April 20, 2015
BioMar and Tongwei expand in China and other Asia
The BioMar Group has signed a Memorandum of Understanding with Chinese Tongwei Co. Ltd to establish a joint venture to produce and sell high performance aquaculture feed in China.
The target of the joint venture is to become one of the leading suppliers of high performance feed to the Chinese aquaculture sector, and in a second step to expand further to other Asian markets.
The two companies agreed to start building a feed factory with an annual capacity of over 100,000 metric tons in China, scheduled to start operation in 2016. In the next stage BioMar and Tongwei target to expand with three to five new factories of similar or larger scales in China, and in production and sales in other countries in Asia.
BioMar''s entry into the Chinese market is according to the CEO of the BioMar Group, Carlos Diaz, a part of a global expansion strategy initiated a few years back with the establishment of a feed production unit in Costa Rica and which most recently has resulted in the construction of a new factory in Turkey.
Carlos Diaz explained that BioMar and Tongwei complement each other extremely well in terms of product ranges and market access: "China is the world largest aquaculture market and Tongwei holds the leading position as a feed supplier to the aquaculture industry in China. BioMar will as a leading global supplier of specialised larval and fry diets as well as high performance grower diets and functional feeds, contribute with know-how and product ranges for the fast growing production of high value fish species in China."
Accordingly, the product range for the new joint venture factory will include starter and grower feeds for marine and fresh water species such as sea bass, sea bream, cobia, turbot, bass, grouper, trout, sturgeon, tilapia, eel, and shrimp.
While BioMar will directly apply feed recipes and product ranges for some species, Carlos Diaz underlines that BioMar also brings a well proven approach in product development securing highly efficient, safe, and sustainable diets: "We have in the salmon segment as well as in other species built a model for feed development, which will be of great value in the development of feed for the new species which are gaining importance in aquaculture across Southeast Asia."
Referring to recent reports pointing to the lack of clean water as one of the greatest challenges for the expansion of aquaculture production in China and the rest of Southeast Asia, Carlos Diaz pointed to another key strength of BioMar: "In this scenario with water becoming an increasingly scarce resource BioMar can contribute with a huge amount of knowledge in environmental management, reduction of emissions from aquaculture to the aquatic environment, and especially with highly specialised diets developed for intensive fish production in recirculation aquaculture systems with very limited water consumption.
BioMar has over the years through proactive research effort and collaboration with farmers, authorities, and research institutions, achieved a leading position in this field. This knowledge will be very important in the future development of aquaculture in China as well as the rest of Asia."
BioMar and Tongwei will each hold 50% of the new joint venture.