JERUSALEM One of the world's largest flavoring and specialty natural ingredient companies is investing in algae to enhance its food and cosmetic products.
Frutarom Industries said on Monday it bought half of a biotech startup called Algalo, which is based on a kibbutz, or communal farm, in northern Israel, that developed a way to efficiently cultivate, harvest and process a variety of algae.
The algae yield strong antioxidants, lipids and proteins that can help cardiovascular and immune systems, as well as bone structure, Israel-based Frutarom said.
Algalo says its low-cost photobioreactor, which uses light to cultivate algae, can grow almost all species of microalgae in high productivity.
Frutarom will invest 10 million shekels ($2.56 million) for 50 percent of Algalo shares and to build a modern biotechnology facility for algae harvesting.
The size of the algae-based ingredient market is estimated to be hundreds of millions of dollars and has grown at double-digit rates in recent years, Frutarom Chief Executive Ori Yehudai said.
"We foresee the rapid growth in this market continuing in coming years in light of consumer trends towards healthier and more natural products," he said.
(Reporting by Ari Rabinovitch; Editing by Tova Cohen)