Novozymes bets big on microbial products

Denmark-based biotechnology giant Novozymes is anticipating huge demand for its microbial products that improve crop yields in China, the world's largest producer and consumer of agricultural goods, a top company official said on Thursday.

The company has already started field trials for its microbial technology in China and expects to commercialize the technology soon, said Peder Holk Nielsen, chief executive officer of the Danish company, which specializes in industrial enzymes.

The company has also teamed up with the world's largest seed company Monsanto Co and formed a $300 million strategic alliance to jointly develop and commercialize microbial technology worldwide.

Microbial-based products are those derived from naturally occurring micro-organisms such as bacteria and fungi, which can be applied to seeds before planting to enhance crop productivity with less input and also to help control pests and diseases.

Nielsen said the microbial technology has promising prospects in China as the country is looking for sustainable growth options. China is facing pressing challenges in agricultural production like shrinking arable land and water shortages due to increasing industrialization and environmental degradation.

"The main market for microbial technology is presently in the US and Latin America. But it is obvious that we can bring the technology to Asian countries like China," Nielsen told China Daily on the sidelines of the World Economic Forum in Tianjin.

Northern China will be the "first goal" of Novozymes to apply the technology as it delivers better results in large-scale farmlands, Nielsen said.

The CEO anticipates no major regulatory hurdle for its technology to enter the Chinese market as the process releases naturally occurring microorganisms into the soil and does not involve any genetic modification technology.

But Nielsen said Novozymes wants to remain modest in China as the research is still in the initial stages and question marks remain about whether the technology could fit with different types of soil and various kinds of crops in China.

In the US, the company has done 170,000 field trials under its partnership with Monsanto and the same will go up to 500,000 by 2016, Nielsen said.

Biologicals are used to complement or replace agricultural chemical products and represent a growing market segment of roughly $2.3 billion in annual sales, according to Monsanto, which is leveraging its vast field-testing and marketing capabilities to promote the products worldwide.

Nielsen said Novozymes will continue to grow its business in China as a leading supplier of industrial biological solutions by recruiting more local employees, but he sees no immediate need for capital investment.