PAC PARTNERS AGRIBUSINESS & FOOD CONFERENCE CONTROLLING YOUR - - PowerPoint PPT Presentation

PAC PARTNERS AGRIBUSINESS & FOOD CONFERENCE

CONTROLLING YOUR DESTINY 28 April 2017

1

 Ridley Drivers of Destiny  Maximising the customer value delta  Innovation at Ridley  Case study – CSIRO and NovacqTM  Destiny within our grasp

AGEND GENDA

2

3

DRIVE DRIVERS S OF OF DES DESTINY TINY – JAWS WS OF V OF VAL ALUE UE

Livestock Yield / Performance Cost of Ridley Feed Ridley’s Mission - and its destiny - is driven by our ability to deliver and extend

• ur customers’ delta between

the cost of our feed and the performance of their animals

• in terms of yields of milk,

meat, eggs & well-being

Nutrition – Formulation of diets, better feed conversion rates (FCR) Merchandising - bulk, off farm, expertise, market presence Quality - DIFOTIS, delivery in full, on time, in spec Logistics - backloading, proximity to grain, 1.9mt in/outbound

Innovation - develop new value adding raw materials, ingredients & by-products to improve

• utput and

reduce cost

“Our Mission is to improve the cost of feed to yield ratio for our customers”

 Quality - adoption of the highest standards to reliably deliver the feed

• rdered by our livestock farmers, in spec and on time.

 Merchandising - using widespread network of regional supply sources to provide raw

materials at competitive prices.

 Nutrition - developing the optimal combination of raw materials to deliver

nutrition solutions which drive down Feed Conversion Ratios.

 Logistics - optimisation of freight routes and loads with backhaul facilitated

through scale and supply chain efficiencies.

Being best in class in all of the above generates a competitive customer delta which delivers core business opportunities and healthy tension for capital e.g. feedmill at Lara & proposed for Tasmania, rendering efficiencies, Narangba test extruder etc. However, none of the above is unique to Ridley. What will drive our destiny is:  Innovation - the ability to provide a unique and sustainable offering to prise

• pen the jaws of value and deliver a customer value

proposition unable to be matched by competitors.

MAX AXIMISI IMISING NG THE HE CUS CUSTOM OMER R DE DELTA

4

 Talent

• Technical experts are employed for each of its business sectors.
• Stringent recruitment processes and standards are in place to recruit

highest calibre personnel.

• A multi-disciplinary internal Applied R&D team meets quarterly to

manage and monitor all formal projects, screen potential projects, and ensure appropriate focus on commercial outcome.

• Full time dedicated R&D Coordinator employed to oversee stage gate

process for approved projects.

• Sponsorship of Ridley personnel for PhD studies in relevant fields.

 Relationships - strategic & other relationships maintained with research institutions

e.g. CSIRO, James Cook University, Monash and Deakin Universities, QUT,

Universities of Melbourne, Queensland and New England, CRC’s.

• applied studies and trials sponsored by Ridley to test hypotheses and

prove up theories which have the potential to deliver positive commercial outcomes. Once in a blue moon, a destiny-changing opportunity may present itself…..

INNO INNOVATIO ION N AT RID RIDLEY LEY

5

CASE CASE STUD STUDY Y CSIR CSIRO O & & NO NOVACQ CQ™

• NO

NOVEL VEL FEE EED D ING INGREDIE REDIENT NT CAP CAPAB ABLE E OF OF CHAN CHANGIN GING G THE THE LANDS LANDSCAPE CAPE

6

After drying/processing “pure” NovacqTM

After drying After grinding

 History - in August 2011, 9t

• f CSIRO-discovered novel feed

ingredient NovacqTM was provided to Ridley, incorporated into feed, and successfully trialled at Bribie Island CSIRO facility.

 Destiny-changing Licence - An exclusive licence for crustacean applications in Australia,

Malaysia, Indonesia and Philippines was negotiated in 2013, China and Vietnam having already been

• licensed. Start of five year program of Applied R&D to prove technology & commercialise the opportunity.

 Destiny outside our control - China, Vietnam, other

potential species applications & rest of world crustacean market.

 Bring destiny within our control by developing the technology and securing:

• Step 1 - any available opportunities in China and Vietnam
• Step 2 - Thailand territory for crustacean application
• Step 3 - all remaining available crustacean markets
• Step 4 - all non-crustacean applications for all markets.

CS CSIR IRO & & NO NOVACQ CQTM

TM

7

ST STEP EPS S 1-3 3 – SE SECURIN CURING NO NOVACQ CQTM

TM DE

DEST STINY INY

884 1,478 4,718 5,260 5,418 5,616 5,955

Source: FAO; Prawn FCR is Ridley estimate FCR is Feed Conversion Ratio, the ratio of how many kilos of feed an animal eats to put on a 1kg of weight of the prawn. The lower the FCR, the better the return to the prawn farmer. A conservative 1.3 FCR has been assumed in producing the above estimates of demand for feed, but in reality varies by country, feed quality and species of shrimp/prawn.

Step 2: Thailand market secured in August 2016, Step 1: Ridley’s executed licence enables sale of Australian made NovacqTM licensed products into “locked out” markets of China and Vietnam. Step 3: CSIRO licensed NovacqTM to Ridley for Rest of World, excluding China and Vietnam, on 27 March 2017 .

('000 metric tonnes)

('000 metric tonnes

8

213 259 685 683 628 958 937 156 403 737 794 793 423 367 232 450 985 1,304 1,366 1,464 1,595 283 367 2,310 2,479 2,631 2,772 3,056

• 1,000

2,000 3,000 4,000 5,000 6,000 7,000 1990 2000 2010 2011 2012 2013 2014 Original Ridley licensed territories Thailand Rest of World Locked out countries

Total tonnes:

 Controlling destiny - execution in March 2017 of a long term strategic research

Alliance with CSIRO:

• Objective to conduct collaborative research to maximise Novacq™ applications

beyond crustaceans.

• Ridley cash contribution of $1m per annum matched in kind by CSIRO for a minimum

five year period, with an option to extend for a further five years.

• Alliance to follow an annual program of research approved by a Management

Committee of equal representation.

• Alliance to target and trial the most likely range of species for potential inclusion of

NovacqTM as a stock feed additive.

• Ridley now jointly controls the destiny of this innovation wherever and in

whatever species are shown via the Alliance to be most positively impacted by the inclusion of NovacqTM into their feed.

• Can the Alliance identify & develop

another unique and innovative

• pportunity to alter the destiny of

(CSIRO and) Ridley?

ST STEP EP 4 4 – OTHE THER R MARKE MARKETS S & APP & APPLICA LICATIO TIONS NS

9

NO NOVACQ CQTM

TM – DE

DESTINY INY IN IN OUR OUR GRA GRASP

Livestock Yield / Performance Cost of Ridley Feed

Improved conversion from different carbon sources Aeration and filtration Reduction in harvest cycle / larger prawns / risk mitigation Optimum efficacy & diet inclusion rates Brood stock / larvae feeding Drying process Enhanced Disease resistance to viral/bacterial attacks increasing survival rates

Up to 40% of annual tropical shrimp production is lost to disease (>US$3bn). Farmed shrimp production expected to grow 50-60% through to 2030 #.

Ridley’s NovacqTM destiny delta

10

5 year program of applied R&D to target and trial the most likely range

• f species for potential inclusion of

NovacqTM as a stock feed additive

# World Bank (2013) Fish to 2030

CSIRO Alliance Ridley internal

Ridley Corporation Limited

ABN 33 006 708 765 Level 4, 565 Bourke Street Melbourne, VIC. 3000 Australia www.ridley.com.au

11