BUENOS AIRES - Argentina's Secretary of Agriculture, Livestock and Fisheries of the Ministry of Economy has granted IFF (NYSE: IFF) approval to commercialize genetically modified (GM) yeasts designed to improve corn ethanol production efficiency. The SYNERXIA® yeast range is said to enhance corn conversion rates into bioethanol by up to three percent.
The introduction of SYNERXIA® yeasts into the Argentine market follows their successful application in the United States and Brazil. Argentina's corn ethanol output is expected to reach nearly 700 million liters in 2023, accounting for over 60 percent of its national bioethanol production. This new development could significantly contribute to the growth of the industry within the country.
IFF's yeasts, developed through hybridization and genetic improvement, are engineered to reduce glycerol formation and optimize ethanol conversion, maintaining effectiveness throughout the fermentation process. These yeasts also show resilience against the yield losses typically caused by high temperatures, a common issue in industrial fermentation.
Sebastián Dicundo of IFF highlighted the benefits of the yeasts in terms of productivity gains and cost reductions, which can lead to improved yields and profits, especially when scaled up in production. He also mentioned the potential for these yeasts to perform efficiently under extreme heat conditions, which could otherwise decrease industrial yield.
The GM yeasts are part of IFF's XCELIS® Ethanol Solutions platform and are certified by various regulatory bodies, including Argentina's National Advisory Commission on Agricultural Biotechnology (CONABIA). Additionally, the National Service for Agrifood Health and Quality (SENASA) in Argentina has confirmed that the by-product from ethanol production using these yeasts is safe for animal nutrition.
Deia Vilela, director at IFF, expressed that the approval of GM yeasts for bioethanol production marks a significant advancement for the industry in Argentina and aligns with the company's commitment to Latin America's development. IFF's presence in the region is further strengthened by their enzyme production facility in Arroyito, Córdoba, which supplies a range of enzymes to various industries across Latin America.
This announcement is based on a press release statement from IFF.
InvestingPro Insights
As IFF (NYSE: IFF) gains approval in Argentina to commercialize its innovative genetically modified yeasts, the company's financial health and market performance come into focus. With a significant milestone achieved in the bioethanol sector, investors may be curious about the company's current valuation and future prospects.
InvestingPro data shows that IFF's market capitalization stands at $19.0 billion, reflecting its substantial presence in the industry. Despite facing revenue declines in the last twelve months as of Q4 2023, with a -7.73% change, the company maintains a solid gross profit margin of 32.07%. This indicates IFF's ability to retain a significant portion of its sales as gross profit, which could be a positive sign for investors looking at the company's core financials.
The dividend yield for IFF is currently at 2.15%, which is a compelling figure for income-focused investors. This is supported by one of the InvestingPro Tips highlighting that IFF has raised its dividend for 21 consecutive years, demonstrating a strong commitment to returning value to shareholders. Furthermore, the company has maintained dividend payments for an impressive 54 consecutive years, providing a sense of reliability and stability in its income distribution.
While the P/E ratio for the last twelve months as of Q4 2023 is notably negative at -99.45, indicating the market has been valuing the company's earnings quite pessimistically, analysts predict that IFF will be profitable this year. This forward-looking sentiment aligns with the company's strategic moves, such as the recent approval in Argentina, which could pave the way for future growth.
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