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Benchmark expects feed sales to be hit hardest by coronavirus

2 April 2020, at 8:53am

Due to the COVID-19 pandemic, Benchmark expects a “significant” reduction in sales of its advanced nutrition products but believes that its genetics sales should hold firm.

A statement released by the company today explains: “To date, it is too early to assess the level of impact in the current financial year ending 30 September 2020 but we anticipate a negative impact on earnings.

Benchmark's nutrition division is one of the world's largest distributors of the brine shrimp artemia
Benchmark's nutrition division is one of the world's largest distributors of the brine shrimp artemia

“Trading in our genetics business has not been materially affected by Covid-19. The two and a half to three year salmon production cycle means that demand for salmon eggs is less affected by the short term impact from Covid-19 on the salmon sector, which is experiencing weaker demand from the catering industry, partially offset by retail demand, as well as challenging logistics to Asia and US.

“In advanced nutrition, global shrimp consumption has dropped, with a consequent reduction in production in most markets. There are cautious signs of a potential recovery in China, although the effect will be slowed by a backlog of shrimp stocks from prior months. Demand for sea bass and bream in Europe and in the US has been significantly impacted, leading to a reduction in production across all markets which could worsen if European borders close to fry or end product. There is ongoing uncertainty and we expect a significant impact from Covid-19 on the division.

“In animal health, the company has built stocks to support customers and trading is on track. Our work towards the commercial launch of BMK08 [the company's novel sea lice medicine] and CleanTreat is continuing, with timings highly reliant on any impact from Covid-19 on the regulatory approval process."

Peter George, executive chairman, commented: "During these difficult times, the group's key priority is to protect our employees and customers' interests whilst at the same time ensuring our financial position remains resilient. We operate in the essential sustainable global food production sector which, while experiencing short term challenges from Covid-19, continues to have strong fundamentals. We remain confident in our strategy for the business for the long term including the prospects for the commercial launch of BMK08 and CleanTreat."