Strategy & Markets
Benchmark’s stated goal is to become the world-leading aquaculture health and technology specialist and a leading global player in each of its markets. The Group’s intention is to build a diversified and balanced food sustainability group including through expansion into existing and new business sectors supported by targeted M&A.
The Group has five divisions: Animal Health; Technical Publishing; Sustainability Science, Breeding & Genetics and Advanced Animal Nutrition which the Directors believe:
- are complementary, creating powerful synergies and the ability to identify and deliver growth opportunities; and
- position Benchmark to become a world leader in aquaculture health, sustainable agri-food business development and the communication of technical knowledge to the agricultural and aquaculture sectors.
Aquaculture is the fastest growing sector of the livestock industry underpinned by positive drivers including:
- increased fish consumption – the current world population of approximately 7.3 billion is expected to increase to 9.6 billion in 2050 according to the United Nations. The increase in global population combined with the perception that fish is a healthy source of protein and an increasing middle class in certain emerging markets are driving absolute demand for fish. Per capita consumption of fish has increased from an average of 9kg per year in the 1960s to an average 18.9 kg in 2010 (Source: FAO, The State of World Fisheries and Aquaculture 2014) and is expected to increase further;
- stagnating volumes of captured fish – global fish production continues to outpace world population growth, and aquaculture remains one of the fastest-growing food producing sectors. In 2012, aquaculture set another all-time production high and now provides almost half of all fish for human food. This share is projected to rise to 62 per cent. by 2030 as catches from wild capture fisheries level off and demand from an emerging global middle class increases. (Source: FAO, The State of World Fisheries and Aquaculture 2014); and
- increased professionalisation of the aquaculture industry. The increased professionalisation and use of technology in aquaculture have supported the industry’s expansion into new geographies and species creating new sources of growth.
Within Animal Health, the Group’s focus is on the use of applied biotechnology and the healthcare sciences in aquaculture. The Group has become an international player in aquaculture by providing a comprehensive offering extending from veterinary health management and diagnostic services through to vaccine and medicine development, manufacture and distribution. Product areas include:
- clinical veterinary services to the international aquaculture sector
- fish health diagnostic services, technologies and laboratory network;
- supply of vaccines, parasiticides and biocides to the aquaculture sector;
- aquatic environment assessment and analysis;
- fish vaccine research and discovery; and
- EU GMP (Good Manufacturing Practice) animal vaccine manufacture to terrestrial and aquaculture markets.
The animal medicines and vaccines sector is estimated at $22 billion within the estimated $92 – 102 billion animal health industry (includes diagnostics, medicated feed and veterinary services). The sector is projected to grow at a CAGR of 5.7 per cent. per year (2011-2016) (Source: Vetnosis)
Breeding and Genetics
Breeding and genetics play a primary role in the development of animal production efficiency, health, welfare and sustainability in the global livestock and aquaculture industries.
In December 2014, the Group acquired a leading salmon genetics company, Salmobreed AS, and a leading salmon breeding company, Stofnfiskur HF, forming the Group’s Breeding and Genetics division. These acquisitions made Benchmark a leading player in the aquaculture breeding and genetics market, creating a world leading salmon and aquaculture breeding business and the world’s second largest independent salmon egg producer.
In July 2015, the Company acquired Akvaforsk Genetics and Spring Genetics extending the Company’s reach into tilapia and other emerging species and extending its team of genetic experts.
The Breeding and Genetics division forms an integral part of Benchmark’s aquaculture operations. Globally, the aquaculture breeding and genetics market is estimated by the Directors to be worth, by species:
- Tilapia – $316m (Source: Inocap)
- Salmon – $110m
- Shrimp – $500m
- Carps – $300m
- Catfish – $100m
- Other/emerging species – $200m
The Sustainability Science division is an international provider of research, advice and training to a growing number of widely recognised international food brands, agri-businesses and primary producers. Product areas include:
- whole business sustainable re-engineering and leadership programmes;
- sustainable farming research and development;
- sustainable aquaculture research and development;
- supply chain consultancy assurance and data analysis systems;
- environmental planning and technical services; and
- communication, design and brand development.
Verdantix estimates the global sustainability consulting market to be $13.8 billion. Of this, $1.2 billion is categorised as strategic and management consulting services and $12.6 billion relates to technical sustainability consulting. The overall sustainability consulting market is estimated to be growing at 4 – 5 per cent. per annum, and this growth is projected to continue accelerating as the developed economies emerge from the global recession.
The Technical Publishing division has built an estimated global readership of 6 million across its publications, which cover:
- online news and technical information to the global agri-food sectors;
- technical book publishing for producers, practitioners and scientists;
- distance learning and practical learning for industry professionals from CPD (Continuing Professional Development) to MSc;
- industry data analysis and editorial coverage of the latest peer reviewed scientific papers; and
- industry conferences.
The Group’s technical publishing business sits primarily within the agriculture segment of the STM (science, technical and medical) publishing market. The STM market was estimated in 2014 as a $33.7 billion market with projected growth from 2014-2015 estimated at 4.0 per cent. The market is expected to grow by 4.3 per cent. from 2015-2016 and from 2016-2017. From 2017-18 growth is expected to reach 4.4 per cent., creating a market worth just under $40 billion. CAGR from 2014 to 2018 is estimated at 4.2 per cent. (Source: Outsell, 2015).
Advanced Animal Nutrition
The Advanced Animal Nutrition Division is a leading specialist manufacturer of primary stage technically advanced nutrition and health products for shrimp and marine species of fin fish. Product areas include:
- Live feed (artemia)
- Replacement diets
- Health products
INVE’s products are used in shrimp hatcheries, shrimp farms, fish hatcheries and fish farms. INVE is perceived as the market leader in early stage fish and shrimp hatchery products. Its products are sold primarily in Asia, Europe and the Americas. An indicator of the growth of the aquaculture industry, the addressable feed market volumes for fish and shrimp according to the World Bank are expected to experience a CAGR of 11.3 per cent. and 13.5 per cent respectively between 2014 and 2016, with Asia and the Americas contributing significantly to this growth.
Asia is the fastest growing aquaculture region, where larger and more professional farms are emerging, making it an attractive market for INVE. The aquaculture feed ingredients market in which INVE participates is expected to grow at 4.6 per cent. per annum in volume for the next five years (Source: FAO, Global Aquaculture outlook in the next decades). INVE currently provides products for marine fin fish and crustaceans (shrimp). The global production of these species is estimated to represent approximately 17 per cent. of total aquaculture production, equating to $39.9 billion in value. INVE’s core segment, the hatchery segment for shrimp and marine fin fish is estimated to account for $1.4 billion. (Source: World Bank: Fish 2030).