Bakery, brewing and beverages bolster Novozymes H1

15-Aug-2010 - Last updated on 16-Aug-2010 at 12:58 GMT

Baking, brewing and beverage enzymes have continues to push growth in Novozyme’s food enzymes division, with their ability to improve product quality and systems performance said to be behind the higher demand.

According to Leatherhead Food International, food enzymes have grown to be worth some US$900m in the last decade. Used as processing aids, their benefits including enabling greener production, improving yield, improving product quality, and extending shelf life.

Leatherhead has also noted that beverage and bakery enzymes are currently the hottest areas of innovation, and has noted keen demand from Asia Pacific.

In its H1 results, Novozymes has said its food enzymes sales grew some 15 per cent to DKK1039m (12 per cent growth in local currencies). This growth was said to be despite divestment of ‘non-core’ ingredients activities in India, which had a negative impact on growth of about 1 per cent. A spokesperson for Novozymes told FoodNavigator.com that the divested ingredients were part of the Biocon business acquired in 2007, but which never really sat well with its portfolio. The food additives part was sold to Bakels, and the brewing part to EAC Industrial Ingredients.

The divestment was completed in September 2009, and will have an effect on the comparative results for the first 8 months of this year.

Recent additions

The company has said that recently launched products have continued to gain traction in the market – such as its Opticake Fresh product for improved freshness in cakes, and Ondea Pro enzyme for making high quality beer from unmalted barley.

So far this year Novozymes has launched an enzyme for the Chinese steamed bread market called a Novamyl Steam, said to allow longer-lasting freshness; and most recently a new generation of pectinases for fruit processing, to break down the cell walls during secondary mash treatment and therefore improve performance.

Increased expectations

Group sales for the six month period were up 15 per cent to DKK4794m, and EBIT margin was 23.1 per cent, compared to 19.3 per cent for H1 2009.

Novozymes CEO Steen Riisgaard said the company is now increasing its sales growth expectations for the full year to 10-12 per cent in DKK, or 7-9 per cent organically, with an EBIT margin of 21 to 22 per cent.

He did betray a note of wariness, saying: “However, it must be remembered that the first half of last year was the easier half from a comparison point of view, and there is still some uncertainty as to how markets will develop in the second half of 2010.”

The increased expectations are based on the strength of the enzyme business, and a slightly more favourable currency outlook.