Next Investors logo grey

Roots scores second commercial ag-tech sale in China


Published 21-JAN-2019 11:02 A.M.


3 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

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.

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.