10 January 2022 – Japanese oil refiner Idemitsu Kosan will spin off its agribio business unit in July 2022, in a merger with SDS Biotech, a consolidated subsidiary, the company said on 21 December 2021.
"SDS Biotech comprises agribio experts and strategies can be more effectively implemented in their hands," an Idemitsu spokesman said.
SDS Biotech is a chemical joint venture between Showa Denko and Diamond Shamrock, which Idemitsu acquired in 2011. SDS Biotech will take over all of Idemitsu’s agribio operations including its compound feed for cattle manufacturing unit and a 60% stake in Idemitsu Agri, a joint venture with trading house Tokai Bussan. The segment generated annual revenues of Yen 2.6 billion ($22 million), with biopesticides and cattle feed being key sales items.
Both Idemitsu and SDS Biotech are focused on maximising the potential of micro-organisms, and there will be synergies in product development, as the merger will allow them to share manufacturing technologies and R&D results, a company official told Feedinfo.
Idemitsu also produces RUMINUP, a well-known methane-reducing feed product in Japan, which they claim cuts bovine methane emissions by 20%. The product was launched in 2011 and is also exported to Asia. RUMINUP’s main ingredient is cashew nutshell liquid (CNSL) sourced from Vietnam. According to the company, CNSL causes reactions in the rumen resulting in faster livestock growth while reducing methane.
Demand for RUMINUP has been increasing since the summer of 2021 due to spreading concerns about greenhouse gases, said one market source. “RUMINUP demand is skyrocketing in a market with four million cows, but there are challenges to make it an integral part of the cattle production process,” the source said, adding that it resembles a medical product rather than a compound feed.
Heavy doses of CNSL may harm livestock, the source said, adding that there is also a need to meet regulatory requirements should Idemitsu plan to expand its production to meet demand rises. However, a Ministry of Agriculture, Forestry and Fisheries official said that since RUMINUP is already in production, it should not be difficult to expand output. “The regulatory process will be longer if raw materials that have not been in use in Japan are introduced,” the official added.
Idemitsu declined to elaborate on the present RUMINUP output volumes or the plant location. According to the Japanese customs data, the Shimizu customs in central Japan cleared 741 tons of Vietnam-origin CNSL from January to November 2021. Based on this data, sources estimate the RUMINUP production capacity to be less than 10,000 tonnes/year.