USA. Novozymes, leader in biological solutions, focus is on discovering and developing enzymes for the commercial market, its largest customers include P&G. and Unilever.

This Davis facility contributes to a multibillion-dollar enzymes industry Victor A. Patton 20 October 2017 Sacramento Business Journal Most consumers of laundry detergent probably aren’t aware that the enzymatic processes involved in stain removal have a basis in nature. On a more local level, even fewer know some of the research going into the enzymes used in detergent and other products has roots here in the Sacramento region. This year Copenhagen, Denmark-based Novozymes marks 25 years of having a research and development facility in Davis. The company’s focus is on discovering and developing enzymes for the commercial market, to “bring nature into an industrial setting,” as CEO Peder Holk Nielsen put it. Nielsen, who has led Novozymes (OTC: NVZMY) since 2013, visited the Davis facility from Copenhagen recently to meet with company executives and recognize the 25th anniversary of the location. Enzymes are proteins that exist in nature and initiate biochemical reactions in all living things. For example, enzymes break down leaves and plant debris into compost. Animals, including humans, use enzymes to break down food in their stomachs to use as energy. Fungi, plants and bacteria are just a few of the sources in nature that Novozymes scientists use to obtain enzymes that can be used in products. Scientists around the world use aerobic microorganisms for the production of enzymes — and those organisms have a metabolism that requires oxygen. However, there may still be a lot of untapped diversity such as anaerobic microorganisms that reside in water, soil and ice. Those microorganisms cannot withstand oxygen, are much harder to work with and are a source for new enzymes. At Novozymes' 64,000-square-foot Davis facility, at 1445 Drew Ave., scientists work with aerobic microorganisms. The largest end application for the company’s enzyme products is detergent, used for dishwashing, laundry and other purposes. The enzymes in detergent, for example, make it possible to remove stains from clothing with colder water. Novozymes is responsible for roughly half of the world’s industrial enzymes. Its largest customers include The Procter & Gamble Co. and Unilever Plc. Novozymes produces enzymes for other uses as well. They are added to feed formula to give animals more nutritional value, and to palm fruit to extract more oil. Enzymes are also useful in converting biomass into ethanol, and turning corn leaves and stalks into biofuels for cars and trucks. One of the major discoveries researchers at the Davis facility were responsible for was the enzyme GH-61. It is used for efficient hydrolysis of plant biomass to sugars that can then be fermented to produce ethanol or other renewable chemicals. GH-61 was discovered in 2001. In a world where companies are looking for chemical alternatives that are more sensitive to the environment, those enzymes mean billions of dollars in business. Publicly traded on the Copenhagen Stock Exchange, with $2.1 billion in revenues last year, Novozymes sells enzymes globally to corporations by the truckload. In the first half of this year, the company's net income rose 1 percent to 1.51 billion Danish krone (about $238.65 million), as revenue rose 3 percent to 7.28 billion krone ($1.15 billion). Holk said Novozymes had a period of rapid growth in 2013 and 2014. The company reported organic revenue growth of 7 percent for each of those two years. Organic growth slowed, however, to 4 percent and then to 2 percent in 2015 and 2016. Those years were tougher, Holk said, as ethanol prices declined and animal feed prices remained stable. Those trends led many of Novozymes' customers to forego buying more expensive technologies. The Davis facility is one of two large research centers Novozymes operates in the U.S. focusing on molecular biology. The other, in Raleigh, North Carolina, is the company’s U.S headquarters. There are 105 employees in Davis. The company has 6,500 workers worldwide. Holk said one of the primary reasons the company chose Davis for its research laboratory was to be close to University of California Davis. Today, around 40 percent of the company’s Davis employees were undergraduate or graduate students at UC Davis, or postdoctoral researchers there. Being near the university also allows the company to interact with the professors who are experts in related fields. Plus, the company teaches courses at UC Davis, in addition to being involved in science, technology, engineering and mathematics education and events for local high school and junior high students, according to Debbie Yaver, Novozymes’ managing director in Davis. “The one advantage we have in this area is the cost,” Yaver said. “The cost of living, the cost to operate is far cheaper here" than the Bay Area. Novozymes has benefitted from efforts and agreements to cut down carbon emissions worldwide, as companies seek more sustainable solutions due to concerns about global warming. Holk said Novozymes' products are making a positive environmental impact. He said use of the company’s products saved 69 million tons of carbon from being put into the atmosphere in 2016. That’s about the amount of carbon produced by 30 million cars, accounting for about .16 percent of global emissions. “We orient our research towards CO2 savings, raw materials savings, water savings because that’s where we think the future profit pools are going to be. Because those are going to be resources that are very scarce,” Holk said. In the meantime, researchers at the company continue to look for enzymes from new sources. Holk said there are so many enzymes produced by microbes in the world, even the research being conducted today is just scratching the surface. “The part of the microbial world that we understand today is just so tiny,” Holk said. “We’ve just seen a fraction of it.” Did you find this article useful? Why not subscribe to Sacramento Business Journal for more articles and leads? Visit bizjournals.com/subscribe or call 1-866-853-3661.