Alltech Inc. a global leader in natural animal nutrition based in Nicholasville, Kentucky, has announced the acquisition of a state-of-the-art algae fermentation facility in Winchester, Kentucky from Martek Bioscience Corporation for approximately $14 million.

“For Alltech, algae fermentation presents our latest technological platform from which we expect incredible opportunities in the areas of food, feed and fuel to arise.” said Alltech Founder and President, Dr Pearse Lyons.

“We have worked in this area for several years and see it playing a major role in both human and animal health and nutrition as one of the world’s more renewable food and energy sources. As with virtually all facilities we acquire, we expect to start an expansion phase here in Winchester within the next 18 months. I am confident that this will be one of the key pieces that will help our company pass the $1 billion revenue threshold in 2015,” Lyons continued.

The purchase price will be paid over four years and will include the majority of the assets on the 23-acre site. The site will be renamed Alltech Winchester and will represent a further increase of over one million liters of fermentation capacity for the company, and become its 5th primary production site in North America and 10th globally. Alltech also has 21 further production sites, which tailor its products for its 120 local markets.

“Alltech is actively developing processes that are derived from a variety of different algae types,” said Becky Timmons, Alltech’s Director of Applications and Quality Assurance. “Algae are one of the most diverse organisms in the world and their potential for product development is tremendously exciting for us. Alltech currently has the largest carbon dioxide sequestering algae pilot plant system in the state of Kentucky and this new acquisition will allow us to move our research further towards true implementation.”

The facility will allow for continued work with Alltech’s carbon dioxide sequestering algae strains as well as strains that are grown with other carbon sources. The algae will then be used for value-added feed products, algae derived bio-fuel, and the production of ethanol.

The laboratory and pilot plant fermentation facilities in the acquisition will allow for quick product and process development. The automated control and monitoring systems on the fermenters will allow Alltech to make advances in new and current fermentation processes. One of the main focuses of the facility will be the development of products derived from algae.

Autotrophic algae require CO2, water, nutrients and sunlight during biomass growth. Each 100 tons of algal biomass fixes about 183 tons of CO2. Heterotrophic algae, which cannot use photosynthesis to generate its own food, can be grown in large closed tank systems, such as are present in the Winchester facility.

Alltech’s interest in algae began with the start of its rural biorefinery project for which it received federal and state funding. Alltech is privately held and its revenues will surpass $500 million in 2010. Alltech’s core competence lies in researching, developing and marketing natural products that are scientifically proven to enhance animal health and performance. The company is the largest producer of protected organic minerals in the world and primary in yeast, algae, and solid-state fermentation systems.