A tiny algae developer is betting its survival on biofuels in a big way — a bravado its director says matches only that of Elon Musk’s.
Euglena Co., a Tokyo-based maker of nutritional supplements, is spending ¥5.8 billion on building a test refinery that converts algae into biofuel used to power jets and vehicles. The investment is equal to about half of last year’s total revenue, though it’ll only produce five barrels a day. By comparison, larger processor JXTG Holdings Inc. has a daily refining capacity of about 320,000 barrels at its biggest plant.
“The fact that a company with a revenue of our size is investing in facilities that won’t make a profit means we’re risking everything,” Euglena’s director Akihiko Nagata said in an interview in Tokyo.
But risks it must take, Nagata said, if it’s to try to reach the heady heights of the company’s muse — Musk’s Tesla Inc. While a comparison to the U.S. company, with a market value of $50 billion, seems far-fetched, he says it draws inspiration from the electric-vehicle maker’s willingness to risk near-term profits and make big investments for longer-term goals.
Nagata sees the test refinery as a major step toward building and operating a commercial biofuel plant that can produce 2,000 barrels a day of jet fuel and diesel by 2025, and the company has the backing of JXTG, the country’s biggest refiner, as well as major airline ANA Holdings Inc.
“I always see our company as similar to Tesla,” Nagata said. “Taking risks to challenge difficulties.”