The economic turmoil unleashed by the coronavirus contagion compounded by the escalating war in Ukraine has culminated in an unprecedented disruption of global supply chains headlined by colossal shortages and skyrocketing prices of key raw materials and industrial ingredients.
A case in point is the surge in the cost of crude and palm kernel oils leading to the prices of detergents and edible oils shooting up. As such, industries are now grappling with the dilemma of either passing on rising input costs to consumers or optimising production processes to keep prices stable to retain customers.
Confronted with such a conundrum, most manufacturers will likely choose one of two options — either cut costs or raise prices.
Recent research by consultancy Inverto revealed that while 45 percent of the firms surveyed have been strongly affected by the disrupted supply of raw materials, 73 percent reported increased prices of key inputs, with 86 percent cited delay in supplies as major constraints emanating from Covid-19.
Incidentally, manufacturers have responded to the supply chain crisis in different ways with 75 percent passing on the rising costs to consumers compared to 62 percent that streamlined the raw material supply chain to prevent production expenses from going through the ceiling.
Unfortunately, in the prevailing economic uncertainty, transferring the higher cost of inputs to already over-burdened consumers is not sustainable at all. While it may partially offset eroded profit margins, consumers will resort to cheaper alternatives, as is already evident in the detergent market.
Cost optimisation offers a more sustainable pathway to defending profit margins, retaining brand users, and winning over new customers.
Therefore, the debate over the use of enzymes as a cost-effective natural substitute for chemical ingredients in many industrial processes is growing. For manufacturers, substituting biological enzymes for chemicals is a viable survival strategy. Why enzymes?
First, it is important to grasp the valuable role of enzymes in production. Enzymes are essentially biological molecules that act as catalysts for metabolic and biochemical reactions. They support chemical reactions.
The most effective producers of enzymes in nature are microbes, that is, single-celled organisms like fungi and bacteria, which are proven natural enzyme factories. There are many compelling benefits of using enzymes as a production cost management strategy.
The use of microbial enzymes comes with a guaranteed stable supply not to mention predictable prices in a fluctuating market.
Second, enzymes reduce the cost of production by reducing the consumption of water, energy, and raw materials. This leads to less depletion of natural resources used in the production of household and food products.
Third, enzymes are non-toxic. Therefore, safer for manufacturers, consumers and the environment. Enzymes are safe biological ingredients in manufacturing many products including detergents, textiles, and food. They also ensure the quality and stability of products.
In fact, modern brewing, baking, and detergent industries depend heavily on these natural compounds.
The use of microbial enzymes comes with a guaranteed stable supply not to mention predictable prices in a fluctuating market. Existing innovative technologies have facilitated large-scale production of bio-enzymes that are not only safe but readily available and easy to use.
Second, enzymes reduce cost of production by reducing consumption of water, energy, and raw materials. This leads to less depletion of natural resources used in production of household and food products.
For consumers, enzymes used in laundry detergents to help remove stains , keeping whites white and colors bright, and help care for the textiles/clothes they love while using less water and at lower temperatures, translating into lower water bills, longer-lasting fabric, and thus greater brand affinity.
Third, enzymes are non-toxic and therefore safer for manufacturers, consumers, and the environment. Enzymes are approved as safe biological ingredients in the manufacture of many products including detergents, textiles, and food. They also ensure quality and stability of products.
At Novozymes, the company I work for, we believe enzymes hold the key to unlocking immense business opportunities. We have the key to unlock the challenge of growth – for our customers who want to grow their business.
We unlock growth for others and for ourselves with the power of unparalleled biotech and help fulfill our purpose of creating better lives in a growing world.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
