Novozymes Q1 bioenergy product sales boosted by new ethanol enzymes

London (Platts)--28Apr2014/722 am EDT/1122 GMT


Denmark's Novozymes, the world's biggest maker of enzymes for biofuels, said Thursday first-quarter sales in its bioenergy segment climbed 29% year on year to DKK 514 million ($95 million) due to higher demand for three separate enzymes that promise higher margins for ethanol producers.

In local currencies, sales of bioenergy products, including enzymes for first and second-generation biofuels and other applications, grew 34% and accounted for 17% of the company's business in the January-March period, Novozymes said.

Three enzymes launched since October 2012 -- Avantec, Olexa, and Spirizyme Achieve -- enable corn-based ethanol producers to get 5% more ethanol out of crops, while improving oil extraction by 13% and reducing energy consumption by 8%.

Growth in sales of enzymes for first-generation biofuels, or the ones made from starch or oils extracted food crops, was just shy of 30%, a company spokesman told Platts.

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"Our total sales in the bioenergy market grew 34% over Q1 in 2013. This includes sales of enzymes to first and second-generation ethanol as well as biodiesel. Sales to 2G [ethanol] and biodiesel are a small part of the business", he said.

"We have more than three products in 1G, though, and more business areas than just ethanol from corn. But it is fair to say that these three new products were the main growth drivers."

Corn is the main ingredient for ethanol production in the US, the world's largest producer of the gasoline additive. Nearly 40% of the country's harvest is converted into the biofuel and co-products such as oil and animal feed each year, data from the US Department of Agriculture showed.

Novozymes said in November 20% of US corn-based ethanol were made with Avantec and 10% with Spirizyme Achieve. The spokesman would not provide an update on these figures Thursday.

Penetration rates of the company's three new enzymes increased in the first quarter as US ethanol production climbed 11% year on year. Novozymes says its US market share is over 60%.

The company anticipates a further rise in enzyme sales for the remainder of the year provided US ethanol output hits 13.5 billion gallons, slightly higher than in 2013, it said.

--Guilherme Kfouri, guilherme.kfouri@platts.com
--Edited by Dan Lalor, daniel.lalor@platts.com

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