News arrived from Thailand that the Thai Union Feedmill Co., Ltd. will conduct a large-scale shrimp feeding trial using feed formulated with high-protein algae meal derived from Cellana\u2019s EPA Omega-3-enriched algae biomass.\u00a0\u00a0 The Union Feedmill is a top producer and distributor of aquatic animal feeds for both domestic and international markets.<\/p>\n
It may have surprised some industry observers after news broke last week that Cyanotech is purchasing Cellana\u2019s six-acre production and research facility known as the Kona Demonstration Facility.<\/p>\n
Let\u2019s look into that.<\/p>\n
First \u2014 no, Cellana is not going away, despite the numerous pivots and challenges we\u2019ve seen in the algae sector. Now that Cellana has its production strain and offtake partners, it\u2019s time to build a plant and husband the limited equity available to the algae industry at the present time towards the construction of the same.<\/p>\n
As Cellana CEO Martin Sabarsky explained to The Digest, \u201cOperating a science facility for $2 million per year or so is something that you would do more to support the industry\u2019s R&D needs rather than directly to support the commercialization of Cellana at this stage. From a Cellana point of view, it is time to fully transition from an R&D company to a commercial company and the capital that we bring in from this point forward will be fully dedicated to our 54-acre commercial-scale facility.\u201d<\/p>\n
What\u2019s worth focusing on, here?
\nWhat\u2019s interesting about Cellana at this stage is that \u2014 aside from the commercial progress towards commercialization that we have elsewhere profiled and recapped below, we have a technology with two high-value products in the EPA oils and in algae-based ink. The algae ventures we\u2019ve seen to date typically have one high-value product paired with one or more bulk products such as protein or fuels. And the volumes coming out of this project \u2014 700-800 tons \u2014 are not likely to disturb the high-values available at the moment for inks and EPA oils.<\/p>\n
More about ink here and EPA oil here.<\/p>\n
The Multi-Slide Guide<\/p>\n
You can see the Cellana story in depth in our Multi-Slide Guide, here.<\/p>\n
The Cellana commercialization backstory
\nBased on a new commercial agreement with POS Bio-Sciences, and the company\u2019s relationships with commercial partners Living Ink Technologies and Neste, in May 2018, Cellana signed a term sheet for $27 million of debt-based project financing with an undisclosed project financing partner for a proposed 54-acre commercial algae facility to be located adjacent to KDF.<\/p>\n
More about POS? In April 2018, based on the successful testing and validation of samples of KA32 provided to POS Bio-Sciences compared to other sources of EPA Omega-3 oils, Cellana announced the execution of a letter of intent with POS Bio-Sciences for the joint commercialization of high-value EPA Omega-3 oils from Cellana\u2019s algae biomass. Cellana and POS Bio-Sciences are currently negotiating a definitive, nonexclusive off-take agreement for EPA Omega-3 oils derived from Cellana\u2019s proprietary algae strain KA32.<\/p>\n
The 54-acre commercial algae facility is expected to produce 700 to 800 metric tons of KA32 algae (on a dry weight basis) annually with estimated pre-tax cash margins of over 50%, based on the yield, price, and cost estimates provided to the project financing partner. The project financing partner has also indicated the availability of more than $100 million of additional debt-based project financing for subsequent commercial facilities, based on the success of the proposed 54-acre commercial algae facility.<\/p>\n
Cellana\u2019s KA32 strain and ALDUO system
\nIn late 2016, based in part on the yields demonstrated by Cellana and other grant consortium partners such as Arizona State University as part of the Algae Testbed Public-Private Partnership, Cellana\u2019s proprietary algae strain KA32 was selected by the U.S. Department of Energy as part of the DOE\u2019s \u201cState of Technology\u201d definition for the photosynthetic algae biomass sector. KA32 is a strain of the genus Nannochloropsis enriched with high-value EPA Omega-3 oils, and the algae meal remaining after extraction of EPA Omega-3 oils has been successfully demonstrated in large-scale animal feed trials and in commercial algae-based ink products sold by Cellana\u2019s partner Living Ink Technologies.<\/p>\n
Based on Cellana\u2019s ALDUO process involving proprietary saltwater strains of non-GMO algae, production on non-arable land, and demonstrated ability to use CO2 captured from waste emissions, Cellana\u2019s ReNew Feed algae meal has one of the lowest combined carbon, fresh water, and arable land footprints of any protein source in the world.<\/p>\n
The Thai Union Feedmill backstory
\nCellana has supplied Thai Union Feedmill with industrial-scale quantities of its ReNew Feed algae meal from its Kona Demonstration Facility, and Thai Union Feedmill will formulate the algae meal along with other conventional shrimp feed ingredients for a large-scale shrimp feeding trial.<\/p>\n
Algal Solutions, LLC will assist Thai Union Feedmill and Cellana in the analysis of the algae meal characteristics and the techno-economics of multi-product, commercial-scale algae biomass facilities in Thailand.<\/p>\n
In a paper submitted to the online open-access Nature journal, Scientific Reports, entitled \u201cMarine microalgae improves sustainability of global fisheries and aquaculture,\u201d collaborators from Thai Union Feedmill and Algal Solutions describe a method for saving up to 30% of the world\u2019s fish catch by producing fishmeal and fish oil replacements from microalgae \u2013 the natural source of proteins and oils in the marine food web.\u00a0 This revolutionary technology is commercially viable.<\/p>\n
In Thailand alone, which now makes 10% of the world\u2019s unsustainable supply of fishmeal and fish oil, growing marine microalgae on just 1.5% of the land now used to grow oil palms could yield USD 650 million in annual net income on sales of USD 1 billion.\u00a0 Applied globally, the effect of sustainable microalgae production could alleviate up to 30% of fishing pressure \u2013 which would contribute enormously to restoring marine ecosystems.<\/p>\n
As the global shrimp aquaculture industry continues to grow annually at a rate of over 4%, the demand for sustainable feed ingredients from microalgae is expected to rise in the future.<\/p>\n
Financial terms were not disclosed.<\/p>\n
The Kona Demonstration Facility backstory
\nAs we reported earlier this month,Cellana announced that its wholly-owned subsidiary Cellana LLC has signed an Asset Purchase Agreement with Cyanotech Corporation for the sale of Cellana\u2019s six- acre production and research facility known as the Kona Demonstration Facility (KDF). KDF is located adjacent to Cyanotech\u2019s existing 90-acre site at the Natural Energy Laboratory of Hawaii Authority (NELHA). The acquisition includes all existing equipment and other assets necessary to operate the facility.<\/p>\n
KDF is located adjacent to Cyanotech\u2019s existing 90-acre site at the Natural Energy Laboratory of Hawaii Authority (NELHA). The acquisition includes all existing equipment and other assets necessary to operate the facility.<\/p>\n
Over the past seven years, Cellana has directed over $30 million of investment, collaborative funding, and grant funding into developing and validating its ReNew Algae platform of high-value, non-GMO algae strains rich in Omega-3 nutritional oils, proteins, pigments, polysaccharides, and fuel-grade oils.<\/p>\n
During this time, Cellana produced over 10,000 kilograms of ReNew Algae at KDF in Hawaii for processing and testing of multiple high-value and high-volume biomass components, including multi-ton quantities of its leading commercial algae strain KA32.<\/p>\n
What does it all mean?\u00a0It means that Cellana has burned its boats, so to speak, in terms of continuing as a R&D entityt. Schools out, time for the commercial scale facility. Having worked up a strain, the ALDUO system and the debt \u2014 what remains is the equity component. That\u2019s where those two high-value \u2014 and de-risking \u2014 products come in. Will Cellana climb the mountain? Everyone hopes so, and we don\u2019t have to wait long to find out, now.<\/p>\n
Reaction from Cellana
\nMr. Rittirong Boonmechote, President of Thai Union Feedmill, stated, \u201cThai Union Feedmill is always in search for advanced technologies that can help improve the sustainability of marine ecosystems.\u00a0 We would like to be the leader of change by developing new algae biomass that could potentially be a fishmeal replacement as well as an agent to enhance our aquatic feed products.\u00a0 With a successful result of the first trial with Cellana\u2019s algae meal, we are excited to move forward into the second trial to evaluate the viability of commercial-scale production.\u201d<\/p>\n
Martin Sabarsky, Chief Executive Officer of Cellana, said, \u201cWe look forward to the results from this second shrimp feeding trial with Thai Union Feedmill, which builds on the success of an earlier trial with Cellana\u2019s algae meal.\u00a0 The current trial involves even larger amounts of Cellana\u2019s algae meal as well as a commercial-scale feed formulation process, and the results will inform our ongoing evaluation of the opportunities for commercial-scale deployment of multi-product algae biomass facilities in Thailand in cooperation with Thai Union Feedmill.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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