Novozymes is gearing up to meet increased demand from emerging markets

Novozymes’ Household Care division expects phenomenal growth in emerging markets. To be tied as closely as possible to these expanding markets, Novozymes is establishing a new centre based in Beijing. The centre will be fully operational in the fall.

If everything goes according to Anders Lund, Senior Marketing Director in Household Care, interesting times lie ahead and future growth within household care will come predominantly from emerging markets.

”Our growth in the emerging markets is phenomenal right now, and we expect it to become even better,” says Anders Lund. The emerging economies are expected to grow at about 8-10% per year, but Novozymes expects to grow more than that. ”Detergents and especially the use of enzyme technology have been underutilized in the emerging economies for the past decades. So there is very much room for improvement,” says Anders Lund. 

Getting closer to the consumers
To be sure to be close to the action, Novozymes is establishing a new centre that is going to focus on developing the Household Care business in emerging markets. The centre will operate in all of Asia from a commercial perspective.

”Often we’ve been criticized that we are too slow when it comes to grabbing the possibilities that lie in Asia and in emerging markets in general. Furthermore we acknowledge that we lack cultural understanding, and that our westernized mindset therefore sometimes pulls the business in the wrong direction,” says Anders Lund. ”With this new centre we want to get closer to the consumers that are ultimately going to use our products.”

More buying power
In general, the number of consumers is growing at a similar pace as the economies in the emerging markets. The middle classes are growing and consumer spending is rising. Electrical appliances such as TVs, radios, mobile phones and washing machines are high on consumers’ wish list. The increasing number of families that own a washing machine spurs an increased demand for detergents, and also more often, consumers choose a high-level detergent brand that often contains enzymes instead of taking down the cheapest alternative that might contain sand blended with a small amount of soap.

Liquids on the rise
Consumer trends in emerging countries often follow the trends from Europe and the US. ”We expect that the trend we’ve seen within liquid detergents in Europe and the US will spread to the emerging markets,” says Anders Lund.

Another product that might drive the market is the so-called “unit dose.” A unit dose is a small tablets much like those available for dishwashing machines. ”If these become as success in the US, we expect the emerging markets to follow that trend,” says Anders Lund.   

Interesting times ahead
Even though Novozymes has a strong share of the market in Asia, competition is present.  Even so, it is not something that keeps Anders Lund awake at night: ”The production economy of our technology is strong, and most importantly we have a continuous flow of next generation products in our pipeline. We’re as ready as we can be to grab the opportunities that lie ahead in the emerging markets.”