A new competitive climate for fish feed

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CEO of Nutreco looks into the future for the feed company Nutreco and the salmon feed business in general. Is there a new competitive climate within the salmon feed business?

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A new competitive climate for fish feed

  1. 1. Knut Nesse – CEO Nordea Salmon Summit Oslo| 28 November 2013
  2. 2. Doubling food production Halving the pressure on the planet Feeding 9 billion people in 2050 3
  3. 3. The essential link Raw material markets Struggling supplies Animal nutrition & fish feed producers Farmers Surging Demand 4
  4. 4. Nutreco’s two divisions • Revenue in 2012 of €5.2 billion • Over 100 production and processing plants in 30 countries • Multinational workforce of approximately 10,000 employees Animal Nutrition Fish Feed Revenue €3.3 billion €1.9 billion EBITA* €149 million €142 million * Before exceptional items from continuing operations and excluding corporate costs 5
  5. 5. Unique knowledge – Skretting’s passion for fish Process technology Nutrition Raw materials Our competence in research and application in daily feed production gives us a competitive advantage Goals Fish health Fish performance Feed quality Food safety Sustainability 6
  6. 6. Skretting – a global aquafeed company 3,400 employees 1.7 million MT of feed Production in 16 countries Sales in more than 40 countries Feeds for more than 60 species of fish & shrimp 5 global R&D units 3,400 employees | Production: 1.7 million tonnes (2012) | Sales in >40 countries | Production in 16 countries | No. 1 in salmon feed 7
  7. 7. World fish and shrimp feed market 2012* Annual growth volume** Europe America Asia*** Africa Sum species Estimated volume (million tonnes) Salmonid 5% Shrimp 5% White fish >5% Sum geography >5% 1.9 MT Turnover 1.5 MT 0.1 MT 3.5 MT €3.9 B 0.7 MT 3.2 MT 3.9 MT €3.9 B 0.8 MT 0.6 MT 9.2 MT 2.0 MT 12.6 MT €6.2 B 2.7 MT 2.8 MT 12.5 MT 2.0 MT 20.0 MT €14.0 B Note: * Defined in addressable market turnover, (€ billions) and volumes (million metric tonnes) ex. carp. Fresh water trout are included in white fish ** Annual long-term growth rate Source: Skretting *** Australia has been included in Asia 8
  8. 8. Value chain – fish feed industry Raw materials Feed R&D Breeding Hatchery Fish Processing Sale Transportation 9
  9. 9. Steady growth of global salmon farming industry kTonnes 2,500 2,000 1,500 Other Faroes Canada CAGR 9% 1,000 UK Chile Norway 500 0 1992 2000 2005 2010 2015e Sources: Kontali, ABG Sundal Collier, companies 10
  10. 10. The potential of Norwegian aquaculture Salmonid value chain 2050 2030 2010 1999 Economic value €1.5 billion 10% CAGR Economic value €4.3 billion 6.5% CAGR Economic value €15 billion 3.5% CAGR Economic value €30 billion Volume 0.5 mill. tonnes 6.5% CAGR Volume 1 mill. tonnes 5.6% CAGR Volume 3 mill. tonnes 2.6% CAGR Volume 5 mill. tonnes Source: Value created from productive oceans in 2050, SINTEF, 2012 11
  11. 11. Growth of salmonid feed supply in Norway kTonnes 2500 CAGR 2014-2020 = 5% est. ~100kTonnes/year 2000 1500 CAGR 1996-2013 = 7.8% 1000 500 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0 12
  12. 12. World’s largest and most modern fish feed factory - Averøy Upgrade fully completed in 2013 Nutreco’s largest ever capex project Total investment of approx. € 80 million Additional capacity of 150,000 MT Total capacity now 450,000 MT 13
  13. 13. A new competitive climate for fish feed? ? 14
  14. 14. Innovation in fish feed is key to meet future demand • To meet growing demand for aquaculture (by 2030), supply should grow by 5.6% per year. However, expected growth based on recent trends is only 3.5%... • Meeting this gap between future demand/supply for aquaculture will depend on the availability of quality and affordable feeds, additional production locations and sufficient water supply • We need to invest in innovation in fish feed to support growth in aquaculture: • Continued emphasis on alternatives to fishmeal and fish oil • Sustainable supply of plant feed ingredients • Improving feed formulation and production Sources: 2007-2030, Arni Mattheson, FAO, AquaVision 2012 presentation; The State of World Fisheries and Aquaculture 2012 - FAO 15
  15. 15. Conclusion • Strong forecasts for global aquaculture growth • Future demand for food from aquaculture will largely depend on the availability of quality feeds • Innovation in fish feed is key to meet future demand • Nutreco’s key driver is to support our customers through innovative sustainable feed solutions that contribute to their productivity and profitability 16
  16. 16. THANK YOU

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