Biotech sector buoyant in ’09, but SMEs still struggle
2009 will go down in history as one of the worst years in financial history, but the food sector looks to have weathered the storm relatively well. Food manufacturers and ingredients firms certainly moved to rein in costs, but the industry benefited from its core output being essential for human health.
According to a report from Ernst and Young published last week, the wider biotech sector (covering human and animal healthcare, renewable resources, industrial manufacturing and environmental management, as well as agriculture and food processing) also displayed resilience. Some 60 per cent of European biotechs cut costs, but the industry’s overall sales were not badly hit. Globally, biotech firms reported profit of US$3.7m altogether last year, compared to an aggregate loss of $1.8bn in 2008.
Glen Giovannetti, global biotech leader for Ernst & Young, warned nonetheless that “companies will continue to face a challenging funding environment for the foreseeable future”.
“The firms best poised for success are those that can seize the opportunities latent in the near-universal need for increased efficiency – from capital efficiency to new approaches to R&D.”
Commenting on the report Nathalie Moll secretary general of EuropaBio, the voice of the EU biotech sector, said there is a strong urge to cut costs in times of financial strife, but that may not necessarily be the best course.
“Our biggest challenge for the coming years will be to ensure that the incentives to invest in biotech remain clear and strong.”
Moll said there’s a particular need to look out for small and medium enterprises (SMEs), often drivers of innovation, but without support and consideration for their particular needs when new regulation is being forged they can flounder.
More information on the Ernst & Young report Beyond Borders, Global Biotechnology Report 2010, is available from www.ey.com.
Biotech and food security
At a time when food prices and food security are high on the agenda, biotech solutions such as genetic modification of crops is frequently flagged as a means to efficiently feed a growing world population using finite resources.
This view of the future of world food is disputed by some, however, who propose that an ecological paradigm as the way forward.
Last month the UK’s Soil Association claimed that much of the drive to increase food production in coming decades is based on a miscalculation. The oft-bandied targets are for food production to increase by 30 per cent by 2030 and doubled by 2050.
It scoured the FAO report that the 2050 figures are attributed to, and said they are based on “a number of incorrect assumptions”. Actually the report says production would need to increase by 70 per cent not 100 per cent, and the doubling claim is based on projections that meat consumption will double in the developing world (excluding China).
The report in which the 2030 projections are based “appears to have been withdrawn by the authors.”
Commentators are “using this inflated claim to justify the need for more intensive agricultural practices and, in particular, the need for further expansion of GM crops”.
