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Symphony Environmental secures agreement with French bioplastics firm

Published: 16:34 01 May 2018 AEST

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Under the agreement, Symphony will initially hold an 8% stake in Eranova

Symphony Environmental Technologies plc (LON:SYM) has signed a collaboration and strategic investment agreement with French company Eranova SAS.

The AIM-listed biodegradable plastics maker said Eranova has developed a technology which extracts starch from algae for use with other materials. The starch can be combined with other polymers to produce compostable and biodegradable resin.

READ: UK Plastics Pact aims to eradicate unnecessary single-use plastics by 2025

These can be used to manufacture a wide range of products, with the technology potentially able to produce biofuel, biopolymers, proteins for food and animal feed as well as by-products for pharmaceutical and cosmetic industries.

One of the key aspects of the technology, the company said, is that it will be possible to manufacture from natural raw materials without the need to use arable land and fresh-water resources normally used for growing crops.

The company said the agreement includes an initial subscription of €500,122 for an 8% holding in Eranova once it is fully funded to begin pre-industrial development, with an option to increase the holding to 51% in one or more tranches at any time within three years of the initial investment.

Symphony added that Eranova required about €4.7mln in funds for pre-industrial development, of which the group's initial subscription was part, in addition to €1.03mln in funding from the French Environmental & Energy Management Agency (ADEME).

The firm also said that Eranova was receiving funds from the French region of Provence Alpes Cote d’Azur together with private investment and soft loans.

READ: Symphony Environmental's deputy chairman hopes UK government will make biodegradable plastic compulsory

Pre-industrial development is expected to start in the second half of 2018 and will consist of constructing long seawater tanks, called "raceways", where Eranova will optimise cultivation of algae for production.

The raceways constructed during this phase will represent 1/50th of a full commercial facility, with the phase also involving the conversion of the starch into bioplastic compounds.

The group added that Eranova has signed an agreement to begin installation of the pre-industrial development with the Grand Port de Marseille, with TOTAL TDR, a division of petrochemical giant TOTAL, supporting certain employment costs due to the innovative nature of the technology.

Aside from the investment, Symphony said that under the agreement it also had the right to purchase 75% of Eranova’s compound made in the Middle East and North Africa, for sale as either raw compound or manufactured finished products within the Middle East region exclusively, and globally on a non-exclusive basis excluding 13 countries in which Eranova has exclusivity.

Michael Laurier, Symphony chief executive, said: "This investment and collaboration agreement adds another key environmental technology to Symphony's range of smarter plastics, and gives the Group an exciting position in the bioplastics market which, according to a recent report by Zion Market Research, is growing at a rate of 12.5% per annum and will reach a value of $35.5bn by 2022.”

Philippe Lavoisier, chief executive of Eranova, added: "We are pleased to have Symphony as an investor in Eranova. Green algae are a major issue for the environment, and our technology will be used to collect and use this pollutant as a source to manufacture an odourless, colourless, compostable and biodegradable range of bioplastics without creating competition with food production.”

In mid-morning trading Tuesday, Symphony Environmental shares were down 0.6% at 24.7p.

--Adds shares price--

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