Asia is growing in importance for Novozymes. Sales there have grown by an average of 10% per annum over the last three years, including in 2006. Rising standards of living in a number of countries and growing interest in the environment spell growing demand for Novozymes’ products in Asia.
In its 11th five-year plan, rolled out in 2006, the Chinese government introduced a goal of saving energy, making better use of raw materials, and generally working towards a better environment. This means that Novozymes will be able to continue to sell large numbers of enzymes in China.
We are seeing the same pattern in other Asian countries, which are constantly growing in importance for Novozymes. Not only is the basis for doing business constantly improving, but there is a real focus on promoting biotechnology at universities. This is particularly the case in India and China, which means that we are increasingly encountering high levels of expertise in biotechnology.
At the start of the year Novozymes expected Asia to be one of the most important growth engines in 2006, and this proved to be the case. It is first and foremost China which is behind Novozymes’ growth in Asia, but sales of enzymes are rising in many other Asian nations too. In 2006 we generated growth in virtually every industry, with enzymes for the detergent and starch industries enjoying a particularly good year.
Demand for high-quality detergents
The growth in sales of detergent enzymes is due primarily to rising standards of living. Consumers in Asia are washing their clothes more often, and more are buying their own washing machine and demanding high-quality detergents.
More and more detergents in the Asian market now contain enzymes, and Novozymes has managed to sell enzymes to some of the biggest brands in China. Part of our success is due to the enzyme Polarzyme®, which was launched in 2005 and made its breakthrough in 2006. Polarzyme is particularly effective at low temperatures, which is important in Asia where many people wash at temperatures of around 20°C.
The growth in sales of enzymes to the starch industry is due to a number of factors. Higher standards of living are fuelling demand for goods such as soft drinks, and the rising price of sugar has made it more attractive to use alternative sweeteners, such as those converted from starch using enzymes.
Bioethanol on the up in China
China currently produces roughly the same amount of bioethanol as all the EU countries put together, and we expect China to become an important market for enzymes for the production of bioethanol.
As China has to import maize (corn) and cereals for food use, there is a great deal of interest there in developing the technology for producing bioethanol from plant waste (biomass), known as ‘second-generation’ bioethanol. In 2006 Novozymes entered into a three-year cooperation agreement with China Resources Alcohol Corporation (CRAC) on the development of this technology. Among other things, the agreement means that Novozymes and CRAC have created a development team to work at a pilot plant set up specifically for this project.
