The Southeast Asian feed additives market
The Market for feed additives in Southeast Asia is growing and is moving towards maturity stage. However, the introduction of new products is needed to ensure the future of the market, accoriding to a new report by Frost and Sullivan.
By Emmy Koeleman
The report analysed the animal feed additives market in Southeast Asia from
2002 – 2012, with 2005 as the base year. In 2005, the feed additives market
segments in Southeast Asia (amino acids, acidifiers and enzymes) recorded
revenues of US$284.3 million, with a volume of 107,100 tonnes. According to the
report, the compound annual growth rate (CAGR) is expected to be 7.6% from 2005
– 2012. The feed amino acids market is the largest segment in terms of volume
and revenue generated in the feed additives market in Southeast Asia. Following
the European Union’s (EU) ban on the use of antibiotics as growth promoters,
acidifiers are proving to be excellent alternatives to antibiotics and are
expected to achieve significant growth. This is most strongly felt in countries
such as Thailand that have large poultry export volumes to the EU. In the feed
enzymes market segment, phytase is likely to continue its dominance due to its
cost reduction and environmental benefits.
2002 – 2012, with 2005 as the base year. In 2005, the feed additives market
segments in Southeast Asia (amino acids, acidifiers and enzymes) recorded
revenues of US$284.3 million, with a volume of 107,100 tonnes. According to the
report, the compound annual growth rate (CAGR) is expected to be 7.6% from 2005
– 2012. The feed amino acids market is the largest segment in terms of volume
and revenue generated in the feed additives market in Southeast Asia. Following
the European Union’s (EU) ban on the use of antibiotics as growth promoters,
acidifiers are proving to be excellent alternatives to antibiotics and are
expected to achieve significant growth. This is most strongly felt in countries
such as Thailand that have large poultry export volumes to the EU. In the feed
enzymes market segment, phytase is likely to continue its dominance due to its
cost reduction and environmental benefits.
Challenges and drivers
The report discusses several
industry challenges. Compliance with strict regulation set by the EU is one of
these challenges that are expected to have a significant impact on the feed
additives market in Southeast Asia. In addition, the control of diseases, such
as bird flu and foot mouth disease (FMD), also remain a challenge. Lastly, low
awareness among end users is still present, which limits the usage of feed
additives. This is mainly due to the cheap generic products that dominate the
Asian market and are competitive with the branded products. The report also
mentions several market drivers, such as the consistent and growing demand for
meat products, the increased awareness among veterinarians, feed millers and
integrators and more scientific evidence that backs the advantages of using feed
additives.
The report discusses several
industry challenges. Compliance with strict regulation set by the EU is one of
these challenges that are expected to have a significant impact on the feed
additives market in Southeast Asia. In addition, the control of diseases, such
as bird flu and foot mouth disease (FMD), also remain a challenge. Lastly, low
awareness among end users is still present, which limits the usage of feed
additives. This is mainly due to the cheap generic products that dominate the
Asian market and are competitive with the branded products. The report also
mentions several market drivers, such as the consistent and growing demand for
meat products, the increased awareness among veterinarians, feed millers and
integrators and more scientific evidence that backs the advantages of using feed
additives.
Key market restraints
Besides the challenges and
drives, the Southeast Asian feed additive market also faces some restraints.
Conservative farmers, for example, are often unwilling to try new additives.
Furthermore, developments in the EU have influenced consumer groups to push for
stronger regulations. Lastly, the lack of variation in feed ingredients limits
usage and variety of feed additives in this part of the world.
Besides the challenges and
drives, the Southeast Asian feed additive market also faces some restraints.
Conservative farmers, for example, are often unwilling to try new additives.
Furthermore, developments in the EU have influenced consumer groups to push for
stronger regulations. Lastly, the lack of variation in feed ingredients limits
usage and variety of feed additives in this part of the world.
Competitive analysis
The feed additives market in
Southeast Asia is still dominated by large multinational companies. These are
mostly manufacturers involved in the feed additives industry on a global level.
The Asian manufacturers are entering the market in increasing numbers, however
the quality of their products is still not comparable to those from Western
companies. Local participants active in the supply to the animal feed additives
market are usually distributors, traders or pre-mixers. A number of mergers and
acquisitions, as well as joint ventures, took place among suppliers of feed
additives in recent years. The most notable acquisition in 2006 was the
acquisition of the Addiseo Group by the Chinese company, China National Blue
Star Group Corporation.
The feed additives market in
Southeast Asia is still dominated by large multinational companies. These are
mostly manufacturers involved in the feed additives industry on a global level.
The Asian manufacturers are entering the market in increasing numbers, however
the quality of their products is still not comparable to those from Western
companies. Local participants active in the supply to the animal feed additives
market are usually distributors, traders or pre-mixers. A number of mergers and
acquisitions, as well as joint ventures, took place among suppliers of feed
additives in recent years. The most notable acquisition in 2006 was the
acquisition of the Addiseo Group by the Chinese company, China National Blue
Star Group Corporation.
Recommendations and conclusion
The market for feed
additives in Southeast Asia is growing. It is moving towards maturity stage in
the feed amino acids market and towards a decline in the feed antibiotics market
segment. In addition, the feed acidifiers and enzymes market segments are in the
process of significant growth. The introduction of new products is needed to
ensure the future of the market; however, they have to show improvements over
existing products in factors such as ease of handling, competitiveness in price,
consistent results and product stability and efficacy. In addition, mergers,
acquisitions and joint ventures are expected to be critical success factors as
they provide research and development benefits and an increase in the market
share. Besides the two factors mentioned above, companies that want to succeed
in the feed additives market need to invest in advertising and promotional
activities, conduct validation studies to support their products and build up
the brand name of their products.
The market for feed
additives in Southeast Asia is growing. It is moving towards maturity stage in
the feed amino acids market and towards a decline in the feed antibiotics market
segment. In addition, the feed acidifiers and enzymes market segments are in the
process of significant growth. The introduction of new products is needed to
ensure the future of the market; however, they have to show improvements over
existing products in factors such as ease of handling, competitiveness in price,
consistent results and product stability and efficacy. In addition, mergers,
acquisitions and joint ventures are expected to be critical success factors as
they provide research and development benefits and an increase in the market
share. Besides the two factors mentioned above, companies that want to succeed
in the feed additives market need to invest in advertising and promotional
activities, conduct validation studies to support their products and build up
the brand name of their products.
Source: Feed Mix Magazine Vol. 15 nr.
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