economics of nutraceuticals algae plant nowra

Just a post on where the income stream is coming from in the short to medium term.

This is from an article in http://www.algaeindustrymagazine.com/ and from the ann of 17 December 2013 announcing the validation of the growth system.

To speed up the path to profitability, Algae.Tec has identified the nutraceuticals market to be worth an estimated $205 billion by 2017 (according to market forecasters, Transparency Market Research) as a significant opportunity that offers:

- Relatively low capital establishment costs
- Potential for high gross margins on revenue
- Significant and growing market in Asia in particular

Algae.Tec has teamed with Nutrition Care, a manufacturer and marketer of high value nutraceuticals for many of the best known nutraceutical brands in Australia and internationally, with a focus on Asian markets in particular.

Initial efforts for the companies will focus on Chlorella, which they agree is an increasingly attractive high protein, nutritional food source, and is highly sought after in Asia; and B-Carotene, which is in demand as a nutritional supplement for vision, immunity and overall health.

Here's the interesting bit:

Wholesale prices for the Chlorella and B-Carotene are currently $16,000 and up to $90,000 per ton, respectively, according to Algae.TEC. A healthy gross margin on revenue is anticipated as capital costs are expected to be in the vicinity of $7,000 per ton.

Production of Chlorella, and B-Carotene, is expected by the companies to be 2,000 tons in 2014, 4,000 tons in 2015, 8,000 tons in 2016, and 10,000 tons by 2017.

Ok, so even focussing on the lower end, the cheaper Chlorella, that's 2,000 tons at with a profit of $10,000 per ton.

$20 million income for 2014, double that for 2015.

The more profitable B-Carotene marketed at $90,000 per ton has the same costs of $7,000 per ton...you do the figures I've assumed 100% at the lower end, but there will have to be some production of the higher B-Carotene.

The capability of the system to be scaled up of into industrial production has been proven with the certification by SESL of the growth system.

This is not a company that announces every small step and it has indeed been quiet, but I'd assume they are getting on with the job of building the new dedicated algae production facility at Nowra.

They signed a long term lease at the Nowra site to enable the rapid firing up of large scale production.