Novozymes reports strong growth for bioenergy segment

By Erin Voegele | April 26, 2018

Novozymes has released first quarter financial results, reporting a significant growth in sales for its bioenergy segment. The increase is attributed, in part, to the recent launch of the company’s first yeast solution for conventional biofuels.

Sales in Novozymes bioenergy segment were up 9 percent organically, but down 5 percent in Danish kroner (DKK) when compared to the first quarter of 2017.

According to the company, good performance from 2017 continued into the first quarter of this year, driven by good momentum from its broader product portfolio. While regions outside the U.S. posted good growth, Novozymes noted they still represent a smaller proportion of total bioenergy sales.

When compared to the first quarter of 2017, Novozymes said ethanol production was flat in both the U.S. and globally. Ethanol producer margins, however, are estimated to have improved slightly.

During the first quarter, Novozymes launched its first yeast product for conventional biofuels—Innova Drive. The company said the new product has been well received by the market. Novozymes said it plans to continue its focus on tailoring process-specific solutions to individual customer needs and expects to deliver more innovation this year.

Novozymes also said that sales of enzymes for biomass conversion make up a smaller part of overall bioenergy sales, and declined as expected during the first quarter of 2018 when compared to the same period of last year. Looking forward, sales of enzymes for biomass-based ethanol are expected to increase, but continue to make up a small portion of the company’s overall bioenergy sales.

“In Bioenergy, the good momentum from 2017 continued into 2018,” said Tina Sejersgård Fanø, executive vice president of agriculture and bioenergy at Novozymes. “Sales were up by 9 percent for the first three months supporting the continuing decarbonization of transportation fuels.”

 “We continue to see our broad and innovative product portfolio support good growth in the market and will continue to work closely with our customers to optimize their production and yields through a tailored approach,” Sejersgård Fanø continued.

“Q1 saw the launch of our first commercial yeast product Innova Drive. Although this is a new area for us, we have seen a high level of interest in our offering,” she said.

“We are encouraged by the positive signs in the global ethanol industry in such markets as China and Brazil,” Sejersgård Fanø continued. “In the U.S., we see both opportunities and uncertainties to the discussions around biofuel policies.”

Overall, Novozymes reported 2 percent organic sales growth. This includes 1 percent organic growth for the household care segment, 5 percent organic growth for food and beverages, 9 percent organic growth for bioenergy, a 5 percent organic reduction for agriculture and fee and a 10 percent reduction for the company’s technical and pharma segment.