Eco Innovator November 2011
Algae Can Help Declining
Along with its potential for
clean energy, algae can also help solve the problem of overfishing and
declining ocean fish stocks.
Brisbane company Qponics Ltd
plans to grow algae to sell into the high-growth, billion-dollar, global
omega-3 oils market. The company is developing what it says is a unique
production system for quality DHA (Docosahexaenoic acid) and EPA (Eicosapentaenoic
acid) omega-3 oils.
The company plans to build
its first operational plant in the Camden area 60 kilometres south west
of Sydney. This will integrate the cultivation of algae into a sustainable
Qponics says the global DHA/
EPA omega-3 oil market is presently $2.5 billion. It exceeds 85,000 tonnes
and is growing at 14 per cent. This growth has been assisted with products
incorporating omega-3 emerging as strong players in the functional foods
But more than 95 per cent of this market consists of fish oil.
"There is rapidly increasing
demand globally for DHA/ EPA omega-3 oils. Deep-sea fish are presently
the most common source but their numbers are in global decline, and most
vegetarians around the world do not consume fish or fish oil. These factors
signaled a major market opportunity for omega-3 oils produced from algae,"
says Qponics' chief executive, Dr Graeme Barnett.
"Because we will continuously
farm the oil-producing algae, which are single-celled photosynthetic plants,
there are no issues about sustainability and our omega-3 oil will be vegetarian-friendly."
"Our aim is to sell ethically
produced DHA/ EPA omega-3 oils to a wider segment of the global market,
which will present a more viable option both to companies that use omega-3
in their products and to end-consumers of products who are looking for
quality, healthy alternatives to fish-based products."
While DHA and EPA Omega-3 oils
are essential in healthy brain development, the company cites studies
in Western countries that indicate most adults and over 70 per cent of
children may be deficient in these oils.
Qponics recently formed a three
year research partnership with UniQuest, the research commercialization
arm of The University of Queensland. Dr Barnett said the research contract
will help select the best strains of algae and provide a significant boost
to the company's market entry.
"Utilizing the excellent
resources available at the University has been a strategic decision by
Qponics to accelerate the development of our DHA/ EPA omega-3 oil products."
Associate professor Peer Schenk
from UQ's School of Agriculture and Food Science says the joint research
will help provide a product with major health benefits.
"Consumer demand is increasing
for omega-3 oils rich in DHA and EPA as a nutritional supplement to prevent
various neurological, cardiovascular and degenerative diseases,"
"My team is working with
Qponics to develop a renewable source of organic omega-3 fatty acids,
particularly for vegetarians, infants and pregnant women, as an alternative
to traditional plant and fishbased sources, like flaxseed and Atlantic
"Our research involves
collecting Australian algae strains from various freshwater environments
and examining conditions for growth optimization with a selection of potentially
high quality oils.
"It's an excellent opportunity
for the University to work with emerging industries on developing a quality
product that aims to make a positive difference to the health of consumers."
Qponics was founded as a private
company in 2009 and operates from the Start Innovation Centre at the Brisbane
Technology Park. In January 2011 it became a public unlisted company,
and it recently gained admission to the Australian Small Scale Offerings
Board (ASSOB), from where it aims to raise capital to fulfil its business
Qponics anticipates its facility
will have capacity to produce up to 200 metric tonnes of algal oil per
year. The current average global wholesale price of algae omega-3 oil
ranges between US$80-US$170 per kg. On these figures gross revenue could
be up to between $16-37 million.
The company hopes to commence
oil production in 2013-14. It is raising $5 million for project costs
including a strategic partnership agreement with Urban Ecological Systems
Australia, the trial and purchase of algae photo-bioreactors, extending
its intellectual property and obtaining organic certification, sales and
marketing, and working capital.
The offer is for sophisticated
investors, and Dr Barnett said capital raising begun slowly. But it has
now sold parcels for around $100,000 and has other investors in the pipeline
and it recently extended its closing date.
Qponics says its philosophy
is centred on the concept of ethical, organic and sustainable production
from algae of high quality omega-3 oils in urban and semi-rural settings
to ensure proximity to markets and distribution channels.
Its aims to operate algal photo-bioreactors
integrated into an ecologically balanced aquaculture-horticulture system
to ensure that operations eliminate environmental pollution and minimize
carbon emissions and water consumption.
At a future time it intends
to apply for certification to use the term "organic" for its
algae oil products.
Qponics is one of three companies
that will be pitching at an ASSOB Pitch Breakfast in Sydney on 10 November.
The company is being assisted in its capital raising by BlueMount Capital.