Dr. T Pearse Lyons, President of US-headquartered leading animal health company Alltech Inc., was in Kathmandu recently with a team of six experts in the fields of animal science, biofuels, food safety and nutrition, under Asia Pacific Lecture Tour (APLT) that Alltech has been conducting for over last 25 years and is being held this year in 15 countries including Nepal. Dr. Lyons talked to New Business Age on the sidelines of the lecture programme organized in association with Nimbus, the leader in Nepal's animal feed industry. Excerpts:
Alltech is conducting APLT for over last two decades. Why Nepal this year?
We have been conducting the Asia Pacific Lecture Tour for almost 25 years. We try to go to as many countries as we can. As we have already developed Indian market, Pakistani market and Bangladesh market, it seems quite natural to us that we have to develop market here in Nepal as well. To do so, you have to be in touch with what people are doing here. You can't do that by staying in America , England or France . You have to be physically present here.
What are the objectives of APLT?
It aims at two things. The number one is to educate the local market and the number two is to educate ourselves as to how far exactly should we be doing in one market relative to the other market. Different markets have different requirements. In the United States , which is very rich in grains, we have different diet for the animals. In Nepal , where lot of grains have to be imported from outside, we have to focus on different kinds of material but at the same time try to achieve the same productivity. In Nepal , as you have scarcity of raw materials, I think, you have to embrace technology faster than anybody else. If I am sitting in the middle of grain, grain and grain, it doesn't matter. If I am sitting in the middle of no grain, no vegetables or fibre, and need to look after the health of the bird, animal and the fish, that brings me to what we call Selplex, a trademarked organoselenium from our company. It is crucial to make sure that an animal’s immune system is right so that it prospers even under difficult conditions. Secondly, in a country like yours where there are different raw materials, you have invariably a lot of problems with mycotoxins. Mycotoxins are every where. They are in hotels. They are in your food. They are particularly challenging to young and reproducing or high producing animals, for example, the layers. When I was in Bangladesh , I tried to convince people to use Sel-plex. But thy were more in favour of our another product Mycosorb. Obviously, they saw that with Mycosorb there was improvement in the animal's performance. But now you also have to see next dimension.
What is the next dimension?
It is that you have to use local raw materials. The price of corn has doubled. More probably it will double again. This challenge is not only in corn. It is in barley and other cereals as well. These are being used for fuel production as well. This is taking away grains from the supply chain. This is going to hurt you. It means we have to learn how to use fibre. The people have to adopt technology fast. You cannot wait for years. There is no way you can wait for seven years when the price of corn and fibre double in one year or 18 months. So you better adopt technology fast, otherwise you are going out of business. So, we are here to educate ourselves and we are here to educate people in Nepal. And remember the education we are bringing is very, very latest. It is not even one or two year old. For example, five years ago, a gene chip did not exist. Now we have a chicken genome, a shrimp genome, all on a chip. I guarantee you not a single professor in your country understands the slightest thing about the genome not because they are not qualified enough but because it is so new. So, we are bringing you new ideas. Yes, it's a small market now but hopefully it will become a bigger one in the future.
What is the current fuel crisis all about? How does Alltech plan to help solve the food, feed and fuel crisis?
We do not. Our business is to keep the farmers’ business. And we will keep the farmers’ business by helping them to use alternative raw materials.
Turning to the fuel crisis, let me say that the world is running out of oil. It has reserves of oil for 32 years, that's all. Not 37, not 30, but exactly 32 years, if we continue to burn 99 million barrels of oil a day like we do now. So, the world will run out of oil. It will need twice the amount of gas in 60 years and twice that amount of coal in 150 years. It means we have finite amount of oil and energy. So, governments around the world are trying to be energy independent. If you look at United States at this moment, its total oil import is far greater than its total agricultural produce. That's despite the US being a huge agricultural powerhouse. So, there is a great requirement or desire to be energy secure, though not energy independent. Therefore, people are looking for other options of fuel like ethanol for which first thing being used is corn. That means our farmers are delighted. The price of their land has doubled, or even tripled. The people selling tractors are delighted. The people selling seeds are delighted. The government is delighted because as the corn prices go up, the need to subsidise the farmers would not be there. So, there is a lot of support for ethanol programme in the United States and to a certain degree, I guess, in Europe as well. But this is causing a crisis as food is being taken away for fuel purpose. What is driving this crisis that we call 'food, feed or fuel' is the quest for energy independence or energy security. The good news, the silver lining, is that this is forcing us all to look at the alternative sources of energy like wind power, hydro power, solar power, nuclear power and the ultimate source - fibre, which, if decomposed for millions of years, produces coal or oil. So, now people are focusing on fibre. In the United States , we produce over one billion tons of fibre waste a year. So do you. You do not produce that much waste here, but you too do produce it. All are the waste grass, waste vegetables and waste wood are in fact waste. If that is processed into ethanol in the United States , we would not import one barrel of oil, to repeat, not one barrel of oil. The problem is that we have not done enough research on that. Now there is a lot of researches going on. I think in Dalian University in China there are 26 PhDs working on renewable fuel. I would like to ask how many PhDs in your country have been working on that issue. The answer is 'none'. Frankly speaking, our country does not have anybody either. However, the good thing now is that with this challenge of oil approaching $100 per barrel, people have started to look at the other technologies which would not have been the case if it was $ 20 per barrel.
Though Nepal has good sugarcane production, no initiative has been taken for extracting ethanol.
How can it be started?
In the US , the government gave the tax break for the ethanol industry. There are two typical forms of supply of the raw material at the moment for ethanol - one is grain and one is sugarcane molasses. Sugarcane is more energy efficient in terms of ethanol yield. So, one way to start this here is may be by giving a break to ethanol producers to get started. Then also ask yourself how you can put something around the distillery industry. With sugarcane, you can also have bio-gas. Similarly, if you are talking about grains, ask yourself how you can add value to the grain business. Can you put dairies? Can you put aquaculture? So, we have to get back to the basics. We can think of all the things that we can put around it. We are going to build what we call bio-refinery in Kentucky . The government has given us an eight million dollars grant and we hope we will get additional 32 million dollars grant from the federal government. A bio-refinery plant is coming up also in Serbia because they also want to be energy secure. They have grain, they have low wages, their government fully supports it and they are smart. So, for Nepal to jump forward, she has to do things differently. Serbia is looking to the Irish model. Maybe that model is suitable for Nepal as well. The model basically says that you have to cluster around it as many businesses as possible so that they complement each other.
How can Nepal go for ethanol and bio-fuel production against the fact that it is already deficient in most of the food grains?
The question is, are you sufficient in sugar? The question is, can you produce more sugar? If you can produce more sugar then you can start to produce ethanol. If you look at the Brazilian model, they are setting an incredible example in this. Is the grain-based distillery in Nepal importing grain? If not, may be you can produce ethanol from grain. However, first of all it has to be rural. Secondly, it has to be community-based. Thirdly, you have to use the local raw materials. That can be sugarcane molasses or grain or whatever it is. And then you can look at what you can cluster around so that you can use the by-product.
Your poultry industry should be driven by your domestic consumption. You have to ask yourself: What would make people buy chicken or eggs to eat? Look at the Chinese model, look at the models from elsewhere. For people to be able to eat more chicken, first it must be affordable and secondly it has got to be safe. The big issues around the world today are not only profit and quality but also branding. You should also look at how individual companies or countries are promoting poultry products. We see, in a smaller way, that egg producers are branding their product. It is not only the question of big or small eggs, but the function of eggs, because it is linked with health and nutrition. So, affordability will drive the efficiency. With the raw material prices increasing, if nothing changes, the cost of producing chicken is going to go up. Using technology will keep the cost down, for example by enzyme application and using more fibre. At the same time, you need to improve efficiency of production. Then you can come to the question of branding and differentiation.
Would you please tell us about the things Altech is doing for HIV sufferers in Africa or elsewhere?
We have a product called Selplex that helps in the health of the animal and we have got the gene chip. With these what we have learnt is that we can switch certain genes on or off. Selplex turns on certain genes that are related to the immune system. When people have HIV, they are affected by a virus. When a bird has a viral challenge, the first effect is that its immune system goes down and Selplex helps in restoring the immune system.
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