* On look-out for acquisitions to speed development
* Keeps long-term financial targets
* Aims to restore enzymes sales growth in H2
* Sees U.S. bioethanol production holding up
(Adds enzyme chief comments, more CEO and BioBusiness head comments, details; updates shares)
By John Acher
COPENHAGEN, Sept 8 (Reuters) - Danish enzymes producer Novozymes A/S aims to develop its BioBusiness into a segment with annual sales of 6 billion Danish crowns ($1.2 billion) in 2018, its chief executive said on Tuesday.
The biological products business, which includes microorganisms for industrial and agricultural applications and biopharmaceutical ingredients, had sales of 375 million crowns in the first half of 2009, roughly one tenth the size of Novozymes' enzymes business.
"The goal is six (billion), and when I look at the BioBusiness, I think they are on the way to get to 6 billion in 2018," Chief Executive Steen Riisgaard told analysts and reporters at a strategy briefing at group headquarters.
"This goal is surrounded by much more uncertainty than the enzymes business," he added. Novozymes is the world market leader in industrial enzymes.
Riisgaard said the group's long-term goal for organic sales growth of more than 10 percent annually was not dependent on the target for developing the BioBusiness division.
BioBusiness chief Thomas Videbaek said that if it was successful, the biological products business could be even bigger than 6 billion crowns.
Riisgaard said: "I think 6 (billion) is a very probable number and a good goal."
Videbaek said Novozymes would continue to look for bolt-on acquisitions in the biological products field and seek opportunities to grow in biopharmaceutical ingredients.
"We haven't defined a size of the acquisitions, but we will look at smaller acquisitions that will strengthen our platform."
Core areas for business development are biological products for industrial and household cleaning, wastewater treatment, agriculture and aquaculture, he said, adding that biopharma was another area with high growth potential.
ENZYMES PROSPECTS
The head of the group's enzymes division, Peder Holk Nielsen, reaffirmed the company's goal of restoring growth in enzymes sales in local currencies in the second half of 2009 after a first-half dip.
"The underlying machine is performing very well despite a lower top line than we anticipated," Nielsen said.
He also said Novozymes stood by its long-term goal for organic sales growth of more than 10 percent annually.
"Once the dust settles (in the world economy) we'll be back on a growth curve that will take us over the 10 percent target," he said.
The group's other long-term targets set last year are a return on invested capital (ROIC) of more than 20 percent and an operating profit margin of more than 20 percent.
Riisgaard said those targets remained valid.
Nielsen said that Novozymes' share of the $3 billion plus global enzymes market was 47 percent.
"We have grown faster than the market, two-thirds of the market growth in 2003-2008 is growth that Novozymes has brought into the market," he said.
Novozymes has pinned big its hopes on sales of enzymes to the biofuels industry, especially for "second-generation" biofuels based on farm waste, such as straw, instead of food crops.
Nielsen said Novozymes expected U.S. bioethanol production to hold up well in the second half of 2009, supported by the renewable fuel standard (RFS), which should lead to bioethanol production of 10.5 billion gallons this year.
"That could even be conservative," he said
Novozymes shares traded up 0.6 percent at 456.50 crowns at 1413 GMT, against a 0.2 percent fall in the Copenhagen bourse benchmark index. (Editing by Simon Jessop, David Holmes and Karen Foster) ($1=5.173 Danish Crown)