Algae.Tec opens U.S. modular container facility, launches ADR program
Advanced biofuels company Algae.Tec has taken a significant step towards developing a demonstration plant today with the opening of its U.S. Algae Development and Manufacturing Centre.
Emerging fuel supplier Algae.Tec (ASX: AEB, FRA: GZA) has opened its Algae Development and Manufacturing Centre in Atlanta, Georgia, where photo-bioreactors will be assembled for shipping around the world.
Algae.Tec is the world's first company looking to commercialise algae driven carbon capture and alternative energy production.
The company has also announced the appointment of the Bank of New York Mellon to commence the establishment of a level 1 American Depository Receipt (ADR) Program.
The ADR gives U.S. energy and cleantech investors access to shares in the fast growing company which is establishing facilities in Australia and Asia to develop its high yield enclosed algae growth and harvesting system.
Algae. Tec is focused on commercialising technology that produces algae at a very fast rate to manufacture sustainable fuels such as bio diesel and green jet fuel that can compete with traditional fuel products.
The company is also the first to market in employing patented technology in a modular system.
Algae. Tec is fitting out modular containers in the U.S. ready for shipment to Nowra in NSW where the company is planning to build a demonstration plant.
Algae.Tec listed on the ASX on January 21 and its shares are currently trading at $0.39, 95% higher than the $0.20 IPO price. Funds from the ASX IPO will be used to cover the costs of the plant.
On February 22 Algae. Tec was also accepted to list on the Frankfurt Stock Exchange (FWB), one of the world's largest cleantech investment centres.
This listing is significant because Germany is a leader in the "cleantech" sector with 16% of its energy needs being met by renewable sources, with the government targeting 30% by 2020.
Also, Deutsche Bourse, the operator of the Frankfurt Stock Exchange, has recently had a merger approved with the New York Stock Exchange that will create the world's largest exchange with the largest investor base.
The algae-to-energy process named the McConchie-Stroud system will be further developed at the plant just outside Sydney. The system is designed to cultivate algae virtually anywhere, including marginal land or industrialised areas.
The containers allow for algae growth deep within containers and, according to the firm, uses one-tenth of the land when the open-pond method for growing is used.
The energy source to grow the algae is solar, and every day the containers are rotated to maximize the amount of sun energy in any one day.
The company is focussed on building strategic partnerships to accelerate commercialisation and has agreements with a Hong Kong based Pacific Minerals Limited, Australian company RKD International Pty Ltd, and the Manindra Group.
Algae.Tec has also entered into an agreement with Leighton Contractors for the purpose of negotiating a long term construction and plant operation commitment with the company.
The construction for the demonstration facility should begin by the end of this year.
Algae.Tec produces vegetable oil and a biomass of simple sugars and edible protein. Current market prices for crude vegetable oil exceed US$1000 per tonne and US$400 per tonne for biomass.
Algae. Tec pilot plant studies show the McConchie-Stroud System is capable of delivering a total manufacturing cash cost of about $200 per metric ton, which is equivalent to less than $40 per barrel.
The company also expects exceptional dry algae crop productivity at 250 metric tons per container module and commercial projects of more than 1000 modules.
A standard plant consisting of 500 modules will produce 125,000 mta of dry algae and will capture over 250,000 mta of stackgas CO2 emissions.
A photobioreactor system for making bio oil from algae has demonstrated a yield of 32,000 gal/acre/year and $40/gal basic cost in pilot operation.
Huge supplies of waste CO2 are available at no cost from many commercial/industrial sources faced otherwise with the cost of disposing or sequestering CO2.
Also, in time CO2 credits could enter the picture with added benefit to operators of McConchie-Stroud algae to oil systems.
In fact, algae oil production may become a financially vital business for some operations now generating significant quantities of unwanted CO2.
A further capital raising may be required to move the company to a full commercial level.
In a move that will give credibility to the algae space, on March 11 Solazyme filed for a US$100 million initial public offering and will be one of the first companies using algae to list on a major stock exchange.
Solazyme will follow the lead of biofuel companies Gevo (NASDAQ: GEVO) and Amyris (NASDAQ: AMRS), which completed successful IPO's in recent months.
Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. will act as joint book-running managers for the offering with Pacific Crest Securities and Lazard Capital Markets as co-managers.
Algae. Tec's business model is supported by the Solazyme IPO as it shows that investors are willing to invest in companies that are looking for commercial applications of algae technology, and can see the potential high rewards of being front runners in the industry.
Unlike other algae-based biofuel companies, Solazyme does not grow algae with photosyntheses. Rather, they use a genetically modified strain that feeds on sugar in a fermentation process.
However, like Algae.Tec, Solazyme is also developing jet fuel. This is being done in collaboration with Australian airline Qantas.
