Novozymes reports significant sales growth for bioenergy segment

By Erin Voegele | August 14, 2018

On Aug. 10, Novozymes released financial results for the first half of 2018, reporting 14 percent organic sales growth for its bioenergy segment. Overall, the company experienced organic sales growth of 4 percent.

Bioenergy sales accounted for 19 percent of the company’s sales during the first half of the year. Household care, food and beverage, agriculture and feed, and technical and pharma accounted for 32 percent, 29 percent, 14 percent and 6 percent of sales, respectively.

While sales for the bioenergy segment grew by 14 percent organically during the first half of the year, growth during the second quarter alone reached 20 percent.

Novozymes said the strong growth momentum it saw for bioenergy during first quarter of the year accelerated even further during the second quarter, driven by technology offerings and closeness to its customers in the market. Novozymes also said its newly launched yeast product, Innova Drive, also posted good growth in the second quarter, albeit from a low base. In addition, the company reported good uptake in Latin America.

During an investor call, Tina Sejersgård Fanø, executive vice president of agriculture a bioenergy at Novozymes, briefly discussed demand from Latin America, particularly Brazil. “Looking outside North America, we had strong performance in Latin America, where Brazilian producers has increasingly started to expand into corn-based ethanol production,” she said. “A number of plants have started to operate, and more are expected to come on-stream over the next few years.”

The company said U.S. and global ethanol production were estimated to be up 2-3 percent during the second quarter, when compared to the same period of last year, compared to a 1 percent increase during the same period of last year.

Novozymes also reported that sales of enzymes for biomass conversion declined during the first half of 2018 when compared to the same period of last year.

Moving forward, Novozymes said organic sales growth for the bioenergy segment is expected to be driven mainly by new product launches and increased penetration from innovation. The company expects U.S. ethanol production for 2018 to be roughly on par with 2017, but noted that ethanol inventories remain high.