Next Investors logo grey

Root’s Italian distributor sets multi-million dollar sales targets


Published 13-FEB-2020 11:21 A.M.


2 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

Italy is in the top three European countries for agricultural production, with fruit and vegetables. It is also Europe’s main supplier of vegetables.

It makes for a perfect market for Roots Sustainable Agricultural Technologies Limited (ASX:ROO) to take an ag-tech stronghold as it looks to boost sales of its Root Zone Temperature Optimization (RZTO) technology in this region.

RZTO technology helps companies improve crop quality and increase yields.

Roots entered the market in October 2019, when it signed a 12-month Letter of Intent (LOI) with leading Italian ag-tech producer and nursery Cairo & Doutcher.

Cairo & Doutcher has been using the technology with great success after Roots installed its hybrid ground source heat exchange system combined with a heat pump to improve crop quality and increase yields for herbs and flowers at Cairo & Doutcher’s growing facilities in Southern Italy.

The Italian producer is an early adopter of agricultural technology, utilising innovative cultivation techniques to improve the quality of its pomegranate, mango, avocado, herb and flower crops. Its satisfaction with the effects of the RZTO system has led to a further agreement between the companies that could have mutual benefits.

This week Cairo & Doutcher signed an exclusive binding agreement to sell a minimum of five Root Zone Temperature Optimization (RZTO) systems during 2020.

To maintain exclusivity in relation to selling the RZTO system Cairo & Doutcher must build up sales of the RZTO system over a three year period, with incremental growth expected each year.

Over the course of the following three years, Cairo Doutcher has also agreed to increase sales of the RZTO systems by 100% per year from €500,000 during 2021, to €1 million in 2022 and €2 million in 2023.

Putting that in an Australian context, Italy could be a lucrative market for Roots worth A$3.2 million annually in as little as three years’ time.

Boaz Wachtel, ROOT's CEO and Chairman said, "With this agreement we are confident we will be able to secure a strong foothold in the very important Italian market and produce significant sales."

Italy holds great potential for roots RZTO’s technology, with the company confident it can produce significant sales and expand its footprint in this territory and throughout Europe.

Dr. Sharon Devir, Roots co-founder and director said, "This binding distribution agreement is testimony to the viability of RZTO technology and the interest it generates around the world. Italy is an important agricultural producer for the EU and it’s a versatile market with great potential for roots RZTO’s technology.”

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.