The acquisition is expected to close mid-2022, subject to customary closing conditions. The terms of the deal were not disclosed.
Phytogenics are standardized, specific and science-based combinations of bioactive compounds found in plants, said Cargill, with it adding that they have particularly high growth potential as components of animal feed.
The deal, said the US agribusiness giant, leverages its global network and expertise in animal nutrition technologies and capitalizes on Delacon’s knowledge and market experience in phytogenic feed additives. The Austrian company operates one of the largest industry-owned trial sites for phytogenic research.
The two parties are already familiar with each other, having been collaborating on the development of such products for the past few years.
“After a successful five-year partnership, Cargill and Delacon will build upon their combined deep history and long-term commitment to scientifically driven, sustainable customer solutions focused on animal health, feed efficiency, and performance,” said Adriano Marcon, president of Cargill’s animal nutrition business.
Markus Dedl, Delacon’s CEO, said the deal would enlarge the phytogenic additive producer's scope for future innovation and make its products more widely available. “Cargill and Delacon will accelerate the pace of innovation and drive strategic, long-term growth.”
Focus on life stages, welfare, and sustainability
Key to Delacon’s growth strategy in recent years has been that development of products across species, and for the various life stages, Stéphane Jolain, chief business officer, Delacon, told this publication in August 2021. “Market demands have changed, the more targeted and specific a solution can be, the better the overall response will be.”
What Delacon has seen in its R&D work over the years, he said, is that the reduction in the use of antibiotics creates more sensitivity in the gut of animals. "If gut stability is not secured, then performance is endangered. We have developed a specific line of products, per species and life stage, to protect animals in challenging conditions.“
The producer has been particularly focused on strategies to support animals in the early growth phases, along with the post-weaning stage for piglets, to ensure the development of normal gut health, continued Jolain.
Multiple market trends are creating growth opportunities for phytogenic producers, noted the executive.
There is a heightened focus in the market on animal health and welfare, while sustainability is also a huge driver in the industry, with greater feed efficiency and the reduction in the use of raw materials, as well the pressure to lower emissions from livestock farming, pertinent trends, noted Jolain.
He spoke then about the focus on microencapsulation technology at Delacon, along with the ongoing efforts around monitoring of the effect of a range of parameters on active ingredients from temperature to moisture to pressure.
