Advanced Enzyme Technologies Ltd - Pioneers in Enzyme Biotechnology

Advance Enzyme Technologies Ltd – Pioneers in Enzyme Biotechnology

Twitter Handle: @shuchi_nahar

Link: https://myweekendspot.blogspot.com/2020/12/what-are-enzyme-biotechnology-market.html

Incorporated by second-generation enzymologists, the Rathi brothers in 1989, Advanced Enzyme Technologies (AET) is one of the largest research-driven Indian enzyme companies with a product basket of 400+ proprietary products developed from 68 indigenous enzymes and probiotics.

Broadly, the business can be divided into three segments –

1) Human healthcare

2) Animal healthcare

3) Industrial processing.

It manufactures enzymes by using natural resources such as plants, fungal, bacterial, and animal sources, using environment-friendly biotechnology processes. It offers these products to 700+ customers across 45 countries worldwide.

Product Insights

This classification provides break-up on the basis of the enzyme function. For example:

1) Proteases: They break down proteins (used in industries like detergent, leather, animal feed, food & beverage, pharmaceuticals, etc)

2) Cellulases: They break down cellulose (used in industries such as paper & pulp manufacturing, coffee production, grain processing, textile, animal feed, etc)

3) Lipases: They break down fats (lipids) into glycerol and fatty acid (used in biofuels production, biocatalysis, industries such as leather, dairy and cheese, etc)

4) Carbohydrases: They break down starch into simple sugars (used in industries like food & beverage, animal feed, cleaning agent, bio-fuel, etc)

5) Polymerases & nucleases: They replicate/break down DNA material (used in research & biotechnology, diagnostic segments)

Revenue Growth Trend over the Years

Indian Enzymes estimated product type Bifurcation

Oligopolistic environment, vast addressable market to the fore

Globally, growth of the enzymes market piggybacks on a diverse spectrum of the customer base. This, together with a limited number of meaningful players, has created a conducive business environment for existing players in the space. Note that enzymes as the cost to the percentage of sales is not material, yet its efficacy is very important to end product including constituency of the end product in terms of its taste, appearance, aroma and, thus, quality perception of the products leading to significant supplier stickiness.

Revenue Split Product Category Wise FY19 v/s FY20 

Specialized the business model with high entry barriers One of the biggest challenges facing new companies looking to enter the enzyme industry is to offer continuous and differentiated solutions as per the client’s requirement that demands real-time R&D capability and flexibility in manufacturing.

Large manufacturing capacities, proven capabilities, experienced promoters, customer stickiness, fairly consistent track record, ability to develop new products in-house, and the quest for unique acquisitions are some differentiators for AET. Revenues have grown at a CAGR of 11% during FY16-20 through the organic and inorganic route.

Business segments

Human healthcare (pharma, nutraceuticals, and probiotics) The company provides proprietary enzyme products, probiotics, and customized enzyme solutions to various pharmaceutical and nutraceutical companies in the US, India, Europe, and other countries. While pharma comprises 40% of the human healthcare portfolio, nutraceuticals account for the remaining 60%. In pharma, the company provides proprietary enzyme products and customized enzyme solutions to various pharmaceutical and nutraceutical companies in India, the US, Europe, and the rest of Asia.

Customers use these enzymes as active ingredients in their pharmaceutical and nutraceutical formulations. Some of its key customers include Sanofi India, Alkem Labs, Emcure Pharma, and Torrent Pharma.

Animal Healthcare

Animal healthcare segment AET’s animal healthcare (animal HC) segment contributed 13% i.e 54 crores towards net revenues in FY20. Animals are fed with mainly two categories of livestock feed viz. 1) forage and 2) Fodder. Other than these two the third category is compound feed, which uses enzymes for production. This feed is designed specifically to suit the nutritional requirements of animals and includes additives, corns, soybeans, sorghum, oats, barley, etc.

Human Healthcare

Human healthcare segment AET’s human healthcare (Human HC) segment contributed 75% i.e 321 Crore towards net revenues in FY20.Human Healthcare and Nutrition AETL provides proprietary enzyme products and customized enzyme solutions to various pharmaceutical and nutraceutical companies in India, North America, Asia (ex-India), Europe, and other countries globally. These products include various anti-inflammatory solutions, digestion solutions, probiotics, etc. which are used by customers as active ingredients.

Industrial Processing

The industrial enzymes segment contributed 13% i.e 56 crores towards net revenues in FY20. As mentioned earlier, the segment has been divided into two sub-segments- food and non-food industrial processing. The food business consists of baking, dairy & cheese processing, fruits & vegetable processing, cereal extraction, brewing, grain processing, protein processing, and oils & fats processing.

R&D The biggest advantage for the company

One of The biggest challenges being faced by new companies looking to enter the enzyme industry is to offer continuous and differentiated solutions as per the client’s requirement that demand real-time R&D capability and flexibility in manufacturing.

Integrated R&D Facilities

Integrated player with presence across enzyme chain, geographies AET is an integrated company with a presence across the enzyme value chain, covering the entire range of activities from R&D, commercial-scale manufacturing, to the marketing of enzyme products and customized enzyme solutions.

In the last five years, the company has enhanced fermentation capacity from 360 cubic meter to ~510 cubic meters. AET intends to set trends in the R&D areas mainly for the formulation for new applications and will continue to significantly invest to build its portfolio in focus applications and industries.

*1 GRAS Dossier under evaluation with US FDA

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Twitter Handle: @shuchi_nahar