CJ CheilJedang gears up to become the leading global bio company in addition to dominating the SPC market!
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- Has maintained and strengthened market dominance since acquiring global leader Selecta in June 2017 - Sustains growth by being featured for its future material to replace fish meal which is an animal protein source - Expands business to livestock, pets and foods in addition to fish feed, targeting 700 billion won in annual sales by 2020 |
CJ CheilJedang is taking a dominant lead in the global soy protein concentrate (SPC) market worth 1 trillion won in the larger potential market for high vegetable protein, estimated at a size of 24 trillion won. Now it is gearing up to become the world’s leading green bio company possessing continuous business expansion strategies. CJ CheilJedang boldly announced its entry into the market back in June 2017 by acquiring ‘Selecta,’ a leading global SPC company, and it officially announced the launch of ‘CJ Selecta S.A.’ in August of the same year.
SPC produced by CJ CheilJedang is a high protein feed ingredient that increased its protein content using soybean meal as the raw material, which is the by-product from making cooking oil with beans. It is classified as a distinguished high vegetable protein along with fermented soybean meal. It is mostly used as the ingredient for fish feed, and is garnering attention as a future ingredient to replace fish meal, which had been used as the main protein source until now. The global market size is estimated to be approximately 1 trillion won, and CJ CheilJedang occupies at least 40% of market share as of the end of last year, securing the lead position far ahead of its competitors like ADM (US) or Caramuru (Brazil). (Based on industry sales estimates)
SPC is a vegetable ingredient that supplements the shortcomings of ingredients of fish meal, and is considered to have significant potential for growth. Fish meal is subject to notable price fluctuations depending on fish catch, and cannot maintain the quality evenly depending on the condition of the fish. On the other hand, SPC can manage quality evenly as it is made from beans, which are a vegetable ingredient, and face relatively low variability in terms of supply and demand, thereby ensuring price stability. In particular, it is regarded as an eco-friendly feed ingredient as it is free from issues like antibiotics or heavy metal accumulation compared to fish meal, and is receiving the spotlight as a future growth engine for big global feed companies.
In fact, the percentage of high vegetable protein ingredients including SPC is rapidly increasing in the feed market. “Up until the 1990s, the percentage of fish meal accounted for about 70% of protein sources in all fish feeds, but now vegetable ingredients like SPC or fermented soybean meal take up more than half,” explained an industry official. According to a recent OECD report, there was a reversal in the percentages of using fish meal and as a vegetable protein source in salmon feeds as of 2015, and the percentage of using vegetable protein source exceeded fish meal for shrimp feeds in 2010 as well.
CJ CheilJedang is generating an annual 500 billion won in revenue for SPC and processed goods. The company is known to have certain attributes that enable it to become the market leader, thanks to its stable production capacity in the global fish feed market as well as quality based on differentiated R&D competitiveness. This underscores the effectiveness of the bold acquisition of ‘Selecta’ a year ago, which features a sales network spanning over 40 countries worldwide as well as logistics competitiveness for being located in the chief producing district of soybeans which happen to be the main ingredient.
Meanwhile, CJ CheilJedang is also expanding its business territories along with the growth and change of the high vegetable protein market. The company is implementing the strategy to expand the SPC demand focused on fish feed to not only livestock feed for cattle, pigs and chickens, but also feed for pets and even SPC for food products. CJ CheilJedang will also increase production capacity and achieve annual sales of 700 billion won with SPC and processed goods by 2020.
“We’re going to maintain our R&D for functional feed ingredients with specific effects that facilitate livestock growth by combining SPC with various amino acids for livestock, such as lysine and tryptophan,” said an official at CJ CheilJedang. (The end)