Solazyme (SZYM) Signs $200M Supply Agreement With Unilever

March 14, 2016 4:15 PM EDT

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Solazyme, Inc. (Nasdaq: SZYM), now known as TerraVia, has signed a definitive multi-year global supply agreement with Unilever. The five-year agreement provides for Unilever to purchase renewable algae oils for use in personal care products and reflects the culmination of more than seven years of collaboration between Solazyme and Unilever.

This new agreement builds upon Solazyme’s initial supply relationship with Unilever for renewable algae oils, which Unilever began incorporating into its products in 2014. These oils are being produced and delivered to Unilever routinely from the Solazyme Bunge Renewable Oils facility. This new five-year, multi-oil supply agreement includes a broad portfolio of oils for use in its personal care products. Production of these oils will take place at the Solazyme Bunge Renewable Oils facility in Brazil and pricing terms are based upon variable production cost plus a defined contribution margin. Oils purchased under this new supply agreement are expected to represent total revenue of more than $200 million over the term of the agreement.

Jonathan Wolfson, TerraVia’s CEO, commented, “Our mission is to deliver products from algae that are better for people and better for our planet. We are proud to partner with Unilever, a global leader in health and wellbeing, whose products touch over 2 billion people on any given day. The growth of our partnership reflects over seven years of collaboration during which we have demonstrated our ability to develop and deliver unique, high performance, and highly sustainable oils at scale, as we continue our shift to focusing on higher value products.”

Alan Jope, Personal Care President of Unilever said, “The decision to use algae oils is fully aligned with the Unilever Sustainable Living Plan and with our goal to grow the business while reducing our overall environmental footprint. We have been working with Solazyme for many years to develop novel ingredients from algae, which improve the performance and sustainability profile of our personal care products. Solazyme has already been delivering consistent, sustainable and high performing algae oils, and we look forward to this next and greatly expanded commercial phase of the relationship.”

The Solazyme Bunge Renewable Oils facility in Brazil produces more oil per hectare/acre with a lower greenhouse gas footprint than nearly all major commercially available plant oils. The Brazil facility embodies the principles of sustainable production and is co-located with a Bonsucro®-certified sugarcane mill that uses the waste sugarcane material (bagasse) as an efficient, renewable source of energy.

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