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Phespa Report Summary

Project ID: 736123

Periodic Reporting for period 1 - Phespa (Phytogenic HEat Stress Prevention in farm Animals)

Reporting period: 2016-09-01 to 2016-11-30

Summary of the context and overall objectives of the project

Heat stress is increasingly affecting animal production due to increasing production in (sub)tropical areas and to climate changes in other regions of the world. Negative effects of heat stress are evident for animal production, product quality, and the economy of the sector. In Europe the economic cost of the heat 2003 was estimated to be up to €13.1 billion. Most of the current solutions are not specifically dedicated to improve heat tolerance, but are based on changing use common feed ingredients resulting in some reduction in heat stress effects. PHESPA the first phytogenic feed additive that has been specifically developed for heat stress reduction. The key benefits of PHESPA are the performance increase: (3% on feed conversion rate), support of animals’ intestinal and immune system, improvement of food safety and animal product quality, reduction of mortality (5-10%). Phytogenic feed (plant-based feed additives), used different botanical ingredients as well as oil, herbs, spices, other plants and their extracts, like essential oils. The term phytogenic feed additive was coined nearly three decades ago by Delacon, which already then recognized the potential of plants to meet challenges in animal nutrition. Delacon has over 30 years of experience in phytogenic application in livestock nutrition and is a pioneer and leader in Phytogenic feed additives. Today, we distribute our products in more than 80 countries. Delacon is already commercializing over 10 feed additive products (for swine, poultry and ruminant). The quality management includes certification according to: FAMI-QS, EN ISO 9001:2015 and Organic Farming Certificate. A HACCP concept is in place in order to guarantee product safety. The EU-28 has the third largest meat production (behind China and USA) and is the first milk producer. Global feed additives market is projected to reach a value of USD 20.7 billion by 2021 and is projected to grow at a CAGR of 4% from 2016 to 2021. Delacon estimates feed production in countries that face heat stress being 50 to 65% of global feed production. Our business plan for the PHESPA allow us to have ROI is of 9.44 after the 5 first year of PHESPA commercialization. A robust execution plan with 7 Work Packages has been built up to ensure PHESPA to TRL9 after 20 months starting from April 01, 2017.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

Results for the Feasibility Study:
1. Technical viability assessment:
Optimization protocols for the Phespa formula has been build up to develop the dry and liquid application product. Work Plan of Phespa for the Phase 2 execution is established with each task of Work Packages detailed precisely to ensure that Phespa will reach TRL9.
2. Commercial potential assessment:
Our market study indicated that consumers are looking for heat stress product. There are some products on the market that claim heat stress prevention but really have limited effectiveness. Additionally we learned that the demand is not only for a heat stress product but especially for heat stress product that can be used in liquid application. We develop a 3 phase commercial plan, including a phase for markets which we currently do not have market presences (e.g. African countries). PHESPA could be good entry for us as company to enter the Africa market as it is region which heat stress is major problem. Finally we defined our commercial strategy to reach our sales objectives.
3. Financial viability assessment:
From our extensive experience developing phytogenic feed additives we have built up our sales plan and projections for the 5 years following the execution of Phase 2 project. We calculated the funding requirements that Phespa project needs to reach the objectives and get to TRL 9 at the end of Phase 2 execution. We also assessed the infrastructure investment we need in the long-term to scale up production capacity.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

PHESPA project is expected to have a great societal impact worldwide on the animal farming industry, especially for the end-users: premix companies & feed mills, farmers, integrated companies, farmers. Their activities and results will be greatly improved by generating more incomes, reducing waste, reducing environmental negative effects and increasing the quality of the product.
Beyond the technical benefits, it is the whole industry, related value chain and stakeholders that will benefits from PHESPA products. This will be visible till the end of the value chain at the consumption point: consumers of meat products will benefits from a healthier product, better quality and environmental friendly.
In addition the growing concern of animal wealth will be greatly improve by providing a natural product (based on plants) to animals and improving their health.
Finally as PHESPA product will be available for Organic Farming, it will promote better farming practices and more environmental friendly. We will strongly communicate on those aspects to raise awareness of the wider public to promote more sustainable (economical, social, environmental) farming practices.

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