Arizona algae company invests $5M to expand omega-3 facility

| August 19, 2011

Algae Biosciences Inc. has big plans for its biobased business, and with $5 million the company will expand a Holbrook, Ariz., commercial facility to produce omega-3 fatty acid oils by the end of 2011. The Arizona-based company has enlisted MMI Construction out of Phoenix to manage and construct the plant expansion. “We are targeting the omega-3 markets, high protein powder markets and markets where our whole algae powder can be incorporated into other products,” said Andy Ayers, president and co-founder of Algae Biosciences. But the young algae company wasn’t always targeting those markets.

After Ayers began analyzing water samples in the late 1990s from the underground sea in northeastern Arizona known as the Coconino Aquifer, his first thoughts were to use the water to grow shrimp. But at that time, according to Ayers, the Chinese and the Taiwanese were already in the market, operating at costs too low to compete with. Ayers then turned his interest to algae and the omega-3 fish oil markets and the potential provided by the pure saline water of the aquifer. “The geographic location is key to the production of our products because of the 360 days per year of sunlight, moderate temperatures and mostly because of the pristine aquifer,” Ayers explained to Biorefining Magazine, “which, due to the lack of contaminants, allows us to produce ultrapure products.”

Ayers said the money for the expansion project will be used to purchase 1,500 bioreactors, build processing and production buildings and purchase equipment to process the algae into the final products and purify water for reuse. The goal for the company is by late 2012 to reach a monthly production capacity of 5,900 kilograms of whole algae powder, a number that would equal 1,060 kilograms of omega-3s and 4,250 kilograms of high-protein algae meal. By the end of 2013, the company believes those numbers will rise to 16,400 kilograms of whole algae powder equaling 4,000 kilograms of omega-3s, 11,000 kilograms of algae meal and 500 kilograms retained as whole algae powder.

According to the company, the aquifer, directly below the facility’s location, remains pure because the water is protected from outside pollution. The body of water measures roughly 40,000 square miles, and in the area of the facility an underground salt dome interacts with the aquifer to produce saline groundwater, according to the company. After extensive research, the company has narrowed down their search of algal strains to roughly 12. The research efforts at the company, however, have not been done alone. Two of the most highly regarded algae researchers at Arizona State University have been collaborating with the company to help develop a successful culture. Qiang Hu and Milton Sommerfeld, both at ASU, have helped to develop a bioreactor system that takes advantage of the aquifer. “We have agreements to cooperate with Dr. Hu and Sommerfeld at ASU to help solve problems in the algae culture industry,” Ayers said. “In addition, we contract with them and their lab to do some of our research in a more efficient and timely manner.”

The company has secured a patent, U.S. No. 6,986,323, for the exclusive aquaculture use of the aquifer, and after nine years in the making, Ayers said things can’t happen fast enough for the company as it continues to grow and begins entering its desired markets.