Latin American market conditions depress Novozymes' feed sales

By Jane Byrne contact

- Last updated on GMT

© GettyImages/Ca-ssis
© GettyImages/Ca-ssis

Related tags: Latin America, Enzyme, Probiotic

Danish producer, Novozymes, reported that sales to the feed industry declined during 2018, as challenging feed enzyme markets, especially in Latin America, put pressure on volumes, including in the fourth quarter.

Animal health sales developed well across the major geographies, it said.

The enzymes producer released its financial results for 2018 this morning. The company achieved underlying revenue growth of 4% in 2018, at the lower end of its 4-6% guidance range released in February last year.

Net profit was DKK 3,227 million (USD $490m), an increase of 3% from DKK 3,120m achieved in 2017, driven by both a lower tax rate and lower net financial costs, said Novozymes.

TinaSejersgrdFan_Large
Tina Sejersgård Fanø, executive VP, agriculture and bioenergy, said the probiotic, Alterion, did well in terms of market penetration in 2018. She also reported that the newly launched product, Balancius, the enzyme it developed with DSM to improve gut functionality for broiler chickens, has been well received in the market.

The company expects to increase sales organically by between 3 and 6% in 2019.

Agriculture and feed sales

Its agriculture and feed sales increased by 3% organically in 2018, but were down 3% in DKK compared with 2017. It said organic growth in the fourth quarter for that division was -3%, while growth in DKK came in at -5% y/y.

Tina Sejersgård Fanø, executive VP, agriculture and bioenergy, said the probiotic, Alterion, did well in terms of market penetration in 2018 and that the product had good traction across all regions. Alterion is a spore forming Bacillus subtilis strain that the company developed with Adisseo; it is aimed at improving poultry performance.

She also reported that the newly launched product, Balancius, the enzyme it developed with DSM to improve gut functionality for broiler chickens, has been well received in the market. “We expect a solid ramp-up during 2019.”

The company said its BioAg business performed very well in 2018.

“BioAg performance in 2018 was strong and driven by the new corn product Acceleron B-360, which was sold for roughly 16 million acres of corn for the 2019 planting season,”​ said Sejersgård Fanø.

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