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Is it a hype? 6

Guten Tag,

all you members of this exclusive community and these two new friends which I already have made, but do still not know how to address them (and faceless too they are!).

The algae industry is starting from the top!

So is it hype!?

I read a lot in all these newsletters from OILGAE to BIOFUELs DIGEST about how algae will solve the coming energy crisis. It seems that enormous amounts of money are floating to nearly every firm or research institution claiming they are producing algae to make all kind of fuel out of them. But with the same I read that all these firm are either in a kind of research stadium or just starting or planning to produce. Industrial scale units which are producing masses (that?s what its all about - its biomasses you have to produce to make a living out of algae culturing!)I find nearly nowhere.
Not before long the impatient finance industry will make a call for success. And what has the algae bio fuel industry (if there is such) then to present?

"XXXX Capital is following a specific approach to investing in algae companies. This approach is linked to its emerging prize competition. Specific details of this competition have not yet been released. We are planning a significant announcement during the second quarter of 2010. We anticipate this announcement will contain additional details concerning not just the competition, but the investment criteria linked to the competition."

This quotation is from an investor who states they are providing capital to environment start-ups worldwide.
Now if the algae industry has to prove how competitive they are, will they be able to do so?
Many times I have asked myself, why are all these (mostly American firms) are trying to climb a mountain starting from the top?
Our PBR-project that we are starting here in Germany will be 18.8 ha (44.4789 acre) and have an estimated production output of 2000 tons per year. Not one single kilogram will be for bio fuel production and the production is already been sold for a satisfying profit. This will give us time and money enough to have a look at bio fuel production and no investor will be sitting in our neck.
See what I mean, first prove that algae breeding is a rewarding and sustainable industry able to earn its money, - then go for the top.........
If you feel on the way up that your expectations where set to high you can always return in safety - but starting from the top you can only go down.
Andreas Abraham ? algaenova at email dot de
Mon March 22 2010 04:35:30 PM by AlgaeNova 1588 views

Comments - 6

  • Narsi wrote:
    Tue March 23 2010 07:52:30 AM

    Interesting perspective, Andreas. Well, what you are suggesting is indeed a logical way of doing things.

    There are many companies worldwide however which would like to speeden things up. That's probably the reason they might want to look at starting from top down instead of a more rational bottom up. Bottom up discovery takes time, though it is more reliable. Top down is risky, but well, if you hit it, you get it!

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  • AlgaeNova wrote:
    Tue March 23 2010 02:48:14 PM

    Hallo Narsi,
    I have absolutely nothing against speeding things up. The faster the better, - but one should play fair with the investors. Some of them might even earned their money by working hard and where always ambitious, even startet themselve with a good idea. I am a little bit afraid that exagerated claims about algae compensating crude oil and being more than a niche product will change from estonished belief into real frustration. This will than disrepute the algae research and all these firms trying to earn honest money.

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  • AlgaeNova wrote:
    Tue March 23 2010 02:48:46 PM

    It is always easy to jump the band waggon claiming "We also do research and found an incredible way to produce biofuel from almost nothing! We only need a little bit taxpayers money and a little bit of fund here, some good-believers there, and off we go!"
    Please show me the figures documenting the productivity of algae biomasses produced of - the best possible algae species, the best possible production method and last but not least the all this for the best possible price and all this in a continious steady production process. If you can`t than call it what it is - a gamble!

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  • Shankar wrote:
    Tue September 21 2010 10:46:28 PM

    As an investor, I want you researchers to take care of finding oil. Dont waste your time and effort breaking even or growing some nutraceuticals and marketing it. I am investing in your brains, in your expertise to grow algae oil. I dont want your brains and expertise to be wasted in making marginal profits.
    i am investing because I make 1000 times profit.
    So, why waste your time on making incremental profits.
    This is not specific to algae or oil from algae.

    This is true and this is exactly how all venture capitalists will look at any project.

    Their risk appetite is much more than what you think AA.

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  • Luis wrote:
    Tue September 21 2010 11:21:50 PM

    As SAM says, once algae is grown in large scale, the price perception that one has for all food products will fall flat. I know it is far away. But now it is important to focus on oil if it is money from Shankar. if it is your own money, first find profits and then find oil :-)

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  • AlgaeNova wrote:
    Wed September 22 2010 08:15:27 AM

    "I am investing because I make 1000 times profit"
    You are a little bit of a dreamer, - aren?t you Shankar!?
    Even the good money of an investor doesn?t disappear if the investment doesn?t pay; - it just goes into other pockets.
    And you seem to know nothing about the algae market. Good for the ones who try to sell you the fairy tale that you will be able to earn "big" money (1000 times) with algae to bio fuel. We calculate a "meek" revenue of 15 - 26% and our investors are happy with this! (the spread is easy to explained, but would need lengthily explanation about the breeding technology depending on a number of circumstances. You might believe the laboratory tales of the manipulated algae strains with the highest possible oil content; - well it works of course in a test tube.....).
    The world has enough for everyone?s need, but not for everyone?s greed - didn?t Mahatma Gandhi said that and it is one of my favourite quotations.
    Believe it or not, it will be impossible for us to produce all the fuel needed with "renewables" other we reduce the world population - but maybe you as a visionary investor have some solutions even for this!
    AA

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