Cyanotech to purchase Cellana demonstration facility

  • A Cyanotech extraction operator pours the final extract of Bio Astin SCE5 at the NELHA facility. (Laura Ruminski/West Hawaii Today, file)

KAILUA-KONA — NELHA tenant Cyanotech has agreed to purchase a 6-acre production and research facility at the Hawaii Ocean Science and Technology Park in North Kona.

Under the agreement, which still must be approved by the Natural Energy Laboratory of Hawaii Authority (NELHA) and the state Board of Land and Natural Resources, Cyanotech would acquire the Kona Demonstration Facility, which NELHA currently subleases to Cellana, along with the equipment and needed assets.

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The facility is located next to Cyanotech’s existing 90-acre site off Makako Bay Drive.

Cyanotech produces microalgae-derived products, including the supplement BioAstin Hawaiian Astaxanthin. Cellana LLC is a subsidiary of Cellana Inc., which makes algae-based products in the fields of nutrition, ink and energy.

In a press release, Cellana CEO Martin Sabarsky said the Kona facility had fulfilled its purpose of allowing the company to develop its algae strains at a large-scale, commercial level.

“This mission has been successfully accomplished with Cellana’s leading strain of algae, KA32,” Sabarsky said in the release, “and so this is a great opportunity to reduce our current operational expenses while we sharpen our focus on commercialization with our expanding set of commercial and project financing partners.”

Over the last seven years, Cellana has produced more than 22,000 pounds of its “ReNew Algae” at the demonstration facility, including its leading commercial algae strain. Sabarsky said that the Kona Demonstration Facility has not been in production since the end of 2017.

In April, the company announced a letter of intent with POS Bio-Sciences for the development and commercialization of oils from its algae biomass.

A month later, it signed a term sheet for $27 million in financing for a 54-acre commercial algae facility next to the Kona Demonstration Facility. The company said the new proposed facility is expected to make 700-800 metric tons of its leading algae every year.

The statement from Cellana also noted that the lender for that project has indicated the potential for more than $100 million in additional financing for subsequent facilities based on the first facility’s success.

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Sabarsky said that another $5 million to $10 million is still needed to move forward with design and permitting.

Cyanotech said in its release that the company expects to use the Kona Demonstration Facility in various ways, including expanding its research and development along with product development and supplementing its production capacity. The company added that it expects the transaction to close toward the end of this year.