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NOVUS INTERNATIONAL: EMERGING ANIMAL HEALTH LEADER
Novus International is on a roll.

Currently executing an aggressive growth strategy, the St. Louis-based manufacturer and marketer of animal health and nutrition products has doubled its revenues in the past five years and is expected to top $600 million this year.

For the first 14 years of its existence, the business, a former division of Monsanto (see timeline), mainly concentrated on selling one major product, Alimet, the brand name for the essential amino acid Methionine into one major market: poultry. That strategy worked so well it maintains a 50% market share in the U.S.

Because of the explosive growth of the poultry market, Novus, and its two major competitors struggled to keep up with demand, experiencing consistent years of double-digit growth. Buoyed by continued expectations of the growing market, the company invested $400 million to build a new manufacturing plant. Its competitors expanded their facilities as well.

And then, the perfect storm hit. In 1997, the Asian financial crises resulted in the global consumption of poultry products imploding. Weakening demand in its primary market, coupled by over production, obviously is an imperfect formula for any business' success.

So, the industry, including Novus, went through a serious downsizing, adjusting to the new marketplace realities.

NEW STRATEGY, NEW PRODUCTS
"After making it through the transitional phase of our industry," Novus President/CEO Thad Simons explains, "in 2001 we put together a plan for growth. Central to it was taking the molecule that we had perfected the manufacture of, developing new products around it and introducing it to new markets."

Simons received law degrees from the University of Georgia, Vrige Univeriteit Brussel, and Columbia University. He worked for a law firm before joining Monsanto's legal staff in Brussels in 1984. He joined Novus as legal counsel in 1991 and was named to his current position in 2001.

Key Novus products include:
Amino Acids: ALIMET and MHA
Organic trace minerals: MINTREX
Nutrition and health: ACIDOMIX and ACTIVATE
Feed preservatives: SANTOQUIN and AGRADO
"In the past two years, alone, we have introduced 37 new products and doubled our number of employees to more than 300," reports Dr. Giovanni Gasperoni, the company's recently promoted Exec. VP, Mktg and Sls.

Gasperoni received his Dr. of Vet Medicine (DVM) at the University of Bologna and joined Monsanto as a technical consultant for Methionine in 1984. He worked in it's crop protection business in Europe, then transferred to Novus when it was formed.

In addition to continuing to serve the poultry market, the company has also introduced new products for Swine, Ruminant, Companion animal, and Aquaculture.

"Each of the markets have a unique subset of decision makers where we concentrate our efforts," Gasperoni says. "They range from animal nutritionists working for
Fortune 100 companies such as Tyson Foods and Cargill, to veterinarians, to individual animal owners."

To serve these markets, Novus has a staff of 25 DVMs and more than 50 Ph.D. and Masters-level nutritionists.

"It used to be all about a product's performance that would earn you the business," Gasperoni says. "However, it now takes a lot more. So, we believe in empowering our customers with tools and knowledge that will help make a positive impact in their local communities and the world."

Some key areas of its focus include:
Increased animal-based food supply.
Improved, sustainable environment.
Use of local by-products.
Food safety.
Animal welfare standards.
Fresh water conservation, and
Animal nutrition and health.

"At Novus, our core vision is to 'help feed the world affordable, wholesome food,'" Simons says. "To realize this vision we work to create scientifically-based innovations that address the key challenges facing the global animal-farming industry."

One example of accomplishing its vision was the "Sustainability Roundtable" the company recently hosted. Representatives from over 30 customers, as well as others in the ag industry attended.

"We opened the meeting by asking each representative to present their view on what the term 'sustainablity' meant," Simon reports. "From there, we broke into groups and brought definition and clarification to the term. We had tremendously positive feedback from the participants, because they could think outside their individual 'boxes' to create an industry-wide solution."

THE NOVUS RESEARCH CENTER
Another point of differentiation is the emphasis Novus has placed on the science of Animal Agriculture. The Novus Research Center is a state-of-the-art, 45,000 ft, scientific facility located in St. Charles, MO.

Its Projects include:
Animal performance testing
Commercial-scale research
Preservatives and formulation chemistry
Analytical services
Engineering and process chemistry
Biochemistry and microbiology
Cell and molecular biology

"At the heart we truly are scientists serving scientists," explained Gasperoni. "That is what the Novus Research Center is all about."

DISTRIBUTION
"Most of our traditional products are distributed directly to the customer or via feed companies," Gasperoni says. "In addition to providing them with our products and technical support, we have also innovated unique services."

For example, 10 years ago, the company supplied its key, large-volume customers with a meter that kept track of the inventory in their storage tanks. When it needed refilling, the meter automatically communicated it to the Novus customer service representative who then scheduled delivery of the product.

"As we enter new markets, we will, of course, seek distribution methods that best serve our customers and our organization," Gasperoni says.

COMMUNICATIONS
To support its sales efforts, Novus has an active marketing and communications outreach program. In addition to advertising in trade publications, the company is active in trade associations and shows, launched a scholarship program, and is one of the main financial supporters of the St. Louis-based World Agricultural Forum (WAF).

"We don't just attend the events, we get very engaged with them," Simons says. A recent example was at the WAF's Congress, a biennial gathering of ag industry, government and other world leaders held in St. Louis last May. In addition to sponsoring the Congress's main reception, Novus hosted their customers' representatives. While they were in town, they first attended Novus-only educational events with tours of its facilities. They then attended and participated in the Congress.

Recently joining the company is Tricia Beal, Sr. Manager, Global Comms and PR. "This is a new position for Novus," Simons says. "As the company grew, we realized that we needed to have somebody to concentrate on giving the company an overall, global brand.

Beal's background includes VP, Mktg for the eBusiness Integrator, McFadyen Consulting in the Washington, D.C. area and Global Marketing Manager for Tocris
Bioscience based in Bristol, U.K.

To accomplish her task, Beal says she is putting together a common infrastructure that leverages all of the expertise within the company. Specific tasks that she has identified to be worked upon the first year include a complete overhaul of the company's Web site, internal portal environment, and a myriad of other activities.

Like most growing companies, as business units develop, silos can sometime also develop. "It's my main goal to build an infrastructure in which we all align our collective knowledge and skills," Beal says.

OUTLOOK
With over 70% of its sales coming from outside the U.S., Novus has a catbird seat on the forces that are shaping the livestock industry around the globe.

What is the future of the industry in the U.S.? "First off, it must be recognized that the U.S. is the power-house of the livestock industry," Gasperoni says. "However, we see more of the rules and regulations that are affecting European producers starting to find their way into the U.S.

"The key drivers include sustainability, food safety, animal welfare, environment and fresh water," he says.

What impact do biofuels have on Novus? "On one hand, the higher corn prices are increasing the cost of poultry, making it less affordable to consumers in developing countries resulting in decreasing demand," Gasperoni observes. "But on the other hand, the production of ethanol is creating a huge supply of DDGs which must be supplemented with our Alimet product to bring up vitamin D content.

"In addition, the DDGs are of varying quality, so we are exploring ways to assist their feeders to provide a more standardized product and a consistent ration," he says.
It is with that type of forward thinking that will assure the success this once, rather "quiet" player, will successfully continue to accomplish its growth goals.

ABOUT NOVUS INTERNATIONAL
1956 U.S patent for MHA issued to Monsanto.
1979 Alimet introduced.
1982 Monsanto acquires Dupont technology.
1991 Acquired by a partnership formed by Japan's Mitsui and Nippon Soda Co.
1996 Alimet for dairy launched.
2004 Acquires Wolfgang Rothel GmbH, German mfgr of organic acids.
2006 New MHA plant opens in Little Rock, AR.


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