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Asian Egg Market: Value-adding to transform eggs into a profitable venture

During challenging times as we experienced here under Covid-19, the regional egg industry in Asia has been affected greatly and it is more important now than ever for companies to diversify their portfolios. In this interview, Nourredine el Molaka, General Manager of SANOVO TECHNOLOGY ASIA, gives insight into how egg producers can transform eggs in multiple ways in order to both maintain profitability and keep up with trends in the constantly developing Asian market.

Could you please share with us your thoughts on how eggs and their related products could be channeled into different sectors other than as shell eggs?

“This Covid-19 crisis has hit many producers of eggs severely and they are being challenged to find new ways to distribute their products; they cannot just depend on the egg themselves anymore. Looking from our perspective, as an equipment supplier, we know that the ready-to-eat market and the retail market have been booming and this will continue. So, I think egg producers that have been hit hard can for example start looking into hard-boiled eggs to be sold on the ready-to-eat market and possibly add flavorings, such as soya and different herbs to them.

So, not just sticking to the shell egg itself but going into the direction of hard & soft-boiled eggs, Japanese omelets, liquid egg, and so on and so forth. This is something we are seeing a lot in all of the convenience stores. So, this is one way to diversify your portfolio.”

 

How and in what ways could automation play a part in maintaining and raising profitability for egg producers in the region? Also, what kind of investment and in what sectors will be required?

“I think the main challenges in terms of cost are of course labor, and as a result of that many producers are looking into automation. There are however many ways to look into automation and because many countries have different levels of growth, so they will all also have their own way of transferring into automation.

Another issue not related to labor is the issue of biosecurity. We have seen what has happened to the swine producers the last couple of years, that they have been hit tremendously with swine flu. This of course affects the profitability of a firm; thus, many producers are looking to automation as a solution to this and are very focused on how they can increase biosecurity, as major outbreaks could vanish them from the market. So, these things go hand in hand, labor, and biosecurity, and I think automation can form a role there.

Going back to your second question, where I see the potential for investment; you need to start with automatization to make sure your eggs are uniform for the market. So, preventing cracks or dirty eggs going into the market, blood spots on eggs, and so on and so forth. There are several technologies on the market to help with that, not only from SANOVO but also from other suppliers.

So, uniformity in your final product is very good, and you can increase that with vision systems as mentioned before, but the next step is robotic automation, which we are seeing in countries like Singapore and Korea, but I see that other counties will follow the robotic automation transition.

Another thing is that is very important is food safety and flexibility; we have seen countries like Taiwan and Korea implementing certain guidelines to trace back eggs from where they came from. So if we look at SANOVO, we just did a joint venture with a company that is doing egg traceability in the egg grading and packing industry. So I think this is another way to place investment and be ahead of the market.

 

Can you expand a little bit on robotic automation?

Yes, well robotic automation takes over the labor normally done by humans, like placing the final eggs into a carton, palletizing that carton, which is, in reality, hard physical work that can lead to, for example, serious back issue. So, in the long run, I think there are a lot of things that can be helped by automation. Robotic automation is the future and will help get things done in a good and sustainable way.

 

You talked about Taiwan and Korea implementing traceability standards through automation, can you explain more about that?

Well, what we have seen in Korea is they had this avian influenza around 2016/2017, they started looking at what they could do to start preventing these kinds of outbreaks. So of course, biosecurity was high on the agenda.

There were a lot of companies in Korea that started supplying traceability systems but only suited for the Korean market. The tracing systems can trace the egg from the farm to the grading center and then from there to the distribution centers and finally to the retailer. This is done by printing, so every producer has their own unique code.

 

Eggs are very versatile and can be used for technical functions, such as binding, or used in other foods such as mayonnaise and baby foods. What is the prevalence of this in the Asian industry and what will be needed to encourage it to keep this industry successful?

Let me just start by saying how I am still surprised by how versatile an egg is and in how many ways it can be used. The transition of consumer behavior is something important, as less will be going to wet markets and they will be transitioning to retail and supermarkets, this will further drive egg processing and eggs being used in many different ways like ready-to-eat products.

Also, the consumption of different sauces where eggs are used will increase. If you look at the consumption of mayonnaise for example in Japan I think that that will drip down to the rest of Asia.

However, we should not underestimate the impact of the Covid-19 outbreak, I think this will put a lot of pressure on many communities and will bring them back to a different level in terms of disposable income, so it will take a while to recover from that.

 

Cage-free is an ongoing buzzword. How would you see the industry moving towards that without losing profitability and how will experts like you, SANOVO, cater to this?

When I started working for SANOVO several years ago I have been taking care of the Netherlands and Belgium as a sales manager, and at that time the transition of going from cages to cage-free started and that was regulated by the governments, who forced them more or less to go into that direction.

I see in Asia that there isn’t a government regulation system in place to drive all producers in that direction, so I think it is more or less consumer-driven, where you see a few producers catering to this target market.

So, I predict this to be a niche market, I don’t think it will get to the same extent in Asia as it is in Europe. Producers will however benefit from being able to choose which market they would like to target.
Another hot topic is climate change, and we at SANOVO are constantly looking at developing our products and equipment and seeing how they can use less energy and save water.

 

 Nourredine el Molaka, General Manager of SANOVO TECHNOLOGY ASIA

 


If you would like the hear the full, original podcast interview follow the link: https://www.youtube.com/watch?v=YvYQ-1KEHhE