Novozymes slashes investment by $95 million; says US ethanol market recovering; cellulosic at “industrial scale” by 2012

In Denmark, Novozymes said that it has slashed investment by $38 million this year and $57 million in 2010 due to falling demand for enzymes, especially in the US market where Aventine Renewable Holdings and VeraSun Energy have filed for bankruptcy and Pacific Ethanol idled three of its four operating plants.

Novozymes CEO Steen Riisgaard told the Wall Street Journal that  “There’s been a lot of turmoil in the fourth quarter of last year and the first half of this year. Most of that turmoil is coming to an end and there’s a better balance now between the capacity in use. The second half of this year should be better and next year we will start to see decent growth again in corn-based ethanol in the U.S.”

Riisgaard also said that Novozymes expects to ship enzymes for cellulosic ethanol in 2010 and that the company expects cellulosic ethanol to be made on an “industrial scale” by 2012.

Novozymes’ US leader Lars Hansen earlier this week was shifted back to Europe to run the company’s European operations, while former head of global planning Ada Monroe was named US chief. Novozymes said it will slow plans to double the capacity at its Nebraska plant and will reduce a projected investment in a new China-based facility.

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