Eco Investor June 2017

Pre-Revenue Securities

New Market and Products for Algae.Tec

Algae.Tec has entered the medical marihuana market, and launched a range of new algae products for the aquaculture and animal feed markets.

Algae.Tec has entered into a Collaboration and Licence Term Sheet with Jardin De Invierno SA (JDL) to expand its product into the growing medicinal marijuana market. JDL is a biosciences company that produces cannabis extracts, derivatives and intellectual property. It has modern research and development and production facilities in Uruguay and is the only company licensed to cultivate and export Cannabis Sativa L Specie for human and agricultural applications.

Algae.Tec's technologies can optimize controlled growing environments for high value natural products. For medical cannabis, it can significantly increase yield while reducing costs. Algae.Tec's proprietary LED lighting technology can reduce the cost of production power by over 60 per cent compared to traditional methods. Combined with growing and yield efficiencies, the technologies can significantly improve revenue and position the company as a global market leader in controlled cannabis production, said Algae.Tec.

The agreement is conditional on any regulatory or shareholder approvals that may be needed and a capital raising of no less than US$4 million.

The annual medical cannabis and related markets were worth over US$6 billion in 2016 are expected to reach US$21 billion in 2021.

JDL's president, Julian Strauss said "Companies from around the world are coming to Uruguay looking for access to unfettered and legal cannabinoid research and development. Only JDL can provide this collaborative service as the only totally unfettered federally licensed research company in the world. This agreement further validates our business strategy and our standing as the premier cannabinoid research and development company in the world."

Algae.Tec's managing director, Peter Hatfull said this is the first of many opportunities to utilize Algae.Tec's controlled environment technologies. "This collaboration will demonstrate that the innovations achieved to date can be used to enhance the growth and yield potential for a range of agricultural products."

Elsewhere, Algae.Tec has launched the FeedMe algae product line for the aquaculture and animal feed markets. This is part of its planned expansion into a range of high value product lines.

The company has developed quality algae-based liquid and powder products with what it says is the optimum balance of essential amino acids, omega-3 fatty acids, vitamins and minerals for the human nutriceutical, aquaculture and animal feed markets.

The FeedMe products were launched in April with first sales through its website, www.feedmealgae.com, and to downstream product formulators and distributors. However, no indication of the value of orders or sales has been given so far.

Algae.Tec said the 2017 aquafeed market is valued at over US$100 billion and reportedly growing at 12 per cent per year. The global animal feed market is valued at $25 billion and is growing at 6 per cent annually. Within these markets there has been a sharp increase in demand for natural and sustainable food supplements that contain essential proteins, omega-3 fatty acids, vitamins and minerals.

Mr Hatfull said "This product line adds to the diversity of the Algae Tec brand and it demonstrates our extensive knowledge of algae species and our ability to expand our current markets of nutraceutical oils, bio fuel, aquaculture and animal feeds through the company's innovative proprietary technology for the sustainable growth of algae. This is in addition to the ability to adapt and licence the technology for other agricultural uses, such as in the recently announced move into the medical marijuana industry."

Developing algae for use as sustainable bio fuels and sequestration of CO2 emissions remains a main part of the company's focus. He said this is developing well with a team currently in India at the Reliance Industries site.

The work led to the development of proprietary technology applicable to the cultivation of alternative algae species for other markets where high value food supplements are in demand, as in the nutraceutical industry, where the company continues to work with Gencor to cultivate the highest return products, he said. (ASX: AEB)

 

 

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