The Aussie microcap with a big solution for bio security concerns
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Special Report: The company is well-positioned to benefit from changes in end-to-end food tracking requirements.
Amid this week’s market selloff, many investors have been questioning how to restructure their portfolios to better manage risk.
But even in a health crisis, there are investing opportunities. And while the short-term pain may be severe, market-moving events of this nature often give rise to broad changes at an industry level.
After all, once the dust has settled, the first question for companies and markets is how to reallocate resources to reduce the likelihood of another viral outbreak happening again.
In that context, there are likely to be key changes across global supply chains spanning industries such as food and medical supplies.
One company positioned at the forefront of those changes is Security Matters (ASX:SMX), the ASX-listed supply-chain technology company.
Speaking with Stockhead, SMX CEO Haggai Alon had some interesting insights into how the coronavirus fallout will act to reshape the global economy.
“I think what we will see is a complete change in Australia’s biosecurity strategy,” Alon said.
Right now, existing measures around food security are compartmentalised across one single point at a time in the process. “That will change – it won’t be about a specific product or segment but on the whole process, it’s the whole story,” he said.
“Take the food industry as an example – people will need to see full visibility along the supply chain, from growing food to producing, marketing, consumption and dealing with food waste as well.”
“Because in the post-corona world, people will realise there’ll be more outbreaks if you don’t have a way to monitor the relationship.”
Using the example of the food industry, Alon said Security Matters is “the only company with a scalable solution” ready to fit that broader trend of end-to-end supply chain management.
The company’s technology allows any solid, liquid or gas to be invisibly and irrevocably ‘marked’ using a chemical-based barcode, and ‘read’ using a unique proprietary reader.
“If you look at the intellectual property we’ve generated, we have the tech to mark animal feed, seed and plantations. From there we can monitor the growing process, the production process – everything related and connected through to the end-product itself. If it’s not the full answer, it’s the best answer at hand,” Alon said.
In light of the latest viral outbreak, Alon said the benefits of SMX’s end-to-end “Intelligence on Things” solution will become even more prevalent in the years ahead.
“It’s not about creating the vaccine; it’s about driving fundamental changes in supply chain transparency,” he said.
“Without that, then every five or 10 years you see the same patterns, with the same loss of life and impact on the broader economy.”
And looking ahead, he sees those same shifts in global food production taking place across different sectors such as low-carbon energy and sustainability.
“I think we’ll see some of the major trends that have been building over the last decade or so are going to merge,” he said.
“Because ultimately, all of them are dealing with trust. And once the effects of the corona virus have been felt through global supply chains, the value placed on that trust is going to be a lot higher.