Animal agriculture is a complex industry influenced by many changing dynamics throughout the food value chain. The price of basic feed commodities, new scientific discoveries relating to animal health and productivity, increasingly demanding regulation at all levels of food production and animal farming, heightening attention to animal and human safety, climate change and impacts of weather extremes and many more factors make the animal agriculture sector one of the most challenging and demanding for all players along the chain.
At Novus, our own business sustainability is both dependent upon long-term robust and profitable animal agriculture while at the same time, making an important contribution to the sustainability of the industry. We are always working closely with our customers and a broad range of industry and academic groups and experts to understand risks, opportunities, needs and current evolving practice. We work in partnership with diverse groups to contribute our knowledge and help develop solutions which have an impact on the sector as a whole, beyond the work we do directly with our customers. We collaborate with specific industry players to identify solutions to their unique needs, and we promote knowledge sharing, scientific research, collaboration and the attraction of new talent to the industry to advance the long-term outlook for animal agriculture and positively contribute to global food security for current and future generations.
For example, we are partners in the Global Agenda for Sustainable Livestock and are committed to the principles advanced by this voluntary industry collaboration.
One of the key areas of focus that we support is the more efficient use of natural resources to make the entire sector more energy, land, water and overall resource efficient. Our expertise and solutions for improving productivity and reducing waste in animal agriculture make us a positive partner to advent the Agenda for Sustainable Livestock and also benefit from a more productive and viable industry.
Supporting the Rendering Industry
The rendering industry in the U.S. plays a significant role in supporting the sustainability of animal agriculture through rendering and recycling approximately 59 billion pounds of inedible animal by-products annually. These waste by-products are sourced from food processing facilities, supermarkets and restaurants and are converted by renderers into a concentrated source of energy for animal and poultry feeds as well as a high quality feedstock for biodiesel. The National Renderers Association estimates that the environmental contribution of the rendering industry through landfill avoidance of the volumes processed in the U.S. industry is equivalent to the greenhouse gas emissions avoided by taking more than 12 million cars off the roads. At Novus, we support this industry with solutions to make the rendering process more efficient, and also make products of the rendering industry more valuable in their use phase.
Enzymes for the Rendering Industry
Feathers are an important part of the rendering industry raw materials and in the U.S. can amount to close to two million tons of discarded feathers per year. We offer the rendering industry a feather-degrading keratinase (protease) enzyme that was developed to improve the economic value in the rendering process by reducing energy costs and improving the nutritional value of feather meal. Our CIBENZA® IND900 product enables the rendering industry to save energy costs and preserve the protein content of the rendered products by enabling the use of lower temperature and pressure rendering operations. Based on trials in commercial rendering operations, we have seen energy savings around $30 per metric ton of feather meal produced.
Not only this, recent trials have shown that feather meal from the rendering process utilizing CIBENZA® IND900 results in a feed ingredient which is on average five percent higher in available amino acid content than current products available to feed formulators. This enables the rendering industry to gain more value from an industry waste product and provide more nutrition for animals.
Ethoxyquin for the Rendering Industry
In 2013, Novus played a major role in partnering with and supporting the rendering industry to navigate regulatory challenges following a Food and Drug Administration (FDA) ban on the use of ethoxyquin as an antioxidant in rendering processes (it had been used for stabilizing fats and meals). This FDA decision was a shock for renderers, effectively preventing use of one of the antioxidants most crucial to the successful processing of raw materials and essential for the survival of the rendering industry.
Ethoxyquin is a well-known antioxidant and food preservative which has been used in human and animal food products for decades, playing a role in preventing rancidity of fats and helping to maintain stability of different products, including rendered products. Without an effective stabilizer, rendered products are highly flammable and potentially dangerous to handle. Ethoxyquin is tightly regulated in many countries, but approved for use in the U.S. in several applications. In 2012, however, the FDA reminded the industry that ethoxyquin had not been approved for stabilizing fats and meals (the main products produced by the rendering industry) and indicated that it would more closely regulate its use.
The rendering industry needed to resolve this critical issue. Although Novus is not a manufacturer of ethoxyquin, we are the largest marketer of imported ethoxyquin in the U.S. and have served the rendering industry for many years. We felt we had a responsibility to support the industry in resolving this issue, and quickly started partnering with the rendering industry and FDA officials to find solutions. We rapidly organized ourselves to perform the essential trials necessary for FDA registration, and managed to persuade the FDA to offer a temporary approval (known as “regulatory discretion”) which would allow use of ethoxyquin at low levels through the remainder of 2013 (and which was again approved through the remainder of 2014). We hope to persuade the FDA to increase this use level through alternative strategies for ensuring safe use of ethoxyquin.
During this process, our objective was to partner with both the FDA and with the industry, in order to find the best solution for all parties and to enable the rendering industry to continue to make a strong contribution to environmental sustainability. Our extensive investment in supporting the industry has helped develop stronger relationships and understanding of the issues, and we are optimistic that a permanent, positive solution will be achieved.
Supporting the Egg Industry
For years, Novus has been actively involved in supporting our customers and the egg industry to advance awareness of the nutritional value of eggs and their importance as a source of low-cost protein in all parts of the world. We partner with the International Egg Commission and also with our local markets to support World Egg Day in October each year and also engage in other activities to advance the benefits that increased access to eggs can bring. Even today, egg consumption in emerging economies is still very low, for example, 39 countries in Africa still have an egg consumption of less than one egg per person per week. With other sources of protein not always available or affordable, eggs can provide an important solution to food security issues in Africa and other regions of the world. Eggs are the first non-vegetable protein source many populations consume, especially in developing countries with a low average income. Although we do not produce eggs, we are a committed partner in the egg value chain, and support the egg industry with solutions for improved productivity and profitability on the one hand, and awareness-raising on the other.
The First FAO-IEC Technical Seminar in Africa
In 2013, we broadened our partnership with the International Egg Commission (IEC) to support the delivery of the first technical seminar for the egg sector held in Africa. Working jointly with the Food and Agriculture Organization (FAO) and the IEC, we assisted in the hosting of a two-day technical seminar in Zambia. The seminar brought together around thirty government representatives, veterinarians and egg producers from Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe for workshops, technical presentations and the exchange of information vital to increasing egg consumption and helping local producers address some of the challenges that hinder egg production in the region. The ultimate goal is to cultivate long-term and ongoing partnerships between IEC members and local egg producer associations. It was important for Novus to participate in this program which is aimed at helping producers in Africa address the specific challenges they are dealing with. Our goal is to provide our customers with the products, resources and information they need to be as successful as possible.
World Egg Day 2013
As in previous years, our teams in Novus worked tirelessly in all our markets in partnership with local egg associations to help advance a range of diverse, fun and educational activities to bring eggs to the people, reaching, we estimate, more than one million consumers.
In 2013, we ran more than thirty different activities in 12 countries, in partnership with local Egg Associations and customers, ranging from fun egg days in schools, to farmers' training events, to promotional awareness campaigns in different countries.
Supporting the Aqua Industry
Novus has been a prominent player in the global aquaculture industry for several years, dedicating research and innovation to meeting the unique needs of this growing sector, which plays an important role in providing nutritious food and protein to feed our growing population around the world. In early 2014, we completed the planned dedication of the Aquaculture Research Center (ARC), located on campus in Ho Chi Minh City, Vietnam, to Nong Lam University (NLU). Novus established the Novus Aquaculture Research Center (NARC) in 2008 to provide cutting edge research facilities for shrimp and fish nutrition and health. NARC provided a platform for the demonstration of more sustainable feed formulation strategies which enhance return on investment for feed manufacturers and farmers.
Advancing Innovation in Aquaculture
In 2013, Novus announced Dr. Amir Sagi, Ph.D., a professor at Ben Gurion University of the Negev in Israel, as the recipient of the 2013 Novus Global Aquaculture Innovation Award. In association with the Global Aquaculture Alliance (GAA), this inaugural award, sponsored by Novus, was presented during the GOAL 2013 conference held in Paris, France. The Global Aquaculture Innovation Award recognizes innovative practices that overcome production challenges or mitigate negative environmental or social impacts at aquaculture farms.
Dr. Sagi’s innovation which involves a novel biotechnology application to produce all-male populations of the giant freshwater prawn was selected as the winner because it effectively addressed a key solution to the complex challenge of expansion of freshwater prawn production without genetic modification or use of exogenous hormones. Dr. Sagi is the past president of the International Society of Invertebrate Reproduction and Development and former dean of the Faculty of Natural Sciences at Ben Gurion University. The GAA received 16 applications encompassing nine species of marine and freshwater fish and shellfish and originating from 11 countries for its inaugural Novus Global Aquaculture Innovation Award.
Advancing Knowledge in Shrimp Technology
Disease continues to be one of the greatest challenges facing commercial marine shrimp aquaculture around the world. Over the past thirty years, improved shrimp farming technologies have enabled production intensification, better shrimp growth and more sustainable farming practices. Despite these advances, catastrophic disease outbreaks have periodically plagued growers in major shrimp producing countries worldwide. In Vietnam alone, shrimp disease has cost producers over $1 billion per year in the past three years.
Biofloc technology is an approach to the production of shrimp and tilapia which is based on high stocking densities of fish and limited exchange of water. In general, biofloc is thought to deliver benefits for limiting disease and maintaining positive nutrition and growth although insufficient empirical evidence has been gathered to date to provide conclusive results.
In 2013, in order to advance the body of knowledge and share approaches to the use of biofloc technology, Novus partnered with the World Aquaculture Society (WAS), the Aquacultural Engineering Society (AES) and Vietnam International University to host a two-day workshop to explore the link between biofloc technology aquaculture production systems and shrimp disease. Over 200 participants attended and the workshop resulted in recommendations relating to the use of biofloc technology and the required conditions to enable successful application and disease avoidance in shrimp farming.
Advancing Young Scientists
Novus supports the development of research and new science-based technologies in aquaculture for the development of affordable, wholesome food, as well as engaging with students to support their research and contribution to aquaculture. As part of its ongoing support, Novus partnered with the World Aquaculture Society (WAS) to create a research challenge for aquaculture students. The Novus-WAS challenge invites students to present a technology which can help reduce production costs through increased productivity, growth or feed conversion efficiencies. The winning contribution in the second WAS internship challenge in 2013 was from Pattanapon Kayansamruaj, age 29, from Bangkok, Thailand. His winning research proposal suggested a methodology for the development of an oral vaccine for an important pathogen in finfish aquaculture. Pattanapon was awarded a four-week, expenses-paid internship to be spent working with the Novus Aquaculture Research team on a current project being carried out at the Aquaculture Research Center in Vietnam.
Collaboration and Knowledge Sharing
Helping to Share Knowledge
As a leading player in the development of feed solutions, working at a very practical level with hundreds of customers all over the world, we are fortunate to be able to serve as a catalyst for knowledge sharing and best practice review to support our customers and the industry in general. We have often brought customers and experts together to share expertise, and in 2013, we created an informal Novus Forum to gather leading animal protein producers from different counties to engage and share for mutual benefit.
In 2013, we held one of our first forums to work on the best model for using enzymes in animal diets. The Novus Forum-Enzyme Summit, one of the first forums organized in HuaHin, Thailand, was focused entirely on meeting the needs of the local animal feed industry. The Forum provided the perfect platform to share experience of commercial applications among producers, academia, researchers and senior Novus experts. At the Thailand meeting, Dr. Chris Knight, Novus’s Senior Vice President, Products and Solutions and Chief Innovation Officer, spoke to the group about trends in animal feed and technology, stressing the need for innovative technologies to meet the growing demand for food as the population grows. Over 30 delegates attended the summit from several different countries in the South Asia region, and feedback was that they all found relevant points of interest and learning to help them back home in their roles.
Helping to Exchange Knowledge
Our position as a global company with customers in all continents provides us with an opportunity to bring experts together to exchange knowledge and best practice, and spread cutting edge thinking at a global level. In early 2013, we organized a knowledge exchange for European and U.S. swine experts. Ten European veterinarians, nutritionists, producers, and feed experts spent a week visiting American farms, feedmills and research facilities in October to learn more about improving production performance. Such industry collaboration is essential for identifying strategies to improve sow longevity, litter performance and maintaining the profitability of the swine sector. Novus can play a key role in coordinating such exchanges to support our customers in dealing with the challenges of the sector across national boundaries.
Helping to Build Capability
In Uganda, in 2013, we created the 300 Club. This innovative program from Novus was specifically developed to support producers in Uganda, helping them to increase productivity and efficiency in their operations.
Uganda has a population of 35 million and almost 40 percent live on less than $0.25 per day. More than 80 percent of the economy is supported by agriculture. Poultry farming is most prominent and there are more than 2 million layers that produce eggs for the local population. However, there are farming challenges in Uganda, including lack of consistent feed quality, high levels of disease and mortality among poultry and overall low productivity. In this context, Novus saw an opportunity to bring Ugandan producers together to advance egg production and provide a framework to help them achieve consistently higher output for better productivity and profitability.
The 300 Club provides a continuous farm assessment tool that yields us the best kind of information to help producers as they pursue a target of 300 eggs per year from each hen. The framework provides a channel for farmers to share experiences and technology to enable them avert challenges. Novus provides technical training each quarter to the 300 Club, coordinates farm tours and visits and provides information and guidance on formulating poultry feed. In addition, 300 Club members can use our mobile phone application to communicate with Novus and each other and receive technical tips and real-time advice.
Helping to Build Best Practice
In India, we took a further step forward in knowledge sharing and education by hosting what we believe is the first “International Master Class on Broiler and Breeder Nutrition” in South Asia. The three-day Master Class was held in Goa, India and was attended by more than 30 animal nutritionists and poultry integrators from all over India. We invited world renowned poultry nutritionists, Dr. Steven Leeson and Dr. Rick Kleyn to share knowledge and expertise and discuss different practices with delegates. This program covered a wide range of boiler and nutrition issues ranging from early development, metabolic disorders, fertility, hatchability and gut health.
Supporting the Talent Pipeline
One of the key roles we can play in supporting the vitality of our industry and its ability to continue to meet the world's needs for food and nutrition is to help attract young people to work in agriculture. With the migration of people to cities all over the world and urbanization levels projected to reach close to 70 percent in the next 20 years, as well as the allure of technology and financial services professions, agriculture may be a low priority career choice for many of today's young students. We, on the other hand, feel that agriculture is one of the most critical sectors for our ability to thrive on the planet. We share a responsibility to attract the best and brightest minds and passions to help advance methods, practices and collaborative approaches within all parts of the food value chain. Our collaborative approach with industry associations, research institutions and universities to promote careers in agriculture continues to be an important consideration in all that we do.
Talent Through IFAMA
In 2013, our former President and CEO, Thad Simons, became the President of the Board of Directors of The International Food and Agribusiness Management Association (IFAMA). IFAMA is a leading agribusiness nonprofit that brings together the best minds from all sectors of food production and consumption to improve the industry.
During his two-year term as IFAMA’s president, Thad specifically seeks to focus the organization’s efforts on global talent development for agriculture.
Talent Through AWARD®
In 2013, we entered our fourth year of partnership with the African Women in Agricultural Research and Development (AWARD) program. The AWARD program helps fast-track the careers of outstanding African women agricultural scientists and provides premier opportunities to research specific nutrition solutions to food security issues in their home countries.
As part of our commitment, in spring 2013, we welcomed our fourth AWARD Research Fellow, Adey Melesse Yalew, to our global headquarters to work with our research and development teams and collaborate with the University of Missouri to better understand mycotoxins through hands-on work experience. During her stay, Adey learned analytical methods for mycotoxins and how to protect the animal from the effects of the toxins. Adey is an Associate Researcher of Animal Biotechnology and Nutrition at the Ethiopian Institute of Agricultural Research in Addis Ababa, Ethiopia. Following her seven-month stay in the U.S., she has returned to Ethiopia to apply her findings to contribute to food security and regional economic development.
Talent Through the Novus Scholars Program
The Novus Graduate Scholars Program engages with universities to identify outstanding research students and offer them a unique opportunity to enhance their experience, knowledge and skills while advancing their sustainable agriculture research. We entered the eighth year of our Novus Graduate Scholars Program in 2013. Each year, students are selected from top agricultural universities in different countries. The Novus Scholars Program currently partners with universities and organizations in China, India, Korea, Vietnam, Brazil, Canada, Kenya and the U.S. One student from each university is selected to participate in an internship at our global headquarters. In 2013, we welcomed 11 students including eight from China, two from Thailand and one from Australia.
Talent Through the John Brown Scholars Program
In 2013, we welcomed the 2013 University of Missouri College of Agriculture, Food, and Natural Resources John Brown Scholars to our global headquarters to take part in a variety of educational settings including meetings with top executives, tours and training. The John Brown Scholars are highly motivated students who are eager to take part in a program that exposes them to the corporate side of agribusiness. Four students who have set their sights on careers in the agribusiness, marketing, bio-chemistry and agricultural economics were hosted by Novus. During their visit, the four scholars were greeted with a full day of meetings with Novus executives to discuss Novus’s role as a global nutrition and health company.
Minimizing Food Chain Environmental Impacts
All of Novus feed ingredients have a positive sustainability impact, providing benefits that improve productivity, reduce waste and enable efficient use of natural resources. We have discussed many of these products and their benefits in Part Two of this report, Summing up Customer Benefits. In addition to these customer benefits, which play a direct role in customer profitability, it is important to note that many of our products provide additional environmental benefits. In all cases, we strive to help improve the overall environmental footprint of the feed industry and the full food value chain.
Some of the specific aspects of our environmental impacts include the massive reduction in food waste and land use as a result of a more efficient food chain. By improving the bioavailability of feed through the use of enzymes, we avoid use of agricultural resources such as land to grow soybeans. In the U.S., for example, nine billion broiler chickens are produced every year that require around 40 million tons of feed, which includes ten million tons of soybean meal. By replacing part of the soybean meal in feed with enzymes that increase the bioavailability of protein to the animal, the total soybean requirement to deliver a ton of animal protein is reduced. Our rough calculation is that, if the entire U.S. market were adding our enzyme to animal feed, the benefit in terms of land use would be in the order of one million acres of land which could be used to produce other crops for human food production or other requirements. Of course, this is a theoretical calculation, however, the underlying truth is indisputable. More bioavailable feed ingredients play an important role in reducing the environmental burden of animal feed production and animal agriculture as a whole. In addition, we play a role in reducing environmental pollution caused throughout the food value chain.
Sustainable Yellow Pigment
Natural pigments are a field of expertise we continue to invest our resources and skill to develop. We are one of the largest suppliers in the world of natural pigments for use in the feed industry and we maintain a Center of Excellence in Spain which includes a focus on the development of natural pigments.
In the feed industry, pigments are used to enhance color in poultry skin and egg yolk and in aquaculture (i.e., salmon, sea bream, etc.). They can be used directly through mixing into feed or concentrated into premixes depending on final user requirements. Through the intake of pigmented feed, the pigment is absorbed by the animals and accumulated in their tissues deposited in the egg yolk of laying hens. In some markets, color becomes a dominant factor in consumer appeal and willingness to purchase.
There are two key challenges for such pigments in our industry. First, natural pigments are limited in bioavailability versus synthetic pigments, which are covered by significant regulatory restrictions and negative consumer perception. Second, natural pigments have traditionally not been preferred due to stability concerns in certain feed formulations and premixtures. In order to address these issues, and offer more sustainable options to our customers, we have developed a new yellow carotenoid pigment, sourced from natural marigolds, which is now starting to reach our different markets. Our new yellow pigment is proven to provide improved bio-efficacy in broilers and layers at a level of more than 20 percent versus alternative synthetic pigments which provides superior coloration and has an unmatched 24 month shelf-life stability in feed formulations which reduces spoilage and waste. In addition to the coloration properties of our natural pigment, the significant environmental advantages of a concentrated, stable and bio-effective product make this yellow pigment another important sustainability-based product in our total portfolio, and supports food industry sustainability.
Sustainable Product Specifications
Dioxins are a group of chemically-related compounds that are persistent environmental pollutants. Dioxins are found throughout the world in the environment and they accumulate in the food chain, mainly in the fatty tissue of animals. More than 90 percent of human exposure to dioxins is through food, mainly meat and dairy products, fish and shellfish. Dioxins are highly toxic and can cause reproductive and developmental problems, damage the immune system, interfere with hormones and also cause cancer.
Novus strictly controls the level of dioxins in the raw materials sourced and final products delivered to the market, testing in qualified laboratories all batches of raw materials to ensure compliance with the most restrictive legislation available. In some of our markets, legal limits have already been established, but in other markets, there is no specific regulation. However, we apply the same standard to all of our production and have developed a proprietary set of tests and controls to ensure that our raw materials are dioxin-compliant and we have been applying these controls at additional cost to Novus during 2013.
In 2013, we managed to source low dioxin oleoresins for 10 percent of our total sourced volume.
Reducing Mineral Pollution
Different minerals such as copper, manganese, zinc and more are added to animal feed in order to compensate for mineral deficiency or potential deficiency. The purpose of adding minerals in animal diets is to help activate certain enzymes which support metabolic processes essential for healthy growth. However, inorganic trace minerals have low bioavailability properties and instead of being used in the body, a high proportion goes to waste, excreted by the animal. Farmers have therefore tended to compensate for lower bioavailability by adding more minerals to the animal diet. At the right level, these minerals are essential for humans and animals. At the wrong (excessive) level, they give rise to safety and environmental concerns.
In excessive quantities, trace minerals become harmful both to animals and to humans. Eating crops grown in soil with elevated levels of trace minerals can cause disease. Similarly, imbalance in trace minerals can cause numerous environmental problems, including water toxicity and disruption of natural ecosystems.
Based on evaluations using a proven methodology developed by The French National Institute for Agricultural Research to evaluate mineral rejection in the litter of broiler chickens, we know that the excretion rate of inorganic trace minerals (zinc, copper and manganese) is between 85 percent and up to more than 99 percent. In other words, these minerals are barely being used by the broilers. However, using chelated trace minerals, the excretion rate is much lower. We confirmed this position in a study with Kasetsart University in Thailand, in 2011, and later in field trials with a large U.S. poultry integrator. The results were astounding. When our MINTREX® chelated trace minerals were added to the broiler diet instead of inorganic trace minerals, we observed an excretion rate of 34-48 percent - around half. This means that far less copper, zinc and manganese is released to the environment as potential causes for pollution, water contamination and biodiversity loss.
In 2013, in our South East Asia Pacific region, where poultry is a prime source of nutrition, we calculated the effect of this to be 140 fewer tons of these three minerals entering the soil through animal feces and polluting the environment.