Audited by PwC

Enzyme Business

Total 2008 enzyme sales were up by 12% in LCY and 9% in DKK. Organic growth was approximately 11%. Overall the full-year development was very satisfactory, especially given that most industries experienced lower growth in the fourth quarter. Faced with high uncertainty and global economic slowdown, customers showed cautious behavior in the fourth quarter, for example by destocking.

According to Novozymes’ own estimates for 2008, the value of the global industrial enzyme market was approximately DKK 16 billion, showing market expansion over the last year. Compared to 2007, the market sizes of food enzymes and of China have been adjusted, increasing total 2008 market value.

In 2008 Novozymes’ market share once again increased within enzymes for detergents and fuel ethanol, while there was a slight decline within feed enzymes. Novozymes’ overall global market share developed slightly positively in 2008, ending at 47%.

Detergent enzymes
Sales of detergent enzymes rose by 13% in LCY and 12% in DKK in 2008. All geographical regions developed positively, and both new and established products contributed to the strong development. Detergent producers across categories continued to use more enzymes in their formulations for improved washing performance and added functionalities. Substitution of other detergent ingredients with enzymes was also a strong growth driver in 2008.

Technical enzymes
Sales of technical enzymes rose by 15% in LCY and 10% in DKK in 2008. Approximately 1 percentage point can be attributed to the activities acquired in India in 2007. Enzyme sales to the fuel ethanol industry showed strong growth throughout the year, outperforming growth in North American fuel ethanol output. Sales of textile enzymes for abrasion of denim fell during the year as the result of a fashion trend in favor of darker denims and a slowing US denim demand. Total textile sales were down 16% for the year.

Food enzymes
Sales of food enzymes rose by 10% in LCY and 7% in DKK in 2008. Approximately 2 percentage points can be attributed to the acquired activities in India. Sales of brewing, baking, and beverage alcohol enzymes performed especially well. High raw material prices and limited resources in the food industry drove an accelerated rate of penetration over the year, as the relative cost savings offered by enzyme technology increased.

Feed enzymes
Sales of feed enzymes increased by 10% in LCY and 6% in DKK in 2008. The acquired activities in India contributed approximately 2 percentage points. High inorganic phosphate prices increased the global demand for phytase enzymes. However, prices in the phytase enzyme market remain under pressure, especially in Europe. Sales of enzymes for enhanced utilization of vegetable proteins in animal feed diets also performed very well during the year. Customers’ cautious behavior in the fourth quarter notably reduced full-year growth.

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