Tuesday, August 10, 2004

Enzymes are used in many industries like healthcare, starch processing, breweries and distilleries,
industrial alcohol, textile processing, garment and denim washing, detergent and cleaning aids, leather
processing, baking and flour milling, food processing, animal and fish feeds, natural extracts and waste
treatment. Enzymes have potential use in many ways in these sectors.

In the leather industry, enzymes help in rapid scud loosening, wetting and degreasing, removal of
adhering fatty tissues from the skin. Apart from these, many more applications have attracted
entrepreneurs to look at this sector as a lucrative one. In paper pulping, xylanases are sometimes used
to avoid the need for chlorine. This technology has been around for about 10 years, but its impact on
chlorine use has been modest because of the associated cost and impact on yield. Detergents is an old
and well established market for industrial enzymes that include proteases, amylases, cellulases and
lipases. In textiles, a fairly well-established application for enzymes is the fading of denim. However,
consumption is no longer as steady as it used to be, now that most of the world's denim is produced in
India and South America.

The leading Indian companies in the sector include Biocon (66.5 crore), Novozyme (65 crore), ,
Advanced Biochemicals (30 crore), Rossari Biotech (24 crore) and Maps India (17 crore). The total size
of the sector in India is about Rs 250 crore.

The other players in the sector include Fermenta Biotech, a part of the Vasant Kumar Group, Maple
Biotech, Textan Chemicals, a Chennai-based player in enzymes for the leather industry, Pappayin
Produckts (India), a leading company of Keartiman Group of Coimbatore, Lumis Biotech, a Kgenix
Group company, Celgen Biologicals, a subsidiary of ABL Biotechnologies, AVON Organics, Organic
Solutions, Resil Biotech, a division of Bangalore-based Resil Chemicals and Sangitha Biochemicals.
Many companies not only produce but also export their products to many Asian and European
countries.

 
2003-04(Rs crore)
Company
Companies like Rossari Biotech, Biocon and Zytex (India)
Biocon 66.52 have received the ISO certification for their facilities and
Novozymes 65 processes. This shows that Indian companies are quality
conscious and are meeting the international standards.
Advanced
30
Biochemicals
Considering the opportunity in the industrial enzyme sector,
Rossari Biotech 24 agri and pharmaceutical companies like Excel Industries
Maps India 17 and Concord Biotech are making inroads into this segment.
TOP 5 202.52
These companies produce various enzymes like amylases,
Others 47.48 proteases, cellulases, xylanases, glucoamylases,
Total BioIndustrial pectinases, papains, bromelain, catalases and many other
250
Revenue eco-friendly biological products.

There are few agencies and companies in India, which

import enzymes for the local market. The agencies include Delhi-based Atul Brewchem, Karan
Agencies of Mumbai, Southern Marketing Agency of Chengannur, Sukhjit Starch & Chemicals of
Phagwara and Zytex (India). Even the Danish company CHR-Hansen has set up a shop in India to
market its products used in food processing industry.

There is a lot of opportunity in this sector as industry leaders put the value of the global industrial
enzyme market, including applications in food and animal feed, detergents, textiles, pulp and paper,
leather and manufacture of chemicals at $1.6 billion to $2 billion. The fastest growing markets are fuel
ethanol, animal feed and food enzymes. Novozymes and Genencor, which holds 22 percent of the
market are the global leaders in industrial enzymes.

The market for industrial enzymes is growing at a healthy pace, boosted in part by demand from
emerging markets, but this volume has been accompanied by downward pricing pressure as a host of
smaller players compete for a piece of the pie. New applications have also helped drive demand and
the industry is responding with a continuous stream of innovative products. The companies are also
looking at producing different types of industrial enzymes, using all the natural methods of production,
from plants and vegetable origin, fermentation-both with solid state and submerge culture techniques.
Companies are also spending on R&D efforts directed not only towards development of new innovative
products but also towards making them available at an economical price to customers.

BioIndustrial Sector, also known as White Biotechnology, uses cells or components of cells like enzyme, organic amino
acids and yeast to produce industrially useful products. Enzymes, which constitute a major segment of this sector, are
used in industrial processing of starch, distilleries, alcohol, textile & garments, leather processing as well as for
supplementing healthcare products.

At present various companies in this sector are Advanced Biochemicals, Biocon India, Maple Biotech, Bhat Biotech,
Novozymes, Artemis Biotech and others. Indian enzyme products are also supplied to Europe and other Asian countries.

BioIndustrial Sector Revenues 2006 (in Rs. crores)

Revenues BioIndustrial Sector Total Biotech Revenue

Exports 41.25 (1.23%) 3357.17 (100%)
Domestic Market 333.75 (10.55%) 3163.83 (100%)
Revenues Change 2005-06 (%) 17.19% 37.42%

BioIndustrial Sector Revenue Growth (2003-06) (in Rs. crores)

Segment 2003-04 2004-05 2005-06

BioIndustrial Sector 238 320 375
Total Biotech Industry 3,475 4,745 6,521
BioIndustrial makes silent progress
Monday, June 13, 2005
 Enzymes market records 34.5 percent growth.
 Indian companies like Advanced and Span to set up new
production facilities.
 Biocon is the top enzymes company.
 Global vendors like Genencor and CHR-Hansen come direct.

The BioIndustrial sector, which predominantly comprises the enzymes companies, is estimated to be Rs
320 crore in 2004-05. The total industry registered 34.45 percent growth in 2004-05. There are about
17-20 players in India and the market leader in the segment during 2004-05 was Biocon, with total sales
of Rs 89.68 crore. Its enzymes business registered 34.82 percent growth. Novozymes is the other major
player in the segment and the company is estimated to have done a total business of Rs 69 crore in
2004-05. Advanced Biochemicals, which has a strong R&D, manufacturing, and formulation knowledge
of over 16 years, has reported its enzymes business grow by 31.8 percent. The company's total
enzymes business was Rs 39.55 crore. Growing consumption of enzymes in the existing application
areas, use of enzymes in the new industrial processes, strict enforcement of environment laws and cost
savings were some of key drivers for the growth of this sector in India.

While, worldwide, the detergent industry is

a major user of enzymes, India is a peculiar
market. In India, this industry is still using
the hand mixing process. However, in the
next few years the industry is expected to
use enzymes in a big way. Similarly, the
food processing industry too is expected to
substantially increase the consumption of
enzymes. The government is encouraging
establishment of wine parks for processing
of grapes for value addition. Beer and brew
industry finds a large potential for use of
enzymes for improving the quality, higher
yields and process efficiency. The textile
industry is another sector that is consuming large quantities of enzymes for desizing, stone wash of
denims, bioscouring, biopolishing of synthetic/natural yarns, raw silk and wool and for fabric. The break
up of industry wise demand was difficult to capture. Nonetheless, the popular perception is that the
pharma sector accounts for 50 percent of the total sales, followed by detergent manufacture (20
percent), textile processing (20 percent), food and feed (5 percent) and leather and paper (5 percent).

Indian companies produce various enzymes like amylases, proteases, cellulases, xylanases,
glucoamylases, pectinases, papains, bromelain, catalases and several other eco-friendly biological
products. The product range and services are growing rapidly as the use of enzymes is gaining
widespread acceptance. Companies are looking at producing different types of industrial enzymes using
all the natural methods of production, from plants and vegetable origin, fermentation-both with solid
state and submerge culture techniques.

Leading global players like Novozyme, Genencor International, Enzyme Development Corp., Dyadic
International and Quest International are present here directly or indirectly. Genencor, a global leader in
the enzyme market and having presence in India since 1996, is planning to enter the Indian market on
its own. It has taken a few people on board. Last year Danish company CHR-Hansen set its shop here
to market its products used in the food processing industry.

Among the Indian players, Advance Biochemicals,

Market Share of Companies Biocon, and Anil Starch manufacture a amylase.
Advance Biochemicals has been manufacturing
2004- and exporting cellulase enzyme for the past nine
Company 03Revenues % Share years. Currently it manufactures about 1000 metric
Rs Crore) ton per year of cellulase enzyme and exports most
Biocon 89.68 28.03 of it. Besides these manufacturers, there are
exclusive enzymes dealers like Atul Brewchem,
Novozymes 69 21.56 New Delhi, Karan Agencies of Mumbai, Southern
Advanced Biochemicals 39.55 12.36 Marketing Agency of Chengannur, Sukhjit Starch &
Rossari Biotech 33 10.31 Chemicals of Phagwara and Zytex (India). Several
of the Indian manufacturers also export enzymes to
Maps India 22 6.88 the Asian, Latin American and European countries.
Others 66.77 20.87 Most of them are predominantly formulators. The
formulation margins can be safely assumed at 25-
Total BioIndustrial 320 100
30 percent.

Indian companies are channelizing their efforts to develop innovative enzymes at competitive prices.
Agri and pharmaceutical companies like Excel Industries and Concord Biotech (manufacturers of
statins) are making inroads into this segment too.

Companies are expanding their manufacturing bases. Ahmedabad-based Maps India will invest Rs 10
crore for production of new enzymes and microorganisms during the current year. It signed a
memorandum of understanding with the government of Gujarat to that effect. Advanced Biochemicals is
setting up a 100 percent Export Oriented Unit and is planning to invest over Rs 110 crore at Indore SEZ
to manufacture cellulase, alkali protease, amylase, catalase, xylanase, acid and neutral protease
enzymes.

The industrial biotech sector is relatively free from regulatory complexities of biopharma and bioagri
sectors. Nonetheless, it is being felt that the current situation tends to favor traders as against
manufacturers. The Department of Biotechnology has taken this into consideration and has included a
road map in its draft on the National Biotechnology Development Strategy to promote and develop the
sector The few strategic actions mentioned include emphasis on industrial biotechnology to reduce
chemical and toxic load in effluent streams, developing non-fossil fuels that are eco-friendly and
developing green technologies in industrial processing and encouraging public-private partnerships to
promote investment in this sector. Further, it has been suggested to promote industrial biotechnology as
a strategic area of manufacturing and developing green technologies.

Besides this, it is being felt that the government has to promote the use and application of enzymes in
different industries and announce a package of incentives to enable new entrepreneurs to consider this
sector as an investment opportunity. Also academic and research institutes in India need to come up
with more commercial technologies. Institutes like Institute of Microbial Technology, Chandigarh,
National Chemical Laboratory, Pune and Indian Institute of Technology (IIT), Delhi are already working
on some R&D projects in the industrial enzymes segment.

With least entry barriers and no social and regulatory risks involved in industrial biotechnology, the
Indian companies that develop enzymes have a good future.