Sustainable Animal Feed

SCP Alimentacin Animal Ecológica is a venture dedicated to the transformation of organic waste from the human food industry, to generate new products with great value for animal feed, which after 4 years of research and innovation work in biotechnology, has managed to establish a patented process for the use of returns and waste from the dairy industry, generating a single-cell protein core with wide uses in the formulation of food for pigs, chicks, calves, fish and pets; and the secondary metabolite of fungi is produced as a liquid organic fertilizer with various uses in sustainable agriculture.

The SCP proposal has the potential to solve three problems: food waste management, import substitution of raw materials for the manufacture of concentrated feed for animals, and decrease the environmental footprint of the dairy industry.

The human food industry losses between 1 and 3% of its sales. In Colombia 1.6 million tons of food are wasted per year. The dairy industry loses up to 3% corresponds to returns or discards (190 million liters/year). The whey produced by the artisanal cheese industry, which can reach 1,000 million liters/year, are discharged as shedding, or delivered without any treatment for feeding pigs. One of the great disadvantages of the feed industry is the high share of raw materials over their production costs. Most of the raw materials of agricultural origin used by the industry are imported, since the national production of goods such as yellow corn, soybeans and sorghum among others, is insufficient to meet the demand. This situation has caused a strong dependence on the agricultural supply of other countries, which implies its submission to price behavior, which are highly volatile. Animal feed production´s inputs are affected by exogenous variables (exchange rate, international prices, tariffs), which influence the formation of the final price. Additionally, there is a weakness in the organic fertilizer production that provide sufficient quantities for the demand from organic agricultural sector.

The proposed value is the recycling of expired waste and dairy products with a patented method to transform them into raw material for the balanced animal feed industry and organic farming. There are two customer segments: dairy products companies that must handle their waste properly; and feed manufacturers: chicks, piglets, calves and fish; In the agricultural sector, it focuses on the small irrigation systems, and on certified organic farmers who require fertilizers with good traceability. A second phase, in the medium term, seeks the manufacture and marketing of balanced feed and organic fertilizers aimed at family farming, including the use of alternative raw materials. we have a patented production process, even without official certification, in which milk waste is processed and transformed into single-cell protein and an organic fertilizer. Our production capacity will be 400 tons per month in year 3, with a gross margin of 65%, an operating margin of 27%, a net margin of 18% and an internal 3-year return rate of 129%. The partners contribute an initial investment of US $ 45,000 and expect to invest, for contributions from the partners, debt, non-refundable items and own investment US $ 186,000 in the next two years.

The animal feed industry is estimated for 2016 at about $ 8.75 billion pesos, with a production of 7 million tons of feed, poultry (69.4%), pigs (13.0%), livestock ( 9.5%), smaller species (5.8%) and fish (2.3%), where the most important variables in its formulation is protein, followed by the amount of energy it can provide to animals. This industry imports 90% of the protein-rich raw materials, in 2014, its value amounted to $ 2 billion pesos. The concentration of the industry is relatively high and seems like an oligopolistic type industry. The items that make up the production costs, the fertilizer component is especially relevant, due to its importance for the proper development of crops and its higher relative price compared to other inputs. However, as a result of the high dependence on imported raw materials for the production and marketing of fertilizers in Colombia, there is a high vulnerability to fluctuations in external variables that determine the price and availability of fertilizers in the country, which implies that the competitiveness of the agricultural sector and the income of producers can be affected. In the second half of 2015 Colombian imports of the fertilizer sector were USD360.7 million.

Feeding a growing population in the world not only means having enough food for everyone, it also means having good quality food that guarantees adequate nutrition and a low impact on the environment. Food losses and waste (30%) in Colombia mean a clear inefficiency of the country's food system, which generates social, economic and environmental impacts. This proposal seeks to reduce, in part, these losses and generate, through the circular economy, employment, new products that substitute imports, at affordable prices for small family farmers, which allow the production of healthy food with a lower environmental footprint.

Dairy industry deliver returns of unsold products, discards and by-products as waste with no commercial value to pig farmers or waste treatment plants, sometimes without sanitary controls. This is a project of circular economy and industrial ecology that, with a simple biotechnological method, transforms dairy waste to raw material for the animal feed industry and an organic fertilizer, which can be produced in large quantities in relatively small areas and a low cost.

Our products have several differentiating characteristics in the market: stable prices because they are not commodities and are produced locally without the added costs of importation and transport or customs fees. It has a stable, standardized composition without health risks from contamination, with high nutritional contents, which without being a product of animal origin has the same amino acid contents and high levels of digestibility. On the other hand, our products respond adequately to the tightening of the rules on the use of raw materials for animal feed, especially for products of animal origin, and the market trend towards the consumption of healthy and ecological products. 

Fertilizer is an organic product with traceability that is produced in large quantities and that due to its organic composition accelerates growth and production processes, which is important if the farmer is working on better agricultural practices or in the transition to organic agriculture.

The process involves the reverse logistics of return materials to the production plant. The products are separated, heavy and conditioned. The unpackaging is processed separately with its conditioning for sale as plastic waste, PET, Tetra Pack, paper and others. Dairy residues are added with sulfates and a source of glucose, homogenized and pasteurized. They are then taken to the incubation beds and the inoculum of the fungi Geotrichum sp and Penicillium sp. The incubation process takes 240 continuous hours. Once the incubation stage is finished the product is filtered and dried with heat to obtain a maximum of 10% humidity. The liquid by-product is stored for fermentation until it reaches its appropriate level of mineralization and can be sold as an organic soil fertilizer (Colombian Technical Standard 5167).

In the case of fertilizer, we expect to include two additional fermentation technologies. A first step is the production of methane, with an anaerobic fermentation, from the secondary liquid metabolite, with the purpose of generating the necessary energy for the process (or at least a part) and then moving on to an aerobic fermentation where it is mineralized Nitrogen (fertilizer maturation) to market with the necessary commercial and technical conditions.

There are lot of reports in the literature regarding the production of SCP in whey, mainly in the use of yeasts, due to the difficulty of finding microorganisms capable of fermenting lactose. There are reports of industrial processes of protein production from whey in Kiel, Germany and in Vienna, Austria, and by Bel industries in France that focused on reducing the pollutant load of dairy industry wastes, and in turn produced a marketable protein. Our technology has a patent registration (NC2016 / 0000183) with protection of invention to 20 years.

New technologies are emerging to take advantage of the growing opportunity to fully or partially replace fishmeal. Given the relative simplicity and efficiency of microbes, compared to reduction fishery species, plants, or insects, it makes sense to consider the merits of various microbial single cell protein technologies. These newer technologies include fermentation of bacteria, microalgae, yeast, and other fungi. http://www.aquafeed.com/af-article/7821/SCPs-and-insects-to-replace-fishmeal-discussed-at-Aquafeed-Horizons-Asia/. Changing raw materials impact nutritionists, formulators and processors, and challenges of incorporating and handling emerging ingredients were addressed at the 11th Aquafeed Horizons Asia Conference 2018. Chris Wilcox, Vice President of Sales and Business Development for Nutrinsic, explains how a single-cell protein made from waste nutrients can help replace fish meal in farmed fish diets. 

Regarding fertilizer, there is evidence in our studies of the national market that there is pressure to replace the use of solid fertilizers such as chicken manure with its residual antibiotics.

We have tested the market and there is a clear demand of our products.

SCP Alimentación Animal Ecológica offers the service of adequate disposal of commercial discards, production residues and waste of milk and dairy and produces: a single-cell protein core, for animal feed, with a minimum content of 50% protein, high digestibility and an adequate balance of essential amino acids, at stable prices and qualities; and, a liquid organic fertilizer for organic agriculture with high phosphorus and potassium contents, of high solubility and ease of application, which reduces production costs and guarantees yields in short cycle crops or fruit trees.

Due to its characteristics and affordable prices, organic producers will be able to have good production levels and good profitability in their crops while maintaining production standards and sustainability of their crops or hatcheries.

In the long term, we will reduce the environmental footprint of companies in the handling of these materials through circular economy activities and support sustainable agriculture profits while contribute to sustainable development objectives 2 Zero hunger, 12 Sustainable consumption and production and 13 Climate Action.

The field tests and lab analysis we have carried out show us that the products are effective and efficient for their use.

The project focuses on the Dairy Basin of the Sabana de Bogotá and the Ubaté-Chiquinquirá Valley, which is the main dairy basin in the country, the volumes it manages and the concentration of the main processing companies with a daily milk production of the department of 3'726,867 liters/year. We will reach in the first year to 1 large company and at least 10 small ones by the second year, and at least 50 SME´s at the end of the year 5.

Our market is at least one large feed mill and 50 self-producers of piglet and chicken farmers in the Cundinamarca region. We expect to produce balanced feed for trout culture farms by maquila on the year 5 and promote the aquaculture among small hatcheries.

By the year 5 we expected to reach organic producer that reach 25,713 hectares with crops. Fresh products represent 30%, dairy products 15%, meat 10%, cereals 15% and others 30%. Another important target is the 80,889 farms dedicated to dairy production in Cundinamarca most of them small farmers that combine dairy with vegetables, corn, and fruit crops.

The proposed venture manages to process 2,000 liters per hour or 2 ton/hour with 24 days of operation reaching 300 tons of returns/month. We will produce 100 tons of protein core during the first year of operations, with production scalability in the third year at 370 tons and 470,000 liters of liquid organic fertilizer. We will have reached nearly 500 clients, among the large producers of balanced foods and the small organic farmers in the country.

For the first year, we entered the market with two technically and commercially validated products at affordable prices for small producers.

For year 3, establish its own R & D & I unit and incorporate it into the structure of the company that allows generating the necessary innovation for the sustainability and growth of the company.

By year 5 we will be a registered B company, with high standards of sustainability and profitable

Market: Both industries, animal feed and fertilizers, aware of its condition, has endeavored to increase the added value it gives to its production, through technical advice to its customers. The historical increase in the concentration of sales by large companies reflects a market structure much closer to a highly concentrated oligopoly. The consequences of the assertion of this market structure, increases the chances of collusion among members of the industry, reduction in the supply of balances and the existence of market power, as a buyer of inputs and seller of food. Within the industry, the high level of indebtedness is noticeable, especially in small businesses; although among the large ones the average is 46%, and in some levels up to 61% are reached.

Technical: Pig farmers' demand for dairy industry waste depends on pork prices, which regulate demand. This generates, by seasons, peaks of availability with exceptionally low prices or low availability with high prices.

Cultural: There are cultural barriers generated by cognitive biases and frames of reference in small producers regarding the use of new technologies, and, additionally, their poverty conditions mean that this population has limited access to some fundamental rights such as education or information or access to the same technologies for sustainable agriculture.

Policy: Although the country signed a peace agreement, the issues of violence and insecurity are still important limitations for sustainability. Colombia is a country with highly developed environmental legislation, but it is not followed.

Market: This means that you must enter the market with differentiating products protected by the patent and the necessary commercial and brand registrations, and a clear savings and liquidity policy to avoid excessive indebtedness and the price war. We are not going to produce commodities, we are going to produce basic goods for the sustainability of the agricultural production of small producers supported by differentiating strategies such as quality and stable prices

Technical: To avoid peaks in the demand for waste, we will establish long-term management contracts that guarantee the collection of waste permanently, reducing costs in dairy companies, reducing the risk of sanctions for non-compliance with environmental regulations and preventing part of those wastes go to the water sources.

Cultural: Transforming these biases requires permanent information and advisory work to be done through social media and technical assistance. Access to products is in the affordable price and in the accompaniment with technical assistance and information through alternative means such as community radio stations or social networks.

Policy: The project proposes an open and transparent management with strategic actors and a management of legitimacy that guarantees the reduction of risks against armed actors. We will monitor legislative and regulatory development in the different instances of the State to adjust to changes or to participate in decisions that affect us

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Our team will be made up of six operators in the production plant and a silver manager who is an industrial microbiologist or food engineer. In the administration there will be two people in the area of accounting and cash, one person in charge of human welfare and one person in management. The technical support team will include an animal nutritionist and three agronomists or agroecologists. All this team is full time with indefinite-term work contracts.

We will have outsourced services such as transportation, both of raw materials and products, maintenance of equipment that makes it an allied company.

The team have been working to strengthen the rural economy through the development of productive models of organic food and fertilizer production for family organic farming. The Team is progressing with the evaluation of technological and biotechnological tests, the adjustments and productive innovations that allow the local production of organic fertilizers and animal feed, based on the experience and knowledge of farmers. This territorial knowledge and interaction with the families, has made it possible to weave fabrics of interrelationships, to join forces in the improvement of the productive processes, the generation of income and the search for welfare conditions for these rural territories. The technical work team or make up 3 people, Miriam Jimenez is an agronomist, master’s degree in rural development management and sustainable agriculture, 25 years’ experience working in rural development projects. Miriam has lectured on Polytechnic Jaime Isaza Cadavid in Medellin. Monica Martinez is Textile designer, with experience monitoring and control of sales by catalog, in social security assurance processes, crisis management and interpersonal conflicts and support to minors in distress. Promoter / counselor in breastfeeding. Juan Mira is a marine biology, master’s in environmental management and 30 years’ experience in environmental management projects in Colombia, as a researcher in consumer behavior in green markets and sustainable products or as Executive director for the Network of Civil Society’s Natural Reserves where he managed a team of 10 staff and an annual budget of US$200,000 in collaboration with WWF, The Nature Conservancy and the Dutch Embassy. 

We have established alliances with diverse actors. With the Jaime Isaza Cadavi Polytechnic we are doing the technical tests of the fertilizer in short cycle crops. With the CIER Regional Research and Ecodevelopment Corporation we are developing the technical validation of the single-cell protein nucleus in red tilapia crops of the cooperatives COOMUFUPAZ and AGRODABEIBA and the financial support of the INNOVANTIOQUIA Innovation Program. With the Connect Bogotá Region Corporation we have had two support processes by this entity, the first focused on the patent brigade, supported by Colciencias (Colombia´s Ministry of Cience), with which we were able to access the current patent, the second process is just beginning with the support of the Inter-American Development Bank in the BIO-BUSINESS ACCELERATION program in which we were one of the 15 projects selected with the challenge of innovation: How to improve the treatment of effluent from anaerobic digesters used for the generation of methane derived from the use of residual dairy used for the production of liquid organic fertilizers and animal feed? We are part of the Bogotá - Sabana Dairy Cluster where the main actors of the sector in the Cundinamarca region are located, promoted and coordinated with the Bogotá Chamber of Commerce, with whom we also work in the business strengthening program for the agricultural sector. We are part of the Hub Bio, a Bio Training program platform aimed at entrepreneurs of MyPymes of Bogotá - Region coordinated by Biointropic and the Secretariat of Economic Development of Bogotá.

The proposed value of the project is in the recycling of expired waste and dairy products with a patented method to transform them into raw material for the balanced animal feed industry and organic farming.

There are two customer segments: on the one hand, dairy products companies that must handle their waste properly; and on the other hand manufacturers of feed, especially for chicks, piglets, calves and fish; In the agricultural sector, it focuses on the associated farmers in small irrigation systems, and on certified organic farmers who require fertilizers with good traceability. A second phase, in the medium term, seeks the manufacture and marketing of balanced feed and organic fertilizers aimed at family farming, including the use of alternative raw materials.

The project is part of the Bogotá Region Dairy Cluster and from this relationship is building strategic relationships with associations of farmers and with milk processing industrialists, to obtain from them, the production that is damaged and the total of their returns, this through a contract where they are recognized a value for the product received.

The project has established a patented production process, even without official certification, in which milk waste is processed and transformed into single-cell protein and an organic fertilizer.

We are game changers in the management of waste from the milk industry, which currently has not made the switch to the circular economy. Not only in Colombia but around the world. The patentability study that was carried out showed that out of a total of 4,296 applications to date, the United States and China are the countries with the greatest interest in the development of dairy products and, therefore, with an interest in waste management in said processes. Therefore, the United States and China are the countries in which it would be worth protecting the invention, without forgetting that the European Union and Russia also participate in the same market. I found Argentina and Uruguay are good prospects for us also.

Before going international we have to consolidate the business model and position ourselves in the national market. Currently there is a great expectation for the products and the process, but we have not gone to the market or generated traction, which is the priority. The support of SOLVE is critical for us in the sense of promoting this initiative and being able to have the support and capacity to face the market.

It is also required to consolidate an image that allows us to promote the productive transformation campaigns required by the agricultural sector in Colombia.

We are a Seed level startups with innovative and scalable solutions for relevant problems. This phrase perfectly describes what we are today and what we require to pass the death valley and grow and consolidate ourselves as an innovative company. We are not only looking for financial support, we also need partners that allow us to overcome some weaknesses that we have as a team. Manufacturing processes have not been standardized, an issue that must be addressed in the short term to enter the market with quality products and with some competitive advantage generated by low manufacturing costs and good demand. The technical validation of the prototype products is necessary as it is the basis of both the registration with the authorities and the development of commercial information that generates greater availability to pay for the products. Commercial validation is urgent as sales are the basis of the company's sustainability.

Although we have made an effort to build alliances and partnerships with different sectors, our relationship with the academy and with the productive unions in the Colombian and international agricultural sector is still weak. We would like to have better relations with research centers or institutes since one of our specific goals is the development of our R&D unit.

We are open to establish relationships with new allies and to listen to stakeholders with new ideas and ways of working

Economic: Evidence-based and context specific innovations to transform waste from the dairy industry will deliver improvements in production yields, and quality. This will lead to increased household incomes and food for farmers, particularly household livestock. The economic impacts will contribute specifically to SDGs 2, 3 5, 8,9.

Commercial: The project will be providing employment and opportunities in Colombia where there is a shortage of good work. The project creates the capacity for a biotechnology company with a focus on social responsibility that develops products for family based and community-run agriculture. The commercial impacts will contribute specifically to SDGs 8, 9, 10, 12

Social: The process will stimulate the economic empowerment of rural people, which will motivate them to stay in their regions with their own rural projects. The project will strengthen family and community agriculture in the framework of the peace agreement implementation period. We will enable closed regional and local food and commercial systems, improving food security and food sovereignty. The social impacts will contribute specifically to SDGs 1 -5, 10,16.

Environment: Fertilizer and animal feeds will solve a need in the community for high quality inputs (which are lacking) without imposing the environmental burden that industrial feed and chemical fertilizers do. The impact will be high quality crops through low impact inputs, cleaner watercourses and less use of chemical inputs which have a high environmental cost in production and in their use. Furthermore, the project will contribute to climate change mitigation with short supply chains with reduced use fossil of energy and the implementation of smart agriculture. The economic impacts will contribute specifically to SDGs 12 – 15 inclusive.