Alan Thomson is a friendly Scot with a straightforward manner, who has spent more than 20 years climbing the ladder at Aviagen, most recently as commercial and technical manager. The retirement of Graeme Dear as general manager Aviagen UK Limited was announced in May, and with it the news that Thomson would be promoted, which he modestly describes as ‘an honour’.
Thomson is not showy but has agreed to be interviewed about his vision for Aviagen, the implications of Brexit, and how the firm is investing in new buildings and facilities for the future. “We often don’t put our heads above the parapet and shout about our successes. I cannot say how much I value the UK industry and not be willing to talk about it,” he says.
Speaking on the phone from Aviagen’s European headquarters in Edinburgh, Thomson explains how the firm is using state-of-the-art technology to help select the best traits in its pedigree chickens, from which are bred the parent and grandparent stock which are sold in the UK and around the world.
Aviagen is the market leading UK supplier of parent stock and has a fairly dominant position in the market for standard birds. It also supplies stock around the world, shipping and flying day-old chicks to Europe, the middle east, and Asia.
The firm is owned privately by EW Group, a German holding company which has subsidiaries in multiple agricultural sectors including functional foods, animal health, grain storage and fish breeding.
Thomson has taken over as UK boss during a healthy period for Aviagen with both sales and profits in growth.
Thomson says the growth has been organic and the company has benefitted from a global increase in demand for poultry meat.
In the UK, as well as the Ross 308, the firm also has the Rowan Range of slower growing birds. When this range was first launched in the UK six years ago, there was some interest but the birds did not perform as expected.
But Thomson says the firm has since worked on making the product better suited to the UK market. “We’ve since developed that product further,” he says.
“Where it will go now is hard to predict. It’s a small market. It may grow. It’s difficult to say. A lot is influenced by the economy, and it’s a marketplace we haven’t traditionally strongly become involved in, and if you look at what’s happened in other parts of Europe, that slower growing product has taken more of a market share.”
Last year, Aviagen acquired Hubbard Breeders. All aspects of the purchase of global operations were completed in early 2018 and the process of integrating Hubbard operations and people into the Aviagen Group of companies is progressing as planned.
As part of the agreement, Hubbard has remained an independent broiler breeding company with separate breeding and commercial activities and continues to be headquartered in France, where demand for slower growing breeds is far higher than in the UK.
The relationship with France is a reminder that Aviagen is an international business supplying day-old grandparent and parent stock chicks to customers in more than 100 countries worldwide.
So, what impact does Thomson think a no-deal Brexit would have on Aviagen?
He takes a deep breath. “We have been doing our best to actively engage with the government on Brexit. There seems to be a changing picture every week at the moment. We have had some positive conversations about key issues affecting the business but to be honest there seems to be too many variables to speculate,” he says.
Aviagen in the UK regularly dispatches between 250,000 and 500,000 chicks per week to customers around the world from UK ports and airports. It also employs workers from across the EU and further afield. And as part of the agricultural industry, it forms part of a business ecosystem that has warned about the potentially catastrophic effects of leaving the EU next March without having negotiated a trade deal.
The main issues he flags are ones that affect agriculture as a whole: “Skills and resources and the real concerns about getting people to work on farms and hatcheries and processing plants, as well as trade tariffs, transportation and the wide range of other areas that are under discussion.
“We export from the UK and that could give us some real challenges,” he adds. “The issue is because we have a large farming base in the UK and hatcheries, the issues we may face with skills and labour are equally of concern.”
If the current UK government proposals, hammered out at Chequers, are accepted by the EU would that work for Aviagen as a business?
“I think it’s too early to say,” he says. “We are looking at a number of difference scenarios. What we are trying to do is scenario planning for as many of these as we can. We have a group of people we are doing that with, internally and externally, to try and plan as best we can.
“Yes, we are concerned about the worst-case scenarios that could come about, but at the moment it is difficult to say exactly what is on the table at the moment, and while it’s frustrating, we are doing as best we can to plan. I find it difficult to say ‘this would work well for us’ or ‘no, that would be worse than that scenario’, so it’s difficult to give you an absolute clear answer.
The NFU warned in August the UK would run out of food in the event of a no-deal Brexit because it can’t grow enough without imports, and other organisations have warned of huge delays at ports in order to check individual consignments unless a deal is agreed.
“I think doomsday scenarios usually tend to be worse than what actually happens,” he says, “but our worst scenarios would be on export, and if stock was held up at border points and we had potentially issues with welfare, that would be a real concern.”
These challenges haven’t dampened Aviagen’s appetite for investment however, and there has been a strong and sustained period of growth for the firm across all of its UK facilities. “We’ve recently opened a new facility within our laboratory operations, which is a lab which focusses purely on our genomics work,” he says. Here, Aviagen staff look at utilising the naturally occurring variation in the chicken DNA to improve traits in the breeding goal such as high feed conversion rate (FCR), reproduction, yield and welfare related traits. “That has been a huge investment for us, but we see the benefits now of what we’re seeing in product development now at commercial level,” Thomson says.
He stresses that gene editing – the controversial emerging technology that allows scientists to alter DNA to, for example, create disease-resistant animals or crops, – is not part of Aviagen’s business.
“It’s something we’ve distanced ourselves from. It’s not in our planning or our strategy for how we select these birds,” he says.
“When we think of genomics, people often think of gene manipulation, but that is not what it’s about, it’s about understanding the gene structures of the chicken and looking for markers. Our selection process is based on physical selection, and that is handling the bird and studying the information we get from our genomics base.”
There has been some talk in the poultry industry about aiming for the ultimate goal of a 1:1 feed conversion rate. Is this attainable?
“Commercially I suspect that’s some way off,” says Thomson. “There are individual birds that have very low FCR, significantly lower than we see commercially. It would be wrong of me to say there are birds at 1:1, but there will be individual birds at 1:1.2 levels. We know at pedigree level there are animals that are extremely feed efficient.”
Aside from the new genomics facility, Aviagen is also growing its pedigree farming base. The firm currently has two of these bases, one in the UK, which was its first, and one in the US.
“We refurbished and rebuilt a lot of that probably around 20 years ago, and we are in the process now of a significant investment in increasing the pedigree farming base by approximately 40%,” says Thomson. There will be a focus on selection for FCR, and the investment will include new technology which will ‘optimise selection capabilities’ through the use of “some pretty smart state of the art technology, building on work already done by placing transponders on individual birds to track where they went, how often they ate, and where they ate.
“When you think of chickens you don’t think of some of the things we use, and that is quite exciting,” he says.
There’s also been some expansion in Aviagen’s farming base with a new great grandparent generation farm.
A new hatchery facility in Rugby – Aviagen’s third – will open in 2019, which Thomson says will complement the expansion of the Stratford-upon-Avon hatchery completed two years ago.
So, given this favourable position, what are Thomson’s plans and ambitions for his time at the helm?
“Having been with the business for as long as I have, to be able to lead it is a tremendous opportunity in my mind,” he says. “We’ve got a fantastic product that our R&D colleagues provide us, and we have to depend on that to take the business forwards. We’ve worked hard to develop relationships with our domestic customers over recent years and that’s something I’d like to build on. Management of the birds, and support of that at customer level is critical. We have to be able to provide quality, and my focus is not just on product but on service and communication.
Thomson is also working on promoting Aviagen’s UK customer rewards programmes, the Flock Awards, and the 400 Club, which he says is about celebrating the successes of the farmers who use Aviagen products.
“We’re going to be running some broiler roadshows this year which is about supporting our customers and celebrating the 400 club. We enjoy going out in the field and speaking to the people managing our birds.
“Growth of the business clearly is important, but I have to make sure the product and service is at a level I expect. We’ve done a good job up until now but there are opportunities to take that forward and improve that and that is the focus I have with my team.”