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Animal Health Market

The animal health industry, which comprises the manufacturing and sale of veterinary medical products for livestock and companion animals (pets), is a global economic sector that is undergoing growth. In 2016, the animal health industry totalled US$ 32 billion in revenues worldwide and Brazil was ranked in third place.

The Brazilian market for animal health is one of the most important on the world stage. In nominal terms, since 2012 the Brazilian market registered a CAGR of 8.1 %, coming in 2017 to a value of approximately R$ 5.3 billion:

 

The production animals segment is subdivided in ruminants (beef cattle, dairy cattle, sheep and goats), horses, birds and swine. The levels of production and quality of this market segment are critical in order to respond to the increased demand on a global scale, as a result of the growth of the world population and living standards, particularly in emerging markets.

The veterinary industry is part of this environment of improved productivity, where the demand for veterinary products has a potential growth as a result of the factors already described, including the low rate of technification of the farms. The use of technologies in farms relates to curative treatments and is more and more based on the use of preventive therapies, and the producer who seeks higher productivity rates uses a prophylactic management through the vaccination of the livestock.

Combining products and services is a marketing trend and Ourofino takes this statement seriously and proposes to provide the market with the best solutions in animal health, contributing to the high performance of the protein production chain. Therefore, all the investment in technology must be accompanied by investments in labor qualification, another market opportunity explored by Ourofino through its Technical Consultant team that, among other activities, provides training courses to farmers and day visits to the field, give lectures to sales clerks, offer assisted application of the products and follow-up on the results. This team generates the demand of the Company’s products by the final consumer and is also responsible for raising the needs and opportunities in the field, presenting solutions and implementing sanitary protocols and calendars.

Market Evolution - Ourofino's Market Share (%)

Market Source: SINDAN/PPE_Ourofino  *Estimated by the Company

Share Source: SINDAN/PPE_Ourofino

For companion animals, the market growth is directly related to the increasing number of companion animals in Brazilian homes, approximately R$ 74 millions according to Pnad and PNS. Between the factors are: the age group of the population that grows faster is that between 30 and 49 years; the average number of children per woman has fallen dramatically; the number of elderly has increased; and the number of single-person households has risen, according to the National Household Sample Survey (Pnad).

As stated by the Annual Report of the American Pet Product Association (APPA), the U.S. pet product market in 2017 was US$ 69.5 billion, and the Brazilian market, according to the Brazilian Association of Pet Product Manufacturers (Abinpet) was R$ 20.3 billion in 2017. Notwithstanding the fact that pets in the United States total 144 million, there is still a great potential to be explored in the Brazilian market.

There is also a change in the relation between the families and their pets, which is becoming more emotional. The change of status of pets is clear. They are no longer seen as pets, but have become family members, and no one leaves a “dear one” without basic items such as food, bath, health care, vaccines, etc.

In its purpose of Reimagining Animal Health, Ourofino has worked for the longevity of companion animals in search of continuous innovation, and is directly set within the context.

This scenario and the change in the population profile have led to a significant expansion of the pet market, which increased by an annual average rate of approximately 15.3% between 2013 and 2017 (Source: Sindan).

Market Evolution - Ourofino's Market Share (%)

 

Market Source: SINDAN/PPE_Ourofino  *Estimated by the Company

Share Source: SINDAN/PPE_Ourofino

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