‘Novozymes seldom competes on price’

Novozymes manufactures industrial enzymes. Tell us about the trends in the area and how are they shaping the global demands, particularly in pharma and biopharma segment?
Organisations around the world — across segments and business verticals — see the need for using better sustainable technologies, the drivers across vertical are different but the voice is only growing stronger including in the Pharma and Bio Pharma segments. Globally, there is an increasing awareness of the impact of consumption on the environment. Consumers are more open to making sustainable choices in their purchase. Companies have recognised this and have started working on products which are good not only for consumption but also post consumption for the environment. This trend is amplified in certain industries such as biotechnology.

How much business comes from the pharma and biopharma sectors? And what are your plans for scaling it up?
Right now, our biggest business comes from the household care and food & beverages segments in line with our global trends, technical & pharma, which is our smallest business segment. We continue to push our technologies across the customers, the timelines of incorporating our technologies in pharma is longer as it involves complying with the demands of the sector. The outlook is in the positive direction. We continuously work with our partner customers to bring innovation which will affect the end consumer and the environment positively. Towards that, we work with their formulation to make them more energy efficient and better performance on consumer relevant needs.

Globally, regulations are becoming more stringent. Do you feel that it is obstructing the growth?
As companies, we need to comply with the regulatory demands that are in front of us. The larger picture needs to be looked into. As the industry matures, it is but natural that regulations are setup to govern and protect the consumers interest. Novozymes views regulations as a positive way to streamline entry of players as well as ensuring that minimum quality standards are maintained in the industry for the benefit of the end consumer.

Tell us more about the enzyme engineering research and how will it help the genetic engineering method.
Enzyme engineering is a key technology which entails genetic engineering to enhance enzyme performance, e.g. improving enzyme stability against high temperatures, variation in pH, or other stresses during a process. The competencies needed to engineer proteins, involve molecular biology, understanding of enzyme structure: activity relationships, high throughput screening, data analytics, and application testing.

Presently, the ‘artificial enzymes catalytic’ conversions are very low. How can they be scaled-up and what are the challenges and opportunities your way?
We do not work in the area of artificial enzymes so cannot comment.

How does Symbiotic enhance the application of pre and probiotics? What innovation are you bringing in this space?
This is an interesting area, but it is too early to comment.

Globally, who do you compete with and how do you maintain the competition in a healthy way?
We compete with global players like Dupont, DSM etc. We are in a business where there is tremendous opportunity to bring in innovation and expand the markets. This is typically that we like to do. Novozymes seldom competes on price. We have grown the global enzyme market across industries and we believe there is far more value in bringing innovation to customers and making the pie larger than competing within a limited space. Our global growth has fundamentally rested on the growth of our customers. Hence, the strong emphasis is on partnering with our customers.

The company recently announced that better business with biology will drive more value from the existing business as well, as it will free up the additional resources to invest in new strategic opportunities. Your strategy for this move?
We have identified the areas where we want to invest, they will be in the area of solving global challenges such as clean water, human health and food availability, as we speak teams have been formed to take the direction forward. We are working on a new portfolio structure with business portfolio units and clear portfolio roles, allowing the organisation to deliver to its full potential. This includes more targeted and differentiated value offerings and service levels depending on the different characteristics of the businesses. This will entail significant investments in new strategic opportunity areas – combining enzymes and microbes – with significant potential beyond the mid-term strategy period. We plan to invest in removal of water contaminants, gut and oral health, and alternative specialty proteins.

The company targets annual growth of more than five per cent from food and healthcare industry in the period 2020-2022. Tell us about the product pipeline and how do you plan to execute it?
Cannot comment on this at this stage.

Any investment plans for the current fiscal?
We have just commissioned a new production unit near Mumbai. As interesting opportunities emerge, we will look at enhancing our investments to meet the business needs and challenges. We also work closely with emerging talents in many institutes across the country and remain open to exploring opportunities to jointly initiate research in biotechnology with budding PHD students.

The company also finds inorganic route to grow. Will we be seeing more coming in from there?
We constantly keep evaluating interesting companies, we will continue to do so.

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