POSTED: 11:56 a.m. HST, Sep 13, 2012
LAST UPDATED: 02:18 a.m. HST, Sep 14, 2012
Kona-based microalgae producer Cyanotech Corp. said Thursday it has secured a $5.5 million long-term loan agreement to make a major investment in its production facility.
Honolulu-based Pacific Rim Bank is providing the loan, which is backed by the U.S. Department of Agriculture under its Rural Development Guarantee program, according to a regulatory filing.
The loan proceeds will be used to finance capital improvements, which include new equipment to be used in the processing of Cyanotech's natural astaxanthin and the addition of new administration and warehouse buildings at its Kona facility. The new equipment includes the purchase of supercritical carbon dioxide extraction equipment for which Cyanotech has signed a purchase agreement with Uhde Corp. of America.
The equipment will allow Cyanotech to complete the processing of astaxanthin in house. The extraction process currently is done on the mainland.
"The company is now focused on our own branded consumer products and the international bulk market. We have strengthened our sales, marketing and product fulfillment capabilities," Cyanotech President and CEO Brent Bailey said in a news release.
"With that underway, we are adding to our processing and production capabilities to meet the growth in demand, as well as to improve our service levels to current bulk and retail customers," he said.
Cyanotech's shares closed up 22 cents, or 3.8 percent, at $6.08 on the Nasdaq Capital Market.