Megamix vitamin E production ramp-up in Russia on track

Russian premixer Megamix LLC’s plans to expand capacity for vitamin E 60% adsorbate and vitamin E 50% adsorbate to cover the entirety of the domestic market’s demand are on track, the company told Feedinfo.

Megamix’s vitamin E adsorbate plant reached a production capacity of 2,000 tonnes/year in 2021, and in a January 2022 interview the company said it was aiming to produce 12,000 tonnes/year by the end of the decade. At the time, Vasiliy Frizen, General Director at Megamix, estimated the total potential of the Russian market for vitamin E adsorbate at about 4,000-5,000 tonnes/year.

“Currently, the production capacity of the feed grade vitamin E line fully matches its built-in process capabilities. The potential of the Russian market for vitamin E consumption is growing pro rata to the compound feed output,” Arseniy Vlasov, Deputy General Director for Business Development & Co-owner, told Feedinfo, adding that the growth rate of compound feed output in Russia in 2022 was 7% year-on-year, which was almost double the rate of the previous year.

Vlasov acknowledged that Megamix did, however, experience some setbacks last year for its vitamin E project due to the need to find new partners in the supply chain and overall logistics issues.

“We overcame these challenges and now we are on a good track to reach our goal to achieve a production capacity of least 40% and cover all needs in the Russian market and CIS countries,” he said.

Megamix has also made progress on its project to produce other vitamins: namely vitamin A, vitamin B12, folic acid, biotin, and possibly other additives — a project which was still in the very early stages in early 2022.

Vlasov said his company is currently in discussions with its partners about a joint venture in “one of the mentioned fields”.

They hope that by the end of Q3 they will be able to disclose the details of this next vitamin project.

In the past year, the conflict in Ukraine and the various sanctions have played a big part in how companies in Russia have been operating and adapting their businesses.

“The changes primarily affected purchasing of the key ingredients for premix production,” Vlasov said.

“If previously a significant share of ingredients was purchased from European suppliers, now the focus is almost entirely on Asian manufacturers. Thus, we are able to fully secure the required import volumes of raw materials.”

On the export side, Megamix has seen its business increase for premix products. “In total, the export volumes of Megamix products increased by over 20% in 2022,” Vlasov said. “We have not observed decreased customer demand in our traditional CIS markets (Armenia, Belarus, Tajikistan, Kazakhstan, etc.)”

In January 2022, Megamix estimated its broiler premix market share in Russia at about 38% and its total premix market share at 32%.

According to Megamix’s Deputy General Director for Business Development, the company has been able to maintain its market share amid a trend of growing livestock production output across Russia.

“Taking into account the growth outlook of livestock production in Russia and availability of nearly all kinds of raw materials and energy, we firmly believe that feed additive production in Russia will be steadily growing,” he also commented.

“Moreover, government support is expected to speed up this process. In general, it should be beneficial for all local market players as it could reduce the cost of feed additives, shorten supply chains and lower forex risks,” Vlasov added.

The Russian government previously said it wants domestic feed additives production to rise 5% by 2024 and 5% more by 2030 to partly mitigate the feed industry’s dependence on foreign vitamins and amino acids.

By Simon Duke, editor-in-chief