Wide Open Agriculture signs Proeon framework agreement for lupin protein manufacturing in India

Wide Open Agriculture (ASX: WOA) has signed a non-binding framework agreement with Proeon Foods B.V. covering potential contract manufacturing of its proprietary lupin-based ingredients, as the Australian company seeks to reduce production costs through manufacturing in Asia.

• WOA signed a framework agreement with Proeon covering potential contract manufacturing of its lupin ingredients, with binding protections covering the Australian company’s intellectual property.
• Proeon could manufacture WOA ingredients in India and gain exclusive Indian distribution rights once WOA approved commercial production.
• The companies planned production trials and would explore a potential joint venture for large-scale manufacturing of lupin protein and co-products in India.

The agreement followed mutual due diligence under a non-disclosure agreement and set out the principles for a potential future contract manufacturing agreement. Most provisions remained non-binding, although those covering intellectual property, confidentiality, costs, governing law and dispute resolution were enforceable.

WOA has been seeking a lower-cost, capital-light contract manufacturing model to improve the economics of its lupin ingredients. The company reported that its former German facility had generated negative margins and offered limited capability to produce co-products.

“This agreement is a genuine step forward for WOA,” CEO Craig Swan said. “With our intellectual property protected, we can now start working closely with Proeon, jointly progressing technical and commercial objectives, running trials, and building the kind of understanding that only comes from working together.”

“Proeon brings real capability to the table, and this is exactly the collaboration we need to find out whether they’re the right long-term manufacturing partner for WOA’s lupin platform.”

Proeon, founded in 2018, develops and manufactures functional plant protein isolates including mung bean and peanut protein. The company is headquartered at the Delft Biotech Campus in the Netherlands and operates production facilities in Pune, India, supplying food and beverage brands across Europe, North America and Southeast Asia.

Its production base in India matched WOA’s stated aim of securing an Asia-based manufacturing and marketing partner to lower manufacturing costs.

“We’ve long admired what WOA has built with lupin protein,” Proeon Foods Founder Kevin Parekh said. “It’s a genuinely underused crop, and WOA’s technology is some of the most interesting we’ve seen in the plant protein space.”

“Signing this term sheet lets us start working closely together, sharing information and exploring what a manufacturing and marketing partnership with WOA could look like, and we’re looking forward to seeing where that leads.”

Under the framework agreement, WOA retained full ownership of all intellectual property relating to its lupin products. It would also own any joint work undertaken as part of production optimization trials.

Proeon could use WOA’s intellectual property solely to carry out its manufacturing obligations and could not reverse engineer WOA’s ingredients or technology. The protections would remain binding for five years after the termination of any agreement.

Proeon would also be prohibited from manufacturing lupin-based products for itself or other parties during the term of any agreement and for five years after its termination.

WOA, meanwhile, would not be required to commit to minimum order volumes or exclusivity with Proeon. The company continued discussions with other prospective contract manufacturers as it assessed a preferred long-term partner and confirmed that further framework agreements could be signed.

The framework also covered distribution in India. Once WOA approved commercial production by Proeon, Proeon would gain exclusive rights to market and sell WOA’s lupin ingredients in the country for a minimum two-year period.

The companies could now begin sharing detailed technical information covering process steps, equipment, production parameters and specifications. This work would be used to identify capability gaps and establish the basis for trial production.

No timetable had been set for technology sharing, trial production or execution of a definitive commercial agreement. Pricing, invoicing, delivery and other commercial terms would be negotiated as part of any future binding deal.

WOA reported that a definitive contract manufacturing agreement would be intended to establish a lower-cost production model than its former German operation while improving its ability to generate value from co-products.

The company develops lupin-derived protein isolates, fibers, oil and other compounds for food, beverage, cosmetics and nutraceutical applications. Its protein isolates are designed for applications including plant-based dairy alternatives, meat substitutes, baked goods and health-focused products.

WOA and Proeon also agreed to investigate a potential joint venture to manufacture large-scale commercial quantities of lupin protein and co-products in India.

The joint venture remained at an exploratory stage, with no binding agreement or timetable in place.

WOA and Proeon would next share technical information and develop a proposed timeline for ramp-up activities while working toward agreement on commercial terms.

WOA would continue discussions with other prospective manufacturing partners in parallel. Before sharing detailed technical information with another candidate, the company planned to put similar intellectual property protections in place.

The company reported that it would select a manufacturing partner based on its technical and commercial fit with the lupin protein platform and would provide further updates as milestones were reached.

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