Krishna Mohan Puvvada, Regional President, Middle East, India and Africa (MEIA), Novozymes
Denmark-based biotechnology firms Novozymes and Chr. Hansen are merging as a result of the $12.3 billion deal announced a few months back. Although there have been several mega-mergers in the ingredients space in recent years, this latest deal between Novozymes and Chr. Hansen is set to have a huge impact, as it appears to be the largest merger in Danish history. While both companies’ main business is producing enzymes, Chr. Hansen focuses more on enzymes and microbials for the food sector, while Novozymes’ largest business areas include enzymes for household products, food and beverages and biofuels. Following up on this latest development and the company’s future plans, nuFFOODS Spectrum spoke to Krishna Mohan Puvvada, Regional President, Middle East, India and Africa (MEIA), Novozymes in detail. Edited excerpts:
Could you shed light on the impact of the recent merger of Novozymes and Chr. Hansen which has been the key highlight of FY 2022-23?
Novozymes and Chr. Hansen, together, will meet customers’ growing demands for efficient, scalable, and sustainable biosolutions. Our merger with Chr. Hansen will truly make us a biotech powerhouse and this combination is bringing in a lot of synergies complementary to the areas that we play and the areas that Chr. Hansen plays. We have guided the markets on the combination to happen in Q4 of this year (2023) or Q1 of 2024. By then we should be ready with that. So, right now, the teams are working on putting all the frameworks, and all the guardrails. Together, we are establishing a new entity. The current addressable market for biological solutions is estimated to be around EUR 15 billion and growing. The economic impact from biological solutions is expected to grow three times by 2040, driven by growing needs and demands from growing populations around the world.
What have been the high points of your business in India during FY 2022-23? What more is in store for the food and agriculture sector?
We have completed 40 years in India, so right now we are celebrating this milestone. We started as Novo Nordisk Enzymes, now we are Novozymes. The market has accepted our technologies well and for us, India is a strategic asset. India is a very big player in the whole emerging market as such, we have been growing double digits for the last 15-18 years in India. Sustainability has been a guiding force for our company, and it is expressed in multiple ways. When we try to look into the future and what is ahead of us, we feel that there is a lot to do in food processing, reduction of food waste etc. as society and countries become richer, there will be an increased demand for better nutrition, more protein on the table. We are seeing a big food transformation happening in the country as the country expands its GDP. When we began our operations in 1983, the country’s per capita income was $270 and now we are at $2500. That has driven a lot of change in the food habits and as we now have an ambitious target of a $5 trillion economy, a lot of new things will have to come.
Today, globally most of the protein consumption sources are animal-based and as the population and affordability increase, we also need to have sustainable practices. Towards this, we are talking about alternate proteins, plant-based meats etc. As a result, we are investing in co-creating centres for plant-based food across the world. We are starting with Denmark, the US and China. We have also made an investment of 2 billion DKK in the US in a facility to produce alternate proteins.
We feel that the whole biohealth, wellness space is also an exciting area. Towards this, we have made a few acquisitions globally. Over the last four to five years, we have been building up that portfolio. We have acquired a company in Ireland called Precision Biotech to move towards gut health, and one in the US, called MBL. Now we have acquired a company in India- Synergia Life Sciences which makes vitamin K2. Towards this, we would like to operate with fermentation-based and microorganism probiotics as the starting point as a technology.
When we talk about agriculture, we need to ensure that our soil is rejuvenated and protected and that our agricultural practices are more sustainable. There is a lot to do out there and India is primarily an agri-based economy and more natural and biological interventions are needed. Outside this, we are also looking at biofuels. For the last 10-15 years, the country has talked about it, but in the last few years, we have really seen an acceleration in adoption. Today, the biofuel mandate has also been advanced which shows the commitment from the government. So, biofuels and bio-agriculture will be focus areas for the company.
How is Novozymes contributing to the growth of the Indian bioindustrial segment, and what are your expectations from the government?
When we started our operations in India 40 years ago, our entire product range in a fully finished form was coming from our global operations. Now we do a lot of formulations in India, and a lot of value addition of enzyme technology happens in India. We are using the local resources to make the finished product. We are not making the enzyme per se, but a lot of the formulations are being done here. As we move forward and as we see the visibility of some of the high-growth sectors, such as biofuel, we will need a lot of volumes. The moment we have long-term customer commitments and visibility, it becomes compelling to take the next obvious step of local manufacturing and when we produce here, by design, it will become a global site. We will produce here and we will also export. So, it will contribute to the Make in India agenda. Our facility in Patalganga, near Mumbai is a huge facility and is actually built to cater to meet the next 20-25 years of requirement for India.
The Indian government has been proactive towards science-based industries including the bioindustrial sector. There is a good engagement with the stakeholders. I also think that the road map towards emerging themes is becoming better and better. We see some clarity, and there is a convergence of things, plans, and direction taking place. There is also a lot of coordinated effort of collaboration including funding to make these things happen. When we look at the bioeconomy, we need to look at all the trends from the future perspective of sustainability, decarbonisation, etc., which means that the industry has to collaborate with all stakeholders, including the government, and articulate the whole efficacy of the biotech sector. The industry also has to take responsibility along with the government, and the climate is favourable in that direction.
Dr Manbeena Chawla