HIGHLIGHTS: Ester Baiget - CEO of Novonesis

0:00Hi, everybody. Tune in to this short version of the podcast, which we do every Friday. For the long version, tune in on Wednesdays. hi everyone i'm nicolaj tangen the ceo of the norwegian sovereign wealth fund and today i'm here in real good company with esther bajet president and ceo of novo nesis which is one of my absolute favorite companies esther is leading the transformation to biosolutions and which basically replaces chemicals with nature-based alternatives and you'll have it in everything you eat bread to the stuff you use to clean your clothes. And basically, Novenesis is part of very many things in your life.

0:41We own two and a half percent of Novenesis, which is more than $700 million. And we are just super excited to have you here, Esther. Thank you very much. I'm delighted to be here, Nicolai. So let's just start with the basics. What do you do? What do we do in Nobonesis? I mean, you actually made a beautiful description of whom we are, Nicolai. We are the leading biosolutions company. We silently touch with our enzymes, with our microbes, more than 2 billion people every day, enabling a healthier life, enabling a healthier planet, enabling solutions that drive value for our customers, transforming the way that they produce and the foods that we eat.

1:23But I mean, biosolution, what is it exactly? And what is an enzyme? An enzyme is a protein that acts as a catalyst and makes things happen in life. You make enzymes, I make enzymes, exist in nature, they're developed by nature. What we do in NovoNesis is we bring them up to scale in a professional way. We help nature to be better. Through bioengineering, through very high advanced analytics, to strain more than 100 ,000 microbes in our libraries and scale up capabilities, we take solutions inspired by nature and we bring that to scale, enabling then value added for our customers. And how do you produce these things?

2:05Through fermentation. You've got like big tanks and you just ferment them? We have big tanks. We have really big tanks, but we also have tiny tanks. What is important is not only the fermentation, it's the finishing and bringing the right level of formatting for our customers. So anyone can ferment. You let bread in the bag and eventually it would mold. That's a fermentation. We ferment at the professional level. Now, NovoNesis is the merger of two companies, Christian Hansen and Novozymes. And I think it's kind of fun because those were two companies which I followed when I was an equity analyst.

2:42And I loved both companies. And now you are one. Now, why is Denmark so strong in this industry, you think? There is a culture and probably a heritage of fermentation embedded in the culture. I mean, actually, we just established a partnership with Noma, the restaurant, who grew through bringing fermentation and the art of fermentation and functionalization of fruit. And we have just created a partnership in that direction, showing the beauty of fermentation and how we can transform the world. So there is a driver of heritage and culture and fermentation. Then there is strong foundations that continue to reinvest and give back to the society.

3:27We're part of also, I mean, our main shareholder is also a foundation, the Novo Nordisk Foundation. And then there is an extraordinary network between universities, small enterprises, big biopharma companies that one fits the other and creates a hub of excellence of biotechnology and also competitiveness that continues to attract the very best talent in the world. So you and I, we met in Brussels at the EU Commission. How would you characterize the EU Commission work here? We're speaking the same language. I hear the language and I feel the understanding that we have an unnecessary level of regulation or the roadblocks.

4:23I'm missing speed. I'm missing speed on the change and on the effectiveness. But what you do, isn't it just like good, good, good? I mean, it's healthy. I mean, it's healthy. It's environmentally good. And profitable. Yeah, for you, of course, and for us. But why would they not just want to stuff your things into everything? And that not only speaks for Europe, it's for everywhere. It's not only good, good, good. It's good for the environment. If you would move to its full potential, only the solutions exist today. We would reduce the CO2 emissions of the planet 8%. No new solutions, only the ones that exist today.

5:04If we would continue and tap the potential of biosolutions as it is today, that will unleash 800 billion economic profit by 2025, 35. This is homegrown solutions. You don't need chips. You don't need import NAFTA. It's based on biomass. So it's local jobs, homegrown solutions that drive and bring value for your customers and fulfill the consumer needs. Why is it not happening faster? is exactly what we're bringing as loudly and hopefully constructively. Also, we see the pull. Some countries moving faster. As you said, the US is moving. China is moving boldly. India is moving. Europe is making the right noises.

5:50We need speed. And when you look at the map for your R &D development going forward, what are the type of solutions that you can see which we are not having now? So we're very pleased on where we are. And then we have solutions ready to bring carbon capture. We have solutions ready for make plastic recycling. We are very excited about the untapped potential of high-value specialized proteins that will bring different answers for the nutritional needs. High muscle weight recovery. Proteins that will boost the muscle weight. proteins that will be for special patient needs, that they have some troubles of digesting one protein and providing another one.

6:37We see really tremendous potential on helping biopharma, on how to boost productivity by making the right enzymes that we're not pharma, we're not pharma, but we can help pharma. Why is your employee engagement strong? I can tell you why I'm engaged and also maybe what I'm feeling about the organization. It is a seamless continuity between your personal values and what we do. We are enabling healthier lives and a healthier planet. And we're growing. It's also a joy to grow on being successful. And you do feel you're changing the world. You do feel you're in an inflection point. and but how do you so that all sounds great right but now I'm working in your I'm working in your factory I'm cleaning your tank between each batch right that's my job I put on my suit I'm cleaning the walls of the tank you know why do I think it's great I I would like to think that because you understand that what you do it's important and how do you make and how do you make me understand that we explain it and we think we say a lot of thank you because if you're not cleaning the tank right, that performance of that good, it's not going to be there and we won't be able to supply our customer with the right time, with the right delivery, and we're going to miss a big opportunity in the market.

8:06Do you think you say more thank you than other companies? I know I like saying thank you. Because it just struck me that perhaps we are not thanking our people enough. I enjoy. I like it. It's fulfilling saying thank you. How would people characterize your leadership style? You'll have to ask them. Definitely you'll have to ask them. I hope they would say I'm good making questions. I hope they would say it's fair and courageous.

8:47it's the heart to the couple what is your leadership top and also what is you as a person they go a little bit together I thrive in an environment where I surround myself for people who is better than me I love being challenged constructively but are you tough? define tough well if people don't perform to your standards what do you do? I am demanding yes because I think we deserve high standards. I think you deserve high standards. I think our customers deserve high standards. But also, we embrace failure. We are an R &D company. We are a science company. Of course we fail. That's R &D. Otherwise, it would not be innovation.

9:29It would be physics. We know that we're going to fail. But we just have to fail fast. We have to learn from those failures. And we have to move on.

9:43So, let's see.