DaBomb Protein Corp (達邦蛋白), which makes advanced soybean meal animal feed, is optimistic about business growth in China as the country tightens regulatory standards in light of rising food safety risks.
The agricultural technology company manufactures soybean meal with its proprietary peptide hydrolysis technology that has several benefits for livestock, including boosting animals’ immune system, balancing their intestinal microflora and high protein digestibility.
The company’s advanced soybean meal is designed to cut reliance on harmful antibiotic additives and has earned Hazard Analysis and Critical Control Point (HACCP) and ISO 22000 certifications from SGS SA.
China — the world’s largest livestock farming and animal feed market — is to ban the use of human and animal antibiotics additives in livestock feed from 2020, making the company’s products a good fit for the market, DaBomb chairwoman Liu Yu-fen (劉郁芬) told an investors’ conference in Taipei yesterday ahead of the company’s listing on the over-the-counter Taipei Exchange on Sept. 18.
China represents 64 percent of the world’s aquaculture output and 48.42 percent of global pork production, said the company, named for a slang term meaning “the best.”
Regulators and livestock farmers have been shifting away from feeding animals protein derived from other animals to reduce the risk of epidemics including mad cow disease, Liu said.
Soybean meal is also cheaper to produce than fishmeal, and the company’s products help achieve comparable bulking of livestock while ensuring ideal flavor and texture of end product meats, the firm said.
The company’s new plant in Zhangzhou in China’s Fujian Province is to start mass production in the second half of next year, it said.
With an estimated annual capacity of 28,000 tonnes of soybean meal, the plant is projected to boost the company’s annual sales by NT$600 million to NT$700 million (US$19.45 million to US$22.69 million), Liu said, adding that funding the plant’s construction was what motivated her to take the company public.
However, several risks remain for the company, including its reliance on soybean imports, and vulnerability to commodity pricing and foreign exchange volatility, the company said in its listing filings.
Even as the company expands into China, about 70 percent of the company’s sales over the past two years were derived from Vietnam, where pork prices have been rocked by an outbreak of swine disease and export bans, the filings showed.
While the company is expanding to the pet food, household goods, agricultural and personal care segments, its current offerings are limited to livestock feed.
In the April-to-June quarter, the company’s net income grew 65.02 percent annually to NT$7 million, while sales grew 7.06 percent to NT$562 million. Earnings per share were NT$0.27.
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