Algae producer Algae.Tec's share price is blooming after the company started producing algae for the nutraceuticals market.
Perth-based Algae.Tec has started production at a new facility at its manufacturing and development centre in Atlanta in the US that can grow up to 50 tonnes of algae per year for use in nutraceuticals.
Nutraceuticals are products derived from food sources - such as algae - which have nutritional and other health benefits and are generally sold in a medicinal form: for example, dietary supplements.
Algae.Tec says the global market for algae-based nutraceuticals is worth more than $250 million a year, and algae used in the nutraceuticals can sell from $US10,000 to more than $US100,000 per tonne.
The price of algae depends on the type of algae produced, its nutritional value, and the speed at which it grows.
Algae.Tec is in talks with a number of potential customers.
"Achieving this milestone is a fantastic step for the company as this plant validates our technology whilst potentially producing a substantial income stream," managing director Peter Hatfull said on Wednesday.
Algae.Tec is now seeking funds to increase the production capacity in Atlanta.
A full-size commercial plant could produce up to 10,000 tonnes of algae each year.
Mr Hatfull said the benefits of algae were well known, but producing it on a commercial scale had been a problem.
Most production of algae is in large, open ponds which makes it difficult to grow on a consistent basis and at consistent quality and cost.
But Algae.Tec grows algae indoors on a very large surface area covered by a very thin film of water. The algae is supplied with carbon dioxide, light and plant nutrients to create a continuous algal bloom.
Mr Hatfull said the biggest market for algae-based nutraceuticals will be Asia, especially China, where Chinese consumers use algae-based products to relieve gut problems.
Algae is used in health products, dietary supplements, face creams and food additives.
It is a source of omega-3 oil, beta-carotene, selenium, zinc, vitamin B-12, vitamin C and vitamin E.
There are about 300,000 known species of algae, all of which have different properties.
Algae.Tec is also developing technology for the production of algae-based biofuels, including biodiesel, jet fuel and ethanol.
The company - in conjunction with India's Reliance Group - hopes to commission a plant for biofuel evaluation in India in the first half of the 2016 calendar year.
Algae.Tec shares were 1.1 cents, or 28.21 per cent, higher at five cents at 1345 AEDT, after climbing as high as 6.5 cents.
