22 December 2020 – Last week, Royal Agrifirm Group and PMI Additives entered a new functional feed additives global partnership.
In recent years, PMI (part of Land O’Lakes, Inc.) has been the exclusive distributor of Royal Agrifirm Group’s Agrimprove functional feed ingredients in the US. This new partnership is extended to global markets and includes Agrimprove and PMI products.
Shortly after the global partnership was announced, we were able to meet with Johan De Schepper, Member of the Executive Committee & CIO, Royal Agrifirm Group, and Adam DeRosier, General Manager, PMI, and discuss the complementary nature of the collaboration and what opportunities may be opened as both firms set their sights beyond the US market.
PMI and Royal Agrifirm Group started their US partnership in June 2016. At the time, multi-activated medium chain fatty acids were not readily available in the US marketplace.
“Our relationship started not just based on a purely commercial point-of-view, but more like a proper collaboration of knowledge and pooling of resources in which we explored applications together and jointly offered insights,” explained De Schepper. “With PMI we looked at how to use MCFAs in the best way possible in the US market which has its own specifics as a marketplace. Our collaboration was less about marketing and more about demonstrating application in the US market and generating long-term success. Customers are primarily looking for knowledge; the product we offer comes afterwards.”
“During the first few years we mainly worked behind the scenes and focused on demonstrating the benefits of MCFAs on animal performance and their use in young animal nutrition. Together we built our proof of concept,” said DeRosier.
Johan De Schepper
“The Veterinary Feed Directive (VFD) in 2017 led to broader demand for our technology in the US. And, initially starting with swine, over the past few years we were able to extend the expertise to other species. We saw huge opportunities for mitigating the spread of viruses in animal feed. So, we also studied more uses of MCFAs, such as its antiviral mitigation properties on viruses like PEDv and Salmonella, for which we worked with Kansas State University to further evaluate the technology and ultimately license a recently approved patent,” he added.
De Schepper went on to say: “We also co-developed products, working on the compositions and applications together. In the past 12-18 months, our relationship has been extended from MCFAs to incorporate other technologies such as unique and performing third generation prebiotics.”
Naturally, as market demand in the US for MCFAs has grown, so has the number of competitors. But according to DeRosier, PMI recorded double-digit growth in the past few years, and across all species markets using his company’s technologies. This year, of course the US swine sector was affected by COVID-19, but the PMI-Royal Agrifirm Group strategy to cater to multiple species helped offset the impact of the pandemic on demand for their products, argued both spokesmen.
“In fact, business grew in the US. And globally significantly in 2020,” commented De Schepper.
Now, based on the foundations of their collaboration in the US, Royal Agrifirm Group and PMI will aim to complement each other’s solutions on the global stage.
DeRosier said: “Until today, 100% of PMI’s sales were in the US. This partnership will be a bridge for us to access the global market. We saw that there was a great opportunity to leverage expertise and global footprint. We are excited about how this can work out and how PMI’s products can fit into Agrifirm’s markets.”
“We will look at countries and evaluate where we will market and sell products or eventually look at our global manufacturing footprint and produce PMI products internationally,” added De Schepper. “Global know-how and local manufacturing will provide more flexibility and faster access for our customers to our technologies.”
First, the partnership will be a catalyst for PMI’s growth outside of the US as Agrifirm will help bring PMI’s swine and poultry products to Europe, Asia and Latin America.
“2021 will be about preparing to launch our solutions globally,” commented DeRosier. “We will sprint now that the global partnership has been announced and we look forward to working with Agrifirm to accelerate.”
DeRosier said that the companies will continue to look for additional applications for MCFAs next to other novel technologies and aim to get PMI’s gut integrity products such as Ambitine or Bastion ready for registration and commercialization next year. Also, in 2021, PMI will seek to launch its own proprietary phytogenic products in the US and through Agrifirm globally
Second, be it for PMI’s products or Royal Agrifirm Group’s Agrimprove brand, the companies have identified some strategic growth markets.
De Schepper said: “We certainly expect an acceleration in the Chinese swine and poultry market, next to the progress by our joint venture with Land O’Lakes called Agrilakes in dairy animal nutrition. Southeast Asia is also looking for different technologies and we will gear up our focus there. We also see solid target markets in Latin America, more specifically Brazil where we have doubled our sales and where we are building on the back of a strong team.”
“In Europe, the regulatory environment is more complex, but we will evaluate ways to bring our products and solutions to that market which is seeking innovations,” he added.
“Regardless of the market, we will look at the complementarity of our combined portfolio to address specific local market needs.”
PMI (via Land O’Lakes) and Royal Agrifirm Group consider themselves to be the world’s only two farmer-owned functional feed additive companies. Asked why this is important from their perspective, both spokesmen believe that such a position allows for their partnership to innovate in a true farmer driven way.
“There is no such thing as a silver bullet and you have work with each other through trial and error to find active solutions, solutions that are truly innovative, regardless of individual company portfolios,” argued De Schepper. “PMI and Royal Agrifirm Group go together to the customer and offer advice and solutions, using the best fit from our combined product portfolio. Everything starts at the farm or in the field. So, it is an advantage for us to have direct access to farms and fields. We get a first line understanding of the challenges and can try out knowledge with farmers fast before leveraging with the rest of the market.”
DeRosier also said that looking at value for farmers is integral to what both firms do.
“We are both farm-to-fork vision type of enterprises and we have visibility of that under the same roof. We are also advocates for agriculture in the US and in global markets, supporting farmers,” he commented.
“Providing solutions to our farmers is embedded in our DNA, and so is ensuring that the farmer has a good level of income and enabling that the farmer knows that he or she can play a role in the overall sustainability of our industry,” De Schepper concluded.
Published in association with Royal Agrifirm Group and PMI Additives