Leo Xie Lei: Kemin AquaScience sees big opportunities in Chinese aquaculture
The urgency for feed efficiency in aquaculture has become acutely obvious given the price of fishmeal will rise 90 percent in real terms between 2010 and 2030, with fish oil price rising 70 percent in the same time frame, according to a Food and Agriculture Organisation (FAO) projection. At the same time China, the world’s leading aquaculture producer, has sought to tame growth in volume for better environmental standards.
It seems good timing then for Kemin AquaScience to enter the China aquaculture market.
Shanghai-based Leo Xie Lei is the chief commercial officer for Kemin AquaScience, which is part of Kemin Industries, a Des Moines, Iowa-based global nutritional ingredient company. In July the firm launched two new global brands for aqua farms – Aquavibra and Aquastem - in Zhangpu, Fujian province. This aquaculture hotbed of southern China has been seeking to expand output against a backdrop of rising costs and stricter environmental enforcement. China’s appetite for seafood will expand from 35.2 million tons in 2006 to 57.3 million tons in 2030 while globally the figure will go from 111.69 million tons to 151.7 million tons in the same time frame.
Previously Xie Lei was president for the Asia Pacific region for the enzymes, cultures, and yeast extract business of Royal DSM NV and, prior to that, ran the firm’s human nutrition and health business in China. SeafoodSource caught up with Xie Lei to discuss the global aquafeed and feed additives market, which is estimated by several market research agencies to be valued at USD 150 billion (EUR 135.8 billion) per year.
SeafoodSource: What are the trends in Chinese aquaculture that create opportunities for your products?
Lei: At present, the aquaculture industry is growing at a rapid pace as compared to other food production sectors and is in a phase where it is becoming more organized, integrated and environmentally conscious. This gives Kemin AquaScience many opportunities as we align our focus on improving the efficiency and sustainability of the culture systems. Some of the innovative solutions include identifying cost-effective alternatives to the depleting feed ingredients, antibiotic alternatives to the new and emerging disease challenges, and molecules to enhance efficiency and performance in various aquaculture systems. We also offer solutions to ensure safety of the aqua feed and feed raw materials.
SeafoodSource: We hear a lot about increased environmental enforcement and consolidation in the Chinese aquaculture sector. Can you explain the timing of your launches?
Lei: Kemin AquaScience will provide solutions according to the requirements of national medium and long-term strategies, such as the requirements for sustainable development and environmental protection.
In the short run, Kemin will start from the animal health and the feed sectors. In terms of animal health, Kemin AquaScience products can improve the gut health of the aquatic animals, strengthening their general health and overall growth; and secondly for the reduction of antibiotics.
Our products, such as probiotics, enzymes or essential-oil based products can be used to replace the use of antibiotics, promoting the sustainable development of the aquaculture industry. To better serve feed companies Kemin will provide a wide range of solutions for various feed formulations. This will help with the feed processing, while improving production efficiency.
We believe that by extending our products to the [fish] farming sector we can fully showcase the strength of Kemin’s products and technologies. Only through the interaction with the aqua farmers, listening to their direct demand and the first-hand feedback we collect, can we then lay the solid foundation for our products and brands.
Aqua farms are not unknown to us, as many members of our global team are from related aqua farming companies, with some of our PhDs having field farming experience during their learning period. Our ultimate goal is to expand into the entire aquaculture chain by diversifying our solutions.
SeafoodSource: What is unique about the products compared to other products already in the market place?
Lei: With our research team having a presence in major aquaculture locations such as China, India, Southeast Asia and Europe, it enables us to work closely with customers and develop customized solutions to region-specific challenges. Kemin has systems and practices in place to ensure the safety of our products across the entire supply chain. Raw material risk assessment process is an example, where we analyze each raw material and assess potential hazards and risks. Part of the research team works as customer laboratory support to ensure that our products are tailored to meet the specific needs of each customer. Also, our product application department provides unique application technology to maximize the value from our products.
SeafoodSource: Please detail the attributes of your products.
Lei: Kemin AquaScience has products catering to the needs of aquaculture farms, feed mills and the feed raw material industry ... Safe solutions include antioxidants, antimicrobials, surfactants and mould inhibitors to address the safety of the feed and raw materials. Healthy solutions improve animal health and ability to mitigate disease risks, which include essential oils, acidifiers, gut health enhancers and immune boosting agents. Efficient solutions, including enzymes, nutrient absorption enhancers, trace minerals and amino acids, enhance the production efficiency while reducing feed costs. There are also products which improve the water quality and farm environment, including active microbials and ammonia binders.
SeafoodSource: How does the Chinese aquaculture sector compare with other markets where you're active - in terms of scale, fragmentation and education of the farmers/actors involved?
Lei: Kemin is involved in many different markets from aquaculture to agriculture, pet food and rendering to human health, and more. For Kemin, China is the largest scale up aquaculture market worldwide. In many regions, the feed industry manufactures for a full range of species. Similarly in many regions, farmers take a large amount of education, but find challenge in identifying which information is scientific based and can be used. Kemin AquaScience takes many actions to educate the farmers.
SeafoodSource: How are you educating the farmers?
Lei: We have taken learnings from our team in India and have created customer events called Knowledge Days, Kemin Touch and Kemin Kontact events, where our technical and sales team travel to customers in different regions and provide them with training programs. This isn’t just a time to educate the farmers on our products, but also a time to educate them on trends, diseases and advancements we are seeing in not only their country but other countries around the world.
SeafoodSource: How are you tailoring to the local Chinese market in terms of pricing, product development and research?
Lei: Kemin AquaScience offers customized solutions based on research in key trends of the aquaculture industry with product value proposition created by our team which support key demands. For example, shrimp and crayfish [in China] are one of the highest growth and unique segments which we have products tailor made of both feed and farm.
Photo courtesy of Kemin AquaScience