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Kevin Quon

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  • Why Solazyme Believes Algae Milk Is The Next Big Thing [View article]
    Sorry, I don't. The powder itself has a pretty lengthy shelf life from what I understand. But I don't know about the milk. As for the powder milk, well considering the ingredients i just showed above in the comment's i don't see why not. Good thinking, never thought of that angle before. That said, not sure how large the powdered drink market is for your regular joe.
    Mar 11 11:52 PM | 1 Like Like |Link to Comment
  • Why Solazyme Believes Algae Milk Is The Next Big Thing [View article]
    Geosteam,

    1) I'm sure you've looked around by now and noticed that Solazyme isn't pursuing many of the similar markets already being explored by industrial biotech cos - including fermentation companies using algae. Indeed, what they seem to be doing is trying to exploit the advantages in their tech platform. Even companies like AMRS are pursuing high valued markets (higher than szym), but they have a limit and AMRS may even fully tap some of these markets within the capacity of their first plant.

    What I was implying by what I said was SZYM is more likely looking to accommodate markets for their partners which can grow to be very large. Additionally, these markets would put szym at a very advantageous position because very few companies, if any, would be able to compete with them. Why sell 100 MT for 99% margins when you can sell 100,000 MT for a comfortable 30% margin? Above all your partner remains happy to have a dominant position in a market due to superior product quality (after all, they were the ones wanting to use this certain oil but never could make it viable w/ today's agroeconomics).

    Yes, the numbers are hypothetical - i just meant that existing commodities which can't be turned into products in an economically viable way may now be able to if the partner so desires. I rather not dig up the exact quote from upper, but a conversation w/ walter rakitsky helped me to understand this concept a little bit.

    2) yeah, more facilities will be ideal, and hundreds of millions will definitely be needed in the near term (hopefully more so from partners). They seem pretty confident about being able to secure additional upstream partners (or maybe already have?), but nothing that could be said publicly. Project debt, including maybe even some more from BNDES would be ideal. I have not heard of anything about this. They're not just letting the plants be built w/o any oversight i'm sure - i didn't think twice about it, but i'm sure they said there was a group overlooking upstream efforts.

    and yeah, fun times.

    Best Wishes,
    Kevin
    Mar 11 11:33 PM | 4 Likes Like |Link to Comment
  • Why Solazyme Believes Algae Milk Is The Next Big Thing [View article]
    T Thomas,

    Algae milk sounds terrible, until you realize it's really only terrible for those not willing to give it a chance the first time around. To be honest, after that it's entirely about brand recognition and it stands out quite nicely. It's also pretty easy to say to a friend "hey, go try out algae milk" and they'll know which one it is. But yeah, the first thought was hope that this was just a test name.

    Cocoa butter - already in the works, but the structured fats platform isn't going to be the first products they introduce. These will come about though. Cocoa butter is actually selling for more than $8k/MT last I checked. I think what will likely surprise people here is szym's solutions to fats/butters not already in established markets. Think of taking a $100k/MT fat/oil (which isn't commercially viable for most products now) and selling it for say $3k/MT in order to make it commercially viable for producers to make products they've always wanted to make. It costs the same for szym to make, but it'll mean the world of difference in terms of opening up new markets for producers.

    I'm not concerned about revenue growth or cash flow at the moment. But my mind is on margin maintenance once the plant is ramped (although remember there are measures already in place to mitigate feedstock costs). Steady ramp is the only real concern for now. Unfortunately, this will only be known in hindsight 20/20 some many many months from now.

    Kevin
    Mar 11 08:00 PM | 3 Likes Like |Link to Comment
  • Why Solazyme Believes Algae Milk Is The Next Big Thing [View article]
    mfulton22,

    Gluten-free? Anything algal-flour based is gluten free. As for when they'll be selling into this market commercially is anyone's guess, however. Commercial samples are already being sent via Peoria and presumably clinton will have to be upgraded before it can start sending out commercial quantities. No word that I know of as to whether Moema will have such capacity. So maybe 1-2 years? Just a guess.

    Kevin
    Mar 11 06:58 PM | 1 Like Like |Link to Comment
  • Why Solazyme Believes Algae Milk Is The Next Big Thing [View article]
    They're not using gmo-algae for algal flour. Tailored oils are a different story, but given that the biomass isn't in the end product it'll also escape the gmo label.
    Mar 11 04:24 PM | 1 Like Like |Link to Comment
  • Why Solazyme Believes Algae Milk Is The Next Big Thing [View article]
    Dedicated facility? Might be going a bit far. Dedicated line within that facility would probably be ideal though. All of this is just my opinion of course. But the point is that it should be able to be repurposed if needed (ie. metalworking fluids skyrocket & food flounders). As for the accelerated plan, it's still in effect. Recall food wasn't going to be a factor for szym until phase 3 back in SRN. Even if we were still part of SRN, plans for that phase 3 plant might've just been announced around now at best. At least with Peoria already running on food, it's a start when it comes to sampling. But i'm not going to sugar coat it. It is what it is.
    Mar 11 04:10 PM | 1 Like Like |Link to Comment
  • Why Solazyme Believes Algae Milk Is The Next Big Thing [View article]
    MDmoney,

    You're absolutely right. It's a very interesting question. Quite honestly, I believe its because few of these older companies really ventured into human nutrition - which requires large amounts of capital and the ability to scale. Many of the smaller algae companies that use fermentation have been secluded to niche specialty products. Bigger names like DSM has only really been looking to use algae for other purposes in food (ie. DHA, which probably carries a much higher margin).

    All said, I dont think anyone in the algae space has really given regular joe food a valid shot. So now we're talking about branding & marketing. It probably also helps that szym is going to be going into foods via their oils anyways so it makes sense for them to do this.

    As for these natural foods, SZYM has moved to file a significant amount of IP in this area (before even talking about the tailored oils). THis was the reason that Roquette even teamed up w/ them, as they didn't want to initially challenge them on their IP (don't ask if they are now.. i've no clue whats going on in that realm although i do know that one look at the patent comparisons show that szym has more of an advantage of roquette when it comes to actual food composition & uses whereas roquette has more processing ip).

    Anyways, that's my two cents on the issue. Good thinking, by the way.

    Kevin
    Mar 11 03:16 PM | 3 Likes Like |Link to Comment
  • Why Solazyme Believes Algae Milk Is The Next Big Thing [View article]
    There are multiple leads that suggest you're on to something. I haven't talked about it, but animal feed (particularly fish feed) appears to be in the works for potential uses of biomass. I haven't talked about it as there is no firm evidence yet.
    Mar 11 03:08 PM | 2 Likes Like |Link to Comment
  • Why Solazyme Believes Algae Milk Is The Next Big Thing [View article]
    Snake Plissken,

    That is correct, although I wouldn't say it stinks. It just depends on your investment time frame. It only takes a few years to get this ball rolling. Peoria is now introducing these food products just like it introduced the tailored oils to customers only 1-2 years ago. Those tailored oils are now being sold. In my head, food products are only 1-2 years out. And it doesn't necessarily have to be through the next expansion at bunge, although that's a likely scenario. Additional eqmpt can be added at each of the existing facilities as in the case of what happened at peoria. (granted it'd probably utilize a dedicated line given the non-gmo algae it uses)

    But yeah, in my impatient head, I would've had them selling product back in 2009 (or before) when we were first hearing wind of it....

    Kevin
    Mar 11 03:04 PM | 2 Likes Like |Link to Comment
  • Why Solazyme Believes Algae Milk Is The Next Big Thing [View article]
    Futuretrade,

    You win the contest for random comment of the day. Personally, I'd be disappointed if sushi ever got replaced by an egg/milk-substitute that has the consistency of flour...

    Way to think outside of the box though!

    Kevin
    Mar 11 02:33 PM | 1 Like Like |Link to Comment
  • Why Solazyme Believes Algae Milk Is The Next Big Thing [View article]
    That is surely a mentally cautious position to take, but you might want to expect much more of that. All of these sales are being conducted on automatic sales via the company's Rule 10b5-1 trading plan. Almost exclusively these sales were used to cover tax witholding obligations in connection with the vesting of restricted stock units prior to the date of sale. I'm just reading off of the filings when I say this. This has been the case for several years now. As someone who looks through a lot of insider transactions, I'm not alarmed. But that is just me. To each their own.
    Mar 11 12:34 PM | 11 Likes Like |Link to Comment
  • Why Solazyme Believes Algae Milk Is The Next Big Thing [View article]
    For what it's worth, the profile of algae milk is found below in the patent application cited above (http://bit.ly/N3NvAK):

    Algal Milk Beverage
    Component Wet weight Ingredient, Percent
    Bottled or Tap water 89.381
    Sugar granulated 1.7
    salt 0.23
    algal flour 5
    Tic 710H Carrageenan (stabilizer) 0.014
    FMC Viscarin 359 Stabilizer (stabilizer) 0.075
    Vanilla extract: McCormick 1x 0.6
    Eggstend 300 (whey protein) 3
    Total 100

    --------------

    90% water? Sounds like a very profitable endeavor should it become a success.
    Mar 11 12:06 PM | 3 Likes Like |Link to Comment
  • Why Solazyme Believes Algae Milk Is The Next Big Thing [View article]
    Isaac,

    I agree with you on that one. It does help though that there are milks already using Algae. Horizon Organic Milk uses a processed oil extracted from fermented alage for its DHA. But branding is everything, and I'm not ecstatic over the term "algae milk". However, I wouldn't be surprised if the curiosity factor leads to greater acceptance though when people try it & realize it tastes MUCH better than they were imagining. So to that end, leaving it titled "algae milk" may actually boost the mental taste. Just a thought. It really does taste like real milk - largely due to that fatty feeling

    Kevin
    Mar 11 11:48 AM | 2 Likes Like |Link to Comment
  • Amyris Advances, But At What Cost? [View article]
    Jim,

    No problem. However, it is very presumptuous that $3700 is the upper limit, although staying in that realm is more than satisfactory. You're talking about the very first tailored oils, and those which we know to be on the lower end of the price value already (Wait until the Capric/Caprylic or Erucic Acid profiles come out). The structured fats platform alone (whether they're used for food or more importantly for skincare), will put the product range in a much higher range. Cocoa butter is now selling for over $8k/MT.

    The weird thing about szym's business is that ASPs are expected to increase over time rather than decrease like most businesses. In one of my articles I provided a quote from CFO Tyler Painter on my last visit about this very idea. You can find it here: http://bit.ly/NLwWu8

    Additionally, I'm not sure why you believe $7700/MT is the same as Algenist, when a chart in the S-1 suggests that the ASPs for Alguronic Acid is $4 million/MT with a greater or equal cost of production of about $1 million/MT.

    Best Wishes,
    Kevin
    Mar 3 12:28 AM | Likes Like |Link to Comment
  • Why Solazyme Rose After Its 2013 Year-End Results [View article]
    Kiefer,

    You are looking at the wrong quarter. Those are Algenist revenues. End of story. If you need more help, feel free to ask. I'm not dodging your accusations. They're just full of misinformation. Stop trying to fight.

    Kevin
    Mar 1 07:36 PM | 4 Likes Like |Link to Comment
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