The long term, strategic partnership was announced this morning. The deal, with commercial crop producer Green Stream Farms, will triple Qualitas’s algae production capacity. The company already grows algae at an open pond facility in Imperial, TX and will continue to do so. But with this deal the company finally has cleared an important supply milestone, said Qualitas CEO Miguel Calatayud.
Leap in capacity
“Instead of scaling up step by step, we just passed a tipping point. With this deal we are now a real alternative to fish oil, to krill oil in the worldwide market,” Calatayud told NutraIngredients-USA.
Green Stream Farms is a team of experienced commercial crop managers, said Rebecca White, PhD, Qualitas’s vice president of algae production operations. The company took over an existing, large open pond facility in Columbus, NM that had previously been operated by a company called Sapphire Energy. It’s another chapter in the by-now familiar story of the promise of algae biofuels giving way to a more realistic goal of dietary ingredients and food ingredients coming from algae cultivation.
Familiarity with the facility played a role in this deal, too. White had previously worked for several years with Sapphire before coming on board with Qualitas two years ago. White had worked on the Columbus facility from the planning stage onward, and made the jump to Qualitas at a propitious time. Sapphire, as so many biofuels players had done before it, was stalling with the attempt to make a high-cost source competitive in a ruthlessly-commoditized fuels market. And Qualitas was looking for expert production help to put its farming operation back on track after its ponds suffered extensive damage in an extremely rare flooding event on the sere plains of West Texas.
Proven facility performance
White said the expertise of the Green Stream team combined with the proven performance of the Columbus facility means that Qualitas can now make a perfectly reliable promise of supply availability at a predictable cost.
“Part of the reason is the partnership with Green Stream is so exciting is that they are farmers. They share the mindset of producing the crop with consistency,” she said.
“When I worked on the farm with Sapphire we concentrated on gathering data on things like water usage, risk mitigation in terms of weather events, risk mitigation in terms of pest management. We developed expertise in things like modifying the water chemistry so that it is ideal for your crop and lost optimal for invaders. We were able to show a 50% increase in yield year over year,”White said.
Calatayud said the plan is to continue to develop the West Texas facility, but did say that having a second production site provides an important risk mitigation factor for future weather events. And White said it is a proof-of-concept for the company’s long-term plan to have a plug-and-play option for algae production that could be replicated at many sites.
Qualitas’s near term focus is its Almega-PL ingredient, a high-EPA oil that is produced by the company’s proprietary photosynthetic marine species of algae called Nannochloropsis oculata. The species yields an oil rich in EPA (with no DHA) that is bound to phospholipids and glycolipids, known together as polar lipids. These polar lipids have hydrophilic heads and hydrophobic tails, which reportedly enhance solubility, bioavailability and incorporation into tissues/membranes.
The company completed a successful NDI notification on the ingredient in June 2014. Qualitas notes that its NDI notification is valid only for Almega PL’s specific composition and manufacturing process. Other aspects of Qualitas Health’s intellectual property – including algae growth and extraction techniques and Almega PL’s composition – are patent-protected.
Future opportunities
While Almega-PL is the star of the show, White and Calatayud noted that the biomass left over from omega-3 oil extraction can be valuable in and of itself. The promise of a cost-effective protein ingredient from algae has been slow to materialize, but the long term trends are in its favor, they said.
“Omegas3 are only about 30% to 35% of the biomass. What’s left over is mostly protein with some fiber,”White said.
“Today we are laser-focused on omega-3s,” Calatayud said. “But the world’s population passed 7 billion in 2012, and at the same time we achieved the lowest poverty levels in history [as measured by worldwide malnourishment levels]. By 2050 we are projected to have 10 billion people, and if we want to continue that level of nutrition we are going to need alternative sources. We can’t make more arable land and we have limited fresh water, but we have an algae-based nutrition platform that makes use of brackish ground water and uses the sun for most of its energy.”