£15m bid for loss-making algae producer TerraVia
The American-owned company that produces algae used to boost omega-3 content in some of BioMar’s salmon feed appears destined for a change of ownership after filing for bankruptcy protection in the United States.
Dutch ingredients supplier Corbion has already submitted a $20 million (£15.2m) “stalking horse” bid — which establishes a low offer — to buy TerraVia, which produces AlgaPrime – a long chain omega-3 rich microalgae ? in association with Bunge in Brazil.
In September last year Nick Bradbury, Biomar Scotland’s Commercial Manager, told fishfarmingexpert.com: “There’s been a lot of interest from Scottish producers, two are already using it in their feeds, and there has been a lot of interest from UK supermarkets too.”
Sugar cane
Kvarøy – which is using the feed for salmon that goes to Wholefoods – and Lerøy are among Norwegian customers for the AlgaPrime-enhanced product.
The algae are grown in Brazil using sugar cane as the key feed ingredient, and there is great potential to increase production.
TerraVia has operated unprofitably for nearly 15 years, and reported a net loss of $22.6 million on revenues of $4.5 million in the first quarter of 2017.
Service customer demand
In a press release this week, TerraVia said it had received a commitment for “debtor-in-possession (DIP) financing”, which it said would provide the necessary financing to support continued operations and its ability to service customer demand, “while the Section 363 bankruptcy restructuring process provides the tools to execute an expedited and orderly strategic transaction. This process will create a level playing field for all interested bidders to compete to provide the highest or otherwise best offer for certain or all of TerraVia's assets”.
In March TerraVia, Bunge Limited and BioMar announced the expansion of their distribution agreement for AlgaPrime DHA, making the product commercially available at scale to salmon farmers and other participants in the aquaculture industry.
A joint press release issued at the time said AlgaPrime DHA, developed to reduce dependency on marine fisheries and enhance the nutritional value of seafood, is expected to be a key feed ingredient in the future of aquaculture.
Development of salmon products
"We believe AlgaPrime DHA will be a significant contributor to the further development of salmon products with a desirable nutritional profile. We take pride in driving the sustainability agenda of the industry and are pleased to be the first feed producer to bring this new feed ingredient to our customers while ensuring economies of scale," said Jan Sverre Røsstad, Vice President and Head of Salmon Division at BioMar Group.
BioMar said today it had no comment to add to this week’s announcement from TerraVia.
Netherlands-based Corbion specialises in lactic acid and its derivatives, as well as creating functional blends containing enzymes, emulsifiers, minerals and vitamins. It supplies ingredients to virtually every food category. It stated: “The acquisition of TerraVia's microalgae platform would extend Corbion's product portfolio into algae-based fatty acids and proteins, while leveraging Corbion's extensive fermentation and downstream processing capabilities.”
