Special Report: Innovative agtech Roots Sustainable is on the precipice of major growth with its revolutionary heating and cooling technology seeing more applications, from lettuce and strawberries to herbs and cannabis.

In the past month alone, Roots (ASX:ROO) has told the market about its plans to expand into the North American cannabis market as well picking up its second sale from a Chinese company, Dagan Agricultural Automation, for an agricultural project.

Dagan paid $278,000 for the company’s Root Zone Temperature Optimisation (RZTO) technology, following on from the successful completion of its first project in China last year.

The new project will include the installation of the tech in 10,000 sqm greenhouses, growing five crops including tomatoes, herbs and flowers. It also formed part of Dagan’s distribution agreement with Roots, with exclusivity conditional on US$19 million in sales over a five-year period.

Roots is now active in six different jurisdictions, with operations in China, Australia and its home in Israel, in addition to the USA, South Korea and Spain.

Going global

Dr Sharon Devir, Roots’ CEO, told Stockhead this year would see the company continue to strengthen its presence in these target markets.

“The orders from China were great for us, even though they were only small amounts of money for them, but the market opportunity in China is huge and we believe there will be more orders,” he said.

“Data is also being compiled from our pilots in Spain and we will be able to move forward there soon.”

South Korea has also been a winning location for Roots – it recently signed a deal with agricultural products distributor Ezfarm to sell its patented root-cooling/heating technology into the South Korean market.

Roots’ RZTO system is able to heat or cool crop roots as needed in one system, mitigating against temperature fluctuations, which is critical in regions where daily and seasonal temperatures can vary significantly.

Making jack

Dr Devir told Stockhead his company is successfully transitioning from the start-up phase  towards commercialisation.

“When working in agriculture you need to be patient,” he said. “First you need to show that your product works and then you move on to sales.

“I think in this next year we may triple our sales as more growers within our target jurisdictions become interested in our technology.

“And we’ve built demand by working in the markets where we get the highest throughput per acre, where farmers can benefit from premium prices and energy costs are a matter of concern, such as in South Korea.”

Roots’ technology has either been proven to work or is being trialled on everything from leafy vegetables to flowers, cucumbers, strawberries, cannabis, herbs, apricots, lettuce and even trees.

Dr Devir said he expected his company would generate its main revenue from cannabis in the coming years, as its technology has been shown to increase yield.

“Our results have been amazing and it is a very attractive market, a big trend across the world,” he said.


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