Indian Immunologicals (IIL), set up by The National Dairy Development Board (NDDB) in 1982 with the objective of making Foot and Mouth Disease (FMD) vaccine available to farmers at an affordable price, is today the third largest animal health player in the Indian market and market leader in veterinary biologicals in India. It operates one of the largest plants in the world for veterinary vaccines which is WHO-GMP and ISO-9001 certified. Besides animal health biologicals, IIL is engaged in marketing products such as formulations and nutraceuticals. IIL’s product range includes Calcium Oral solids – Calsagar Plus; Area specific mineral mixture for each states and region which is introduced for the first time in India. These products are available in veterinary retail outlets, also sold directly to dairy farmers, feed mills and corporate dairies.
IIL also ventured into the cattle feed business in line with NDDB’s National Dairy Plan which aims at bridging the demand-supply gap for milk in India by targeting an output of 180 million tons by the year 2020. The cattle feed business began operations by taking over NDDB’s feed plant at Rajkot which has an installed capacity of 200 tons of feed per day. This plant also has facilities for production of bypass protein and area specific mineral mixture. It currently produces scientifically formulated feed for buffaloes and milch cattle apart from the standard BIS Type II feed. Special feed for calves and bypass protein feed are also being manufactured. The mineral mixture plant produces 14 variants of area specific mixtures manufactured as per recommendations of NDDB. In an email interview KV Balasubramaniam, Managing Director, Indian Immunologicals, shared his thoughts about the current trends and challenges before the Indian animal nutrition market.
What are the current trends in animal nutrition market in India?
Animal nutrition is an important aspect of animal healthcare and is about 31% of the total animal health industry. It is estimated that poultry nutraceuticals is growing at compound annual growth rate (CAGR) 9% while cattle nutraceuticals is growing at only CAGR 6%. Animal health nutrition market is driven by milk boosters such as calcium supplements, followed by mineral mixtures and fat supplements. Calcium supplements and mineral mixtures contribute 85% of the total nutraceuticals market in bovine segment and Bypass fat constitutes 4%. Probiotics, Vitamin Premix and other supplements constitute the balance 11%. Similarly, amino acid supplements and toxin binders constitutes 58% of the total poultry nutraceuticals, followed by vitamin premixes 17%, growth promoters 6%, enzymes and probiotics 6%.
How do you see the business opportunity in this space?
Entry of new players is easy due to lack of regulations. This has led to high bargaining power of buyers, driving down the prices of nutraceuticals and therefore thin margins. With increasing middle class and demand for protein supplement, there is an increase in demand for milk. This will give rise to higher demand for nutraceuticals. With the current trend, nutraceuticals market is expected to grow up to `1,300 crore by 2017-18.
How many companies are operating in this space and how many are MNCs?
There are about 450 animal health companies in India. It is estimated that nearly 200 companies are engaged in marketing or manufacturing nutraceuticals products for bovines, canines, poultry and sheep. There are about 12 multinational companies operating in India in animal health segment and nutrition segment.
Who are the leading players and what is their market share?
In animal health segment Zoetis is No.1 with 13% market share, the top 10 companies together constitute 75% of the total animal health market. Virbac has an estimated 40% market share in bovine nutrition segment. In the nutraceuticals segment Virbac, Kemin, Provimi (now Cargill), Alltech, DSM and Zoetis are the top companies in India. Virbac has above 20% market share in the nutrition market.
What kind of support is government providing?
Government does not provide any subsidy or support for this sector. However, nutraceuticals and cattle feed segment is not taxable, which in itself is a noteworthy support extended by the government.
What role are public sector institutes playing?
The role of public sector institutes has been insignificant and contribution to the industry is not up to the mark. However, National Dairy Development Board (NDDB) and Indian Council for Agriculture Research (ICAR) have done mineral mapping and developed mineral supplements required as per region, soil and other conditions.
How many new products were introduced through public institutes and tech transfers and private institutes?
There are many technologies developed by universities, ICAR etc. However, materialising these technologies into new products is highly localised and minimal. Mainly private players have played a larger role in this and even multinational companies have a larger presence with new value added products in this segment. Indian companies such as Indian Immunologicals (IIL) has developed many nutrition products with the help of their parent organisation, NDDB and rolled out into the market successfully.
Considering the huge animal population do you feel India has sufficient supply of nutrition products?
India has sufficient supply of nutrition products. However, the market demand and size of the market is not commensurate with the livestock population, especially in bovines.
What are the challenges?
Some of the key challenges before the industry include regulation to bring in quality standards, that will enable many companies to grade up. Bureau of Indian Standards (BIS) norms is in vogue, but it is not a hindrance to market the product; control over various diseases that are affecting our country, which can override all efforts to make livestock productive through nutraceuticals; improvement in breeding and genetic status of dairy animals and integration of dairy sector.