Valensa International and Contract Biotics have announced a multiyear contract between the two companies for the supply of commercial quantities of the algae biomass used for the production of high quality astaxanthin. With this new supply source Valensa has significantly expanded its capability to provide the market with formulated, condition-specific astaxanthin-based products, which have proven to be in high demand as health media celebrities and consumers become aware of the broad-ranging and demonstrated health benefits of the ingredient. Contract Biotics is a U.S. based wholesale producer of a wide variety of high quality algae biomass and related biological compounds.
According to Dr. Rudi E. Moerck, president and CEO of Valensa, supplies of algae biomass have been a limiting factor on the growth of the astaxanthin market for the last several years, even as demand has ramped up. “Growing high quality algae biomass for the production of astaxanthin is a time-consuming and difficult task to undertake. Over the past several years Valensa has visited and had discussions with virtually every existing and potential new algae grower around the world to support the long-term growth of our astaxanthin products business,” he said. “Contract Biotics is the first new producer to ship us commercial quantities of algae biomass that meets our quality standards. We are pleased to announce our validation of Contract Biotics’ capabilities as a new supplier,” he added. Although specific financial terms were not disclosed, the agreement does contain ‘guaranteed supply, guaranteed purchase’ provisions.
Contract Biotics CEO Ken Reynolds commented on his company’s efforts leading up the agreement: “Working closely with a partner like Valensa has been ideal for us, in that they bring a wealth of knowledge of astaxanthin production, as well as substantial investments in the final production, quality control, packaging and business acumen necessary to bring successful nutritional products to market,” he said. “Many startups significantly underestimate the requirements and cost of QA/QC and good manufacturing practices. Valensa’s expertise and capabilities in this area have been invaluable as it allows us to focus on what we do best, which is to grow tons of algae,” he added.
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As one of the most powerful known fat soluble antioxidants, astaxanthin has long been recognized for its ability to protect against cell damage caused by oxidative stress. There has been an added surge in its demand in recent years, with health experts such as Dr. Oz and Dr. Mercola publicly promoting the benefits of astaxanthin-based supplements. Astaxanthin is a component of krill oil; however krill is not a viable source for the production of commercial quantities of the carotenoid. It is commonly produced through the cultivation and harvesting of a naturally-occurring variety of freshwater algae. However, the specific species for this purpose is extremely difficult to cultivate on a commercial scale, and suppliers have had a hard time keeping up with the growth in demand.
Dr. Moerck went on to state: “We see this as the beginning of a long and mutually beneficial relationship. Contract Biotics’ first shipment rivaled what we typically see from established producers, so with their demonstrated ability to expand and scale commercially it was an obvious win-win for both companies to enter into a long-term agreement. We are encouraged by Contract Biotics’ success and look forward to continuing this relationship.”
In regard to their company being a relative newcomer to the algae industry, Reynolds said “Although we elected not to make any public statements prior to this point, we had to reach a number of milestones to get here. This contract comes on the heels of many years of planning and development, as backed by several rounds of equity and debt funding and managed by executives with nearly four decades of commercial scale algae facility construction and operation. I am very pleased that we have the opportunity to support Valensa as it continues to expand its line of formulated products.”