Sanovo: An `Ideal Company` for the global egg industry

[i!DUSTRY
Sanovo: An 'Ideal Company' for
the global egg industry
An undisputed layer sector innovator and visionary, Sanovo Technology Group
leverages the competencies of six specialist companies under its wing to remain
the layer sector's leading provider of process technology
by ANG Yen Yin
E
ggs are a major food product and an affordable protein source around the world, whether in the form
of raw eggs for home consumption, or liquid and
powdered eggs that supply the processed food and catering
industries. According to a report by Food and Agriculture
Organization (FAO), world egg output jumped 73.6%, from
35.2 million tonnes in 1990 to 61.2 million tonnes in 2008,
and is expected to continue to increase at an annual rate of
approximately 2% through 2015.
Moreover, global demand for eggs is set to climb as the
world population grows. The trend is further accentuated by
the EU debt crisis and recent recession, which reinforces
consumer price sensitivity in favour of egg consumption.
Denmark-based Sanovo Technology Group, the world's
leading turnkey supplier of egg processing equipment and
facilities, is in the best position to ride the global layer
sector's ongoing growth wave. With a heritage of serving
the egg processing industry going back to the early 1960's,
the company specialises in providing services ranging from
equipment designs, engineering and installation, to commissioning and staff training.
38 FEED Business WORLDWIDE I May 2012
Roberto Roversi, Head of
Product Management,
Sanovo Technology Group
Nourredine el Molaka,
Area Sales Manager,
Sanovo Technology Group
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"We are dominant in the European market, where the level
of egg processing is relatively
high by world standards - with
more than 30% of eggs produced
here being processed," says Roberto Roversi, Sanovo's head of
product management.
The company saw vast potential of processed egg products
,in the commercial food industry
some 50 years ago. It has since
focused on creating highly-specialised and cutting-edge products for the egg processing industry, through its R&D centres
and production facilities in Denmark, Italy, the Netherlands and
the United States.
Today, Sanovo is a global
market leader in the egg industry, boasting a complete range of
advanced machines and equipment that meet international food Sa novo's OptiBreaker cup
safety requirements and standards. These include egg, loaders, egg breakers, liquid egg
pasteurisers and egg powder processors, along with graders
and egg packaging machines.
Focused on Asia's growth
Reputed for its forward-looking business strategy,
Sanovo set its sights outside of Europe as early as 1970s.
It ventured into the American and Asian markets and currently has sales offices in the United States, Argentina, Bralil, China, Japan, Malaysia and Taiwan, complementing a
network with locations in 17 countries.
According to the FAO, over the past decade, global egg
production rose by about 3%
per year, with China accounting for 60% of output growth.
With China's vast market leading the way, Asia will account
for more than 60% of global egg
output by 2015, according to an
International Egg Commission's
(IEC) forecast.
With both production and
consumption moving to the east,
Sanovo Technology Group notes
the shifting spatial pattern of the
world egg industry. "At present,
North America, China, Eastern
Europe and South America account for 80% of our turnover.
But we foresee Asia along with
Central and South America to be
our biggest markets in the next
five years," Roversi says.
The Asian market, in particular, holds both potential and
challenges with different cultures and requirements and wide
vanatwns in industrialisation. China, for instance, only
started using egg products as an ingredient in its food industry in the mid 2000s, despite its status as the world's largest
egg producer and consumer.
Culture, consolidation create opportunities
Thanks to its widespread vegetarianism and consequent
shunning of meat, India, the world 's second most populous
country, abounds in egg producing and marketing, according to Nourredine el Molaka, Sanovo's area sales manager. "India is particularly challenging as we do not have a
subsidiary there. "
Sanovo Technology Group's headquarters in Odense, Denmark
May 20121 FEED Business WORLDWIDE 3Q.
I
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He explains that, "It is a totally different market from
the rest of Asia and requires a totally different approach,"
adding that, "However, we do have excellent agents in India and throughout Asia that serve as our eyes and ears in
the local markets." El Molaka concludes that, "Sometimes
it's good to shed the Western European perspective and put
ourselves in the shoes of the local suppliers and customers," and emphasises that the company has made great efforts in adapting products tailored to meeting local market
needs.
Besides China and
India, Sanovo is also paying attention to burgeoning Southeast Asian markets such as Thailand and
Vietnam, whose small
and medium-scale farms
are targeted customers
for some of its lowerrange machines. At the
same time, a market such
as Thailand or China are
exceptionally lucrative:
In both countries, integrators now account for a
large, expanding proportion of layer inventories,
meaning that they have
already developed the
scale economies required
for investing in Sanovo's
higher-end, large capac- STAALKAT OptiGrader 600
ity machines.
What is good about Asia is not just its growth but the
fact that it is being accompanied by rapid, unprecedented
consolidation. As each of Asia's national layer sector consolidates, it enjoys larger economies of scale. This organic
growth makes the country's layer capital transition from using Sanovo's lower end equipment to requiring its higherend, larger capacity devices.
In that respect, el Molaka notes that Sanovo 's long-term
investments in Asia have already achieved regional milestones. This includes the recent establishment of the first
and most modern egg processing plant in Pakistan using
Sanovo's flagship equipment.
Processed foods create new openings
With processed foods increasing their share of developing country consumption, there has been a marked shift
towards processed egg products and processed foods containing egg derivatives. Consequently, FAO data clearly
indicates that international trade of egg products has been
increasing at a faster rate than that of raw eggs.
Facing an ever growing customer base that requires
new, increasingly sophisticated capital equipment, Sanovo
Technology Group sees the need for continuing expansion
and innovation to provide the best and most efficient solutions possible. In early 2011, the company acquired Italybased Italproject, a global supplier of robots and automation
40 FEED Business WORLDWIDE I May 2012
for end-of-the-line process with over 40 years of industry
expenence.
The acquisition grows out of the need to expand its existing product line, coinciding with surging demand for endof-the-line automation from larger customers. "Our customers are growing and doing something we don't have in our
product range, so we have to acquire in order to add value
to them. The addition of !talproject is just a natural progression in our business strategies," el Molaka explains.
Besides offering complete "Pack to Rack" precise
packaging solutions, the
acquisition of Italproject
allows Sanovo to enter
the business of robots and
automation on a worldwide scale. This gives
the company a platform
not only in the egg industry, but the entire food industry supply chain.
This is in line with
Sanovo's long-term vision to move beyond its
egg handling and processing systems. In fact,
the company has already
leveraged the processing technology expertise it developed for egg
handling to expand into
diverse fields. These include capital goods used
in the manufacturing
of specialised vaccination equipment, poultry processing
equipment, livestock enzymes and their yeast inputs. The
resulting synergies also enabled Sanovo to greatly enhance
the functionality and productivity of its egg handling products and analysing equipment.
All this was accomplished through a combination of inhouse research alongside a decade of strategic acquisitions
and investments. This eventually created the company's
present structure of subsidiaries and operating divisions
- Sanovo Technology A/S, Staalkat International, Sanovo
Process Solutions, Rame-Hart, Foodcraft and the more recently acquired Italproject in one global group.
The integration of each acquisition's competitive advantages allowed Sanovo Technology Group to merge synergies across the board, providing a foundation of jointly
leveraged competences under one company, such that each
division can innovate and produce the best-quality products
for its field of specialty. Such synergies allow Sanovo to
remain at the forefront of technical expertise - and distinguishes this company from its competitors, making it the
global egg industry's leading supplier of processing equipment.
Roversi explains that, "We want to be one company
that is doing everything possible - the 'Ideal Company' .
That is why we are constantly growing and merging and
getting a group of companies that can supply the whole egg
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industry in every kind of way."
Impact of globalisation on egg industry
Like any other industries, globalisation and changing trends in consumer behaviour and consumption habits
pose new challenges for the egg industry. More than ever,
consumers around the world are demanding higher quality products which are safe. At the same time, the global
regulatory, economic and sanitary context is changing, with
more and more consumers becoming aware of animal welfare issues, rearing methods and the way animals are fed.
For example, starting January 2012, European welfare
regulation (EC/99174 Directive) prohibited the use of conventional or battery cages for laying hens in the EU, requiring egg producers to provide larger and more comfortable
'enriched' cages. These must include nesting and scratching areas that allow for more natural behaviour.
"The rule forbids the import of eggs laid in the old battery cages for consumption, but these eggs are still allowed
to be sold into the processing sector, albeit at lower prices,"
Roversi notes. While the processing sector is spared at the
moment, he predicts that the EU egg industry will continue
to polarise as the bigger operators squeeze out smallerscale enterprises. If nothing else, the cost of complying
with such regulations will squeeze out smaller, capital-poor
producers.
"We expect to see a reduction in the production of shell
,"he opines, adding that the ban could have a negative
I
impact on the European egg industry 's competitiveness,
as welfare regulation requirements push up egg production costs, while more eggs are consumed through products
containing eggs, potentially outside the EU.
"That's why we are moving our equipment towards increased capacity every year in terms of R&D and product
innovation," Roversi says, explaining that the company's
advanced high-capacity egg loaders, breakers and packers help large processors improve operational efficiencies
and reduce unit costs, thereby contributing to their bottom
line.
The 'Ideal Company'
Having carved a niche in the world egg industry through
an intense, five-decade-spanning focus on product development, strategic acquisitions and strong commitment to
customer satisfaction, Sanovo Technology Group describes
its continuous pursuit to be the world's 'Ideal Company' as
its future challenge. '
Roversi concludes that, "The strategy is not to compete in a single piece of equipment or for a single customer
but to compete on all fronts, striving to be the 'Ideal Company' - a well-rounded company that integrates equipment
systems, technical expertise, collaboration, synergy and
everything." So far, Sanovo has built its success on being
all things to all egg industry stakeholders, and is empowered to leverage these successes to the next level. ~
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