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VegaAlga Report Summary

Project ID: 673023

Periodic Reporting for period 1 - VegaAlga (Sustainable agricultural eco-system: business and technological solution for eco-conscious vegetable cultivation using on-site produced algae fertilizer)

Reporting period: 2015-09-01 to 2016-08-31

Summary of the context and overall objectives of the project

Both regulations and customer needs have driven growth in the market for green labelled food products cultivated in a sustainable way. Nevertheless, the availability of affordable technological tools for the production of green vegetables is limited. Furthermore vegetable suppliers (in Europe typically farmers with smaller land) neither have the essential technological knowledge nor the willingness to change their cultivation methods. Realizing these trends, Vegetable Trading Centre (VTC), a regional market leader of vegetable production and trading, and Multisense, a technology intensive start-up, put together this proposal, aiming at the establishment of a commercially and technologically sustainable agricultural eco-system. The technology for on-site production of microalgae and their usage as biofertilizer in vegetable cultivation has been piloted at VTC. In the proposed business model, this technology will be sold to framers helping them to make microalgae based fertilizer on their own land in a cost-effective eco-friendly way. The trader (Vegetable Trading Centre) guarantees to buy the vegetables produced this eco-conscious way and bring them to supermarkets at a higher price for producers.
Giving a quick answer to the market trends in Europe such as expanding demand for „green” market both from customer and from supermarkets and changing regulations on fertiliser usage we decided to build up our own algae production facility. We established a 25 m3 pond algae production site, which was opened 30th October 2014. The system, at this current stage, is able to provide microalgae for our own purposes in a semi-automated way. We decided to make an automated system that is able to operate with minimal additional work. Furthermore, we aimed at increasing algae growth by a carbon dioxide supply from a dedicated composter. It will create a closed system. We have been working together with Multisense who is responsible for the measurement system for nutrient detection since, in algae production systems, the parameter setup and their maintenance is crucial for obtaining high production yields.
Within our overall goals there are several sub-objectives that are to be realised during the project life-time.
Our final objective is to commercialize a cost effective technology for the production of microalgae and their use as biofertilizer in agriculture, in particular for vegetable growth, and to support it with a sustainable business model.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

Technical objectives:
- To up-grade the current pilot system – WP1 – partially completed and ongoing. The already existing pond were completely renewed and additional 5 ponds were built. The concept of the open ponds changed to walled superstructure. Reliability and stability tests and corrections are ongoing.
- Create a full automatic control system and define the control algorithms – partially completed and ongoing. A complete control system was developed and built up in the test greenhouse. An online CRM and monitoring system development is ongoing together with reliability testing.
- Upscale the technology and connect with composter - completed
- Build 3 new pilot/demonstration plants – completed – 5 new were built and the old pond was renewed.
- To optimize the operation of the pilot site to achieve high production yield and efficiency. We target to reach 2-3 g/l concentration. – WP1 – completed
- To find algae species most suitable as possible effective bio fertilizers for particular vegetables. – completed.
- The aim is to create the knowledge helping the end-user farmers to select the most suitable algae bio fertilizer for a given vegetable species, and further to suggest the optimal conditions for the growth of the selected algae species – partially completed and ongoing. The measurement data acquisition is ongoing and conclusions are continuously formulated based on preliminary assumptions.
- We will optimize algae based nutrients at first for onion, garlic, celery, parsley, wheat and sunflower. – WP2 - ongoing
- To improve the delivery system for irrigating algae based fertilizer and to study the possible formulation methods for algae bio fertilizer that can be spread on lands using existing devices – WP3 – completed.
- To carry out field tests with the produced algae on vegetable lands and demonstrate the productivity and pricing advantages compared to traditional fertilizers and commercial bio fertilizers on the market. The aim is to reduce the fertilizer cost by 30% compared to conventional fertilizers and to increase the productivity by 10-15% (depending on the vegetable type) – WP4 – ongoing.
Commercial objectives
- To create a general design of the algae production system that can be easily installed at any farm, with corresponding use cases as examples. Our target is to make a system a 25 m3 pond for 12.000 € selling price (including essential sensor system for 2.000 € + hardware and built up for 6.000 €), and to make a fully automated with “all parameter detection” sensor equipped system for 21.000 € (including a 8.000 € sensor system + hardware and built up for 6.000 €) with 33% target profit margin in both cases. To keep the seasonal operation costs of the 25 m3 production pond under 350 € – WP1-WP5 – to be verified.
- To further develop a Business Plan incorporating a detailed commercialization strategy and a financing plan in view of market launch. – WP6 – ongoing.
- To initiate early marketing actions including an extensive Dissemination and Communication Plan promoting the project and its findings during the period of the grant. The plan will include establishment of a commercial web page and will describe how to facilitate the knowledge/technology transfer to farmers all over Europe. The dissemination strategy will include practical workshops (at least four), conference presentations (at least two), specialized magazines/journal publications (at least three), and mailings to at least 500 farmers and cooperatives. – WP7 – ongoing.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

This Customer Development Plan has been developed to achieve the final objective: to commercialize a cost effective technology for the production of microalgae and their use as sustainable “green” fertilizer in agriculture especially in vegetable and grain growth and to support it with a profitable business model.
This business plan has been developed to present Zöldségcentrum Kft. in English so called Vegetable Trading Centre Ltd. (referred to as VTC) to assist in raising the equity capital needed to begin the sale of its initial products and finish development of its complete product line meanwhile raising their profit.

The newest, ongoing development of VTC is VegaAlga microalgae-fertilizer system.
This is an innovative technology for on-site production of microalgae and their usage as fertilizer in vegetable and grain cultivations. The technology serves farmers helping them to produce their own microalgae based fertilizer on their own land at cost-effective eco-friendly way and in parallel switch the health- (and price-) level of their products to a higher level as becoming a green labeled product supplier.

Vegetable suppliers (in Europe typically farmers with small sized land) neither have the essential technological knowledge nor the most modern possibilities to change the cultivation methods.
Realizing these trends, Vegetable Trading Centre (VTC) - a regional market leader of vegetable production and trading - and Multisense - a technology intensive start-up company – are working on to develop the establishment of a sustainable agricultural eco-system.

Agricultural and healthcare regulations are also supported the trend of raising demand of green labeled products. To ensure the highest interest and the lowest hesitation of the farmers in the new system, VegaAlga guarantees to buy the vegetables produced by this eco-conscious way in the initial periods and resell them in selected main retail markets (hypermarket, supermarket and discounters) where it has its partnership already. There is a high demand by the consumers and retail partners for purchasing green labeled food cultivated at sustainable way.

VTC testing period is based on 15 partners and 5 retail channels. After analyzing the results of the launch further expansion is planned to other Hungarian farmers with modular pricing and also with an option for annual fees. Later on VegaAlga Fertilizing System is planned to be launched abroad as a franchise system (to BENELUX, Germany, UK, France, Slovenia, Romania, Austria).

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