Pearse Lyons is not afraid to pursue challenges outside his core area, writes CLIFFORD COONANin Beijing

DUNDALK-BORN Pearse Lyons, chief executive of Kentucky-based animal health group Alltech, is asking questions as he enters the room, bearing croissants for a breakfast meeting and suggesting ways of revolutionising how we make food.

Alltech’s main business is animal feed ingredients, which function as part of animal health and animal nutrition, and the group’s core business is anything to do with yeast.

However Lyons’s relentless pursuit of challenges outside his core area is what has characterised the public face of much of Alltech’s success.

“The cornerstone of Alltech has been yeast fermentation since the beginning and the company has never strayed from that core competency. I’d always been involved in yeast – worked in Irish Distillers, been a brewer, written a lot of books about yeast,” says Lyons in Beijing.

He is not fazed by global slowdowns. Last year, one of the toughest years for most companies, Alltech took on more than 300 staff and introduced pay increases.

“We increased salaries at a time of crisis and we hired three or four hundred people. We doubled our ebitda [earnings before interest, taxes, depreciation and amortisation] and we cut our debt,” says Lyons.

Last year’s ebitda was about $100 million (€79 million) from 113 countries and 14 production sites.

“This year we have completed the acquisition of the world’s largest algae plant in Kentucky.

“We’ve commissioned a plant in Serbia making products to replace [the controversial food additive] MSG [monosodium glutamate] by providing a natural alternative,” he says.

“Also, our beer, Bourbon Barrel Ale, came number two in the world out of 3,330 beers and 642 breweries.”

With his background, brewing beer is a natural offshoot for Lyons. “Barrels for making bourbon may only be used once, so we intercept them and use them to brew beer with 9 per cent strength.”

Still though, the beer business is a small part of his company’s €400 million turnover.

Alltech started life from a small office in 1980. It now has businesses in every continent, and has its headquarters in a high-tech campus in Catnip Hill Pike, Nicholasville.

Lyons is a fan of the big gesture. His decision to bring Muhammad Ali to Ennis, Co Clare, where the boxing legend’s great-grandfather came from, won him huge publicity in Ireland.

Alltech is also spending $10 million to sponsor the 2010 FEI World Equestrian Games in Kentucky, the first time the event, which is basically the Olympics of the horse world, has taken place outside Europe.

Sixty-one countries are signed up to take part in the games, which will be broadcast to 460 million people and will directly target the agribusiness community Alltech needs to reach.

The company’s decision to sponsor the games dwarfs any of its previous sponsorships in this arena.

Lyons sees Muhammad Ali as a truly great Kentucky brand, alongside Kentucky Fried Chicken, and wants Alltech to be similarly high profile. “We want to be a superbrand out of Kentucky,” he says.

The aim, Lyons adds, is to build a brand in the same way Intel has done. “We want to bring recognition to Alltech – we want to be Alltech Inside.”

The sponsorship of the equestrian games has done much to improve awareness of what the group does. When seeking a $30 million grant for renewable energy from the US government, the raised profile helped.

“Our credibility has jumped enormously. You could not have bought the coverage,” says Lyons.

“The games have forced us to focus on branding. These games have never made money, but they will this time. We’ve done merchandising, sponsorship, branding.”

One of the firm’s products is Bluegrass Sundown, an Irish coffee-style concoction which came about after freezing journalists complained at a chilly race meeting that there was no decent coffee.

The governor of Kentucky served Bluegrass Sundown at the last Kentucky Derby, the US’s main racing event.

The coffee for Bluegrass Sundown comes from Haiti. “One dollar from every bottle goes to building a school in Haiti.”

Lyons is confident that he can continue developing Alltech into a $4 billion company. Much of his confidence is based on the growing international demand for food, especially meat.

“We cannot feed the world’s growing population if we continue to use current technology. Meat consumption is expected to double in the next century.

“We have to find different, natural, sustainable ways to feed the animals. We need more openness, more traceable, nutritious ways. We are not what we eat, we are what the animals we eat ate,” he says. “A cow in a poor part of Africa provides milk but it cannot be compared to the milk an Irish cow would provide.”

Lyons reaches across the table and hands me a small token. “That’s the monkey genome right there, in that chip,” he says. “The gene chip will be able to help us optimise animal performance.”

One future development for Alltech will be in pharmaceuticals. The company has set up an $11 million, 20,000sq ft Centre for Animal Nutrigenomics and Applied Animal Nutrition next door to its headquarters, which will focus on research into the gene.

Some of these products have potential applications for humans, such as a supplement that could have an application in fighting Alzheimer’s disease.

“Alltech has a primacy in science – we have sponsored 150 PhDs and three times that number of MAs. All of them have worked for Alltech,” he says. That’s more than any university department.” .

Alltech has been in China for 18 years. “We know China and we can quadruple our business here,” he says.

The group’s overall policy in emerging markets is to manufacture locally. “We source minerals here and make products here. We are looking at fermenting yeast here.”

The group’s sales are divided evenly between Europe, southeast Asia, North America and Latin America, with Africa providing about 5 per cent of the total.

Sustainability is a major issue for Alltech. Lyons considers environmental issues to be crucial in the future, particularly as agriculture is responsible for 18 per cent of greenhouse gases.

“We have to address this and utilise new technology such as co-generation,” he says. “We are creating farms of the future and they all should have solar panels, co-generation, carbon dioxide and the utilisation of cellulose.”