Alltech acquires algae fermentation facility from Martek Bioscience
October 6, 2010
BY Bryan Sims
Nicholasville, Ky.-based global animal nutrition supplier Alltech Inc. acquired a state-of-the-art fermentation facility in Winchester, Ky., from Martek Bioscience Corp. The purchase price, worth $14 million, will be paid over four years and is expected to close by late November, according to Alltech.
The 23-acre site will be renamed Alltech Winchester and will represent a further increase of more than 1 million liters (about 264,000 gallons) of fermentation capacity for the company, and will become its fifth primary production site in North America and 10th globally, according to Alltech. Alltech intends to grow, cultivate and harvest certain algae strains for value-added feed products, algae-derived biofuel and the production of ethanol.
“For Alltech, algae fermentation presents our latest technological platform from which we expect incredible opportunities in the areas of food, feed and fuel to arise,” said Alltech founder and president, Pearse Lyons. “As with virtually all facilities we acquire, we expect to start an expansion phase in Winchester within the next 18 months.”
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Assets sold by Martek include a majority of the land and buildings at the Winchester site as well as certain equipment, including all of the production-scale fermentation and recovery equipment. According to Martek, the sale of its Winchester facility falls in line with its plans to restructure its Winchester manufacturing facilities in an effort to streamline operations, improve capacity utilization and reduce manufacturing costs and operating expenses.
Following the sale and restructuring, Martek plans to continue to maintain its presence in Winchester with approximately 50 employees focused primarily on lab- and pilot-scale development, limited production and supply-chain management. In addition, the company added that it intends to maintain necessary production redundancies through continuing access to certain key processes at the Winchester facility and arrangements with contract manufacturers.
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“The restructuring of our manufacturing operations and this related asset sale is a necessary part of our strategy to significantly offset price reductions resulting from our infant formula contract extensions through the implementation of manufacturing cost savings, product innovation initiatives and growing our noninfant formula business,” said Martek CEO Steve Dubin. “This transaction will also enable Martek to maintain a considerable presence in Winchester where we will carry out a variety of critical innovation, development and other activities.”
According to the company, Alltech’s interest in algae began in 2008 when it received $30 million in federal and state funding to develop a 1 MMgy demonstration-scale plant in Springfield, Ky. The project aimed to validate the commercial viability of a novel solid-state enzyme process that can convert a range of lignocellulosic feedstocks to ethanol and other biobased products. Other participants in the project were the University of Cincinnati and the University of Kentucky.
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