The climate and sustainable development became major issues on the global agenda in 2007. This is good news for the world – and for Novozymes.
These are exciting times. Times when one revolutionary scientific result replaces another; when the whole planet has become our market and workplace; and when the world has woken up to the realization that an extensive and global effort is needed to solve climate problems. This is a time when many hands and minds must work together to keep the world on track – and when it is clear that sustainability makes sound sense in business.
Novozymes offers bioinnovation: biotech-based innovation that can replace traditional means of meeting industry needs – efficiently, cost-effectively and environmentally friendly. In this way our products help our customers – and the world – on their way towards more sustainable development. The outside world has realized this.
Sustainability drives growth
There is solid documentation that our enzymes have a positive influence on the environment. At a rough estimate, the world saves 100 kg of CO2 emissions every time our customers use 1 kg of Novozymes’ enzymes. This means that our products have reduced CO2 emissions by about 20 million tons in 2007 alone – mainly because using enzymes saves energy compared with traditional processes. In comparison, Denmark must reduce its CO2 emissions by approximately 13 million tons per year during 2008-2012, according to the Kyoto Protocol obligations.
In a world where global companies are expected to focus more and more on sustainability, and where CO2 taxes and high energy prices are a reality, these facts drive increased demand for our innovation, products and service. And this is helping Novozymes grow.
This is clearly visible in the bioethanol industry. Here, alternatives to oil-based fuels are developed, and enzymes play a vital role in this process. We notice these effects in Novozymes, as our sales to the bioethanol industry rose considerably in 2007. We can also see it in our sales of detergent enzymes, which showed impressive growth in 2007 after several years of relative stagnation. Here too, one argument suggests that the benefits of adding enzymes to detergents will increase as oil prices climb – partly because enzymes make it possible to achieve good wash results at lower temperatures.
The growing global environmental awareness thus provides good opportunities for Novozymes – the more expensive raw materials and energy are, the more valuable our technology and our innovation become. Our financial results already show this development: In 2007, we achieved 14% growth in sales in local currencies and 5% in earnings, and we are well on our way to fulfilling our ambition of reaching DKK 10 billion in sales by 2010. In fact, Novozymes' growth outlook is so positive that we have increased long-term expectations. We now believe that we may achieve "10 in 10" through organic growth alone. This is one of the reasons why we have decided to build a new site in the USA – to meet the increasing demand for our enzymes.
An eventful year
2007 was an eventful year in other areasas well. We believe that the best ideas are created in dialog with others, and have therefore joined a number of interesting partnerships around the world. Through them, we can help a wide range of industries to develop technologies and products for the future.
With the acquisition of Biocon Limited’s enzyme activities, we welcomed 150 new colleagues in India. Biocon’s enzyme activities are a good strategic match for our existing enzyme business, and this acquisition will give us a very strong position in the Indian enzyme market. The use of enzymes is still limited in India, but India’s increasing prosperity offers good potential for growth.
At the end of the year, we also welcomed 83 new Canadian colleagues following the acquisition of Philom Bios Inc., a manufacturer of microorganisms for agriculture.
All in all, 2007 has been a very good and exciting year for Novozymes. And a year when the world really began to take notice of the positive gains linked to our bioinnovation in addressing climate change. We must understand how to fully exploit this opportunity. Novozymes adopted a new slogan in 2007 – Rethink Tomorrow – and that is exactly what we must do. We must help our customers to rethink tomorrow – for the benefit of the customers, the world and Novozymes.
Steen Riisgaard, President and CEO