Roots Sustainable Agricultural Technologies Ltd (ASX:ROO) has executed a third sale and installation agreement with Israel based Dagan Agricultural Automation for a state-of-the-art greenhouse project.
The $64,400 sale follows the $278,000 purchase order in January and the completion of Dagan’s first $323,000 project with Roots in China last year.
The installation will involve Roots’ proprietary Root Zone Temperature Optimisation (RZTO) technology in two-thirds of a one-hectare greenhouse in the Guiyang district of Guizhou, China with 70% of the sale payable upon shipment of the equipment.
The remaining payment will be received upon project completion in quarter two 2019.
Roots co-founder & CEO Sharon Devir said: “Roots continues to build momentum in the world’s largest agricultural market, securing our second RZTO installation order from Dagan this quarter.
“It highlights the strength of our partnership with one of the world’s largest ag-tech integrators, as well as the significant opportunity for our hearting and cooling technology in a market that produces more than 50 percent of global vegetable production.”
The remaining third of the greenhouse will be used a control measure, allowing the farmer to directly compare RZTO crop yield, quality and performance to un-treated control group crops.
Under the agreement, Roots will receive 70% of the sale payment upon shipment of equipment with the remainder payable upon installation completion in May 2019.
Installation will lead to “further sales activity”
Devir added: “This state-of-the-art pilot will further support Roots’ China operations, enabling us to demonstrate the benefits of our root zone technology in a sizeable greenhouse alongside control crops.
“A successful pilot is expected to lead to a larger installation phase for this particular project and further sales activity in the future.”
The installation forms part of Dagan’s distribution agreement with Roots, with exclusivity conditional on US$19 million in sales over a five-year period.