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Novozymes' sales increased by 8% in 2011. Household Care, Food & Beverages, and Feed & Other Technical Enzymes were the largest growth contributors. The highest rate of organic sales growth was in the biopharma industry.

Total sales in 2011 were DKK 10,510 million, an increase of 8% compared to last year. Exchange rates impacted sales negatively, and sales in LCY were up by 10%. Acquisitions contributed approximately 3 %-points to growth.

According to Novozymes’ own estimates, the global industrial enzyme market grew in 2011 to a total market value of approximately DKK 20 billion, up from DKK 19 billion in 2010. The industry did not see any major new entrants to the market in 2011 besides the change of ownership of Danisco, which was acquired by DuPont. Novozymes’ overall market share was maintained at roughly 47% and was positively affected by a slight increase in market share in Feed and Food Enzymes, and reduced by a slightly lower market share in the US fuel ethanol enzyme market.

Enzyme Business

Enzyme Business sales were up by 6% in LCY. Sales in DKK reached 9,489 million, up by 4% compared to 2010. Sales of Household Care Enzymes, Feed & Other Technical Enzymes, and Food & Beverages Enzymes were the largest growth contributors in the period.

Household Care Enzymes

Household Care Enzymes sales increased by 6% in both LCY and DKK compared to 2010. Growth was driven by increased enzyme penetration across detergent tiers to enhance wash performance, enable low-temperature washing, and replace traditional chemicals in detergent formulations. Sales of Household Care Enzymes to emerging markets were also a strong growth driver through the year.

Food & Beverages Enzymes

Food & Beverages Enzymes sales increased by 8% in LCY and by 6% in DKK compared to 2010. Higher demand, particularly from the specialty food, starch, and alcohol industries, was the main driver. Enzyme sales to the baking industry saw a modest, expected decline, whereas newly introduced products and concepts for the production of healthy foods contributed positively to growth throughout the year.

Bioenergy Enzymes

Bioenergy Enzymes sales were up by 1% in LCY and down by 3% in DKK compared to 2010. Growth in US-produced ethanol volumes fell throughout the year – which was also the case for Novozymes’ Bioenergy Enzymes sales. Full-year 2011 US ethanol volumes are estimated by the US Energy Information Administration to have reached 13.8–13.9 billion gallons, up by 4–5% compared to 2010. The relatively lower rate of growth in Novozymes’ Bioenergy Enzymes sales compared to US ethanol production growth during the year is a result of a slightly lower enzyme content by gallon of ethanol produced across the industry – as ethanol producers have optimized their production – and also of variations in individual producers’ ethanol output. Nevertheless, favorable blending economics and exports throughout the year kept US ethanol production growing compared to 2010.

Feed & Other Technical Enzymes

Feed & Other Technical Enzymes sales were up by 9% in LCY and by 7% in DKK compared to 2010. Within the feed area, phytase enzyme sales developed very well in a competitive European phytase enzyme market. In the third quarter, Novozymes launched RONOZYME® HiPhos, an animal feed enzyme currently approved for the Brazilian market with superior phosphate uptake in swine and poultry diets. Approval for this product in North America and Europe is expected in 2012. RONOZYME® ProAct performed very well in the Latin American and European markets, and was also approved for the US market mid-2011. Sales of textile enzymes were challenged during the year due to a contraction in the textile market and a competitive Asian market situation.

Advanced biofuels on the brink of commercialization

Construction began in 2011 on the first commercial plants for the production of biofuels from agricultural residues, and the industry continued to advance through process improvements and government support. Grants and loan guarantees in the US, a new 5-year plan in China, and industry initiatives in Europe and Brazil point toward commercial-scale facilities becoming operational on all four continents within the next couple of years.

This is what Novozymes has been working for in close concert with our partners for a number of years, and we are now on the brink of commercialization.

Milestones in 2011
In the US, the Environmental Protection Agency approved E15 gasoline (15% ethanol) for vehicle model year 2001 onward. The previous “blend wall” allowing only 10% ethanol to be blended in gasoline had threatened to prevent further growth in biofuel production and compliance with the Renewable Fuel Standard. While commercial challenges remain, this landmark decision offers a clear way forward for increased use of biofuel in the US.

Meanwhile, the US Departments of Energy and Agriculture continued to support advanced biofuels by providing funding and loan guarantees for the first commercial plants. Novozymes’ partner POET as well as other companies received loan guarantees under these programs during the year. In addition, the Department of Defense announced that it will invest up to USD 510 million over the next 3 years in the production of advanced “drop-in” aviation and marine biofuels for military and commercial transportation.

In Italy, Novozymes’ partner Mossi & Ghisolfi Group began work on what is expected to be the world’s first commercial-scale plant for advanced biofuels. The facility is due to be fully operational by mid-2012, producing roughly 50 million liters a year from energy crops and wheat straw.

China announced considerable support for advanced biofuels in its 5-year plan for 2011–2015. Acknowledging that advanced biofuels are in their infancy, the government will provide support for industrial players to commence construction of the first commercial facilities over the next 5 years. Novozymes’ Chinese partners COFCO and Sinopec plan to bring an advanced biofuel plant with a capacity of 50 million liters on line within the next few years.

Novozymes launched the first commercially viable enzyme for the production of biofuel from agricultural waste early in 2010. With the first commercial plants now becoming operational, and all the industrial and political initiatives being launched around the world, we look forward to learning how the technology scales, driving further improvements and commercial opportunities.

Working across the value chain

Gathering key players is a way to drive the household care industry toward sustainability and higher enzyme usage. Novozymes wants to help the household care industry become one of the first to deliver a radical reduction in environmental impact throughout a product’s life cycle without increased costs. Innovation and technological advancement are instrumental for this change, but no-one can get there alone. To achieve this bold vision, all players in the value chain need to come together, cooperate, and rethink tomorrow.

Realizing this, Novozymes hosted the first Copenhagen Detergent Sustainability Summit in 2009. Held in conjunction with the UN Climate Change Conference (COP15), it brought together key representatives of a range of detergent manufacturers, retailers, and NGOs to spearhead work toward a more sustainable and profitable future for the industry. The summit concluded that the way to achieve real progress was to expand cooperation not only up and down the value chain, but also sideways to include a range of other raw material producers, such as chemical companies.

Second sustainability summit
In December 2011, Novozymes hosted the second summit, which fulfilled the promise of broad participation of all players in the value chain. The presentations and discussions explored two ways of making laundry greener: new technical solutions and changes in consumer behavior.

Speakers from Asda, P&G, Henkel, Unilever, BASF, AkzoNobel, Method, Whirlpool, and Ecolab addressed topics such as consumer trends, the needs of developing and emerging markets, and technologies for compact detergents and low-temperature washes. Also presented were the results of a study that concluded that the fact-driven approach to sustainability that most companies rightly take is not necessarily what changes consumer behavior.

The context of consumer needs is important too, and the study revealed rather surprisingly that health and safety, for example, are of increasing importance to consumers in emerging markets, while those in developed markets are still driven very much by traditional factors such as cost and time savings.

Toward greener detergents
Novozymes’ enzyme solutions for the household care industry improve the performance of detergents at low temperatures, enable the formulation of more compact products, and are readily biodegradable. With their unique catalytic action, enzymes are a low-volume ingredient that can reduce the need for oil-based ingredients and chemicals such as surfactants and phosphates that traditionally make up the bulk of detergents.

Interaction with other players in the value chain is important for Novozymes in a number of ways. First and foremost, we can position ourselves as a key technology enabler in the industry. By investing resources in bringing together the players in the value chain, we demonstrate our commitment to invest in our customers’ agendas and drive change. This also generates crucial input for our internal development processes, providing the context needed to come up with new and improved enzyme solutions for our global partners.

Through industry associations and technical innovation collaborations, players across the industry are committed to making detergent products with a reduced environmental impact. We aim to lead the industry toward more sustainable products and have committed to continue hosting the Copenhagen Household Care Sustainability Summit on a biennial basis.

  • 2011 ENZYME BUSINESS & BIOBUSINESS SALES BY INDUSTRY

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    Household Care Enzymes
    Food & Beverages Enzymes
    Bioenergy Enzymes
    Feed & Other Technical Enzymes
    Microorganisms
    Biopharma
    2011 MARKET SHARE IN ENZYMES FOR INDUSTRIAL USE

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    Novozymes
    Others and captive markets
    DuPont
    DSM
    FIVE-YEAR SALES DEVELOPMENT IN ENZYME BUSINESS
    DKK million

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    Household Care Enzymes
    Bioenergy Enzymes
    Food & Beverages Enzymes
    Feed & Other Technical Enzymes
  • The Copenhagen Household Care Sustainability Summit 2011
    Novozymes invited the entire value chain within household care to meet and discuss how to create a pathway for sustainability and drive consumer change.
    View more
    The Copenhagen Household Care Sustainability Summit 2011 The biofuel landscape Perspectives from Executive ManagementSee all videos
2011 ENZYME BUSINESS & BIOBUSINESS SALES BY INDUSTRY

Loading Chart...
Household Care Enzymes
Food & Beverages Enzymes
Bioenergy Enzymes
Feed & Other Technical Enzymes
Microorganisms
Biopharma
2011 MARKET SHARE IN ENZYMES FOR INDUSTRIAL USE

Loading Chart...
Novozymes
Others and captive markets
DuPont
DSM
FIVE-YEAR SALES DEVELOPMENT IN ENZYME BUSINESS
DKK million

Loading Chart...
Household Care Enzymes
Bioenergy Enzymes
Food & Beverages Enzymes
Feed & Other Technical Enzymes
The Copenhagen Household Care Sustainability Summit 2011
Novozymes invited the entire value chain within household care to meet and discuss how to create a pathway for sustainability and drive consumer change.
The biofuel landscape
In 2011, Novozymes' partners and customers invested in demonstration plants in the US, China, and Europe.
Perspectives from Executive Management
Novozymes' Executive Management reflect on the past year and what lies ahead.

BioBusiness

BioBusiness sales were up by 73% in LCY. Sales in DKK reached 1,021 million, up by 66% compared to 2010. Acquisitions had a positive impact on sales. Organic sales growth was approximately 16% in the period, mainly driven by Biopharma sales.

Microorganisms

Microorganisms sales were up by 86% in LCY and by 79% in DKK compared to 2010. Sales growth was positively impacted by the acquisitions of both EMD/Merck Crop BioScience in early February and, to a minor degree, the Brazilian bioagriculture company Turfal in August 2010. Organically, Microorganisms sales grew by approximately 5%. Sales to the Wastewater and Cleaning Solutions industries performed well during the year, whereas the existing BioAg business was negatively affected by unfavorable weather conditions, which caused flooding and variations in crop-planting patterns.

Biopharma

Biopharma sales were up by 41% in LCY and by 37% in DKK compared to 2010. The strong sales growth was mainly related to rising sales of Recombumin® and partly also to timing, as the biopharma industry is subject to substantial variations in sales patterns, with sales comprising a small number of transactions of relatively high value.

The phosphate challenge

To feed a growing population, agricultural production per unit of land needs to increase with less input and a reduced impact on the environment. As a building block of all living cells in plants and animals, phosphate is a key ingredient in fertilizer and animal feed. It is also a finite resource, and growing demand has already pushed prices to record-high levels. Phosphate pollution is proving a serious environmental problem, and making better use of this precious resource is therefore a pressing issue in farming.

Improving phosphate efficiency
Novozymes is at the forefront when it comes to improving phosphate efficiency in agriculture. Our solutions can significantly improve phosphate utilization in both fertilizer and feed, enabling farmers to get more out of less.

Recent acquisitions in North and South America have made Novozymes a global leader in microbial solutions for crop growers. Our fungal inoculant product Novozymes JumpStart®, for instance, enables growers to use fertilizer far more efficiently by making more soil-bound phosphate available to the plant. Another fertility inoculant product, Novozymes TagTeam®, makes better use of phosphate and also provides more fixed nitrogen, delivering higher yields from pulse crops such as soybean and peas.
 
In the animal feed business, Novozymes and long-term partner DSM Nutritional Products launched their newest phytase enzyme product RONOZYME® HiPhos in 2011, which, for the first time, enables the replacement of all feed phosphate additives in swine and poultry diets and significantly reduces phosphate waste in manure. The product was launched in Brazil in September and will be rolled out globally over the next few years.

Reducing phosphate pollution
Around 80% of the phosphate in fertilizer and feed is in a form that is normally unavailable to plants and livestock and therefore builds up in the soil, increasing the risk of leaching into groundwater and downstream waterways. This leads to algal blooms and reduces oxygen levels in the water, which is a growing problem in many countries, causing marine dead zones that grow in size every year. The UN Environment Programme estimates that each year more than 20 million tons of phosphate is released into the oceans worldwide, causing serious harm to marine life, and most of this is due to leaching from animal manure and intensive fertilizer use.

By increasing phosphate efficiency significantly in both fertilizer and feed, Novozymes is addressing not only the global challenges of agricultural output and limited phosphate reserves, but also the increasingly costly issue of phosphate pollution.

  • 2011 ENZYME BUSINESS & BIOBUSINESS SALES BY INDUSTRY

    Loading Chart...
    Household Care Enzymes
    Food & Beverages Enzymes
    Bioenergy Enzymes
    Feed & Other Technical Enzymes
    Microorganisms
    Biopharma
    FIVE-YEAR SALES DEVELOPMENT IN BIOBUSINESS
    DKK million

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    Microorganisms
    Biopharma
    2011 SALES BY REGION

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    North America
    Europe/MEA
    Latin America
    Asia Pacific
  • Changing patients’ lives with hyaluronic acid
    Novozymes' animal-free hyaluronic acid can help people who suffer from osteoarthritis, a common disease that causes severe pain in the joints.
    View more
    Changing patients’ lives with hyaluronic acid The phosphate challenge Biopharma highlights and expectationsSee all videos
2011 ENZYME BUSINESS & BIOBUSINESS SALES BY INDUSTRY

Loading Chart...
Household Care Enzymes
Food & Beverages Enzymes
Bioenergy Enzymes
Feed & Other Technical Enzymes
Microorganisms
Biopharma
FIVE-YEAR SALES DEVELOPMENT IN BIOBUSINESS
DKK million

Loading Chart...
Microorganisms
Biopharma
2011 SALES BY REGION

Loading Chart...
North America
Europe/MEA
Latin America
Asia Pacific
Changing patients’ lives with hyaluronic acid
Novozymes' animal-free hyaluronic acid can help people who suffer from osteoarthritis, a common disease that causes severe pain in the joints.
The phosphate challenge
Phospate is a finite resource. By using Novozymes' products farmers can reduce the amount of phosphate they add to crops and animal feed.
Biopharma highlights and expectations
The pharmaceutical area is experiencing great momentum right now, and the future looks promising.

Sales by region

Sales in Europe, the Middle East, and Africa (Europe/MEA) increased by 8% in LCY and by 7% in DKK compared to 2010. Household Care Enzymes and Feed & Other Technical Enzymes were the main growth contributors in the period, whereas Bioenergy Enzymes sales fell slightly.

Sales in North America were up by 7% in LCY and by 3% in DKK compared to 2010. Microorganisms sales, positively impacted by acquired BioAg sales, Biopharma sales, and Feed & Other Technical Enzymes sales, were the strongest growth contributors during the year.

Sales in Asia Pacific increased by 8% in LCY and by 7% in DKK compared to 2010. Household Care Enzymes, Food & Beverages Enzymes, and Microorganisms sales were the strongest growth contributors in the period.  

Sales in Latin America were up by 43% in LCY and by 38% in DKK compared to 2010. Household Care Enzymes and Feed & Other Technical Enzymes performed very well in the period. Microorganisms sales also grew strongly, mainly due to acquired BioAg sales.

New hyaluronic acid plant

Novozymes inaugurated a new plant in China in September 2011 to supply hyaluronic acid (HA) to the world market. The plant represents an investment of more than DKK 300 million, and Novozymes expects to play a significant role in the market for this product, which is estimated to be worth around USD 200 million (~ DKK 1,100 million) a year – and growing.

HA is a naturally occurring polysaccharide found throughout the human body in tissues such as skin and cartilage. It functions as a binding and protecting agent in tissue hydration and lubrication, making it well suited to a wide range of biomedical applications such as medical devices and drug delivery.

Product of the highest purity
Commercial hyaluronic acid on the market today is derived from either rooster combs or attenuated strains of Streptococcus bacteria, both of which are associated with a number of challenges. Owing to the risk of animal-derived contamination of the final product, the use of HA from rooster combs is in decline, and Streptococcus-based production has become more prevalent. However, as Streptococcus is inherently pathogenic to humans, it is not the ideal production organism.

In an effort to overcome these shortcomings, Novozymes has developed Novozymes Hyasis®, the next generation of high-quality HA, which is produced using the safe, nonpathogenic host Bacillus subtilis and offers unprecedented safety, consistency, and performance. Our proprietary technology also improves the recovery process by replacing traditional solvent-based solutions with water-based techniques.

The product offers numerous advantages for medical devices as well as drug delivery and formulation. It can be used in many clinical applications, such as adhesion prevention, dermal fillers, tissue engineering materials, wound healing, and sealants/hemostats, as well as a range of ophthalmology and osteoarthritis applications.

Production complies fully with international requirements for the manufacture of active pharmaceutical ingredients (ICH Q7) and will enable all regulatory requirements for the use of HA in drug products to be met. The new plant is located in the TEDA district outside Tianjin in close proximity to Novozymes’ existing enzyme production.

Product launches in 2011

Since 2000, Novozymes has invested more than DKK 10 billion in R&D and has launched roughly 100 new products. The following products were launched in 2011: 

Q2

Blaze® Evity®: An enzyme with the Evity stabilization platform for the automatic dishwashing segment. Blaze Evity addresses all types of protein soils and provides consistent performance even after harsh storage conditions.

Q2

Stainzyme® Plus Evity®: An enzyme with the Evity stabilization platform for the automatic dishwashing segment. Stainzyme Plus Evity addresses starch-based soils and provides consistent performance even after harsh storage conditions.

Q2

Provia®: An enzyme that improves fermentation performance in starch-based ethanol. Provia breaks down protein present in corn, which improves yeast health and leads to higher ethanol yields.

Q3

RONOZYME® HiPhos: An improved phytase enzyme which increases the release of phosphorus in animal feed.

Q4

Hyasis®: A high-quality Bacillus-derived hyaluronic acid with superior safety, consistency, and performance for use in medical device and pharmaceutical applications.

Q4 Terminox® Supreme: An improved and more stable catalase for bleach cleanup in the textile industry.

 

Innovation in R&D
Besides delivering innovation across a number of important industries, Novozymes' R&D organization has discovered new enzyme categories.
Great opportunities for Novozymes in Brazil
Brazil's economy is growing and with this comes a middle class that is likely to invest more money in convenience products such as washing machines. This creates interesting opportunities for Novozymes.
New facility in China to produce hyaluronic acid of the highest purity
Novozymes’ state-of-the-art facility in China is dedicated to produce the first fully Q7 cGMP-compliant hyaluronic acid for use in biomedical and pharmaceutical applications.