAA. As a result, a portion of customers have made the switch, according to the company.
CJ Bio admits that there is still a long way to go to establish arginine in the swine market, as functional aspects are still not explored by the industry.
“There is a fundamental difference between poultry and swine when it comes to arginine,” Dr. Saremi said. “Birds have a much higher requirement for arginine and are not able to synthesise arginine endogenously. Pigs, however, are able to produce arginine in their gut. Thus, arginine is classified as non-essential for swine.”
“But looking at genetic advancements in pigs, there is increasing evidence that arginine is semi-essential which means its concentration in feed needs to be carefully monitored. Thus, timely arginine coming from raw materials is not sufficient to support performance,” he added. “Consequently, supplementary arginine as a cost-efficient way to cover arginine needs of pigs without increasing dietary protein levels can play an important role.”
