RLF AgTech targets global growth and agricultural change with public listing

RLF AgTech ASX IPO agriculture
RLF AgTech has raised $8.5 million, having gone to market for a minimum subscription of $7 million for its IPO.

Australian crop nutrition technology developer RLF AgTech will have the highly-competitive international agricultural market in its sights when it hits the ASX boards shortly.

The Perth-based company’s initial public offering has raised funds to facilitate its expansion overseas and build on an established position as a provider of Australian-based plant technology and nutrition products for farmers and growers worldwide.

The expansion is based on an increasing awareness of the yield and quality improvement generated from the use of its products, across millions of hectares of broadacre and horticultural crops in a multitude of different countries, climates and agricultural environments.

RLF AgTech’s products have been demonstrated to produce typical yield increases of 10-30% in a range of crops globally, which returns multiples on investments for farmers.

In addition to higher yields, RLF AgTech’s products also create better quality crops leading to more nutritious food for consumption, and through their work at a physiological level, stimulate plants to sequester carbon into the soil and reverse and improve environmental degradation associated with the over use of traditional fertilisers in industry.

Capital raising

In its IPO, RLF AgTech raised $8.5 million through the issue of 42.5 million shares at $0.20 each. This gives the company an indicative market capitalisation of $36 million on listing.

The bulk of the funding is expected to be ploughed into RLF AgTech’s sales and distribution network and via the establishment of its wholly-owned subsidiary RLF Carbon, which seeks to enable global agriculture to obtain net zero (or potentially even carbon negative) production of food.

In pursuit of that outcome, RLF Carbon recently entered into a non-binding letter of intent with the largest trader of carbon credits in Australia, the Commonwealth Bank (ASX: CBA) to discuss and explore opportunities for a carbon feasibility study which could lead to a possible strategic relationship.

RLF AgTech believes there could be a high market demand for RLF Carbon’s products to play a key role in global agriculture reaching net zero, based on the predicted deposition of carbonaceous matter in the soil, which across Australian grain crops as an example, could potentially generate hundreds of billions of dollars in Australian carbon credits.

Discovery Capital Partners was the lead manager to the IPO.

On listing, RLF AgTech will be assigned the ticker code “RLF”.

Enormous market

Chairman Donald McLay said the size of the company’s target market was “enormous” and in urgent need of new technologies.

“If existing population and prosperity levels continue to follow current trends, it is estimated that nearly double the amount of global crops will be required to be delivered by 2050 to meet [world] demand,” he said.

“Improved productivity and better technology will be essential to ensure we can feed a growing population sustainably and in an environmentally-responsible way.”

Mr McLay said RLF AgTech’s products benefit the entire crop lifecycle.

“Because we affect the critical root-to-shoot ratio, we also have the potential for achieving a globally significant and natural mechanism of carbon sequestration,” he said.

“Our wholly owned subsidiary RLF Carbon has been incorporated to specifically pursue this objective.”

Mr McClay was previously chairman of Credit Corp (ASX: CCP) during which time he stewarded the company’s growth from a $20 million market cap to in excess of $2 billion.

Plant nutrition

RLF AgTech specialises in the formulation of plant nutrition products to improve the quality and yield of most crop types.

The business idea generated from an awareness of the scale of the enormous inefficiencies in global agriculture, in particular the industry’s over-use of traditional chemical fertilisers, causing significant damage to soils, plant health and a vast global greenhouse gas footprint.

RLF AgTech believes the issues will only become more acute as global pressure mounts for farmers to grow larger quantities of food.

It says its products allow growers to eliminate the amount of traditional fertilisers used by their operations in return for “exceptional crop yield” and a reduction in greenhouse gas and carbon emissions.

Users of RLF AgTech’s products, which are applied as a liquid to the seeds and/or foliage of a crop, can, for example, reduce their chemical fertiliser usage by up to 20%, which will typically more than cover the cost of RLF AgTech’s products as well as provide significantly increased yields and returns.

Proton technology

RLF AgTech’s claim to fame has been the Australian-developed plant proton delivery technology (PPDT) which binds critical nutrients to a hydrogen proton source which works within a plant to provide an additional energy source to photosynthesis to drive increased growth above and below the soil.

The technology is believed to work at a cellular level to help plants expend less energy during the transfer of nutrients.

The conserved energy can then become available to drive plant growth and yield, while increasing the size, quality, resilience and nutritional value of crops.

Research has shown that plants grown using RLF AgTech’s technology deliver typical yield increases of up to 30% and can achieve an enhanced root system, increased top growth, more new shoots and thicker stalks.

The healthier a plant is, the better it is able to withstand the adverse effects of climate change in cropping environments and the more income it can attract for farmers and growers. The product also stimulates plants to increase the rate of root exudation, which catalyses the growth of micro-organisms within the soil – leading to better nutrient uptake and richer, healthier soils in the long term.

Nutrition demand

Managing director Ken Hancock said demand for specialty plant nutrition and technology-based crop management programs was growing.

Farmers are becoming more aware of the role they play in providing a viable alternative to traditional fertiliser practices in a more sustainable, environmentally conscious way that will allow global agriculture to support a growing population.

“This is especially so when seeking to address many of the challenges facing agriculture, such as climate change, soil condition and carbon capture as they transform to new economic frameworks,” he said.

“With the introduction of innovative and more efficient forms of farm management – and our high-tech nutrition products and crop management technologies play a clear role in this – the better aligned they can be with industry and government policy directives aimed at achieving sustainable agricultural outcomes.”

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