Interview

Carlos Díaz is CEO of BioMar, a Danish global feed company that produces feeds for 45 different fish and shrimp species in more than 80 countries. After becaming a Veterinarian at the University of Concepcion in Chile, he joined BioMar Chile in 2000 as S&M Manager when BioMar bought Ecofeed, a Chilean fish feed company, where he had worked since 1994. He became Managing Director in 2003 and then Vice President Americas in 2006. In 2009, he changed his position from Vice President of BioMar Americas to Vice President of BioMar Continental Europe and from then several positions including business development. He has held the position of CEO of BioMar since 2014.

with Carlos Díaz

AQUAFEED: Would you give us a brief outline of your journey through aquaculture and how it brought you to where you are today?

CD: I was originally a veterinarian and started my career in fish farming before going into feed. From the first moment, I really liked the aquaculture industry, an interesting and dynamic area where there are always new things to develop.

I joined a Chilean company that had a Danish royalty to introduce extruded feeds in Chile, back in 1994, so my link to Denmark comes way before BioMar. I have had the opportunity to work in different fields from technical, nutrition, operations, research, to sales and marketing, and I have to say it helps a lot in understanding the whole value chain as well as the farming challenges. My journey in BioMar began in 2000 and it’s been a fascinating one, with the opportunity to lead and grow this great company.

AQUAFEED: BioMar is investing in innovation for alternative ingredients. Could you give us an overview of the most recent changes regarding the sourcing of new raw materials?

CD: As a solely dedicated aquaculture feed producer, we are extremely focused on innovation, investing

in R&D and a big part of that is new raw materials. We do not talk about replacement but more complementing different sources of nutrients. Through time, we have reduced our dependency on single sources and try to have more alternatives, bringing sustainability and less volatility to our products and concepts, as we believe this is what this industry needs. This is more challenging, of course, and requires a professional and wellstructured global sourcing department interacting with other parts of the organization such as R&D, formulation, sustainability, quality and food safety. Requirements are growing and the systems to deal with this complexity also, so we need to be ahead, and we think we are. Byproducts, single-cell raw materials, novel oils, etc. will all be a part of the basket going forward, and we see some other alternatives in the pipeline for the future.

AQUAFEED: According to BioMar’s latest Sustainability Report, the company achieved a five-year average 1:1 or below FIFO ratio. What is the impact of alternative ingredients on this reduction?

CD: As a purpose-driven company, one of our guiding principles is sustainability, which together with innovation sets our strategic agenda. Years ago, we started an ambitious sustainability program, internally, and this reached further to our products and concepts. Why? Because as we like to say, “it is the right thing to do”, but also over time we have found great opportunities to differentiate and help our customers through this.

The FIFO ratio was one of the objectives, and as stated in the report, we have managed to accomplish it. The role of alternative ingredients to compliment fishmeal and fish oil has been extremely important, and of course, without them, it would have been impossible. But of course, to be able to use all these alternatives it means years of research and development, but at the same time, we need to maintain high performing products, economic efficiency, safety while maintaining the attributes of the species we feed, for example, flesh quality, EPA and DHA content, color, etc., in the case of salmon and trout. Through time, we have reduced our dependency on single sources and try to have more alternatives, bringing sustainability and less volatility to our products and concepts, as we believe this is what this industry needs.

AQUAFEED: Sustainability is key to BioMar’s agenda. How is BioMar lowering its carbon footprint?

CD: As stated, before we started our sustainability program back in time, a long list of targets and KPIs were established. These targets finished this year and we are in the process of reevaluating, our operations, targets, materiality assessment, etc., to continue developing what has been going well and address the challenges, plus maybe some more focus on new things.

We see sustainability and, in general, ESG as part of our business. We start from a strong purpose and from there escalate all our guiding principles, values, ambitions, targets and KPIs. Carbon footprint is one of these important targets, which of course is very important, and with the development in our program, we link more and more our investments, KPIs, technology development, etc., to comply with the ambitious goal of reducing it. Of course, this is not a walk in the park since we are growing at the same time, different countries, products, species, sources of energies, etc., which keeps us focused on it all the time.

The evolution of our approach starts from a sustainability program and report, to making ESG part of everything we do, that means it is on top of the agenda in strategic and financial decisions. We believe this is the way to run a company like ours in these times, and especially going forward.

AQUAFEED: Investors are pouring millions into RAS farms. What are the main challenges you think this expansion will face and what is BioMar doing to assure the feed supply?

CD: It is exciting to see what is going on in RAS around the world. BioMar has a long history in this field since our Danish company has been specializing in this area for a long time, long before the boom.

The trick in RAS feeds is to understand that we need to take care of two living organisms, the fish of course but also the biofilters. At the same time performance needs to be good, meaning the TEP (Total Economic Performance) needs to be right. This can be challenging and requires a lot of research and development, not only in nutrition but especially in physical aspects of the feeds and the perfect quality all the time. One mistake in these systems can be expensive, I think we see every day in the news that all these projects are not a “walk in the park”, failures and problems will be part of the development in all of them.

In BioMar, we have created an especial global RAS taskforce, including expertise in R&D, BioFarm (technical assistance), marketing, sustainability and sourcing, to develop and market the perfect product for each system and work systematically with different customers and species. We dedicate important resources of our R&D budget and we have just invested in a state-of-the-art facility in BioMar Denmark to increase our capacity but more importantly to deal with the increasing demands in technology due to physical quality requirements as this goes hand-inhand with nutritional requirements. We believe we have an important market position not only in salmon but in other species with our concept ORBIT.

AQUAFEED: With the recent investments in China and Vietnam, BioMar has made a big move into the Asian markets. How do you expect other emerging markets, such as Africa, will evolve? What are the main challenges?

CD: For the time being, we are focused on Asia and South America as emerging markets, and especially in shrimp as part of our strategy and we try to stay focused. In strategic development, it is very easy to find things to do, however, it is more difficult to decide what not to do, at least in the strategy period. Even if we believe aquaculture in Africa will develop in time, it has not been our focus for this strategy period.

We started as BioMar in trout, moved to salmon, then to marine species and some other freshwater species, with our last movement in shrimp. With our new organization setup, we focus on business segments and we strongly believe what we have built in other fish species, knowledge and market positions, that we can transfer to shrimp.

Of course, China is much more than shrimp, but the species we focus on in that country, where we already have two plants, are mainly cold water and marine species where we have strong knowledge and position in other markets.

The main challenges for all these markets, including Africa, are the increasing demand in environmental and sustainability restrictions, water availability and a legal framework, which for sure will come like it did in developed aquaculture areas like salmon.

AQUAFEED: BioMar along with IBM Food Trust, Kvarøy and Tellspec offer digital solutions that promote transparency in the supply chain. How can the feed industry take advantage of blockchain technology to introduce digital trust?

CD: It has been interesting to be part of this project with an innovative customer like Kvarøy, a farmer who is always ahead in his field. I strongly believe that in these times, and maybe especially now after what we have seen with COVID-19, consumers will focus more and more on what they eat, not only that it is tasty and healthy, but produced responsibly and complying with ESG standards, with strict food safety procedures and strict traceability.

I believe this technology will help make all data more available and will answer the need for transparency. It will be exciting to see how it will develop but for sure transparency and food trust will be top on the agenda for seafood in the future.

AQUAFEED: Even though the demand for animal feed has been relatively stable, the COVID-19 pandemic has hit the supply chain and some countries are moving to domestic feed production. What are the main short-term effects do you expect in the aquafeed industry?

CD: In the short term, we have seen in some markets our customers hit by the decrease in demand in the

HORECA sector, which has been the main effect. We have not seen an important decrease in production and therefore, demand for feed, and we have not seen what you mention in terms of domestic feed preference. Also, in the shrimp sector on top of the HORECA effect, we have seen a big influence on what is happening in China, where they claim traces of COVID19 in some products. The decrease in production is easier in shrimp where the production cycle is much shorter, I think is more difficult in fish.

So the main effect has been in prices and therefore profitability of our customers, which of course could make our business riskier for a while. Having said that, we have lived through many big sanitary and price crisis in different species around the world in BioMar and we have managed, supporting good customers and working together with solutions when needed.

We believe the HORECA demand will come back slowly but surely, however during this time other channels in retail like online, etc. have developed at an incredible speed, so I am sure that the comeback for the major seafood products will be stronger than before.

AQUAFEED: Where would you like to see the aquaculture industry in the next ten years?

CD: I believe aquaculture has a big role to play in feeding the planet in the coming decades, but of course, it must be done in a sustainable and responsible way. By far, the most efficient way of producing a healthy, sustainable and tasty protein is by aquaculture, so I am very optimistic about the future.

I would like to see an industry more proactive in communication, highlighting the positive aspects of this production and responsible, correcting or working hard in the environmental challenges in all areas. There are different kinds of seafood products, from low to high end, with different price segments, but all of them require taking care of the water, environment, working actively with communities and all stakeholders.

In summary, I would love to see aquaculture through all these proactive actions in the position it deserves, attracting new talent and developing areas where this economic activity could be the solution, and, at the same time, developing more brands and good stories in the developed markets such as salmon, shrimp and other fish species.