Bioenergy sales drop for Novozymes
Aug. 10, 2016 - Novozymes reported yesterday its sales to the bioenergy industry dropped 6% in the first half of 2016 compared to the same time last year as its customers focused on lower-cost solutions.
The margins for ethanol producers remained low in the first half of 2016. The company’s two recently launched products Avantec Amp and Liquozyme LpH helped offset the dip in sales, but not enough to offset the overall negative impacts from product mix and pricing competition.
Novozymes total profits balanced out the drop in bioengery sales to yield a net profit increase of 8% in the first half of 2016 compared to the first half of 2015.
The company expects bioenergy sales to contract organically more than previously expected in 2016, as the competitive market for enzymes is expected to continue, driving prices down and offering lower in-use cost for ethanol producers. U.S. ethanol production in 2016 is expected to increase by around 2% compared with 2015. Novozymes expects to launch more innovation in the U.S. conventional ethanol market in the second half of 2016.