Denmark's Novozymes A/S , the world's leading industrial enzyme producer, is now in talks over a series of projects that will boost its presence in China's growing biochemical sector, a company executive said on Wednesday.

Michael Christiansen, president for Novozymes China, told a media briefing that the company was discussing projects with six or seven firms looking to produce value-added downstream products such as plastics and fibres from agricultural waste, a process encouraged in the country's 2011-2015 five-year plan.

What we have seen in the biochemical area is that we will have lots of projects. We have got three new projects this year, and next year I expect that would be increased to an additional six or seven, which are enabled under the incentives and aspirations of the new five-year plan, he said.

Further details about the projects will be announced in March, he said, adding that Novozymes was currently working to make the new technology fit with the new partners.

The company is already working with the Dacheng Group, the parent of Global Bio-chem, China's top corn processor, and Meihua Holdings Group, a major producer of food additives. Both use Novozymes' proprietary enzymes and technology to break down corn stover to produce sugar.

Beijing has restricted the use of corn for biofuel, citing concerns about food security and the need to guarantee supplies of animal feed. Industrial processors have instead been encouraged to expand through the use of agricultural waste.

But agricultural waste consists of cellulose, and the chemistry required to break apart its long starchy chains is complicated and requires the use of enzymes.

The Danish company has an exclusive enzyme sales contract with COFCO, China's top bioethanol producer. COFCO plans to expand its cellulosic ethanol output to 50,000 tonnes next year and double it further by 2013, said Christiansen.

Second generation biofuel from agricultural waste is not expected to become commercially viable until 2013, and COFCO has been trying to expand its biofuel output using alternative feedstocks such as cassava and sorghum, which are in short supply.

Li Bei, deputy head with COFCO's biochemical and bio-energy division, told reporters in May that China has the potential to produce 7-8 million tonnes of cellulosic ethanol by 2020, and COFCO aims to produce 45 percent of the total.

Expansion is being encouraged by Beijing, which may offer tax exemptions and subsidies as China aims to bring the share of renewable energy to 15 percent of total energy consumption by 2020, up from 8.3 percent in 2009, Li said.

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