Roots is expanding globally as its disruptive agritech solutions tackle Agricultural’s biggest problems.

Agriculture is undoubtedly one of the most energy intensive industries in the world.

Maintaining pumps, tractors, cool storage, and harvesting crops – they all require large amounts of energy which often make up 50% of the farmer’s direct costs.

Water usage is also a big requirement in farming, with irrigated agriculture using about 60% of the water available for human use.

All these add up to more carbon footprints as well as the depletion of scarce fresh water – two issues at the top of the UN SDGs (Sustainable Development Goals).

But there is an ASX-listed company which focuses on tackling the environmental issues associated with farming – Roots Sustainable Agriculture Tech (ASX:ROO).

The Israeli-based company is developing and commercialising cutting edge, disruptive technologies to address critical problems faced by agriculture today.

This includes systems that can manage a plant’s root zone temperatures, as well as the shortage of water for irrigation.

The company’s Root Zone Temperature Optimization (RZTO) technology optimises plant physiology for increased growth and quality by stabilising the plant’s root zone temperature at an optimal range throughout the year. This is achieved in any substrate such as pots, growbags and hydroponic systems.

Using heat pumps either alone or with Ground Source Heat Exchange (GSHE) installations Roots is able to provide an accurate range of root zone temperatures for the plants to obtain maximum output and provide production security.

Apart from increasing yields and quality, the technology also increases growing cycle planting options and mitigates extreme heat and cold stress, while significantly reducing energy consumption.

“The essence of our technology is to control and maintain a very stable range throughout the year over the temperature of the roots, not the canopy,” Roots’ CEO Boaz Wachtel told Stockhead.

“And Roots now has a machine that not only controls the temperature of the roots, but also controls the irrigation water temperature along with the liquid fertilisers’ temperature – and this is all in one unified machine.”

 

Patented technology

Roots’ technology is backed by a number of patents the company has successfully received, mostly in the United States.

Recently, Roots has further strengthened its IP (intellectual property) portfolio of innovative agritech solutions with two additional US patents applications.

The first patent application relates to its new dual-use of drip irrigation equipment, which is able to push temperature-regulated air (either hot or cold) between irrigation intervals.

Roots anticipates first sales of this system to commence during Q4 of this year.

The second patent relates to a coordinated system which unifies a number of temperature-related critical functions that are currently served by separate equipment.

“With the unified machine, we’re now able to control three temperature parameters. And by doing this, the yield and output of the plants dramatically improve across the board,” said Wachtel.

Wachtel explains that in the agricultural industry, nobody else has a technology that cools roots – which has now become a major concern for farmers in the face of rising global temperatures. ROOTS tech allows root zone cooling or heating with a single system and reduce the use of air cooling or heating significantly.

In order to manage temperature, farmers usually buy separate equipment to heat or cool the air, with significant Capex, Opex and environmental footprint.

“Our technology saves most of the air heating and cooling that is commonly done by just maintaining a very narrow range of the roots’ temperatures.

“So we not only cool roots, we can both heat and cool the roots at the same time,” Wachtel told Stockhead.

 

Global expansion

The company targets what’s called ‘covered agriculture’, which is plants grown in covered facilities such as greenhouses or under shade nets.

Produce where yields could be increased by using Roots’ technology include strawberries, tomatoes, lettuce and cannabis and may other crops.

“We have extensive experience with the cannabis market worldwide, where we increase the yield and THC levels in many strains for cannabis growers,” said Wachtel.

Overall, Roots currently has 60 installations of its technology worldwide, covering several jurisdictions.

It has ongoing installation projects including South Africa, Turkey and the Gulf states, where it’s in the midst of a major installation in the UAE.

The company has rapidly advanced the installation and supply of Heat Exchange Probes (HEPS) in the UAE as part of its recent sales agreement with EliteArgo.

Parts and systems have been shipped from Israel to the UAE, where installation of two HEPS across a 1.6 hectare, 9000 plant greenhouse has commenced.  The project is worth around US$105k to Roots.

According to Wachtel, the Gulf countries will remain a big opportunity as the region wants to establish food security but is having difficulties due its harsh conditions.

“Gulf countries have a significant push to adopt technologies that can help them grow food in their own backyard,” he said.

Speaking of backyards, Roots has also designed the ‘Super Mini’ RZTO product aimed at the increasing number of people who are growing their own produce at home due to rising food prices.

“COVID caused many people to start thinking about producing their own food. So we developed a small system for homeowners who grow food in their own garden to maintain the root zone temperature,” said Wachtel.

 

Untapped markets

Globally, Roots is accelerating its expansion in Latin American countries, with its recent binding agreement with ScaleUp Israel.

ScaleUp will provide Roots with an introduction to dealers and investors in the region, as well as distributors.

Latin America is a significant untapped market as the region hosts some of the most dynamic farming systems worldwide having successfully fed a fast-growing population.

The company has also recently reviewed its expansion strategy following an extensive assessment of multiple opportunities in Europe and the US.

Roots  will now aggressively accelerate commercialisation of its current and recent innovations, such as the unique Heat Exchange probe technology, in order to address and mitigate markets affected by climate crisis.

“The implementation of an expansion in operations follows the board and management’s extensive review of opportunities, which are expected to create a series of value catalysts over the coming months,” Wachtel said.

“We already have two beta products in the making, and now we’re going to commercialise this product which hopefully will be available by the end of the year.”

A marketing campaign in the UK has commenced to leverage existing dealerships focused on providing farmers with sustainable and energy saving technologies that are government subsidised.

There are now plans to also expand similar agreements across Europe in the coming months.

 

Huge opportunity

Roots is gradually creating value for its shareholders through the IP being generated over time.

The company’s core technology is addressing one of the biggest challenges of our time – global warming.

Agriculture has always had enormous problems but those problems are now being put to the fore due to climate change.

Global warming has affected agriculture tremendously, including a lack of fresh water and energy to manage the rising temperatures.

“I ask investors to trust Roots because we are doing important work for the environment,” says Wachtel.

“It takes time to build value in agricultural technologies because it’s a complex area, but the problems and needs are on a global scale, so the opportunity is huge for us.”

 

This article was developed in collaboration with Roots Sustainable Agriculture Tech,  a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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