Roots Sustainable Agricultural Technologies (ASX: ROO) has Italy and one of Europe’s largest agricultural markets in its sights after signing an exclusive and binding sales and distribution agreement for its RZTO technology with Cairo & Doutcher.
Under the exclusive agreement Cairo & Doutcher, a leading Italian ag-tech production and distribution company, will be tasked with achieving clearly defined sales targets totalling €3.5 million (A$5.66 million) between now and the end of 2023.
Ongoing exclusivity can be secured by meeting minimum annual sales commitments in the form of selling five systems in the first year and following up with €500,000 in sales in year two, €1 million in year three and €2 million in year four.
Roots chief executive officer Boaz Wachtel explained that the deal is expected to secure a strong foothold in the very important Italian market and deliver a steady stream of sales in the near future.
Growing in Italy
Root’s agreement with Cairo & Doutcher was struck following the successful installation of the company’s ‘Root Zone Temperature Optimization’ (RZTO) system for root zone heating and cooling of flowers at Cairo & Doutcher’s greenhouse in southern Italy.
After successfully trialling the technology, Cairo & Doutcher will continue to use Roots’ system for customer demonstrations in Italy and has confirmed that three additional installations will soon be added for other crops.
In further good news, Roots said that implementation of its RZTO technology has even attracted the attention of Italy’s agriculture minister Teresa Bellanova, who is expected to view the system and its benefits in the near future during a scheduled visit.
According to Roots, Italy is one of Europe’s premier countries for agricultural production including fruit, vegetables, viticulture and olive crops. In 2016, the country’s agricultural sector was estimated to be worth close to €31.6 billion, second only to Spain.
“This binding distribution agreement is a testimony to the growing viability of RZTO technology and the interest it is generating around the world,” said Dr Sharon Devir, co-founder and director of Roots.
“Italy is an important agricultural producer for the EU and it is a versatile market with great potential for our RZTO’s technology. Cairo & Doutcher share this enthusiasm for the technology and the sales targets they have set reflect this,” said Dr Devir.
The news saw Roots shares climb almost 14% to $0.041 in morning trade.