Ready to enter commercial phase says Algae.Tec CEO on recent news
Algae.Tec Ltd. has made several important announcements over the past month. On Jan. 11 the company announced plans to nearly quadruple capacity at its algae development and manufacturing facility in Atlanta. A week later on Jan. 18, Algae.Tec announced it had signed a binding Memorandum of Understanding with Shandong Kerui Group Holding Ltd. to form a 50/50 joint venture in China for a commercial-scale algae production project. In addition, the company also announced a $5 million capital raising event with Patersons Securities Ltd.
According to Algae.Tec CEO Peter Hatfull, the cumulative impact of these announcements means that his company is making the transition from a development-stage company to a commercial entity. “We’ve reached a completely new level,” he told Biorefining Magazine. “We are getting external validation of our technology and building commercial plants. It means that within two to two-and-a-half years we will have significant revenue coming in, and that, of course, is the basis for share price increases,” he said. “This is a game changer for Algae.Tec.”
Hatfull specifies that the $5 million being raised through Patersons Securities will be used for two purposes. First, it will be used to fulfill obligations Algae.Tec has made under partnerships with Lufthansa and the Sri Lanka subsidiary of Holcim. While the demonstration-scale project under development at the Holcim cement plant will eventually scale-up to commercial levels, it will initially feature a demonstration operation utilizing five of Algae.Tec’s algae production modules.
The capital will also be used to upgrade the Atlanta manufacturing center. “We will improve both our research and development [operations] there, and our production manufacturing capacity,” Hatfull said. Larger production capacity will be needed to fulfill the needs of the Chinese joint venture, which will require 250 algae production modules.
The joint venture project in China is expected to be fully operational within 12 to 18 months, Hatfull said. While the Atlanta facility will manufacture algae production modules for the project, Hatfull also noted that the actual cost of the China project will be subject to a separate capital raising event. He estimates that his company will need to raise approximately $20 million to finance its half of the project. According to Hatfull, he sees an enormous potential in the Chinese marketplace for algae biofuel technologies, and fully expects Algae.Tec to license its technology to other Chinese carbon dioxide producers in the future.