Associated Press
01-10-07
Kansas City becoming hub for animal health care industry
DAVID TWIDDY
Associated Press
KANSAS CITY, Mo. - The vast cattle pens that once helped move much of the
nation's meat supply are gone, replaced by aging warehouses and the frequent
belief that this former frontier town left its agricultural roots far behind.
But not so fast. With little apparent care and feeding, the business of keeping
animals well and productive has continued to thrive here, with one consultant
estimating that about one out of every three dollars spent around the globe on
animal health care flows through Kansas City.
It's a statistic that has shocked many of the city's business leaders and led them
to suddenly reverse course, embracing Kansas City's "cow town" past and using
it as leverage to gain an even larger share of the market.
"I don't think anyone had sat down and put a pencil to it," said Dallas-based
consultant Ron Brakke, who released his findings last year.
According to Brakke, animal health companies headquartered in the area, which
include firms making vaccines and other pharmaceutical drugs for livestock and
pets, now account for roughly a third of both that industry's $14.2 billion in global
sales and its $5 billion in U.S. sales.
He added that the area's share of global sales has doubled since 2001, when five
of the companies had yet to move to Kansas City or weren't involved in animal
health.
Area business and government leaders have kicked off an aggressive initiative to
create an animal science "corridor" in the region and attract even more likeminded companies.
They're also hoping expanding the knowledge of their expertise in animal health
will boost their efforts to develop a life science center.
"It was because of the existing infrastructure and organic growth that attracted
those companies," said Robert Marcusse, chief executive of the Kansas City
Area Development Council. "What we're trying to do is take the momentum that
we have already and accelerate it."
More than 120 companies in a region stretching from Manhattan, Kan., to
Columbia, Mo., provide product development, manufacturing, distribution or
support services to the industry, employing more than 5,000 people, including
500 researchers.
They range from industry giants like Bayer HealthCare's Animal Health Division,
maker of such things as industry-leading flea medication Advantage and
Advantix, to specialty firms like Crest Flavor Co., which produces pet food
additives.
Four of the world's top 10 animal health companies are either based in the area
or use Kansas City as their U.S. headquarters, including Bayer, Boehringer
Ingelheim Vetmedica, Fort Dodge Animal Health and Intervet Inc.
IVX Animal Health, the world's largest generic pharmaceutical manufacturer, is
based in nearby St. Joseph, while Hill's Pet Nutrition, a leading pet food maker, is
based in Topeka, Kan.
Industry members said the Kansas City region provides a number of benefits that
has allowed it to collect a disproportionate share of the industry. Chief among
them, Brakke says, is that almost half of the nation's fed cattle, more than 40
percent of its hogs and 20 percent of beef cattle are raised within 350 miles of
Kansas City, placing businesses in the midst of their customers.
In addition, companies can take advantage of a ready supply of trained workers,
not only from veterinary programs at Kansas State University and the University
of Missouri, but from similar veterinary and lab technician training programs at
Oklahoma State University, the University of Nebraska and Iowa State
University.
Kansas City is also a transportation hub, helping companies amass raw materials
and distribute their products by rail, truck or air.
IdentiGEN Ltd., an Irish company that tracks beef shipments by DNA, this year
established its U.S. headquarters in Lawrence, Kan., because of location.
"We're in the middle of cow country and that's what we work with," said Donald
Marvin, president and chief executive of IdentiGEN North America. "We receive
samples from all over and it's important that those samples get to us in a timely
fashion."
Another recent addition is Synbiotics Corp., which makes veterinary tests for
such things as heartworm and avian flu. The company announced in August it
was moving its headquarters from San Diego to Kansas City.
"Often there's a heightened amount of testing once a company comes up with a
cure or vaccine, so being able to team up with other animal health companies is
important," said Paul Hayes, the company's chief executive.
Joerg Ohle, president of Bayer's Animal Health division and chairman of the local
initiative's advisory board, said state leaders have been receptive to the industry,
providing tax and investment incentives.
"They embrace the heritage and are prepared to help me leverage these assets,"
Ohle said.
He added that as scientists are increasingly finding links and human medical
discoveries through treating diseases and disorders in pets, building on animal
science will give the two states an edge in the national race to develop
bioscience industries.
"The community understands this is within life science," he said. "It's one piece of
the puzzle."