Wide Open Agriculture (WOA) has secured a $1.2 million tax rebate under the federal R&D Tax Incentive Scheme for FY24. The ASX-listed ingredient company says it reflects the large amount of R&D it has undertaken in developing its proprietary lupin protein isolates ready for market.
WOA chair, Yaxi Zhan, said the rebate would allow the company to continue pursuing its strategic goals, including entry into the South-East Asian market for lupin protein.
“The tax rebate of $1,277,758 will be used to support operational expenses related to the commercialisation of the lupin protein, as well as strengthening the balance sheet by repaying a $500,000 R&D loan along with accrued interest,” Zhan said.
The scheme is administered by the Australian Tax Office (ATO) and AusIndustry and enables companies to receive up to 43.5 per cent refundable tax offset of eligible expenses. Late last year the ATO released its first annual Research & Development Tax Incentive Transparency Report that revealed $11.2 billion in expenditure was claimed in FY22.
Commercialisation progress
WOA said it had strengthening sales momentum, with commercial sales and purchase orders for more than five metric tonnes of lupin protein isolate from a European customer, Latin America distributors and an Australian food manufacturer.
While the value of these initial commercial sales is not financially material to the company, they represent a step up in the commercialisation of WOA’s products.
“These sales provide proof of the global potential of WOA’s lupin proteins which are starting to overcome one of the largest challenges for food companies - the long product development and commercialisation timeline of new ingredients,” the company said.
Zhan added, “Backed by a secure and scalable homegrown lupin supply from Western Australia, we are targeting the premium end of the market while working to bring down production costs through scalable alternatives.
“As a small company operating with a semi-commercial plant, our strategy has always been to showcase the global potential of our breakthrough lupin proteins, rather than produce volume non-commercially. And now, we’ve clearly demonstrated that potential.”
Strategic update
At the beginning of March, WOA delivered an update on its board-led strategic business review. Since it divested Dirty Clean Food in April last year, WOA has been transitioning from a “diversified, regenerative food and agriculture company to an alternative protein technology and ingredient business”, focused on producing lupin protein isolates and associated products.
Its key asset is its proprietary intellectual property associated with lupin protein isolates. In the last 12 months, WOA said it had been enhancing value through R&D, production process improvement, and sales development activities.
Following the acquisition of Prolupin in October 2023, WOA now owns a large range of lupin related intellectual property including patents, recipes, trademarks and know-how. WOA has been building on that and gaining “valuable information” on scaling production of lupin protein isolate for human consumption. “This is and will remain the core asset of the Company,” it said.
“All relevant IP is now owned directly or via exclusive licencing agreement by the Australian head company of the WOA group. The commercialisation of this IP and its ability to carve out a share of the $23 billion global alternative protein market is still considered a significant opportunity for the company.
“The recent success in obtaining regulatory approval to supply lupin protein isolate into the Chinese market marks a significant step forward,” it said.
Further work will be carried out on food applications to cater for the South-East Asian market. This will include work on a lupin tofu, to complement the existing applications including lupin cheeses, breads, milk, protein bars and protein powders.
Production strategy
Over the past 18-24 months, the Company has successfully scaled up its Buntine Protein production from pilot scale to semi-commercial production through the acquisition of the purpose-built lupin protein processing facility in Germany.
The acquisition has enhanced WOA’s technical expertise and operational know-how and helped develop commercialisation plans for the full utilisation of lupin seeds – lupin protein Isolates, lupin fibre and lupin oil, strengthening the economic viability of the business case for lupins as a human food ingredient.
