Could you provide a breakdown of demand expectations by species – poultry, swine, cattle?
 
(Mark Rottmann) In terms of our non-human consumption products, in the next two years, we see animal feed for poultry and swine  accounting for 30 to 50 per cent of our demand, aquaculture at 35 per cent of our demand and the rest being petfood or miscellaneous or small applications such as biotech, pharmaceutical or fermentation media.

The wild card is nucleotides for agriculture, we are seeing some incredible test results – if only 5 per cent of traditional industrial fertilizers were replaced with organic peptides/nucleotides it would completely change the balance on the demand side for us.

Our commercial agent LinkAsia Partners has been learning of some issues with local plasma protein sources in Asia. Fear of pathogen transference as well as the presence of Salmonella has prompted major feed companies to look for alternatives. One of the largest international feed companies has already moved to adopt European standards in Asia and to not use plasma proteins in piglet, bovine, poultry, diets to avoid risk of contamination from these pathogen issues.  This opens up about 150,000 tons of market potential for high grade fish peptide isolates.

How much does animal feed and petfood account for in the company's annual sales? 

(Mark Rottmann) With our peptide/nucleotide line of products today, we are fairly evenly distributed between poultry and aquaculture, with growth in the Asian pig market just around the corner. Due to some immediate supply and demand issues as a result of the earthquake in Chile, we expect rapid growth in the coming months for petfood specialty ingredients followed by 20 per cent growth after that.

What is the current state of demand for your petfood products such as Perfect Digest? How quickly is this segment of the business growing? 

(Mark Rottmann) We are just launching this product in North America, using Ingredients Inc.  of Chicago, Illinois, as our USA distribution arm. We are filling a short term demand gap and then expect 20 per cent growth after that – I was surprised to learn that some petfood companies still use fishmeal ingredients which are stabilised with ethoxyquin.  Being ethoxyquin free, we see this issue creating more demand in petfood – and because our fish peptide has low molecular weight profile, when replacing fishmeal, the clients can reduce inclusions by 70 per cent and still get the same “palatant kick”.

Petfood applications are different than aquaculture, as the fish based proteins are more of a palatant than the full protein nutrition requirement.  Fish eat fish in nature so fishmeal needs to be a larger part of aquaculture diets – but in petfood, the highly refined palatant is the way to go.

What are your observations on feed additive use in South America? 

(Mark Rottmann) This depends on the company we work with, some are very accepting of new technology and ingredients, and look for value added, meaning  they want to be shown the increase in profits and growth from an additive and they will compare that to the cost investment of the additive.   

Others simply think in terms of “Bulk Commodity Products”. The bulk commodity guys tend to have lower feed performance, but there is always a market for the farmer who buys on price per kilogram, rather than feed conversion rate or mortality data etc.  

It takes time for farmers to test, experience and finalise their data showing that 25g of PerfectDigestTM gives 75g of bird weight increase or that using PerfectDigestTM applied to shrimp feed 1 hour before placing in ponds will increase growth by 10 to 20 per cent simply because the shrimp find and eat the feed faster. They will prove and re-prove before increasing their feed costs by 2 per cent but in the end, when they see 5 per cent productivity benefit, that means they have added 3 percentage points to their bottom line – in razor thin margin industries like poultry and shrimp, that can mean a doubling of profits in some years.

In November 2009 BlueWave Marine Ingredients appointed LinkAsia Partners Pte. Ltd., Singapore, as their exclusive marketing and commercial support partner for the PerfectDigestTM line of animal feed and petfood products in Asia Pacific. How is this partnership developing? What has it meant for the company? 

(Mark Rottmann) This partnership is developing quite nicely. LinkAsia is a perfect match for BlueWave – they have opened many doors and as our export ability gets finalised from both Ecuador and Peru we expect LinkAsia to create a large portion of our demand going forward. 

Could you provide an update on the Fish Peptide Isolate (FPi) production plant in Manta, Ecuador?

(Mark Rottmann) The plant has been working beautifully. We are regularly making products which meet human consumption standards and our peptides continue to show growth stimulation in poultry and pig applications thus providing 300 per cent return on investment for the farms which use the product at 1 per cent inclusion. Some initial shrimp data is showing 10 to 15 per cent growth but we want to run a lot more ponds before we make firm claims of this magnitude.

Product contamination remains a big issue. How do you ensure the safety of your products? 

(Mark Rottmann) We start with a sanitary designed plant and fresh raw material and we finish with good manufacturing practice and traceability to daily batches. But of most importance is that our people make sure that our product is contaminant free through diligent care in running the plant. Conscientious employees are the critical factor when running a sanitary plant.  As for the blatant and negligent use of melamine, that is an ethics issue. I can only speak for BlueWave in saying we will never participate in this type of activity. To intentionally adulterate products is immoral and criminal.

What research and development is currently under way at Blue Wave? What technology is shaping your operations? 

(Mark Rottmann) We brought the latest manufacturing technology into our plant from day one, so right now our research is focused on client applications.  We have two broad product categories in the PerfectDigest line, ultra low molecular weight and fat free fish peptides for poultry and pigs and medium molecular weight fish peptides with lipids for aquaculture and fertilizer.

We have had great initial success, but we need to get a lot more return on investment documentation from our current clients so that we can help new clients get over the price/kg analysis hump.

We don’t have legions of nutritionist ourselves, but there is plenty of new and independent research regarding peptides and the fact that they are processed more efficiently than either free amino acids or full length protein molecules.

BlueWave is simply producing and commercialising such peptides on an industrial scale – as with any new additive, the market takes time to experience, learn and accept this new functionality.

What plans for expansion or acquisition does BlueWave have in the short to medium term? What are your growth projections for 2010? 

(Mark Rottmann) At this point, BlueWave is not an acquisition minded company – but we are very expansion minded. With the new Peru plant we will triple capacity and, in general, we are optimistic of 50 per cent annual growth over the next few years. We are in active joint venture partnership discussions for Spain, North Africa and Brazil. 

Fishmeal

What is your current analysis of the international fishmeal market? 

(Mark Rottmann) BlueWave's business is an adjacency to the fishmeal industry as opposed to being a direct competitor. That said, our view is the current high prices are expected to remain due to short term tight supply out of Chile and longer term demand as well.

Fishmeal is a big volume, commodity product with few dominant players or regions. Fishmeal has essentially been the same cooked/dehydrated product for the last several decades with quality improvement along the way. It is an industry where declining raw material supplies have been and will continue to be a way of life.

Will fishmeal continue as a viable source of protein for compound feed manufacturers? Are you prepared for a future without fishmeal?

(Mark Rottmann) I see fishmeal being an ingredient for many years to come but I think feed mills and growers should be looking to replace fishmeal on the margins. We are finding ways with fish peptides and nucleotides to actually increase performance while reducing fishmeal inclusion rates. Lack of fishmeal creates opportunities for BlueWave. We have access to different raw material sources that most traditional fishmeal plants can’t process, so you could say that a world without fishmeal means more opportunities for us.

A recent study has suggested canola protein concentrate may be a better form of fish feed than fishmeal. What is your reaction to this claim?

(Mark Rottmann) If someone is making the claim that they can replace 100 per cent of the fishmeal inclusion in aquaculture diets with canola protein, then I’d be initially skeptical. Ultimately, the market will tell us if it’s true or not.

What are the main challenges faced by the fishmeal production and aquaculture industries?

(Mark Rottmann) At BlueWave we see three key areas:

Sustainability - not enough raw material 
Environmentally Green Production - dealing with waste water effluents.  
Formulations - finding ways to enhance performance at the margins. 

Genetically speaking, aquaculture needs fishmeal in the diet but not all fishmeal is the same. Understanding how to produce products where 1kg performs like 1.5kg of the past has the same effect as increasing fishmeal supplies.

How can the fishmeal industry ensure it is environmentally sustainable in the long term?

(Mark Rottmann) Tens of thousands of tons of raw material, maybe 10 per cent of current world production, is lost through inefficient production or simply being thrown away. Capturing that is smart, but won’t change the 50 to 100 per cent demand increase issue expected to be faced in the next 20 years. Industry needs to utilise whatever raw material quota it receives in the most efficient manner possible.

INTERVIEW: BlueWave Optimistic For Fish Peptide Growth

Source: Feedinfo News Service

April 28 2010 - BlueWave Marine Ingredients specialises in producing fish peptide based products which are used as speciality ingredients and additives in food, fertiliser and feed industries.

Based in Peru, the company is currently expanding.  In an interview with FeedInfo News Service co founder and chief operations officer, Mark Rottman discussed the company’s latest demand expectations, research and development and the current fish protein market.

Could you provide a general overview of BlueWave?

(Mark Rottman) BlueWave is a technology based company producing new versions of peptide/nucleotide fractions from marine protein sources.  Our products are used as performance boosting speciality ingredients and additives.  We are market focused on feed, food and fertiliser.

BlueWave is structured as a holding company where manufacturing sites are joint ventures with local raw material sources and site providers.  BlueWave is responsible for the technology and marketing of the products.

Currently we product more than 1,000 tons a year of fish peptide-based products.  Our first site is located in Ecuador and our expansion site in Pisco, Peru will treble capacity later this year.  We currently employ 25 workers and will have between 30 and 50 by the end of the year.

Where is your area of biggest demand?

(Mark Rottman) Our demand comes from the performance increase that farmers realise by including peptides at low inclusion rates, say 1 to 3% in animal diets or using 200kg per hectare as a micronutrient fertiliser - it’s a very different offering than commodity fishmeal and we don’t compete with fishmeal on a ton for ton basis.