China boss of feed business enjoys integrating with Chinese society

Pearse Lyons, founder and president of Alltech Inc, one of the world's largest animal health and nutrition companies, lives in the Republic of Ireland, Europe's most western country and one of its smallest.

He was born in Dundalk, in the county of Louth, and launched the business in 1980 after receiving a PhD from the University of Birmingham in the United Kingdom. The company began supplying agricultural products for poultry and other livestock, as well as items for the wider food industry.

An international livestock breeding exhibition in Nanjing, Jiangsu province. Because of dramatically rising demand for meat and dairy products, China's animal feed industry is now one of the largest in the world. Provided to China Daily

His only son Mark is vice-president of Alltech Corporate Affairs and is in charge of the business in China.

Born in 1976 in Ireland, Mark moved to the United States when he was 6 months old. He obtained a bachelor degree in political science and environmental science in 1999 at the University of Chicago. Then, at Heriot Watt University, in Edinburgh, Scotland, he received a master's degree in brewing and distilling, which was followed by a PhD in the area of solid state fermentation.

Many people from Alltech with good educational backgrounds relocated to China at the end of 2011 as part of Mark's father's focus on the Asia-Pacific market.

"Sending Mark to China was an adventure and a new opportunity," said Pearse. "We wanted to send our trusted people to one of the leading markets in the world."

Alltech now has a presence in 128 countries and regions with 2,800 employees and 32 production facilities. It operates under three main divisions: animal nutrition and health, crop science and food and beverage. Alltech's core business is animal nutrition and aquaculture, which generates 95 percent of its total sales.

In the 1980s, the animal feed giant entered China. It opened its first Asia-Pacific office in Beijing in 1994. Alltech's business in China has been growing by more than 25 percent year-on-year. The company currently has three plants on the Chinese mainland, two in Tianjin and one in Beijing.

China is now Alltech's fourth-largest market after the US, Europe and Brazil. The emerging market now accounts for approximately 35 percent of the world's feed tonnage.

"I believe China to be our single-most important market in the future," said Mark.

Alltech has maintained year-on-year growth of more than 20 percent globally for three decades and expects global revenues to reach $4 billion by 2015. Of that, it expects $1 billion will come from China.

Data from the US Department of Agriculture show China's demand for meat has quadrupled over the last 30 years. The country now eats a quarter of the world's supply — 71 million tons a year — and the demand is expected to continue rising.

The Chinese diet was largely vegetarian and fish until the economy opened up in the 1980s. Now the average Chinese person eats annually four times as much meat: 37 kilograms of pork, 13 kgs of poultry and 9 kgs of beef and mutton or lamb, according to Companiesandmarkets.com, a market research databases portal.

In addition to meat, the Chinese government predicts milk consumption in China will increase to 300 grams a person every day by 2020.

Because of the pace of dramatically rising demand for meat and dairy products, China's animal feed industry is now one of the largest feed markets in the world.

"Food efficiency is very important in China, especially when raw material prices are reaching historically high levels. So, if feed goes well, people can get better food by reducing feed costs while increasing animal performance," said John Strak, honorary professor in Food Economics with the UK's University of Nottingham. "But the challenge for Alltech is they have set high goals in sales. Let's see how they deliver them."

The animal feed giant is implementing an investment strategy it calls China Now, which includes building relationships with key players in the market and finding new ways to connect with industry and academia alike.

Alltech has set up long-term partnerships with five leading Chinese universities to aid future scientific studies. It is hoped they will be the bases for successful breakthroughs in scientific research, which could provide natural and efficient animal feed.

Moreover, Alltech said it will provide more than $40 million in on-farm solutions to Chinese producers. It is targeting $60 million in sales in 2013.

"Alltech's strength is using natural nutrition. Their algae animal feed is a pioneer in the industry," said Lu Mingbin, general technical manager with New Hope Liuhe Co Ltd. "Moreover, they have a great ability to integrate their resources and products."

However Lu pointed out that in comparison with Chinese rivals, such as the Hubei-based Angel Yeast Co Ltd, as well as international competitors, such as the US-based Zinpro Corp, Alltech has relatively higher prices. "Chinese farmers need good quality feed but at lower prices," he said.

In addition to algae, Alltech is also improving animal health and performance by the use of yeast fermentation, enzyme technology and a process called nutrigenomics, which aims to develop rational means to optimize nutrition with respect to the subject's genes.

Mark said the 100 percent family-owned company will never go public so it can keep its corporate strategy independent. He said Alltech's high growth in sales will transfer into reinvestment in order to reach higher goals.

To achieve this ambition, Mark's daily routine starts at 5:30 am. He goes to bed after 10 pm and spends most of his daytime traveling within China meeting customers.

"Michelangelo said the greatest danger for most of us is not that our aim is too high and we miss it, but rather it is too low and we achieve it," Mark quoted his father as telling him.

Instead of complaining about his work pressure and lack of vacations, he enjoys his life in China. What he likes the most is "meeting different Chinese customers and eating spicy Sichuan food".

Before entering the Chinese market, Mark served as director of international projects for the company, overseeing developments and operations in Serdan, Mexico, and its flagship yeast production facility in Sao Pedro, Brazil. Then he worked as director for North America from 2010 to 2011.

But, wherever he goes, he retains his roots.

"The Irish are instilled with a fiery passion that carries over into everything that they do — from making fine whiskey to conducting business with countries abroad. This is who we are, this is what you do for entrepreneurship," Mark again quoted his father as telling him.

As an Irishman, Mark is friendly and talkative. He is always the center of attention in a crowd, making everyone feel at ease and comfortable, despite being the boss. He is neither cynical nor boring and says of himself he doesn't know everything but is useful.

He once visited a friend's new home in the evening on impulse, singing and dancing with his father in front of a huge crowd. He is even learning mahjong from his Chinese colleagues, considering it a good way to understand Chinese culture.

"My father said his dream of building a top global animal nutrition company was fuelled by the passion he inherited. And he has been watching the Alltech-Ireland stories become intertwined as we worked together to achieve economic growth and stability over the past 30 years," Mark said. "My own dream and passion, instead of making more money, is having an impact on the industry, or maybe the world as a whole."