More sustainable feeds/Feedmill acquisition in the Philippines

More Sustainable Feed

Expansion and acquisition of feedmill in South Mindanao

More Sustainable Feed is a Grieg Seafood and WWFUS project to evaluate environmental, social and governance (ESG) risk in salmon feed ingredients it uses. The approach is to analyse both the feed ingredients and the suppliers of those ingredients. The goal is to reduce ESG risks to the company from purchased feed; it also takes into consideration wherever possible of the economic incentives for greater ESG risk reduction. To mitigate the risk of overfishing, the company uses less marine ingredients in its salmon feed. Unfortunately, some of the alternatives used, like Brazilian soy, were later linked to new issues of concern, such as deforestation and conversion.

The outcome of this work will help to enhance Greg Seafood’ feed strategy and its approach to novel feed ingredients. While Grieg Seafood is undertaking this work for its own purpose, findings will be available to other salmon aquaculture producers plus downstream buyers, investors and even consumers and producers of other animal proteins, including other aquaculture species.

Feed ingredient liabilities are of great concern to producers since the buyers, financiers and even end consumers are interested in the full supply chain risk reduction. Unless farms are vertically integrated with feed production, most animal protein companies will not know the origin of all the ingredients that are in their feed as well as how and where those ingredients are produced. In animal protein production, 100 or even more ingredients are in the feed and it would be difficult to list all of them and their origin on the package. In shrimp aquaculture feed companies do not provide information, beyond total protein.

Grieg Seafood identified WWF-US office as the core partner in the project for the design of the overall assessment. During the discussion at SEG, on the ESG risks in feed ingredient supply chains, the Grieg Seafood and WWF-US teams outlined the scenario today and that of the future. Many ingredients are at risk -certified (fishmeal and soy). Novel ingredients have embedded ESG issues when they scale up. In general, industry is too reactive and needs to be more proactive. Together, industry needs to identify and mitigate ESG, drive change to be a sustainable food system; and work towards a 100% traceable and transparent supply chain.

On some key takeways, they said, “Feed is a black box. It is far from transparent and traceable. Often it is only traceable a few steps down the supply chain. There are many risks that we are not aware of. Pre-competitive collaboration to address issues concerning animal protein production and value chains is needed to achieve change at scale effectively. A proprietary approach is not the way forward. Each company cannot have their own ESG system or use different life cycle assessments (LCAs). Common definitions and methodologies are necessary. We should aim to either remove the worst performers within each ingredient from our supply chain and incentivise farmers to become better.”

In the Philippines, ADM a global leader in animal nutrition, has acquired South Sunrays Milling Corporation (SSMC) feed mill in Polomolok, South Cotabato, Mindanao. The addition is a step forward in providing a wide range of leading-edge products to meet Asia’s demand for innovative and high-quality products in the animal nutrition market.

“Globally, ADM is expanding its ability to meet growing customer demand for high-quality, responsibly-produced animal nutrition products, and we look forward to bringing our expertise and production capabilities closer to even more customers in the Philippines,” said Gerald Wilflingseder, President, Animal Nutrition, Asia Pacific, ADM. “This addition increases our regional production capacity, enabling us to enhance our wide range of leading-edge solutions to better support our customers’ dynamic needs in a timely manner, while providing further opportunities to offer new product solutions in the Philippines and across the region.”

The South Cotabato mill, along with existing ADM feed production facilities in Cebu and Bulacan, support customer growth in the region with a wide range of leadingedge pet food, complete feed, aquaculture and premix solutions. Further, the investment will support economic development through the creation of more than 100 new jobs in the region. “We are excited to combine our global expertise with deep local insights to unlock greater value for our customers in the Philippines and across the region,” said Lorenzo Mapua, managing director, Animal Nutrition, Philippines, at ADM. “This acquisition will allow us to offer a wide range of high-quality feed products for swine, poultry and aqua for both backyard and commercial farm segments with our recognised brands such as Ultrapak, Evialis and Ocialis.”

SSMC started the feeds tolling business in South Cotabato in April 2017. After three years, SSMC expanded its second feed mill to produce quality feeds for aquaculture, petfoods and extruded raw materials like full-fat soya and other raw materials. One of their milestones includes venturing into shrimp farming in Sarangani province, under a new corporation, South Sunrays Aqua Ventures Corporation.