Laying down new roots: Roots ag-tech expands into Africa

Anyone who has tried to grow coriander on their apartment balcony (like me) will understand that food production, even that of a measly herb, is somewhat of an art form. The climate, topography and differences in soil all affect the type and quality of foods that can be grown in certain regions. 

Adding to an already difficult task, experts have been harping on for years about the global challenges we will soon face when it comes to agriculture and food production, calling for strategic and sustainable farming practices and planning. Ag-tech companies are putting their heads together to deliver innovative solutions for these important problems. 

Israeli company Roots Sustainable Agricultural Technologies (ASX: ROO) is one of those companies, creating technologies to optimise plant growing by managing root zone temperatures and irrigation levels. 

Having commercialised their proprietary technology, Root Zone Temperature Optimisation (RZTO) in other jurisdictions, the Company is now looking abroad, expanding into Africa where the Company sees significant opportunity in the blueberry and cannabis markets (yeah, apparently South Africa has a booming blueberry industry… who knew?!). The industry has seen rapid growth in the last five years with no indication of slowing down. The area where blueberries are planted around the Western Cape is expected to grow by 17%. 

South Africa is also home to a thriving cannabis growing industry which is expected to achieve strong profits and growth following an injection of funds from the Department of Agriculture, Land Reform and Rural Development as part of their plan to create over 25,000 jobs and increase foreign investment in the country. 

Helping Roots lay down some metaphorical roots in the country is Cherry Irrigation, a Cape Town based company whose expertise lies in designing and installing agricultural technology solutions to growers nationwide. For 30 years, Cherry Irrigation has been helping farmers maximise crop yields and plan for sustainable growth each season. 

Roots has signed a Letter of Intent (LOI) with Cherry Irrigation who will have exclusive rights to sell, market and install Roots’ proprietary tech in both South Africa and Namibia. 

Roots is keen to see their products enter these new markets and jurisdictions. CEO of the company, Boaz Wachtel said: “Securing our first LOI and sales into Africa is a major step for our company and highlights the applicability of our products to farmers and growers globally. We expect our RZTO and HEP technologies to be well received, specifically in a region experiencing large growth in segments in which our product can considerably increase crop yield and crop quality.

“Discussions are well progressed with numerous other parties following an increased level of demand for technologies providing sustainable agricultural practices. Roots remains in the box seat to be able to establish our presence in further key markets as this trend continues to accelerate.” 

The agreement also includes a royalty however the amount of this is to be decided in early 2022. Cherry has already purchased some Roots systems to use as pilot installations over the next few months and will inform more details of the arrangement.