Roots scores second commercial ag-tech sale in China

By Zoe Gross. Published at Jan 21, 2019, in Technology

Blossoming ag-tech small cap, Roots Sustainable Agricultural Technologies (ASX:ROO), has secured a second commercial sale and installation deal with Dagan Agricultural Automation, its exclusive distribution partner in China.

The A$278,000 / US$200,000 purchase order from the sale is payable to Roots in instalments during 2019, with the first to be paid immediately.

The new project in China from Dagan — one of the world’s leading global ag-tech integrators — will see Roots’ patented RZTO heating and cooling technology installed in 10,000 sqm greenhouses and growing five crops, including tomatoes, herbs and flowers. ROO’s technical team will oversee installation.

Roots' disruptive RZTO technology optimises plant physiology for increased growth, productivity and quality by stabilising the root zone temperature of the plant in question. It also mitigates against the impact of daily and seasonal temperature changes, helping farmers grow crops more effectively throughout the year.

This new order follows on from the successful completion of Roots’ first agricultural project in China with Dagan last year, which saw RZTO heating and cooling systems installed in nine greenhouses.

It also forms part of Dagan’s distribution agreement with Roots, with exclusivity conditional on US$19 million in sales over a five-year period.

As Roots CEO and co-founder, Dr Sharon Devir, pointed out, this second order further strengthens the company’s presence in China — the world’s largest agricultural market — and aligns with its long-term targets in the region.

“We’re already seeing great yield and quality increases from crops grown in the first project,” Devir said.

“This second substantial sale validates the confidence our distribution partner has in our root zone temperature optimisation technology. This is particularly important in a country which accounts for 53% (nearly 550 million tons) of global vegetable production.”

“We believe China’s vast agricultural requirements offer significant long-term sales opportunities for Roots’ RZTO technology.”

This latest development from ROO continues last year’s momentum, which saw the rapidly maturing small cap ramping up commercialisation of its disruptive tech.

In December, ROO conducted its first RZTO cooling pilot in the floriculture production sector — a market that’s worth US$55 billion each year. Following on from a number of successful cooling pilots on edible herbs and promising interim results on medicinal cannabis, that pilot saw RZTO technology being used to cool the roots of Peruvian lillies. Here, Roots reported that growth and cultivation of flowers with cooled roots started eight weeks earlier than control plants.

Importantly, ROO is the only company in the world with commercially viable two-in-one root zone cooling and heating technology — something that gives it a sharp edge in the increasingly competitive ag-tech space.

Investors seem to concur. ROO is currently up 13% at 13 cents.

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