Market and customers
Novozymes sells its products worldwide and is subject to the financial and political risks that this naturally entails. Growth in individual markets is therefore influenced by the local economic situation and local legislation.
A relatively small number of customers account for a high proportion of Novozymes’ revenue in certain product areas, which means that Novozymes is also affected by the trend in these customers’ market conditions. Novozymes works closely with its major customers to limit this risk, for example by means of joint development projects and joint production planning, including integration of IT systems.
Novozymes tries to maintain its position as market leader by continually launching new and improved high-quality products that meet the customers’ needs. This places high demands on the Group’s research and development, requiring development to keep pace with customer needs. Failure here would entail the risk of a negative impact on Novozymes’ sales targets. Novozymes allocates up to 14% of revenue to research and development to ensure sufficient resources for future innovation.
Enzymes produced using GMOs
Novozymes produces a large number of enzymes using genetically modified organisms (GMOs). Without this technology it would be necessary to use larger quantities of raw materials, water, and energy, and in many cases commercial production of an enzyme would not be profitable.
The use of gene technology is the subject of ongoing debate around the world, mainly concerning genetically modified foods or foods containing GMOs. Novozymes’ use of gene technology has only featured in the debate to a limited degree, as the Group’s end products do not contain GMOs. However, it is possible that Novozymes’ production and sales to the food and feed industries in particular may be affected by the public debate on gene technology and the impact this may have on consumer demand.
Read more about Novozymes’ use of gene technology at www.novozymes.com.