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Algae Tec Signs Supply Agreement with Gencor; Share Price up More Than 30%

Algae Tec Signs Supply Agreement with Gencor; Share Price up More Than 30%
Currently, global demand for algae-based supplementary products exceeds 21,000 metric tonnes per annum, representing a $1.3 billion per year market with growth rate of 6% to over 20%.
May 26, 2016 By Matthew Dibb Tags: AEB

Algae. Tec (ASX:AEB) announced that the company signed an exclusive supply agreement with Gencor, a prominent worldwide supplier of health supplements.

The supply agreement provides Gencor with exclusive rights to buy all of the algae oil and powders produced at the Algae. Tec plant, located in Cummings, Georgia. The algae supply will be used for nutraceutical applications. This agreement follows detailed due diligence and testing by Gencor on the quality and properties of algae oil and powder that produced by the company.

Gencor Pacific’s Managing Director, Mr. R.V.Venkatesh commented on the agreement: “This is an exciting partnership for Gencor. Algae. Tec plant is among the world’s leading algae technology companies and we will be developing new products and markets with them.”

Algae. Tec’s plant is designed to manufacture approximately 50 tonnes of high value algae every year, which will be used for Gencor and the nutraceutical market. Algae. Tec now aims to increase this production capacity to 1000 tonnes per year, with a revenue of over $50 million per year.

Currently, global demand for algae-based supplementary products exceeds 21,000 metric tonnes per annum, representing a $1.3 billion per year market with growth rate of 6% to over 20%.

Algae. Tec’s Managing Director, Peter Hatfull commented on the nutraceutical market: “This first supply agreement with a world leader in the ever expanding nutraceutical market is testament to the quality of both the technology and product developed by the Company and continues apace the progression of the Company to cash flow.”

Increased Orders from Reliance Group

On 1 April 2016, the company announced that it has received increased orders worth US$1.138 million from Reliance Group.

The company will assist Reliance in building a pilot algae plant in India, by providing detailed engineering services and supplying equipment. The plant is set to be commissioned in the next few months.

AEB surged 31% since the announcement, and was last quoted at $0.059 (as at 12:20 pm (AEST)).      

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Matthew Dibb Author: Matthew Dibb May 26, 2016

Matthew has an extensive track record in equity markets and derivative advisory. Spanning a career in several investment banks and prviate wealth groups including Macquarie Bank, his specialist knowledge relates to capital market advisory and equity market analytics. Matthew has a diploma in Financial Advisory, Applied Finance and is ADA 1 & 2 accredited.

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