KEY INTERVIEW: FMC Eyes Asian Expansion Opportunities
21 Oct 2014 --- FMC Corporation announced the opening of its Asia Innovation Center in China this summer. Here, FoodIngredientsFirst speaks to the company’s Business Director, Global Food Ingredients, Bryan Bast, to find out more about this move and what it means to the ingredients industry.
FMC Corporation made the bold decision to open up a state-of-the-art Asia Innovation Centre in Shanghai this year, despite having operated in the region for many years without this facility. So, why was this investment necessary and what does the company hope to achieve with this center?
“Essentially we are trying to centralise and coordinate our operations in Asia,” explains Business Director, Global Food Ingredients, Bryan Bast.
“We needed to cross-pollinate our innovation and also to bring more value to customers. It’s a very significant step forward for us as a business.”
And indeed the center itself is an impressive facility. The nine-story unit is expected to serve as the company’s hub for research and development, technical innovation, operational support and executive management in the Asia Pacific region. It will be home to more than 180 FMC scientists, sales and marketing personnel, support staff and executive leaders. In addition, it features world-class laboratories for crop protection research and unique facilities designed exclusively to develop new functional ingredients used in the health and nutrition markets.
“The unit will look at a lot of areas of research and development for the company but within health and nutrition our focus is largely in the food and pharmaceutical industries,” explains Bast. “Within food we work traditionally in two key spaces and these are dairy and beverages.”
There is a lot of growth still happening in these markets, particularly in Asia, confirms Bast. “One solution does not fit all so we will need to look at each country and company in the region on an individual basis, as is our practice.”
Working on innovation for these companies does mean the creation of new products, but another requirement within this is to help its existing clients to make their businesses more effective and also sustainable. This can come in all sorts of forms, such as developing new agricultural products to safely improve crop yield, or looking at naturally-derived functional ingredients to enhance food texture and stability.
Functional foods
Functional foods of course, have been high on FMC’s agenda for a while, and this subject will feature as part of the R&D plans for the new Asia center.
“More recently we moved properly into omega 3 as a business although we have been very active in this space for many years,” explains Bast. “Many of our ingredients have worked side by side with our pharmaceutical expertise, so this gives us a natural advantage.”
“We are absolutely going to focus more on the pharma-nutra space but all the time customers stress to us that they want to add more nutrition to their foods, generally in the form of functional foods, which is where our move further into omega 3 comes into play,” he says. “A lot of our customers are working more on the concept of merging pharma and food and we are well positioned to help them with this.”
Omega 3 is one ingredient that is definitely going down that path, he says. “We have a lot of expertise in the pharmaceutical side of our business with omega 3 and so we are confident that the taste issues which some producers have concerns about, are considerably reduced. Our background is in this area.”
Bast speaks about many growth areas which the company is well positioned to tap into further, one of which is dairy, which is starting to pick up in many of the Asian countries.
“We are still going to see the continued growth of dairy for years to come,” he predicts. “But there are definitely some other areas which we are seeing start to develop, especially when we look at the Asian region.”
One of the factors driving growth in Asia is an increase in the number of people with disposable incomes.
“Growth across the food and drink categories in Asia is different from the US because tastes are so different, but there are plenty of overlapping areas as well. Some of the interesting categories in Asia for us include nutrition in children’s food, including the addition of functional benefits in things like candy. “
Convenience foods in Asia
Bast also speaks of growth in the convenience sector as the amount of families with two working parents continues to grow rapidly in Asia.
“A demand for putting more nutrition into prepared foods, as well as dairy and beverages, is also evident,” he notes.
Meanwhile, younger consumers in Asia are also starting to demand Western-style convenience foods.
“A lot of popular Western convenience foods are being translated into the Asian markets but we are also seeing the more traditional Asian foods being converted into convenience formats,” he explains. “So this often means looking at the shelf-life of various popular meals and foods but also as more families have refrigerators in Asia our role is in helping the range of foods to evolve.”
Looking ahead
The next step, says Bast, is that the company is planning to open a new production facility in Thailand.
This, along with a smaller laboratory which was opened last year in Singapore and the new innovation center, will help to enhance the company’s Asia presence even more.
“As we look to add more production technology we will add more laboratory capabilities,” he says.
Expanding in Asia is a big part of the company’s plans going forwards but it’s not a simple strategy and FMC is aware that there are challenges ahead.
“On the macro side we need to keep an eye on the Asian economy, which we expect to continue to ebb and flow over time,” he notes. “We will still see the same cycles there going forward but we have the ability to adapt to this change.”
As well as Asia, general expansion will continue to be part of the company’s overall plans and new headquarters are planned for 2016, along with other investment plans.
“This will be a major step for the corporation,” he says.
By Sonya Hook
