EPA+DHA Rich Algal Oil: Closing the Gaps October 25, D. Christian Martin Global Category Manager, Aquaculture DSM Nutritional Products 1

Transcription

1 EPA+DHA Rich Algal Oil: Closing the Gaps October 25, 2017 D. Christian Martin Global Category Manager, Aquaculture DSM Nutritional Products 1

2 DSM at a Glance Evonik at a Glance 2016 Sales* 7.9 billion 2016 Global* presence ~21,000 employees worldwide Sustainability leader Top ranking Dow Jones Sustainability Index 2016 Sales 13.5 billion 2016 Global presence ~33,000 employees worldwide Sustainability is a core element of Power to create Excluding 2016 pro-forma and pro-rata (annualized) sales ( 1,445m) & number of employees (ultimo 2016) of non-consolidated Associates & Joint Ventures (for sales this is mainly Patheon, DSM Sinochem Pharmaceuticals and ChemicaInvest) 2

3 Three Key Mega Trends: Shaping the business environment for the aquaculture industry World population is growing Consumer preferences are changing Implications for aquaculture Resources are become scarcer Keep up with the increasing demand. Trend to more piscivorous diet Consumers want full traceability; digitization amplifies this trend Consumers demand for animal health and well-being Consumers demand healthy food Increasing focus on sustainability Impact of limiting aquaculture industry growth EPA+DHA required for fish growth and health 3

4 Aquaculture Growth Continues: Fish is the most important animal protein source in human diets Development of global meat and fish supply Source: FAO 2015 Source: FAO

5 Volume Looming EPA+DHA Supply Gap: The traditional supply of omega-3 from fish oil will limit the growth of the aquaculture industry Market supply demand for omega-3 1. Supply: Approximately 900k tons per year Limited supply of fish oil as source of omega-3 fatty acids Past Future 2. Demand: Increasing demand for EPA+DHA Aquaculture industry growth and EPA+DHA biological requirement Consumer demand for omega-3 s and healthy nutrition Meeting the demand for omega-3 fatty acids by utilizing new and sustainable sources of EPA + DHA in the future. 3. Supply-demand gap EPA+DHA supply gap will emerge in the near future 5

6 Emerging Value Gap: The omega-3 levels in farmed salmon halved during the last decade If nothing was done the level of the beneficial omega-3 can only really go down. Prof. Douglas Tocher Stirling University 6

7 Omega-3 Content is Important to Consumers: Salmon consumers care about the Omega-3 level in their salmon % of UK salmon consumers answering question How important is Omega-3 content in the final salmon product? Omega-3 content is very important to salmon consumers, with 55 % of responders saying it is extremely or very important Not at all important 10 Unimportant Somewhat important Very important Extremely important Omega-3 content is confirmed as an important attribute of salmon consumers care Source: DSM-Evonik Salmon Consumer Studies

8 Even More, EPA+DHA Benefits Human Health at All Life Stages * Includes ongoing research; Disclaimer: Not for purposes of claims or EPA:DHA ratios 8

9 Closing the Gap: DSM and Evonik join forces planned Joint Venture Veramaris Specialist for the cultivation of marine organisms including algae Biotechnology capabilities in development and operations Specialist in developing industrial biotechnology processes Know-how in operating competitively large scale manufacturing sites for fermentative amino acids. 9

10 Both Partners Plan to Establish a Joint Venture: Offer a future-proof source of omega-3 EPA + DHA DSM and Evonik to found a 50:50 joint venture to be named Veramaris, headquartered in The Netherlands The new production facility to be built at an existing site of Evonik in Blair, Nebraska, USA and is expected to come on stream in 2019 Joint venture s capital expenditure in the facility will amount to around US$ 200 million over the next 2-3 years Initial annual production capacity will meet roughly 15% of the total current annual demand for EPA and DHA by the salmon aquaculture industry Our EPA+DHA rich algal oil is specifically developed for use in animal nutrition - from aquaculture to pet food Broad IP protection in place for our strain, product and process Finalization of the joint venture is subject to regulatory approvals and other customary closing conditions 10

11 Closing the Gap: The ideal alternative EPA+DHA product for the future Rich in both EPA and DHA for complete nutrition EPA and DHA content greater than 50% Free from contaminants Omega-3 innovation from natural marine algae Non-GMO Liquid product High purity Broad use in animal nutrition from aquaculture to pet food 11

12 Our EPA+DHA Rich Algal Oil Has an Unparalleled Value Proposition Our algal oil Benefits from our algal oil EPA + DHA Contains both EPA and DHA Concentration (%) 50% Highest concentration available on the market Handling properties No feed process modification Oxidation stability Stabilized by tocopherols Absence of dioxins and PCBs Naturally pure GMO status Non-GMO product Supply security Reliable supply Price volatility Low volatility Flexibility in feed formulation High flexibility 12

13 Waste-Free Production is Part of Our Holistic Sustainability Approach 13

14 Closing the Gap: Supporting the sustainability agenda of the aquaculture industry 1. WE DELIVER HIGHEST QUALITY. Our algal oil is a rich source of omega-3 with more than 50 percent of EPA and DHA the two key fatty acids. It is produced from natural marine algae and stabilized by tocopherols. The production is transparent, raw materials traceable. 2. WE PROVIDE SUPPLY SECURITY. The initial production capacity will meet roughly 15% of the total annual demand for EPA and DHA by the salmon aquaculture industry. 3. WE DELIVER SUSAINABILITY Our production of algal EPA + DHA utilizes nature s process for production of both EPA and DHA algae; and therefore does not contribute to overfishing. 4. WE PRODUCE WASTE-FREE. Our algal oil is produced through fermentation process using locally sourced sugar. The excess biomass is used for beef cattle feed, or biogas for electricity production, making the production entirely waste-free. 14

15 Our Natural Marine Algal Oil is a Sustainable Alternative Solution for EPA and DHA Supply Current Natural practice food in aquaculture chain % Natural marine algae Zooplankton Fishing vessel Fish Fish oil Salmon % Animation The composition of fish oil DSM and Evonik algal oil DSM and Evonik breakthrough shortening the natural food chain 15

16 Thank you for your attention! 16