Novozymes’ acquisitions within bioagriculture contribute to sales growth

The recently completed acquisition of EMD/Merck Crop BioScience (AgroNews 2010-12-21 ) strengthens the company’s capabilities in the domain and has already impacted sales in the microorganism sales area in this first quarter.

Novozymes announced its financial results for the first quarter of 2011. Sales of microorganisms were up by 95% in Danish kroner, mainly due to the contribution from the acquisitions of EMD/Merck Crop BioScience and Turfal completed this year and last year respectively.

Agricultural biologicals is an interesting niche in the USD 150 billion global market for fertilizers and pesticides. The market is divided into three segments – biofertility, biocontrol, and bioyield enhancement – and the three segments have a combined value of roughly USD 1 billion.

Biofertility products help plants take up more nutrients, biocontrol products help plants fight off pests and diseases, and bioyield enhancement products support the health of plants. These products enable farmers to optimize the use of fertilizers, increase yields, and save money while putting less stress on the environment.

"With the recent acquisitions, Novozymes has become one of the leading players within biofertility and agricultural biologicals. They are emerging and very interesting industries that have a great fit with our organizational and technological capabilities, and they allow us to address the opportunity to help meet the global challenge of feeding the world’s growing population in a sustainable manner,” says Thomas Videbæk, Executive Vice President for BioBusiness.

Acquisition completed – Integration in progress

On February 7, 2011, Novozymes completed its acquisition of EMD/Merck Crop BioScience. The integration process is well underway, and the initial responses from employees and customers have been very encouraging.

Sales and marketing have started to learn about the combined product and customer portfolio, and the scientists are exploring the potential of the joint platform.

Thomas Videbæk, who spends a great deal of time in Milwaukee himself heading up the integration, continues: “We're in the midst of integrating the two organizations, their products, customers, and technologies. Our focus is on making sure that all the employees embrace the change and, very importantly, on ensuring that our customers understand what the new company is capable of.”

With approximately 165 employees and sales of around USD 60 million in 2010, EMD/Merck Crop BioScience was one of the leading players in the global market for agricultural biologicals, with a strong track record having delivered an average annual sales growth of around 15% over the past seven years.

Headquartered in Milwaukee, Wisconsin, and with a division of equal size in Pilar, Argentina, EMD/Merck Crop BioScience has a well-established presence in the US and Argentina and complements Novozymes’ existing operations in Canada and Brazil.

EMD/Merck Crop BioScience’s products and technologies are well defined and established, with documented and proven efficacy gains on numerous soils and crops. Its biofertility and bioyield enhancement products are primarily used in growing soy and pulse crops, and they join Novozymes’ existing biological product range consisting mainly of biofertility and biocontrol products applied to canola, pulses, and soy.