Corbion in talks to acquire Bunge stake in algae JV
Euronext Amsterdam listed, Corbion, and Bunge are 50.1%/49.9% partners respectively in the JV, which operates a facility in Brazil, specializing in the production of algae ingredients based on sugarcane feedstock, such as AlgaPrimeDHA, a DHA rich ingredient targeted at the aquaculture feed sector.
Bunge has reported a weak finish to 2017, with losses in its Q4, giving rise to further speculation about a takeover of that agribusiness giant. It also reported that it is looking to exit both sugar trading and the renewable oils JV as it released its fourth quarter and full year 2017 results on Wednesday (February 14).
"The trigger for the talks is really the fact that Bunge is planning to make changes to its portfolio, as per their announcement yesterday," a spokesperson for Corbion told us.
Although, it noted the discussions with Bunge were “constructive”, Corbion said it is uncertain if or when an agreement with the US company would be reached.
The spokesperson would not disclose the likely capital outlay involved in acquiring full ownership of the JV.
"We are at the discussion stage, and will not pre-empt [any outcome] by speculating on numbers now."
Corbion, a Netherlands headquartered producer of lactic acid, lactic acid derivatives, emulsifiers, functional enzyme blends, minerals and vitamins, remains convinced about the potential for the algae ingredients market.
"Our interest in and expectation for the algae business – including AlgaPrime DHA - is unchanged," added the spokesperson.
Sustainable production model
Corbion only acquired the stake in the SB Renewable Oils joint venture when it completed the purchase of all the operations of the previous stakeholder, TerraVia, in September 2017, following that San Francisco based firm filing for bankruptcy.
It said the Brazilian industrial plant it currently operates with Bunge, through the JV, embodies the principles of sustainable production to produce algae-based products with low carbon, water and land use impacts.
As a result, AlgaPrime DHA has a lower environmental footprint and higher yield per hectare than DHA produced from most other non-marine sources, added the Dutch company.
The ingredient took top honors fat at the Global Aquaculture Alliance’s innovation competition at GOAL in Dublin in October last year, with Miguel Oliveira, vice president of global innovation with Bunge, saying at that event: “Aquaculture is one of the fastest growing food production systems in the world, and AlgaPrime DHA is a great fit with Bunge’s expertise and capabilities.”
The venture was producing about 1,000 tons of AlgaPrime DHA at that juncture and had seen a positive market response to the feed ingredient.
