BioMar’s new Chinese, Australian factories up and running amid strong first quarter

BioMar Group has posted a positive start to the year as the company’s new factories in China and Australia both come online and produce feed for the first time.

The company’s Q1 2020 results showed revenue of DKK 2.3 billion (USD 332 million, EUR 308 million), an increase over the DKK 2.1 billion (USD 303 million, EUR 281 million) earned in the same period in 2019. BioMar said those increases were driven by its salmon and shrimp segments, new capacity, and close cooperation with customers in order to meet their needs as the coronavirus spread globally.

The company also delivered higher earnings before interested, taxes, depreciation, and amortization (EBITDA) of DKK 159 million (USD 23 million, EUR 21 million) for the quarter, compared to DKK 132 million (USD 19 million, EUR 17 million).

The positive first quarter comes amidst the ongoing COVID-19 crisis, which BioMar Group CEO Carlos Diaz said the company has been carefully planning for.

“On one hand, we are very proud to have started the year in a good way, setting all-time records for a Q1, but we are very conscious of the potential impact of the pandemic on our business and the industry,” Diaz said. “Being in the food value chain, we play an essential role, making sure high-quality products reach consumers. However, there are many uncertainties ahead financially as well as looking at the overall impact of the virus on the countries where we operate.”

Those operations include two new factories that have recently started production. The two factories, located in Wuxi, China, and Tasmania, Australia, are both part of a strategy to target markets in the region.

The Wuxi factory was first planned as part of a growth strategy for the company in 2016, and recently had its first products delivered. The new factory is the company’s second in China, and according to BioMar, the facility has already been delivering “high and consistent quality,” which will allow the transfer of production of certain feeds from the company’s Denmark facility to China.

“We are very happy with this important next step to expand our activities,” Diaz said. “We have established a good business in China through a combination of local production and imported products. We are serving traditional customers as well as customers striving to bring new value propositions to retailers and end-consumers. The Wuxi factory will allow new possibilities for customers with advanced product requirements through all production life stages.”

The new factory is designed to produce higher-end feeds that were previously sourced out of the company’s facility in Denmark, and early production runs have shown the facility is producing feeds with consistency and quality “comparable to the standards seen in high-performing, well established aquafeed factories,” according to BioMar.

All of this was accomplished even as the COVID-19 pandemic was taking its toll on normal life in China, which resulted in a delay of the factory’s construction.

“We have experienced an incredible dedication from employees in our JV, as well as from the supporting project team. During the corona[virus] crisis, we have managed to find new ways of collaborating and bringing people together across the globe, exchanging process knowledge, formulation experience and innovation ideas,” Diaz said. “It has been amazing to witness, how we can work closely together, while at a distance, and obtain such high product quality. I envision a ‘new normal’ in terms of global collaboration, when we open up borders and countries.”

Alan Xiaoqing Qian, the BioMar-Tongwei’s general manager, said that the COVID-19 related delays were offset by a fast commissioning phase.

“After some delays in the construction of the factory, we are extremely happy to have come through an uncomplicated commissioning phase, where we obtained a consistently high nutritional and physical quality,” Qian said.  “Feeds for sturgeon, rainbow trout, Californian sea bass, and large yellow croaker are ready for the market. We have agreed with our customers, that we will start moving some orders from the BioMar factory in Denmark to now be produced in China.”

Soon after the announcement of the first production runs coming out of the company’s new factory in China, BioMar held a “virtual launch” of its new EUR 40 million (USD 43 million) Australian facility, which was first announced in 2017. The new facility has the capacity to produce up to 110,000 metric tons of aquafeed per year.

“While it’s not currently possible to formally celebrate our opening together with our staff, customers, and community, we must acknowledge all those involved in bringing the project to life. We are now up and running in Tasmania and we’re excited to add our technical and production capacity to the region’s aquaculture industry,” BioMar Australia’s Managing Director David Whyte said in a release. “Trials of our products are already underway in a variety of species in Australia and New Zealand, and we are bringing BioMar’s global best practices and nutritional know-how into our region helping to support sustainable innovation in aquaculture.”

Despite COVID-19 forcing the company to hold a virtual launch, the facility itself is “business as usual production-wise,” according to BioMar. The company added that it is handling direct impacts of the virus while planning for the future.

“Right now, our focus is on handling the direct impact of the coronavirus and at the same time trying to prepare for the ‘new normalwhich will follow,” Diaz said. “I believe that businesses able to turn this crisis into an opportunity by rethinking the future, will have a strong advantage going forward.” 

BioMar's strong first quarter comes on the heels of a record-setting 2019, which saw revenue of  DKK 11.2 billion (USD 1.7 million, EUR 1.5 billion), and an EBITDA of DKK 966 million (USD 146 million, EUR 129 million).

Photos courtesy of Biomar


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