General, News

No Fudging Names, Novozymes Is Going for the Big Rebrand

It’s no small marketing feat to make bacteria, enzymes and yeasts appealing to the masses, but that’s exactly what the world’s largest industrial biotechnology company has in mind.

Novozymes is in the final stages of merging with Danish rival Chr Hansen and working on a new identity, but there will be no fudging of names as seen in other recent mega-mergers. There’s no room for the “zymes” bit as this is going to be a complete rebrand, according to Chief Executive Officer Ester Baiget.

“We are a biotech company, it needs to be a name that welcomes everybody,” Baiget said in an interview with chemicalESG. We’ll find out when the deal closes, either later this year or early in 2024, she added.

New names aside, there are bigger fish to fry for Baiget. She’s looking to pull off a transformational deal at a time when similar combinations of enzyme and probiotic rivals are showing signs of strain. International Flavors & Fragrances kept its name following the $26 billion purchase of DuPont’s Nutrition & Biosciences, but it’s rapidly divesting assets to counter weaker-than-expected markets, cash flow issues and an inflated debt load. And analysts have noted a surprising amount of debt and cash leakage from integration costs at dsm-firmenich, created by the $21 billion combination of….well, you can work it out.

There are no such risks with Novozymes and Chr Hansen, according to Baiget. The one-time costs budgeted for at the outset still stand.

Being a diversified biotech company is key. Novozymes suffered the same trends in food and beverage and human health markets, yet it was the turn of its bioenergy business to shine. Sales jumped 27% in the first half on the back of demand for new innovation for bioethanol to replace gasoline and 2G biofuels and expansion into Latin America, a market that is already producing a billion barrels of ethanol and growing at a “solid” double-digit rate as it shifts from sugar cane to corn, where you have two growing seasons a year. That’s against the US market for traditional ethanol that’s expected to be flat at best this year.

There’s a never-ending push to develop enzymes and yeast that drive up yields from fermenting biomass.

Over time, the yet-to-be-named NewCo will expand Bioenergy into areas like Sustainable Aviation Fuel and biochemicals. Currently, the direct exposure to ethanol is down to 50% and more resources are being reallocated elsewhere. For aviation fuel, the enzyme technology is ready. Investments need to be made to capture the green CO2 from bioethanol production and install the pipelines needed to distribute it.

“This will all take time. 10 years ago, the whole North American market was for bioethanol for gasoline replacement. Today, 30% of the value that our customers generate is from byproducts,” Baiget said. “All the new developments are not for making more gasoline replacement, it is to drive diversification.”

subscribe to our newsletter

Keep up to date with the latest news

Subscription Form