Skretting securing commercial amounts of algae oil

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Omega-3-rich algae oil is three-times more expensive than traditional fish oil, but that’s not stopping feed maker, Skretting

Veramaris — the joint venture of DSM and Evonik — will, according to its owners, be able to produce 15 percent of the global demand for Omega-3 algae oils when their feed factory is finished in the fall of 2019.

Read Skretting expects industrial production of algae oil by 2019

SalmonBusiness had understood algae oil as a raw material to be three-times pricier than fish oil. Skretting marketing director, Mads Martinsen, wouldn’t comment on exact sums, but he defended its general price.

Skretting marketing director, Mads Martinsen

“The curve, historically, goes upwards, if you follow the price development of fish oil,” Martinsen said.

“It stayed that way, even when the demand goes up. Suddenly, algae oil can outcompete fish oil. It’s two to three times more concentrated, so we need smaller amounts of algae oil vis-à-vis fish oil. So, the price can be defended,” he said.

Bottleneck
Fish oil has long been a bottleneck for feed producers. The Omega-3 fatty acids EPA and DHA are an absolute necessity in feed, and that’s why algae oil has been seen as a good alternative to the commercially produced fish oil.

“If you are a pure feed nutrition physiologist, it’s easy to see the advantage in this. Algae oil has an extremely high concentration of EPA and DHA,”  Veramaris managing director, Karim Kurmaly, told SalmonBusiness. He says his company has delivered algae oil to several large feed producers.

Pilot-stage
For now, Veramaris is producing pilot volumes of algae oil. Skretting has been right alongside its development for many years, and the company says its critical to get past the current pilot.

“In the pilot phase, it’s costly to start using this type of raw material. But, if we don’t go through with it, it won’t be commercialized,” he said.

“We have to get through it. We need to be forward-looking and take the measures now to help us in the future,” Kurmay added.

Massive investment
Growth in the Norwegian aquaculture industry has been marginal since 2012, and feed producers have noticed. In order to grow, alternative raw materials are needed, according to Martinsen.

“The bottleneck with fish oil has been around for many years. In recent years, we’ve been given more time because there hasn’t exactly been much growth, especially in Norwegian aquaculture industry. If we’re going to grow, we need an alternative,” he said.

Production of Veramaris algae oil is scheduled to get going once a plant in Blair, Nebraska is ready in 2019. DSM and Evonik are investing USD 200 million dollars in the facility.

The plan was set in motion exactly a year ago, and now the necessary pieces are in place.

“As you know, the great demand for fish oil is a problem,” Kurmaly said.

“Another problem is the overfishing of illegal and unregulated fish. Algae oil is sustainable,” he asserted.

Read Skretting in ramp-up mode