Carbon abatement company SeaStock has secured federal government funding as it eyes the expansion of its production capabilities in Western Australia.
The local manufacturer, backed by Perth and east coast angel investors, notched a $140,000 grant through the federal government’s Industry Growth Program. The funding boost was a part of the Prime Minister and federal cabinet's visit out West this week, where they are making rounds of announcements ahead of the election next year.
Minister for Industry and Science Ed Husic visited SeaStock's headquarters in Fremantle to tour the land-based production facility and announce the funding, designed to help the business scale up its production.
SeaStock produces concentrated natural bioactive compounds derived from Asparagopsis seaweed, which it grows on land.
The concentrate can then be used in a cattle feed product that when digested significantly reduces methane formed in the gut, and therefore emissions. SeaStock farms the seaweed at its base in Fremantle, but it is readying to undertake a feasibility study to expand its production capabilities.
Mr Husic said the grant was about backing the ideas of emerging manufacturers who were solving problems for other businesses or were strengthening their operations.
He said the investment was designed to support SeaStock to increase production of their product to aid farmers in the challenge of reducing methane emissions.
"We know the demand is there in agriculture to reduce methane emissions, we need to be able to tackle a challenge, which has been the cost of Asparagopsis as a feed item," Mr Husic said.
"If we can improve the efficiency of this and also cut costs, that will make a big difference for farmers, but it’s an even bigger difference in terms of our efforts to get to net zero, especially in the agriculture sector."
SeaStock co-founder and managing director Tom Puddy said the grant money was a major step up for the business, which would now focus on locking in a site for its first large-scale production system.
He said they were eyeing sites where they could potentially co-locate with other industries, as SeaStock can use other businesses’ waste CO2 in its production process.
"We have interest at a number of sites in WA regionally as well, and we’ve already started doing some economic modelling around that," he said.
"The money will go towards actually doing the design and the feasibility work, so that we can get to a final investment decision, to then apply for either some more capital grants, or we can raise money from industry to support the scale."
The first large-scale module is tipped to cost $5 million, which would essentially be the demonstration plant for building multiple modules alongside each other. To date, SeaStock has raised $2 million from its investors, the majority of which are Perth angel investors. Mr Puddy said the business had done well to drum up interest in the current market.
He said the investor appetite for biotech and agtech companies had been tight over the past 12-18 months given the global economic situation.
"In that tight market, we’ve been successful at raising money to fund our operations, and we continue to receive interest as well, but pre-COVID would be a very different situation," he told Business News.
"We’re starting to see investment appetite in Europe starting to come back on stream now as well."
"Agtech and biotech companies, it’s not a traditional investment in Western Australia, there’s been a lot of focus on oil and gas and mining technology, and so it takes a bit to introduce the concept and the opportunity to local investors, but when they understand it, they’re very supportive of it."
"We’ve done very well to already attract a number of investors into the business, and they see the journey that we’re on, and they’ve given us some immense support."
Mr Husic said the challenge of reducing methane emissions in livestock was a problem not only Australia, but the world was seeking the solve.
"Being able to see SeaStock scale up creates not just a problem-solving platform for us here, but a great export opportunity longer term," he said.
"We want to be able to back local firms, especially emerging manufacturers, with their ideas, and in the process, grow great jobs as a result."
Ahead of raising more capital for the expansion, Mr Puddy said the focus was on getting traction in the market for the products to bring in demand.
"We know the demand’s there, but we need to get product out," he said.
Source: Business News | Author: Isabel Vieira | Published: 3 September 2024
