Algawell: Biofuel Technologies

The product we offer is low-cost ethanol which is used in consumer products such as disinfectants, paints, shampoos, soaps. With the passing of the Philippine Biofuels Act, ethanol is also required to be blended with gasoline.

Traditional means of ethanol production comes from processing corn or sugarcane. Algawell, on the other hand, produces ethanol from processing cultivated micro-algae. Unlike sugarcane, which harvests once every several months, algae grows at a faster rate which allows us to harvest every month.

Our production process goes through 3 stages:
1. Algae cultivation (nurseries)
2. Algae fermentation (fermentation tanks to convert biomass to an ethanol-solution)
3. Ethanol processing (distillation units)

Throughout the entire cycle, low-skilled manual labor is needed to run the system. High-skilled employees are mainly directed toward R&D to focus on improving the current processes. In the first year, only 10 people are needed to fill in these 2 tasks.

Algawell runs a supply-chain model, whereby revenues come from businesses that require ethanol as a raw material. There are two target markets: industrial users and for-energy users. The former involve industries that use ethanol as a raw material in their products, as mentioned earlier. Based on our market studies, they seek ethanol that stays at an affordable, stable price. The latter are generally known as big fuel companies such as Petron and Shell which get their supply in much larger quantities than any individual industrial ethanol user.

As for the supply of materials, the main ingredient that Algawell needs is a constant stream of algae for processing. Initial stocks will be cultivated by the company. But before our processing rate begins to create an algae shortage, the company commits to educate local farmers in algae farming, as well as provide them the tools to create their own nurseries. The company will then purchase the algae blooms that they manage to grow. This plan then reduces the company's risk of running out of raw materials as well as being able to provide the farmers with an additional source of stable income.

Toll manufacturers carrying products that require ethanol are identified as the primary target during our startup phase. We plan to reach these prospective clients through company visits and follow the basic protocol of giving out our ethanol samples for their quality analysis. The objective of these visits is to compete in a bidding process in securing long-term contracts with them, usually lasting for 6 or 12 months.

Most of the ethanol supplied for industrial use come from processed corn or sugarcane and has a price of P150 per liter. With a lower price offering of P100 per Liter (30% cheaper), Algawell clearly communicates a cost-saving argument to buyers on why they should switch to us.

To secure our long-term price advantage, Algawell needs to secure vast amounts of algae and process them more efficiently to benefit on the economies of scale. Through our educational programs with local farmers, we will be able to teach them how to grow their own algae which we will purchase from them. This will quickly expand our algae supply base without the limitations of space. And through our commitment to research, our ethanol processing systems will always be one step ahead of the competition.

On an acre of land, Algawell will be able to produce 5,000 Liters of ethanol through algae cultivation, as compared to 680 Liters per acre with sugarcane. Through economies of scale, we are able to pass on savings to our customers. Our ethanol also meets the industry's standards.

I come from 2 very different backgrounds, but both have prepared me in my new role in Algawell.

The first is from my family business of managing hog farms. In our 8 years in the industry, I have learned how to create production systems as well as training the employees to run them on their own. This skill will enable Algawell to leverage our time and quickly scale our productions’ growth.

The second is from my 2 years' experience as a marketing manager in L’Oréal Professionnel (a salon products brand). I have learned that there are always multiple customers for a product such as the product-users (salon hairdressers), the decision-maker (salon owners), the end-consumer (salon client), and the internal customers (sales team). I have had weak product launches before when I failed to address one of these customers. I will see to it that it doesn’t happen with Algawell.

In terms of development, the company aims to provide income and stimulate the economy in locales where it operates. This is possible because part of the micro-algae the company will cultivate shall be sourced from farmers and other rural personalities. This is a win-win situation.

For Algawell, additional algae can be obtained for ethanol production without having to invest in the equivalent amount of production space. Thus, cost-savings will be attained. For the farmers, income would be generated, possibly with minimal effort. For one, they can simply collect algae in waterways where there are algal blooms. Alternatively, they can grow algae through any ponds they might have and then supply us the algae.

In order to sustain this impact, Algawell will provide our targeted farmers with livelihood modules, one of which is to familiarize them with a model for identifying, growing and transporting algae. A follow-up module would then be to guide them in building their own algae supply micro-business. This shall prove beneficial and compatible with their harvest schedule. In the summer months, the farmers become idle or engage in odd jobs. Yet since algae blooms are mostly experienced during the hot season, they can supplement their yearly harvest with income during the summer. Such an initiative is credible and has a chance of success because similar benefits have been experienced with a nearby industry: seaweed (macro-algae) cultivation. In this case, fishermen supplemented their income by growing and supplying seaweeds.