Fertoz Ltd (ASX:FTZ) continued to build its commercial fertiliser partnerships in the US during the March quarter by securing a multi-year supply agreement and letter of intent for joint venture with PhoSul LLC.
This agreement targets 1,000 tonnes of product sales in the first year and will run year-to-year, renewing automatically.
Executive chairman Patrick Avery said he was pleased to strike a new partnership with PhoSul LLC, which Fertoz would look to deepen through a joint venture.
He said: “PhoSol is part of Propeat, a leader in commercial fertilisers in the US, and part of the Pocock Group, which could provide further opportunities to grow our business utilising that network to broaden our product lines and increase volumes.”
COVID-19 impact on sales[hhmc]
Although some supply disruptions were evident during the quarter and sales were lower than expected, subsequent to the end of the quarter, sales have increased beyond expectations and if logistics disruptions continue to ease, the company is confident of maintaining sales to budget.
Avery said: “Although sales got off to a slow start due to COVID-19, the industry continues to grow in terms of both farmers and acres, and the number of transitional acres is also increasing.
“With organic farmers needing to achieve strong yields this crop year in order to maintain healthy profitability, we see opportunity to continue growing our book of sales of certified organic fertiliser options that empower farmers to improve their soil fertility and crop yield.”
Minimising expenditure[hhmc]
The company undertook quarterly production and product planning to identified sufficient ore resources in easy to access stockpiles, allowing it to minimise mining expenditure in 2020.
Avery said: “Fertoz continued with our exploration program in the fall, winter and spring, completing exploration and mining studies, ore and mining analyses and finalising some longer-range plans.
“Bulk sampling permits are ready for Alberta and Marten-Fernie area, and will be utilised as required.”
“We have significant volumes in inventory and will only extract sufficient bulk samples this summer to match sales volumes.”
North American operations[hhmc]
During the quarter the company progressed discussions with numerous potential distributors and third-party fertiliser processors in the USA, with a focus on supply to the western regions, particularly California.
Fertoz also opened discussions with mid-sized fertiliser companies without organic divisions to promote potential joint ventures.
The first production run is set for quarter two CY20, initially trialling the product in Idaho and neighbouring states, with Fertoz to lead the sales efforts of these products and slowly ramping up deliveries to partner Humic Growth.
Asia Pacific plans[hhmc]
Sales to Australia and New Zealand for the first quarter of 2020 are down but still ahead of budget.
The next product shipment to Australia of 336 tonnes is due to arrive in May.
Product is ready to ship to Philippines and Vanuatu after COVID-19 delays and the recent cyclone in Vanuatu.
Share purchase plan[hhmc]
Fertoz completed a share purchase plan (SPP) over the quarter which aimed to raise $2.5 million at 80 cents per share.
Avery said: “During the quarter, Fertoz also finalised a share purchaseRead More – Source
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