Friday 24 November 2017

New diseases offer opportunities for those interested in animal health products

The farmer standing in front of me was close to tears. I was interviewing him for RTE's 'Ear to the Ground' about his awful experience with a new disease that was crippling his newborn lambs.

Schmallenberg was only discovered in the German village that the disease gets its name from in 2011.

However, in two short years it has defied thousands of miles of land and sea to infect Irish cattle and sheep farms.

The reality is that this is just the latest in an ever increasing list of diseases that are becoming endemic within agriculture systems across the planet.

The vast majority of them have no implications for human health, but can be devastating to the farmer's bottom line.

The latest arrival, Schmallenberg, leads to abnormal foetuses that are born dead or survive only a few hours.

The clamour for a vaccine within the farming community is understandably deafening.

It's no surprise then, to learn that vaccine sales is one of the fastest growing markets in the agri-sector. From a paltry €13m in 2002, the market has trebled in the last decade to the point where it is now topping €40m a year.

Indeed, the entire farm animal medicine market is one that is beginning to attract investor's attention.

Last year, sales (at wholesale level) grew by 12.5pc to top €100m.

This should be set to increase even further as farmers gear themselves up to reach the ambitious targets set out in the Government's Food Harvest 2020 report.

Estimates vary, but this will probably result in another 500,000 animals being added to the national dairy herd over the next seven years.

These stats are likely to be part of the reason that the US multinational, Henry Schein, splashed at least €6m on an Irish veterinary medicine distributor, Vetlink, late last year.

With sales of over €56m in 2011, and an operating profit of €1.6m, it might appear that Vetlink would be too small a concern for the likes of Henry Schein with a turnover of close to €7bn.

But there is probably more at stake than just opportunities within Ireland behind this deal.

Proposals before the European Commission are already well advanced to make it easier for companies to sell their products across the EU.

Currently, the big players such as MSD and Zoetis (formerly Pfizer Animal Health) spend hundreds of millions a year getting their products past the individual regulations governing veterinary products in each member state.

The changes have the potential to open up a massive market. The French market alone is about 13 times the size of its Irish equivalent.

It's not just the massive multinationals that will benefit from these developments. Companies north and south of the Border have already carved out very nice businesses for themselves in this area.

Dundalk-born Edward Haughey has built up a fortune worth an estimated €600m on the back of his Northern Irish company, Norbrook.

Galway vet Michael Burke set up Chanelle Veterinary 30 years ago in Loughrea. It now employs 200 people and has over 700 registered products being sold into over 80 countries around the world.

Cavan-based Univet has also earned millions for the Crowe family that own the company.

These companies have long realised the value of keeping farmers' animals alive.

With global demand for meat and dairy expected to grow so strongly over the coming years, coupled with the continuing emergence of new diseases, it's understandable why multinationals are investing in this space.

Schmallenberg may be the latest disease breaking farmers' hearts the length and breadth of the country, but these new diseases also offer a huge opportunity for Irish entrepreneurs with an interest in animal health.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business