The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for October 29, 1999

Company earnings releases
 Veterinary Corporation of America (VCA) announced revenues in the third quarter of 1999 increased 12% to a record $84 million, from $75million in the third quarter last year. For the nine months ended Sept. 30, 1999, revenues increased 15% to a record $244 million from $211 million for the nine months ended Sept. 30, 1998.
 Intervet reported excellent results for the third quarter 1999.  No further details were given in the press release.

Company News Releases
 Novartis Animal Health, the best-performing sector of its agribusiness division, looks to be exempt from the organizational changes planned for the crop protection and seed businesses.  The company’s animal health division was also exempt frm an angribusiness streamlining program involving 1,100 job losses, which began earlier in the year.
 Fort Dodge announced that Bursamune® in ovo, an infectious bursal disease (IBD) vaccine, has received temporary authorization of utilization from the National Agency for Veterinary Medicament of Fougeres for in ovo administration to broiler chickens.  Such temporary authorizations (ATU) have been used for the initial registration of a number of new products in France in recent years. Embrex will supply Fort Dodge with the Viral Neutralizing Factor (VNF®) necessary to manufacture the complex under an agreement between the two companies. Bursamune® in ovo will be marketed in France by Fort Dodge Animal Health beginning later this year.
 PPL Therapeutics announced 80 job cuts as part of a major shake-up.  PPL was cited as saying that the cuts would mostly hit its production, research and administration divisions. The company, which employs 220 staff, has decided to focus its activities on its main projects, including organ transfer from one species of animal to another. In a bid to turn in a profit as soon as possible, it is dropping or shelving development programmes less likely to attract marketing partners.
 BASF is planning to expand its plant in Cuernavaca, Mexico, in order to produce new vitamin additives for the animal feeds industry. BASF is the principal supplier of such products to companies such as poultry companies, Bachoco and Pilgrim’s Pride. The amount of investment in the product was not revealed.
 IGEN International, Inc. announced the launch of its PATHIGEN E. coli O157 Test at the International Meat Exposition in Chicago.  This is the first product launched by Company’s Industrial Business Unit for food testing. Developed by the USDA’s Agricultural Research Service (ARS) based on IGEN’s patented ORIGEN technology, the test has demonstrated an unprecedented level of sensitivity and precision in detecting this dangerous strain of the food-borne pathogen.
 International Absorbents Inc. announced the opening of a new 4,000-square-foot manufacturing facility in Bellingham, Washington. The new facility will produce the environmentally friendly wood-based ECOfresh cat litter product.  The non-clay market for cat litter products is the fastest growing segment of the category.  The recent completion of test marketing in key supermarkets indicates a high demand for ECOfresh.

Animal Health News
 Retiring chair of the National Chicken Council John Bekkers, CEO of Gold Kist, Inc., told NCC members at their annual business meeting that the industry experienced positive Salmonella samples at 33% at the beginning of the 1990s and reduced that to 20% in 1996 and 11% this year. He said that the industry can and will do even more to improve its record on Campylobacter, Salmonella and other pathogens, but that the industry may be  approaching the limits of technology that’s available.
 The European Commission Tuesday proposed renewing its ban on animal welfare grounds on the use and marketing of the hormone BST, which is used to boost milk production in dairy cows, it said in a statement.   Bovine Somatotrophin (BST) is already banned in the 15-nation bloc, although a five-year moratorium on its use is set to expire at the end of the year.
 The U.S. cattle industry said Thursday it saw new hope for resolving a 10-year-old beef dispute with the European Union following a change of leadership in Brussels. The promise of a new EU proposal to comply with a World Trade Organization ruling is the first major development in the beef hormone battle since summer, when the WTO gave the United States and Canada permission to impose retaliatory duties on about $125 million of EU goods.

Agribusiness News
 The amount of land planted to genetically modified (GM) crops around the world is expected to leap this year by more than 40 percent, according to Monsanto Co. Significant increases were in China, Argentina, Canada and South Africa.  He cited data showing land area planted to genetically modified crops was estimated to rise by 44% to 98.55 million acres this year from the previous year’s level.

The Brakke Consulting Viewpoint

It has been an interesting week in the life of Brakke Consulting.  I’m writing this weekly response for the week from my hotel room in Cambridge, UK where we have just completed a very successful seminar on the animal health industry.  We had a very successful seminar with representatives form all of the major companies in attendance.  I must say that I’m struck by the regulatory environmment here.  I’m not sure what it all means but it cannot be good for the industry.

During my visit this week there has been a big battle between UK and France related to not allowing UK beef to be imported into France.  The response of the UK has been to not allow any French farm products into the UK.  What is this thing called the European Common Market?  It is obvious that some of these issues will not be solved for some time. 

As noted above in our articles, the 3rd Quarter results are now coming in and it looks like no one in animal health is breaking any sound barriers with growth in sales and earnings.  Those that have a small increase over prior year should be pleased.  We cannot wait to see what the 4th Quarter inventories are going to look like at distributor, dealer, and clinic levels. 

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