Contents:

I. INTRODUCTION Scope of the Report Research Methodology Disclaimer Product Coverage and Definitions II. EXECUTIVE SUMMARY III. GEOGRAPHIC MARKET ANALYSIS 1. Global Market 1.1 Market Environment 1.2 Compound Feed 1.3 Current Market Situation by Segment 1.3.1 Vitamins – Development and Forecast 1.3.2 Amino Acids – Development and Forecast 1.3.3 Enzymes – Development and Forecast 1.3.4 Colourants – Development and Forecast 1.3.5 Antioxidants – Development and Forecast 1.3.6 Probiotics – Development and Forecast 1.3.7 Prebiotics – Development and Forecast 1.3.8 Flavours – Development and Forecast 2. United States of America 2.1 Market Environment 2.1.1 National Economy 2.1.2 Legal Regulations 2.2 Compound Feed 2.2.1 Cattle, Pigs and Poultry 2.2.2 Aquaculture 2.3 Current Market Situation by Segments 2.3.1 Additives in Total – Development and Forecast 2.3.2 Vitamins - Development and Forecast 2.3.3 Amino Acids – Development and Forecast 2.3.4 Enzymes – Development and Forecast 2.3.5 Colourants – Development and Forecast 2.3.6 Antioxidants – Development and Forecast 2.3.7 Probiotics – Development and Forecast 2.3.8 Organic Acids – Development and Forecast 2.3.9 Prebiotics – Development and Forecast 2.3.10 Flavours – Development and Forecast 3. Western Europe 3.1 Market Environment 3.1.1 National Economy 3.1.2 Legal Regulations in Western Europe 3.2. Compound Feed 3.2.1 Cattle, Pigs and Poultry 3.2.2 Aquaculture 3.3 Current Market Situation 3.3.1 Additives in Total – Development and Forecast 3.3.2 Vitamins – Development and Forecast 3.3.3 Amino Acids – Development and Forecast 3.3.4 Enzymes – Development and Forecast 3.3.5 Colourants – Development and Forecast 3.3.6 Antioxidants – Development and Forecast 3.3.7 Probiotics – Development and Forecast 3.3.8 Organic acids – Development and Forecast 3.3.9 Prebiotics – Development and Forecast 3.3.10 Flavours – Development and Forecast 4. Eastern Europe 4.1 Market Environment 4.2. Compound Feed 4.2.1 Cattle, Pig and Poultry 4.2.2 Aquaculture 4.3 Additives in Total – Development and Forecast 5. Asia with Main Focus on China 5.1 Market Environment 5.2 Compound Feed 5.2.1 Cattle, Pigs and Poultry 5.2.2 Aquaculture 5.3 China 5.3.1 National environment 5.3.2 Legal regulations in China 6. South America 6.1 Market Environment 6.2 Compound Feed 6.3 Current Market Situation by Segment 6.3.1 Vitamins – Development and Forecast 6.3.2 Amino Acids – Development and Forecast 6.3.3 Enzymes – Development and Forecast 6.3.4 Colourants – Development and Forecast 6.3.5 Antioxidants – Development and Forecast 6.3.6 Probiotics – Development and Forecast 6.3.7 Organic Acids – Development and Forecast 6.3.8 Prebiotics – Development and Forecast 6.3.9 Flavours – Development and Forecast IV. SELECTED PLAYERS Adisseo Ajinomoto Alltech BASF Cargill Chr. Hansen CJ Corp. (Cheil Jedang Group) Danisco Degussa DSM Nutritional Products Evialis Kemin Kemin AgriFoods North America Lallemand Lesaffre (Saf Agri) Novozymes Novus Nutreco Provimi

Summary:

The global market for feed additives has experienced substantial changes over the past few years. In 2004, the world market for nutritional feed additives was valued at approximately € 6,2 billion. Major growth took place in Asia, especially in China. South America and to a lesser extent Eastern Europe contributed to further growth in the market. The huge US market however showed only marginal growth and Western Europe even had to report a downturn in market size. The latter was due to declining livestock numbers and compound feed use in Europe. The market growth of the use of nutritional feed additives is mainly driven by the following market trends: - Economic environment: A growing population along with increasing disposable income leads to significant growth in demand for meat products. This effect is especially strong in the developing regions in South America and Asia. In these regions, a rising demand for meat goes along with a huge potential for improving feed efficiency as inclusion rates of feed additives are still on a low level. Japan, Europe and the USA however have already reached a level of saturation. Here the market is shifting to more convenient and processed products. In general meat market is driven by a higher demand for food quality. - Trend towards pig and poultry meat: A continuing trend towards an increasing demand for pig and poultry meat has a positive impact on market growth, as these animal categories account for the major consuming segments for feed additives. - Ban of antibiotic growth promoters: The EU placed a ban on the use of antibiotics as growth promoters in animal feed and the last four antibiotics have been phased out in January 2006. Therefore feed producers have to look for suitable alternatives. Currently additive producers of probiotics, prebiotics, organic acids and enzymes seek to offer a comparable solution. Therefore the ban on antibiotics in Western Europe and the EU accession countries in Eastern Europe can be seen as the key market driver for the mentioned additive segments. Major concerns about antibiotics in animal feed also stimulated the market for alternatives in the USA. - Consumer preferences and concerns: Especially in the developed regions, consumer preferences play an important role in the meat industry. Therefore changes in the demand structure of consumers constantly compel the industry to adapt. During the last years, consumers asked for a certain level of quality and guarantees of safe foods. Discussions of the safety of some ingredients have opened the market for natural additives. Besides the above mentioned factors, there are certain market restrains that are challenging the market for feed additives: - Outbreak of animal diseases : In the years under review, the meat industry was threatened by several outbreaks of animal diseases. Above all, the Asian influenza has challenged the industry the most and has become a global problem. Concerns of consumers are reflected in a reduced consumption of poultry meat and have led to a price drop in some regions. Additive producers therefore have to face a decline in additive demand and eventually a further pressure on product prices. - Price development: Prices for almost all feed additives have dropped during the past few years. The reason for the dramatic price erosion can mainly be seen in an oversupply. Especially Chinese vitamin producers challenged the industry with particular low prices. In some segments volume increases could not always compensate for the heavy price drops, and thus, the market value of several additives is now less than it used to be in past years. In the future, most prices will remain on their current low level or in some segments continue to fall further. - Increase in raw material costs: Apart from falling prices, additives producers were challenged by high raw material costs and therefore reported lower incomes from additive sales. In the market outlook this situation is not expected to improve much. All in all, the above mentioned drivers and restrains will lead to a volume increase in nutritional feed additives, which might even outperform the market growth of compound feed. However market growth, in terms of revenue, will be on a much lower rate at about 0,6% annually. Following this market development, feed additives will account for € 6,4 million in 2010.

Companies Mentioned

- Adisseo - Ajinomoto - Alltech - BASF - Cargill - Chr. Hansen - CJ Corp. (Cheil Jedang Group) - Danisco - Degussa - DSM Nutritional Products - Evialis - Kemin - Kemin AgriFoods North America - Lallemand - Lesaffre (Saf Agri) - Novozymes - Novus - Nutreco - Provimi