View the live interview here: www.youtube.com/algaetec

Executive Chairman Roger Stroud was interviewed on Sky Business News about Algae.Tec, its share price performance since the listing, and plans for the future

Explain the product Algae.Tec is developing:We’ve been working for about 7 years, working with and growing micro algae, which is a unicellular plant. It is the smallest plant that can grow. It’s also a synthetic plant that needs light to grow, and it has the potential to grow fast.

How different are the algae you are working with and the algae that people see growing on our swimming pools? In many ways not a lot different; the ones growing on the pools, are green algae and are quite high in sugars, the ones we have selected to use are made up of about 50% oils, 30% sugars, and about %20 proteins. Proportions change depending on the algae. The vegetable oil can be converted to bio-diesel, the sugars can be converted to ethanol, the residual biomass can be pelletized as high protein and fed as animal feed or the biomass itself can be hydro cracked and turned into green jet fuel. There is a lot of utility in the plant.

Are there still trials going on around the world to formulate a type of green jet fuel that will work? As far as green Jet fuel’s concerned, it’s a reality, the science is there. What is the challenge is getting sufficient yields in growing the algae that on price terms can compete with the existing mineral sourced fuels. We are comfortable that we have a solution to that, which includes a 40ft sea container, we have appropriate mechanisms inside, and we have already completed a pilot study in the US, in Atlanta. But the external validation is what we raised the money for.

Where was the technology developed? My partner Earl Macconkey, and I have been involved in the bio-diesel industry for over 10 years. He was the head of the Dow Chemical division for 25 years, so he is steeped with chemical engineering. We met in 2003 in Boston, and realised a sustainable product for bio-fuel is very important.

Do you need a lot of space to produce algae as a fuel? No we don’t. That’s one of the advantages. We need our light collectors. But in terms of actual space required, in comparison to the pond method, we are on about a thousandth of a footprint. So its actually quite discreet and it doesn’t matter what type of land it’s developed on.

What has happened for Algae.Tec since its listing on the ASX? I am delighted to say that we listed on 24c and now we are on 28c. So we are holding our own very nicely. I guess one could say shareholders to date have a 25% gain on their investment. And at the moment we have 560 or so shareholders. And we are looking forward to significant fresh announcements as time goes by.

Back to the IPO, how much money did you raise and what exactly will these funds go towards? We raised $5.1 million and we are very happy with that sum. The funds will be applied as per the prospectus. The majority of the funds will be applied to developing the modules and allocating them to the demonstration facility down at the Minildra site just above Nowra. That process will take approximately 12 months to get the modules up and going and hopefully are getting pretty close to complete validation at that particular time. Coincidentally we will be complying to the appropriate authorities to get approval for a commercialised arrangement, in other words, a commercial plant of some 200-250 modules and that will include EPA approval, government approval and so on.

When will the test plant be finished? In terms of erection, the latter part of this year. It shouldn’t take too long to go through a validation process.

For those who may not be familiar, please explain the McConchie-Stroud system. The McConchie-Stroud system is an engineering solution to growing a plant, which is the micro algae. Historically speaking, most solutions being pursued at the moment are, what is called the open pond method, and the open pond method is more of an agricultural scientific solution as opposed to applied engineering. In our particular case we have developed a particular mechanism along with various other additions to create a very small footprint in which we can create the algae. In essence, what we’ve done is to, in all cases, it’s a photosynthetic solution, and so algae needs light. But what we have done is, as opposed to the pond method, which involved taking the system to the light, we’re bringing the light to our system. As a result, we’ve been able to reduce our footprint significantly.

As an advanced bio-fuels company, what are the main challenges what will be facing your business? As in any engineering solution, there are always a certain number of challenges, but as far as the future is concerned, it will not be as much a challenge as a technical procedure, which the engineers will need to develop as we go into large scale commercial. That’s probably the major issue, none of it’s rocket science and we don’t see any of it as insurmountable at all so really the word challenge is not as appropriate as developing a procedure which will always be improved upon, as any industrial process is as we go down the track. This is, as far as we’re concerned, the start of a long journey where we hope to produce many projects in many countries, but we’re in the baby step stage at this point. So the challenges will become often more corporate and procedural as we go down the track and will diminish in terms of any of the engineering issues.As far as the algae industry goes, there is quite a few aspirants in the US mainly the Pond Method. We don’t look at it as competition; we look at it as collaboration – in the sense that it’s good to have an industry to have a few participants in it.

Lastly, what is so compelling about algae as a bio-fuel as far as shareholders and potential shareholders are concerned? We’re at a very interesting stage as far as the world is concerned, in terms of energy. If you look at the oil price over the last decade, as a result of this huge increase in demand for that particular product, which is oil, we will continue to see pressures applied to supplying. It also allows alternative solutions to the pursuit of oil to be adopted and we are one of those alternatives. We think that growing algae is a very sustainable, environmentally friendly, environmentally responsible approach to a solution.

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