Issue Date: March 8, 2004
Per falholt, chief science officer at Novozymes, and Peder Holk Nielsen, the firm's executive vice president for sales and marketing, are both chemical engineers. In the late 1970s, they were classmates at the Technical University of Denmark, where Falholt earned a master's degree and Nielsen earned a Ph.D.
Although Falholt and Nielsen were schooled in chemistry, today they both work for a company that achieves most of its sales by replacing synthetic chemicals with enzymes grown in bioengineered microorganisms.
Rather than irony, the two executives see this developmentas evolution. Back in the 1970s, Nielsen says, chemistry was king, andbiotechnology was in its infancy. Today, the tables are turning: Bioengineeringis bigger at the Technical University than chemical engineering, and theysee a similar shift starting to occur in industry.
Novozymes' recent financial performance reflects thisnascent shift. While most of the chemical industry struggled to grow lastyear, Novozymes' sales, in local currencies, increased 12% to $882 million.While chemical industry earnings stagnated, Novozymes' net earnings rose13% to $110 million, for a profit margin of more than 12%.
Illustrations of the diverging fortunes are easy to find.Major chemical companies like HuntsmanCorp. and Lyondell Chemicalstruggled last year in the face of the oil industry's ongoing phaseoutof methyl tert-butyl ether (MTBE) as a gasoline oxygenate. Novozymes,meanwhile, enjoyed high growth in sales of the amylase enzymes used toproduce ethanol, MTBE's replacement.
And more growth is on the horizon. Amylase is used toconvert edible cornstarch to glucose before fermentation into ethanol.But Novozymes and other enzyme producers are developing cellulose-degradingcellulases that may pave the way to making ethanol from the inedible partsof corn. Last month, the company completed a U.S. government-funded projectthat lowered the cost of making cellulase 12-fold.
Chemical replacement is occurring in most of Novozymes'markets, Nielsen says. In baking, for example, emulsifiers are being replacedby lipases--fat-attacking enzymes that help the phospholipids presentin wheat act as natural emulsifiers. In tanning, enzymes are replacingharsh chemicals used to soften leather. In papermaking, enzymes are replacingthe chlorine used for bleaching and the acids and bases used to cleanfouled equipment.
In addition to these degradative applications, enzymesare showing up in catalytic roles, such as margarine production.
FOODCOMPANIES make margarine by the partial hydrogenationof fatty acid-rich vegetable oils. The process converts some cis doublebonds to the trans configuration and creates what are known as trans fats.Trans fats are associated with high levels of low-density lipoprotein--or"bad"--cholesterol, and starting in 2006, the Food& Drug Administration will require labeling of trans-fat contentin food products.
Nielsen explains that one technique for making trans-fat-freemargarine is to fully hydrogenate vegetable oil and inter-esterify itwith unhydrogenated oil. Archer DanielsMidland has made such margarine in Europe for years via a chemicalinter-esterification that uses sodium methylate as a catalyst. However,anticipating the U.S. labeling law, ADM's food ingredient researchersteamed up with Novozymes scientists to develop an enzymatic inter-esterificationprocess based on lipase.
According to Nielsen, chemical inter-esterification reactorsare much larger than enzymatic ones and operate at higher temperatures.Chemically inter-esterified vegetable oil also needs a water wash to removeby-product soaps, he says, plus extensive purification to remove darkcontaminants. ADM opened an enzymatic inter-esterification plant in Quincy,Ill., in 2002, and Nielsen expects other margarine producers to followits lead.
Nielsen and Falholt are confident that the advent of suchenzyme-based processes will continue to drive Novozymes' growth. Althoughthe executives still draw on their chemistry training to do their jobs,they see biology as having fundamental advantages over chemistry in manyindustrial settings.
Chemical manufacturing processes have largely been perfectedover the years, they say, whereas enzymatic ones continue to evolve rapidly,thanks to new genomic, screening, and microbe evolution techniques. InNovozymes labs in Bagsvaerd, Denmark, and Davis, Calif., scientists ferment,purify, and wash 10,000 enzymes per day, Falholt notes, compared withjust one per month in 1990. "We do more in a day today than in our entirehistory up until 2001," he says.
Moreover, Nielsen points out that chemicals are generallymade in single-purpose reactors, whereas enzymes are fermented from organismsgrown in all-purpose tanks. "For us, the real factory is not the plantor the stainless steel reactor--it's the microorganism," he says. "Thetank is like a barn where we hold the microorganism, but it's the organismitself that does the work."
Nielsen sees the enzymes business--and biotechnology ingeneral--as part of a history that started with the Industrial Revolution,when energy was first harnessed. "Next, chemistry came into play. It hasdone great things for us, but it is 120 years old," he says. "We see changeagain. We had the Industrial Revolution, and we had chemistry. Now wehave evolution, when nature comes back into play.
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