Food and beverage enzymes contribute to Novozymes strong Q1

By Jess Halliday

- Last updated on GMT

Related tags United states dollar Starch Novozymes

Novozymes saw double-digit growth for its food and beverage enzymes business in the first three months of the year, helping the Danish firm towards solid results and maintained ambitions for the full year.

Food and beverage enzymes notched up DKK759m in sales, representing 28 per cent of overall sales and an 11 per cent increase in local currencies (13 per cent in DKK). The growth was on a par with that seen in household enzymes, which are expected to be the strongest contributor to full year growth.

Novozymes overall performance saw sales grow by 16 per cent in DKK and 14 per cent in local currencies, with biobusiness sales up 78 per cent in DKK in this period and thanks to the positive impact from acquisitions.

The stronger operational performance worked to off-set the effect of a negative currency tide for the US dollar, enabling the company to maintain its EBIT growth expectation.

Organic sales growth expectations are 7 to 10 per cent in local currencies, or 10 to 13 per cent in DKK. When the acquisition of EMD/Merck Crop Science, completed in February, is factored in DKK sales growth is projected to be 8 to 11 per cent.

Food demand

Novozymes said that the growth in food and beverage enzymes was driven mainly by the specialty food, starch and alcohol industries. In the case of starch, the growth was due to the use of enzymes to reduce reliance on sugar, in the face of higher prices, as well as demand from emerging markets.

New products for healthy foods are also said to have “continued to contribute positively to growth”​,​the company said.

Sales of baking enzymes saw a modest decline, but Novozymes said this was anticipated. In full year 2010 baking enzymes – together with brewing enzymes – had been in higher demand due to quality, performance, and yields.

Ethanol plant

Other big news for the quarter has been the start of construction work on a cellulosic ethanol plant in Crescentino, northwestern Italy, with its partner M&G. The plant will produce 13 million gallons of ethanol per year from biomass, the price of which will be competitive with gasoline.

Production is expected to start next year.

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