viewFertoz Ltd

Fertoz signs multiple contracts including with heavyweight Archer Daniels

The company has signed multiple distribution contracts in North America for its organic phosphate fertiliser.

Fertoz Ltd - Fertoz signs multiple contracts including with heavyweight  Archer Daniels
Archer Daniels, which employs 40,000 people, will stock Fertoz products

Fertoz Ltd (ASX:FTZ) has revealed multiple new deals including a supply agreement with one of the world’s largest agribusinesses, Archer Daniels Midland Co (NYSE:ADM).

Archer Daniels will make Fertoz’s phosphate-based fertiliser products available to its wholesale and retail customers through physical and online channels, with first sales expected in Spring 2020.

Fertoz has also done other details with existing distributor Blairs Ag and with AgVend.com, Trimble Ag and Ponderosa Ag.

The Blairs Ag order is for 15,000 tonnes to be delivered as 5,000 tonnes per year over the next three years with deliveries starting before year-end.

Expanding base of distributors and manufacturers

Fertoz’s executive chairman Patrick Avery said: “The deal with ADM not only de-risks the company from a volume growth target perspective, it also represents strong validation of the quality of our organic rock phosphate fertilisers and blends from a global leader in food production, processing, storage and transportation.

“With consumer desire for simple, wholesome food driving growth in the organic category, ADM has introduced and expanded a range of organic products, including grains, beans, seeds and flours.

“As demand for organic packaged foods has grown among label-conscious consumers, so too has demand for organic inputs.

“We are pleased that after reviewing a range of competing products, ADM has chosen to market Fertoz's organic rock phosphate to its substantial grower and distributor network.

Targeting organic farmers

“Following our recent efforts to gather contact details of organic farmers, we are now targeting all relevant potential customers within a 100-mile radius of our key distribution centres.

“This targeted approach is generating promising leads that we expect to convert into sales in 2020.

“This should compensate for the lower-than-expected sales in 2019, which, as shareholders know, was impacted by a 1 in 100 year weather event.”

15,000 tonnes orders in hand

A sales update today revealed the company has orders-in-hand at just under 15,000 tonnes for fall and winter delivery.

With early snow in US state of Alberta and Montana, deliveries have slowed a little but the initial snow has melted, leaving a window for further deliveries.

Trucking deliveries are planned for all good-weather days in October, November and December.

Looking through the recent and current weather events, the market outlook remains in good shape for the longer term.

According to MarketWatch’s 17 October 2019 report, Global Organic Fertilizers Market, the organic fertilizer market grew at 14% in 2018 and is forecast to maintain this growth rate through to 2023.

Quick facts: Fertoz Ltd

Price: 0.073 AUD

Market: ASX
Market Cap: $11.27 m

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