Fertoz Limited (ASX:FTZ) continues to progress partnerships for organic fertilizer distribution in North America and has signed a distribution agreement with South Dakota-based Soil Works LLC.
The company has also renewed its partnership with a Krezco organic phosphate rock producer based in Mexico and has secured first sales of Krezco phosphate rock into Texas.
Fertoz has now established multiple distribution points across key agricultural provinces in Canada as well as states in the USA with additional distribution and sales agreements in the pipeline.
Three pillared growth strategy
Executive chairman Patrick Avery said: “We are pleased to update shareholders with recent progress on additional distribution and supply agreements.
“Our growth strategy has three key pillars – sell our organic fertilizer products direct to farmers to generate word-of-mouth advertising and referrals and secure field trials; sell via major distribution partners; and sell our products to third-party fertilizer manufacturers who want to develop additional organic product blends or who are not happy with their current phosphate supplier.
“Each of these takes time but to date, we have executed on all three elements of our strategy”
Avery said: “We are working steadily to extend our reach in the Pacific North West, the key farming areas in western Canada, and the western United States.
“Our goal is to keep moving south along the western US states to establish distributors and partnerships in the largest organic producing state in the USA – California.
“We already have some exposure there, but we are keen to become a major player in the organic fertilizer market in California.
“We are also pleased to advise of the first sale of the Krezco organic rock phosphate we source from Mexico.
“A Texas-based organic farmer has acquired 20 tonnes for trial purposes. We expect to make more sales into Texas over the coming months as, like California, it is not impacted by the sometimes-severe weather events that have impacted our growth to date.”
Now that the sales channel has been proven, the company is working to reduce costs to enable distributors to enjoy higher margins.
With the sales representatives of most of the company’s distributors primarily paid on commission, Fertoz expects this effort will unlock meaningful sales growth.