Novozymes, the world's largest producer of industrial enzymes, is upbeat on growth opportunities in China.
The Denmark-based biotech giant will increase investment in China, including in production and customer-facing activities, as the company's local business grows, according to Peder Holk Nielsen, president and chief executive officer of Novozymes, during a trip to Beijing Monday.
With a 48 percent market share in industrial enzymes, Novozymes provide biological solutions for producers of ethanol, bread, detergent and textiles in 130 countries.
In the first half of 2017, Novozymes posted better-than-expected financial results, with its China market being "a positive surprise," according to Nielsen.
In his eyes, huge changes have taken place in China in the past two decades, and so has the company's business here.
"Compared with over 20 years ago, when there were hardly any cars in Beijing and few high rises on the northeastern third ring road, Novozymes' business in China is much larger and matters more today," Nielsen said in an interview. "Any strategy that goes on in Novozymes today will have an element of China to it, which was not the case 20 years ago, simply because the opportunities in China are so large and impressive."
"The main growth opportunities in China are in sectors like household care, including laundry and cleaning products, as well as food and beverage, as China's shift from a global manufacturing center to a domestic consumption-led economy means more demand for such products," Nielsen said. "China's detergent market is growing very fast, both liquids and powders. That's something we take interest in."
He believes that ethanol fuel is another market area to watch, and that despite currently being a small player in the biofuel market, China will hopefully become a much bigger market with its large fleet of cars, significant gasoline consumption and recent plans to expand ethanol fuel use.
The government last week announced a plan to push nationwide use of bioethanol gasoline by 2020 to cut emissions and fossil fuel consumption.
"The 2020 ethanol plan for China is exciting for Novozymes. It's also exciting for the world," Nielsen said. "It needs to get off the paper and become something that's real."
"The country's quest for sustainable solutions not only creates opportunities for Novozymes but also is changing businesses all over the world, because the Chinese market is a large driving force of growth for many foreign companies," he said.
Meanwhile, he expected to see better practice of rules in protection of intellectual property rights, though there has been improvement in this field.
With over 1,000 employees in China, Novozymes has grown from a single office in Beijing in the early 1990s to a network of research and development, production, sales and marketing in six Chinese cities.
