TOKYO -- Tokyo-based euglena, a biotech venture formed by the University of Tokyo is expanding overseas operations. The producer of algae-based products started selling supplements in Singapore and cosmetics in Macau last month.
At Wednesday's earnings briefing in Tokyo, President Mitsuru Izumo stressed that the company is steadily making progress to achieve its medium-term sales target of 30 billion yen ($270 million) for the year through September 2020.
The company's net profit fell 29% on the year to 300 million yen for the six months through March. Although advertising and other costs increased, the company has maintained its profit forecast for the full year, thanks to an increase of regular mail-order customers, which rose about 40,000 from the end of last September to 190,000.
But in the face of stronger domestic competition, euglena is pinning hopes of growth on its overseas operations, which launched in China in 2015. The company has not disclosed overseas earnings, but sales are estimated at around several tens of millions of yen.
"Our overseas sales are still small, but we want to boost sales so that they can contribute to profits," said Izumo.
The company plans to increase sales in China and Southeast Asia. Moreover, euglena's Okinawa production facilities have obtained halal certification, allowing the company to sell its products in Muslim countries.
The biotech venture also hopes to sell algae-based jet fuel overseas, and expects commercial use of the fuel by 2020.
Construction of euglena's pilot algae biofuel plant in Yokohama will start on June 1. The new plant, which carries a 5.8 billion yen price tag, will produce 125 kiloliters of algae biofuel a year. "[Our plants] cannot be compared to oil plants," said Director Akihiko Nagata. In order to make algae biofuel a viable alternative for airlines, the plants must be vastly larger than the pilot in Yokohama.
If algae-based jet fuel is commercialized, Nagata predicts production and sales could spread to overseas markets. In this case, euglena could try producing it on a large scale outside Japan then selling it to local airlines. This makes sense from a biological point of view, since algae thrives in Southeast Asia and other tropical regions with ample sunshine.
"Japanese drink maker Yakult Honsha is using its core technology of fermentation to generate profits across Asia," said Izumo. "I want to see algae-based jet fuel and food in Asia."