The algae company that was the first to expand to the food additive and cosmetic industry will now be the first to appear on a major stock exchange market.
The San Francisco-based biofuel/green chemistry company — Solazyme — wants to hold an IPO this quarter.
Solazyme, which produces algae through a fermentation process, filed for a $100 million initial public offering (IPO).
The company announced a joint agreement with The Dow Chemical Company on the New York Stock Exchange.
But why does algae matter?
Algae can produce more oil per acre than any other biomass in the world, creating 4,000 to 8,000 gallons of oil per acre per year.
The algae oil can be converted to use for not only biofuel production, but as a replacement for fossil petroleum and plant oils used in a range of products from cleaner fuels to food to skin care products.
In its S1 report, Solazyme proposed to target all three markets: fuels and chemicals, nutrition, and skin and personal care. With the company developing innovative products in all three spheres, it will use the $100 million to develop manufacturing capacity in each market.
Oil is essential to our lives. We use oil for everything from transportation fuels to chemical-based products to food and personal care products.
Our reliance on oil is not ending any time soon, and with petroleum exceeding $100 a barrel we are becoming desperate for oil alternatives.
Solazyme offers a solution. Although other algae companies offer an oil alternative, Solazyme is special.
Not only is Solazyme the first to target the different markets associated with oil and bioproducts and the first to go public, it is different from other algae companies in that it does not grow algae through the process of photosynthesis.
Solazyme uses a process that modifies algae to feed on sugar in large fermenting kettles. Once the algae get fat, Solazyme squishes them to extract the oil.
Using their sugar-based process, Solazyme is able to produce more algae fuel at a cheaper cost than competitors because it does not have to yield the expensive cost of removing oil from water like the photosynthesis companies.
Thus, Solazyme combines the most cost-effective oil-producing organism, algae, with the most cost-effective extraction, sugar fermentation.
This company has the potential to become the global market leader in the design and production of renewable oils and bioproducts.
Of course, other algae companies will follow Solazyme’s lead in becoming public but, like I said, Solazyme is special.
Just check out Solazyme’s website, it won Biofuel Company of the Year in 2010.
Until next time,