Solar Foods' demonstration plant provided further evidence of the scalability of Solein production

Translation: Original published in Finnish on 05/27/2025 at 07:25 am EEST

We feel the news reduces the risks associated with the scaling of Solein's production, which is positive for the company and may increase customer interest in the industrial-scale Factory 03 plant, which is in the pre-planning phase. Our forecasts assume that production will scale to a larger volume than the current demonstration plant, so the news does not warrant any changes to our forecasts.

The difference in the efficiency of the pilot and demonstration plant is narrowing

Solar Foods reported yesterday that the 01 demonstration plant had reached production parameters that, according to the company's estimate, would make the industrial-scale Factory 02 currently in the pre-planning phase, profitable. With the 01 demonstration plant, the company aims to prove that Solein’s production will also scale to a reactor larger than the pilot plant. In the demonstration plant commissioned in April, Solar Foods has now achieved a Solein production rate of 0.8 kg/m3/h and an O2/CO2 energy efficiency factor of 2.7x in a 20 square meter bioreactor. The levels correspond to those achieved by the Espoo pilot plant in 2022-2023, which is a hundred times smaller in scale. Since then, the pilot plant has achieved an even higher production rate of 1.6 kg/m3/h and an O2/CO2 energy efficiency factor of 3.0x, which the new demonstration plant is aiming for. We believe the most important measurable efficiency gains for the demonstration plant to achieve the pilot plant's key figures are related to the processes and equipment of Factory 02 itself. Progress in Solein's productivity and energy efficiency is key for Solar Foods, as it increases Solein's competitiveness by lowering its production costs and increasing production capacity.

Solein is produced in a bioreactor using gas fermentation technology, which is a completely new technology in large production volumes. Thus, there were no guarantees that Solein production would scale up in bioreactors larger than the pilot plant, but the scaling up of production at the 01 demonstration plant provides encouraging evidence for the industrial-scale Factory 02 plant investment, which is in the pre-design phase. In connection with the plant in question, Solein's production is intended to be scaled up considerably and moved to 100 square meter bioreactors. We believe the accumulation of evidence of Solein's production efficiency on the scale of the new Factory 01 reduces the uncertainty associated with production scaling and may increase the interest of potential partners in the pre-planning stage Factory 02.

Customers need to be involved to enable the 02 factory investment

In early 2025, Solar Foods announced a letter of intent with two international customers regarding a commercialization plan that, if implemented, would cover almost half of the annual production of the industrial-scale 02 plant. Phase 1 of Factory 02 is targeted to be operational in 2028. The planned factory investment is considerable for Solar Foods, but we believe that customer commitment to the project, e.g., through partial ownership, advance orders or other financial instruments, can help finance the project. Thus, convincing customers of Solein as a product and the scaling of its production play a critical role in enabling the 02 factory investment.