Turn market challenges into opportunities with reformulation
Turn market challenges into opportunities with reformulation
Reformulation towards enzymes can reduce your exposure to market uncertainties and bring new, performance-driven opportunities.
Novozymes can help.
Extreme weather conditions, the global pandemic, and pressures on logistic chains have recently resulted in price and supply pressures on key detergent raw materials. These, in turn have hit operational efficiency, fostered uncertainty, and cost businesses a lot of money.
Ways to attain a more stable cost structure and supply
By replacing a certain amount of surfactants with enzymes, you have the possibility to reduce your formulation cost without compromising on performance.
A key challenge in the industry now is to make a performing detergent that is less vulnerable to fluctuating raw material prices and availability – and safer for the environment and the people who use it.
Download our new insights paper to learn more about your reformulation opportunities.
Local and global events disrupting the chemical ingredients supply
Since April 2020 when Covid-19 reached global pandemic level, the prices of raw materials often used at detergent manufacturers have fluctuated and in many cases increased dramatically.
Extreme weather events are also having an intense effect on the chemical market. The Big Freeze in Texas was first local, but with about 20% of the US chemical industry offline, according to the Independent Commodity Intelligence Services (ICIS), the negative supply impact has become global.
Key chemical feedstocks are being rerouted, driving up prices and causing shortages in other parts of the world. The Big Freeze in Texas or the blockage of the Suez Canal are just some of the latest events in a chain of disruptions to have hit trans-continental chemical supply chains over the years.
It was less than 4 years ago that the heart of the US chemical industry in the Gulf of Mexico was paralyzed due to Hurricane Harvey. Texas used to be spared from hurricanes or polar vortexes, but due to climate change, the chemical industry may need to prepare for once-in-a-century weather event every 5 years.
Price volatility and lack of availability of chemical ingredients are a big concern for detergent manufacturers
When a detergent mainly consists of chemicals, and when the surfactant cost alone can comprise up to 50% of the raw material cost, this largely impacts detergent manufacturers’ bottom lines.
Enzymes, meanwhile, originate from nature and are part of a different value chain with more reliable supply and more stable prices. This difference can help protect detergent manufacturers and consumers from the price volatility and lack of availability in the chemical markets.
We saw this trend firsthand at Novozymes with the sudden higher demand for cleaning and laundry products during the Covid-19 pandemic (up 25-50% at peak times). As demand suddenly rose, challenging the industry overall in maintaining supply, both our European and American production sites beat production records, meeting our customers’ needs, as well as delivering to customers even faster, to meet urgent requests.
Across our different industries, and particularly in our household care unit, we managed to deliver on time and in full when chemical value chains were in disarray. This demonstrates our ability and our dedication to being a trusted partner and supplier — particularly in volatile market conditions.
Supply chain continuity – right when you need it
Every day, truckloads of enzymes and microbes reach our customers to help advance their work. We pride ourselves on delivering on specification, on time, all over the world. We secure supply with flexible logistics and a global network of multipurpose production facilities, located across four continents.
So many people depend on you to deliver – and we hope that you will depend on us too.
Let enzymes unlock critical business value for you during uncertain times
Current times are forcing consumers and business around the world to rethink processes, systems, and habits, and to implement more sustainable solutions to balance and protect public health, the economy, the environment, and their business' bottom lines.
There is value for consumers when detergent manufacturers and distributors can keep up with rising demand for products at the right price and availability, despite interruptions in key raw material supply.
Enzymes are part of the answer for a robust supply chain and continuous delivery of value to consumers.