Here's why the Stemcell United (ASX:SCU) share price nearly doubled today

A new joint venture has boosted the Stemcell share price by over 80% today. The new JV will focus on industrial scale food production.

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The Stemcell United Ltd (ASX: SCU) share price has nearly doubled today, rising by 83.3% at the time of writing. In short, this is due to the company's announcement of its joint venture (JV) agreement with Blue Aqua International Pty Ltd to cultivate and farm sea grapes in Singapore on a commercial scale.

The proposed JV partner, Blue Aqua International, is a one-stop solution provider for the aquaculture industry worldwide. Specifically, the group provides cutting-edge solutions for the management of the aquaculture environment and the optimisation of animal nutrition.

Stemcell United is an Australian small cap in the field of plant stem cell technology. Accordingly, it is actively researching products in industrial cannabis and Chinese herbs for use in the cosmeceutical fields. 

What moved the Stemcell share price?

Stemcell United has successfully trialled plant stem cell technology on Sea Grape cultivation at its research base located in Singapore. As a result, the joint venture combines the strengths of both parties in creating an integrated aquaculture farming system. Moreover, the collaboration aims to implement a scalable circular economy in aquaculture. This includes plans to promote the ocean vegetable's unique qualities as a sustainable superfood and plant-based protein.

The Stemcell share price has rallied based on the potential for revenue generation within a relatively short period of time. Although the company already generates revenues, this moves it closer to becoming a profitable organisation. 

Management commentary

Mr. Philip Gu, Stemcell United CEO and Executive Chairman, commented:

SCU is honoured to be able to partner with Blue Aqua in making Sea Grapes available to the growing population on a commercial scale, and with the strong belief that Sea Grapes will become part of a recognised balanced diet mix… The COVID-19 pandemic has added additional urgency to Singapore's food security concerns, which makes this joint venture even more compelling.

Dr. Farshad Shishehchian, Founder, Group President and CEO of Blue Aqua International commented:

The synergy with SCU is palpable. Passion and a strong technological partnership is a good recipe for sustainable growth. The joint incorporation of SCU Green Aqua Farm embodies our continual efforts to build a circular economy in aquaculture, starting with our own production systems towards the development of sustainable nutrition globally.

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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