Rethink Tomorrow

Business model

Interactive business model Innovation pipeline update

Novozymes produces a wide range of industrial enzymes and microorganisms. Together with our partners, we turn to biology to unlock business opportunities across industries. We create microorganisms that help farmers achieve a better harvest and support sustainable agriculture. And we deliver biological innovation to producers of ethanol, bread, detergents, textiles and many other products. In brief, our business model is to develop biotech solutions to the world’s pressing problems, profit from doing so, and then reinvest in finding more biological answers.

By looking for new enzymesImprovement in water and energy efficiency (and reduction of CO2 intensity) is measured by the reduction in an index that comprises resource use divided by gross profit, compared with the same index for 2014 efficiency levels. Consequently, these indexes measure Novozymes’ ability to create value while reducing its environmental footprint. and microbialRelating to or caused by microorganisms. technologies or improving existing ones, we deliver and apply innovation that has an impact and creates value for customers, improving performance and reducing costs. Our business model fits well with current and future global macro and industry trends. Together with our strategy, it forms the framework for our operations and will ultimately enable us to achieve our long-term targets and deliver on our purpose. Of course, there are also risks associated with Novozymes’ operations and with opportunities not materializing, and these are presented in the Risk management section.


Sustainability and business go hand in hand

Sustainability is an innate part of all Novozymes’ products and a key part of Novozymes’ value proposition and business model. Sustainability is also evident in our agreements with suppliers and partners, as well as in our production. We have ambitious targets for reducing our resource consumption and CO2 emissions, as well as a strong focus on providing a safe and motivating working environment for our employees. With climate change high on the political and public agenda, our focus on sustainability is an advantage as customers look for sustainability as a differentiator. Our long-term target for global CO2 savings resulting from customers’ application of our products enables us to track and document our impact.


Our dedication to sustainability goes beyond the products we offer to our customers. When the UN Sustainable Development Goals (SDGs) were published in September 2015, we started working on ways to integrate these into Novozymes’ business. The SDGs highlight environmental, economic and social issues of global importance, such as eradicating poverty, investing in sustainable water, energy and transport infrastructure, and enabling food security. Our purpose and our long-term targets are guided by these goals.


Spotlight: Household Care & Technical

Anders Lund, Executive Vice President, Household Care & Technical presents 2016 highlights and focus areas for 2017.

Business model


Once our innovation teams have tested and prepared an enzyme for an industrial processes, we apply that enzyme to a set of fast-growing microorganisms – our “workhorses” as we call them. Microorganisms produce enzymes, and an important part of our production process is to identify the microorganisms that produce the exact enzymes we need for each production process. One microorganism only produces a grain of sand’s worth of enzymes, and industrial processes often require an entire beach. To produce these vast amounts of enzymes, we make the microorganisms multiply using fermentation. Having recovered the enzymes after the fermentation process, we prepare them for use by our customers. Our global production setup enables us to do this wherever the necessary technology and skills are available. Currently, we produce our enzymes at eight plants across four continents.

Innovation pipeline update


Novozymes’ innovation pipeline contains more than 100 research projects across the business. In 2016, Novozymes launched eight new products. The chart on the right shows some of the major innovation areas in which Novozymes is investing. All these eight innovation programs represent significant market-expanding growth opportunities in terms of sales, and most also have the potential to impact sustainability positively. In 2016, progress was made in all programs, including two product launches. Four of the seven existing programs progressed to the next phase, and one new program – grain milling – was added in Food & Beverages.


In Household Care, hygiene solutions build on the functionality of stain removal and target consumers’ clothes having a more complete feel of cleanliness and freshness. Tailored enzyme solutions for emerging markets is another area of research, as these geographies require special solutions and innovative approaches at low cost. Both programs remain in the “Development” phase, and the first products are on track to be launched in 2017.


We have made significant progress in Food & Beverages with our technology for improving yields in vegetable oil processing, and the status for the platform has been moved from “Discovery” to “Development.” A new track for grain milling has also been added, as this is a new area where we are looking into the feasibility of using enzymes to increase efficiency in the milling step of grain-processing facilities.


In Agriculture & Feed, all three tracks progressed, with the new corn inoculantInoculants are beneficial microorganisms that promote plant health. Acceleron® B-300 SAT being launched with Monsanto, and the new animal probiotic Alterion® being launched together with Adisseo. The development of new transformative microbesThe materiality assessment process identifies topics that pose both risks and opportunities for Novozymes’ business strategy, based on a systematic analysis of internal and external stakeholder perspectives. Relevant topics are those that may reasonably be considered important for reflecting the organization’s economic, environmental and social impacts, or for influencing the decisions of stakeholders, and therefore potentially merit inclusion in the report. for corn, soybeans and wheat, together with Monsanto, also progressed. These new BioAg products will further add to the division’s growth potential.


In BioenergyBioenergy comes in the form of liquid fuels, electricity, heat and steam, and is produced from primary crops or biomass such as sugarcane, grains, agricultural residues, algae and household waste. In liquid forms, it is typically used to replace gasoline and diesel in transportation., our partners have seen increasingly stable production and higher utilization rates throughout 2016, and further improvements are expected in 2017.


Spotlight: The innovation pipeline

Thomas Videbæk, Executive Vice President & COO, Research, Innovation & Supply takes a look at Novozymes' innovation pipeline and key priorities for 2017.