China & The Path Forward for Canadian Feed Barley
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1 China & The Path Forward for Canadian Feed Barley
2 China s Feed Mill Industry Process approximately 210 million tonnes of feed in 2016, and demand is growing 60% to 70% of processed feed is corn. This translates to million tonnes of corn per year Total Canadian feed mill production is approximately 20 million tonnes per year 2
3 Timeline ( ) 2014 Summer Ministerial mission to China 2015 November Beijing Wahmix Bio-Tech Co. Ltd. and customer fact finding trip to Canada Opportunity for Canadian (12% protein) feed barley vs. Australian (9.5%) barley 2016 September Invitation from Wahmix to address sponsored feed ingredient conference in Beijing Presentations from Dr. Rex Newkirk and Phil de Kemp 3
4 Timeline (2017) April Feed barley seminars in Fuzhou, China for select Wahmix customers Presentation from Dr. Rex Newkirk July August BCC invites Wahmix and six (6) of their major customers for an eight (8) day tour Group visited hog, poultry and barley farms, feed mills and University of Saskatchewan research facilities October BCC hosts Guangdong Feed Association 4
5 July August Feed Tour 5
6 Timeline (2017) continued November BCC and Wahmix sign letter of cooperation in Beijing witnessed by Minister MacAulay 6
7 Who is Beijing Wahmix Bio-Tech Co. Ltd.? Biotechnology company specializing in research and development, manufacturing and sale of feed enzymes to Chinese feed mills Service feed mill customer base of approximately 50 million tonnes 7
8 Opportunity for Canadian Barley China needs to secure additional feed ingredients and supplement corn feed with cheaper ingredients to meet rapid industry growth Product differentiation via high protein Canadian barley 12% protein vs. Australian 9-9.5% 8
9 Market Challenges Distance to port and ocean freight mean Canadian barley is rarely cheaper than Australian or Black Sea barley Canada currently at 3% tariff ($7.50/mt) disadvantage to Australia China s traditional view of corn and barley price discounts for feed formulation inclusion at 300 RMB ($57/mt) Competition for Vancouver export terminal capacity Declining Canadian barley acres 9
10 How to Harness this Opportunity Show value and cost savings of using high protein barley Show Canadian experience in using barley in feed rations for poultry and hogs via incoming missions Narrow the perceived discount of corn and barley feed price inclusion Provide technical market support, nutritionist, feed processing/formulation, and farm management expertise Feed trials for broilers, layers, ducks and hogs 10
11 Why Partner with Wahmix? Industry leader in feed enzyme manufacturing in China Understand and promote animal nutrition formulations using alternative feeds in rations with enzymes Well connected in feed nutrition academia and research networks 11
12 Why Partner with Wahmix? Excellent business relationships with major feed mill customers Trusted and respected by their customers and academia Two (2) years establishing a relationship with BCC Customers have selected Wahmix to work on their behalf for introduction of Canadian feed barley in their feed rations, formulations and trials 12
13 Feed Mill Customers (Opinion Leaders) 13
14 Feed Mill Customers (Opinion Leaders) Fujian Sunner Development Co., Ltd. Feed mill volumes Targeted barley usage 2,000,000 mt 200,000 mt Guangdong Nanbao Group 3,000,000 mt 300,000 mt Sichuan Giastar Group (20k-80k sows) 200,000 mt Fujian Haixin Group 1,500,000 mt 400,000 mt Yike Group 2,500,000 mt 500,000 mt 1,600,000 mt 14
15 Paradigm Shift to Grow Canada s Barley Market Line companies expected to export over one (1) million tonnes of malting barley to China in 2017 Canadian malt companies buy one (1) million tonnes of malting barley annually Sales of 1 to 1.5 mmt of 12% protein feed barley annually to China will require a future collaborative industry approach with farmers. Integrated malting barley and feed barley purchasing strategy 15
16 Phil de Kemp Executive Director, BCC
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