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Alltech: Sowing the seeds of progress

By KONG WENZHENG in New York | China Daily Global | Updated: 2019-06-18 00:00
Workers transport bags of imported soybean meal at the Port of Nantong in Nantong city, East China's Jiangsu province, Aug 6, 2018. Soybean meal is extensively used as a source of protein to feed farm animals. [Photo/IC]

Twenty-five years ago, Alltech China — the Chinese subsidiary of Kentucky-based animal nutrition and feed company Alltech — was established in Beijing. At the time, China had a small feed market that was undersized for its population.

Over the years, Mark Lyons, the president and CEO of Alltech who headed Alltech China for six years until relocating to the US in 2018, has watched the market grow to the world's biggest feed market, and as a foreign business executive, he sees mutual benefits in the market that he believes will endure.

"When Alltech China was established, the Chinese feed market was about 6 million tons of feed," Lyons told China Daily, while attending the Fifth China-US Governors Forum held in the US state of Kentucky on May 23, 2019.

That's roughly the same size as Ireland's feed market today, while China's population was more than 250 times larger than Ireland's at the time.

Today, some estimates say China has grown to a market of 200 million tons of feed, which Lyons called "dramatic", and he said that was just the tip of the iceberg of how much has changed in terms of animal husbandry and farming sector in China.

Lyons's engagement with China's market and industry has gone beyond his role at Alltech and led him to become vice-president of the Soil and Fertilizer Alliance of China and a committee member of the China Toxicology Association.

He has seen the transformations in China incentivized by trends on the customer side, including the young population's increasing focus on health, the increasing demand for agricultural products and the high level of customization in the food industry that could further impact sourcing industries.

Supporting these major shifts in China is the country's research ability, an aspect that made China attractive to Alltech from the beginning.

"It's not just the financial aspects" that made China an important market, said Lyons, "it's also the research alliances."

Lyons said the framework within China provides an opportunity to quickly get the best innovations and solutions into the market, and "make sure that the best technologies are coming forward, irrespective of where they come from."

While the company formally established its Chinese subsidiary in 1994, it has had a presence on the Chinese mainland since the mid-1980s, when it introduced its products through distributors in Hong Kong.

Over time, Alltech China has grown into a company of 300 employees with facilities in several major cities, including Beijing, Tianjin, Guangzhou and Chengdu.

"The pace of change within our company is very, very quick, and it matches the pace of change of China," said Lyons, the son of Alltech's founder Pearse Lyons, who first visited China in the 1990s with his family.

Lyons has found China's opening up crucial and beneficial to foreign businesses, and "in broad strokes, the foreign business community is very eager" to take part in China's opening up.

"A lot of the people that I got to know there have a lot of passion for China — the people, the market, the dynamics," he said. "How could the interest wane?"

With China and the US engaged in a year-long trade dispute, Lyons said there should be more positive narratives about how the relationships between businesses and markets have been mutually beneficial.

"We really need to go back and focus on that mutual benefit, and that mutual benefit can certainly continue," he said, adding that China should continue its opening up.

The current trade situation, which has the US agricultural industry caught in the crossfire as China's retaliatory tariffs hit products like soybeans and pork, poses challenges to companies like Alltech, even though the company is, by and large, following an "in China, for China" strategy.

"We have to think about supply chains, we have to think about how we source materials if things continue, but we are also very optimistic," said Lyons.

"We feel that [as] the two biggest economies in the world, we'll find a way. [It] may take longer, [there] may be disruptions, but those are things that always come in life — we have to find our way through this," he added.

Now back in the US to head the company, Lyons keeps fostering the relationship. Alltech was the sponsor of the Fifth China-US Governors Forum held in Kentucky in late May, where hundreds of governors, mayors and businesspeople from both countries gathered to discuss the future of Sino-US relations and the opportunities for further cooperation.

Part of Lyons' optimism comes from witnessing his Chinese colleagues, friends and the nation as a whole confront challenges and find ways to resolve them. Seeing a country so vast yet changing so fast has made his six-year stay in China a transformative experience, Lyons told China Daily.

Lyons went to head Alltech China one year after the company hosted its annual President's Club conference — a high-profile meeting normally held in Kentucky that gathers about 100 executives from the industry — in Beijing and Shanghai.

The Chinese market then was already a fast-changing one with a lot of dynamism, and the company, while it already had a foothold in China, was lacking a senior management-level presence in the market, Lyons explained.

And Lyons felt the need to be in Asia for a time.

"If you are going to be in Asia, be in China," he said.

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