Sweden’s Simris Alg and the Dark Horse Factor
July 12, 2011, by Jonathan Williams
r. Fredrika Gullfot, a biotechnologist and great fan of bio-based and sustainable technologies, had been following the algae field for about five years, and was very excited about its development globally. But she was surprised to learn that the Swedish company BioReal (now a subsidiary of Fuji Chemicals Ltd), which commercialized astaxanthin production about a decade ago, had no followers whatsoever in Sweden, her native country.
She knew that there were many valuable and unique substances that could be produced with microalgae. So, having an entrepreneurial background, she decided to start her own algae company, Simris Alg, and contribute to this new industry in Sweden.
Her top priority was, and is, to develop Simris Alg into a viable and thriving business, offering an attractive range of innovative algae-based products in the functional food and health sectors. “Our process is based on a sustainable biorefinery concept,” she says, “exploiting the whole value chain of products and services.”
Simris Alg’s staff is also active as consultants and contract researchers in the cleantech field, where they see a great demand from both existing and potential customers. “I believe the integration of microalgal cultivation with existing industrial processes is the key to sustainable bulk production of algae-based biofuels,” says Dr. Gullfot.
As a small company with no dedicated R&D resources of their own, she sees this is as an opportunity to contribute to the development in the field, as well as augment the company’s revenue in their early days of development. They have, for example, recently completed a feasibility study at a large Swedish industrial plant, growing algae on carbon dioxide and wastewater from a fermentation process.
And since growing microalgae is a completely new field in Sweden, Simris Alg faces the challenges of both educating the public on the great potential of algae, while at the same time proving their business model. As entrepreneurs with substantial capital needs, another challenge is finding good advisers and investors, which are harder to locate in Sweden for a company like Simris Alg than for higher profile startups in areas like IT or mobile services. Despite these challenges, Dr. Gullfot feels that they have done very well so far. “We have made it so far without venture capital, by classic financial bootstrapping strategies and some soft funding.”
Funding the company’s development to date, they have received a competitive startup grant from the VINNOVA Swedish Governmental Agency for Innovation Systems and the Swedish Energy Agency, and minor development grants from Innovationsbron and ALMI Innovation, both public innovation funding agencies. Their running costs have so far been covered by revenues from their cleantech consulting business.
The young company’s largest setback so far was having no laboratory access during the spring of this year. “We had been promised laboratory space at a university business incubator before Christmas, but the whole process got delayed,” explains Dr. Gullfot. “Meanwhile, we had to keep our strain collections at the office. In April, we gave up, and within a day we found a local pharma company with spare space and moved in.”
Successfully growing algae in Sweden has to take the regional parameters into account and use them to their benefit, according to Dr. Gullfot. “We do not have large desert areas with abundant sunlight all year round, which generally might be considered the ideal conditions for growing algae. But what we do have is a moderate climate with less need for cooling, significantly extended hours of daylight in the growing season, lots of water, great industrial waste streams for growing algae (CO2, nutrients and heat), a world-class process industry, and a general aptitude for new and green technologies and building great companies. Also, sun conditions and PAR levels are much better in certain regions in Sweden than, for example, in Germany or the Netherlands, where successful commercial algae operations already are in place.”
Climate is not really a major issue for Simris Alg, though, as their business is focused on high-value products that will be grown in closed-system photobioreactors in greenhouses with controlled climate and light conditions.
The company’s execs see their success factors rather in the networking and collaborations they can create with related partner industries. “Sweden is somewhat of a developing country in terms of algae,” notes Dr. Gullfot, ”and is heavily dependent on international collaborations to gain access to necessary know-how and technologies.”
“The upside here is that we can kick off our industry at the current state-of-the-art level. So, in general, countries like Sweden could eventually play somewhat of a ‘dark horse’ role in the growing algae world – of course depending on the application in question.”
Simris Alg is currently in small-scale operation, having recently re-established their laboratory facilities and just about to start trial-scale production of their first products.
“Our next big milestone,” says Dr. Gullfot, “is to build our first commercial scale production facility in spring 2012. We have a big challenge ahead—to attract the capital to build it.”