Value chain models for the top 5 bioactives

Summary

MLA has sponsored considerable previous research on red-meat based bioactives. This report builds on that base and adds to it by including more recent estimates of market sizes, prices, and other data, and more importantly by describing the dramatic rise of China and India as global competitors in some bioactives markets.

In addition, this report includes information gained from more than 20 interviews and site visits with active participants in the Australian and New Zealand bioactives sectors. The report thus combines quantitative and qualitative information in describing the current situation and in making
recommendations for the future. 

This report is structured somewhat differently than previous reports, based on the observation that from an industrial economics perspective the blood-based bioactives are quite similar to each other, and as a group quite different to CS. The report therefore considers CS separately, and the four blood-based bioactives as a group, although separate market information is provided for each of the four. 

Overall, the report concludes that CS is unlikely to be manufactured in Australia without support from MLA, governments, or other outside organisations. Overseas manufacturing, particularly in China, has a very
large cost advantage due to efficiencies of scale and lower labour costs, and while there is much talk about market niches for CS from BSE-free sources, there is little evidence for the current existence or future viability of such niches.

On the other hand, blood-based bioactives are likely to continue to be
manufactured in Australia, perhaps in larger volumes than at present, based on the ability of Australian bioactives companies to identify local markets and other quality-sensitive niches for their products. However, it is important to note that the specific blood-based bioactives studied in this report may not continue to be the mainstay of Australian production.

There are already recombinant forms of BSA on the market, for example, and the FDA has shown concern about the use of bovine-based prothrombin in medical devices no matter what the country of origin. In order to prosper over the long term, bioactives companies, like all science-based organisations, must have an eye on the future needs of the market and
the ways in which they can respond to, and ideally even anticipate, those needs.