Business highlights

Enzymes
The enzyme business had a very satisfactory year, with nine product launches. Full confidence continues in the scope and quality of current research projects.

In 2007, detergent enzyme growth rates were stronger than seen in recent years. This made a significant contribution to the year’s total growth. This is attributable to increased sales in Europe, continued growth in developing countries, and stabilization on the North American market.

Sales of enzymes for bioethanol production also contributed considerably to the growth in sales in 2007. This area is continuing to attract great attention from the media, politicians, customers, investors and others.

In the bioethanol field, Novozymes entered into several commercial and research alliances in 2007, with a focus on the technology of tomorrow, where it will be possible to produce bioethanol from biomass such as agricultural by-products. In September, Novozymes entered into a partnership with Brazilian CTC regarding research into processes for the production of fuel ethanol based on sugarcane by-products (bagasse) that is currently either incinerated or used in sugar and ethanol factories. Research within enzymes for bioethanol production based on biomass is the largest focus area in Novozymes, and there are many indications that in four years Novozymes will be strongly positioned to commercialize this area.

In 2007, Novozymes made its largest acquisition to date. The acquisition of Indian Biocon Limited’s enzyme activities is considered very attractive and will strengthen Novozymes in several market segments. Novozymes’ position and opportunity for harnessing the rapid growth in the Indian market is now even stronger.

Productivity improvements were especially high in 2007 and played an important role in the 5% growth in Novozymes’ operating profit (excluding non-recurring items). This is despite increasing raw material and energy prices and unfavorable exchange rate developments. These improvements also helped free up the production capacity needed to keep pace with increased sales in 2007. In the light of high growth rates, and the development of sales in enzymes for the bioethanol industry in particular, Novozymes initiated an expansion of its production capacity in China.

Microorganisms
The microorganisms business faced many challenges in 2007, especially in the American market. In addition, Novozymes decided to discontinue an unprofitable product line, which resulted in a slight reduction of market share.

Novozymes acquired the Canadian company Philom Bios Inc. in 2007, which will support future activities in the growing sustainable agriculture market.

Biopharmaceutical ingredients
During 2007, the business area was further consolidated and several potential products were tested by customers. This business area developed as expected in 2007. Novozymes is still focusing on long-term growth opportunities within this area. This is supported by the various collaboration agreements that have been entered into.