BEUNOS AIRES, Argentina -- Louis Dreyfus Company, one of the world’s largest commodities traders, is planning to join competitors Cargill, Bunge and Archer-Midland-Daniels (ADM), known collectively as the "ABCD" companies, in getting into the aquaculture feed business.
Louis Dreyfus is looking for strategic partnerships to grow in the areas of fish, poultry and pork, CEO Gonzalo Ramirez told Undercurrent News at the FT Commodities Americas Summit 2017 conference in Buenos Aires, Argentina. The Amsterdam-based company, which sells food to 500 million people worldwide, is seeking to add value to its sales of basic commodities and “get closer to the consumer”, Ramirez said.
“The world needs to eat more fish,” Ramirez told Undercurrent. “I like the quote from Cargill CEO David MacLellan to go long [on] fish and short [on] pork. I don’t necessarily agree with the idea that we should go short [on] pork, but we should go long [on] fish.”
Ramirez said increasing fish supply through aquaculture will be just one component of a wider strategy to make more protein available to an expanding world population. One of the main ways of feeding the world’s poor will be through supplying a growing range of products using texturized vegetable protein, known as TVG, he said.
Cargill has been the most active of the ABCD companies in pursuing an aquaculture strategy. The Wayzata, Minnesota-based company purchased Norwegian fish feed supplier EWOS from Cermaq for €1.35 billion.
Cargill has recently inaugurated research and development centers across the world to study fish feed formulas for salmon and shrimp, and is working on a genetically modified plant containing canola that could produce a new source of omega-3 fatty acids.
In addition, Cargill has financially backed start-up Calysta that is producing a synthetic protein from methane at a pilot facility in the UK. Calysta and Cargill are building a commercial scale facility in Memphis, Tennessee that will be inaugurated next year.
Bunge partnered with San Francisco-based start-up TerraVia Inc to produce a fermented, Omega 3-rich powder from algae at one of Bunge’s sugar mills in Brazil’s Sao Paulo state. ADM is building aquaculture feed lines at a plant it owns in Nanjing, China, and a new facility in Hunan province to supply the Chinese aquaculture industries.
Besides the ABCD companies, Dutch feed supply companies Nutreco NV and Royal DSM are also expanding in aquaculture by investing in research and technology to discover new sources of feed.
Ramirez said the challenge for Louis Dreyfus is moving away from being a supplier of raw commodities and getting closer to consumers. The company is looking to build a portfolio of partnerships in different markets. “They offer you an origin, for which you offer a destination,” he said during a keynote presentation. Major grain exporting countries such as Argentina also need to transform their current model by converting more vegetable into protein in the country, he added.
Louis Dreyfus was set up in 1851 and has revenues of more than $55bn a year, supplying 81m metric tons of agricultural products around the world and operating in more than 100 countries.
