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Is this environmental stock about to go?

Whatever you think of the tractor demonstrations by German farmers: Agriculture is currently having a difficult time – worldwide. Not only that the world’s population is growing inexorably and more and more hungry mouths have to be stuffed, while at the same time the area available for growing food is shrinking. Traditional chemical fertilizers that help to cope with this problem also cause considerable ecological and economic consequential damage – and are therefore, as in Germany, also restricted in use.

The small, Canadian society EarthRenew (WKN A2P6MB / CSE ERTH) is now preparing to become part of the solution to this problem. The company has a patented process for producing high quality organic fertilizer from livestock waste, the development of which has invested around ten years and approximately $ 70 million. And now EarthRenew is on the verge of commercializing this process on a large scale!

Agriculture faces enormous challenges globally

The available land area, which is sufficient or of high quality to produce food, has been reported to have decreased by almost 33% in the past 40 years. And this so-called devastation causes an estimated cost of around $ 40 billion a year! The problem is the lack of organic soil components, which leads to a reduced biodiversity of the soil and a lower crop yield of the plants. An economic threat to farmers worldwide!

(Research, in turn, suggests that with each percent more organic soil, crop yield increases 12%, and with every 1% increase in organic soil, soil can hold more water.)

The use of nitrogen fertilizers and manure spills also costs $ 157 billion annually in the United States from damage to health and the environment! The search for alternatives is therefore pressing …

The EarthRenew alternative

And EarthRenew offers such an alternative. The company has developed a process that can be used to produce affordable, effective organic fertilizer from farm animal waste – in pellet form. The latter has the advantage that the EarthRenew fertilizer can be applied more precisely than traditionally sprayed fertilizer. In addition, the pellets are not simply “washed away” by rain, but remain on the plant for a longer time, so that the effect is stronger.

The production facilities are also modular, so that livestock farmers receive a scalable waste disposal solution that they can adapt to their individual needs. And, a huge advantage, these systems produce electricity at the same time! For EarthRenew, this means that you can tap into several sources of revenue: the sale of organic fertilizers, the sale of electricity and possibly a share in the cost savings of manure management.

EarthRenew does not go its own way, however. The company has already entered into numerous partnerships to increase the value of its organic fertilizers and expand the product range. You already get support from government and other agencies, including Canada’s Industrial Research Assistance Program (IRAP)!

Advantages of EarthRenews organic fertilizer

In our view, the EarthRenew product has a good chance of securing a portion of the organic fertilizer market, which was $ 6.3 billion in 2017. Experts predict that this market will grow by 12.08% per year and will therefore have a volume of USD 11.16 billion by 2022.

According to the company, Earth Renew’s organic fertilizer enables crop yields to be increased by 120 to 145% compared to similarly used chemical fertilizers. One of the reasons for this is that the plants absorb 90% of the nutrients provided with the organic fertilizer. In addition, as mentioned, the nutrients are available to the plants much longer than with conventional chemical fertilizers and the pellets are easy to transport and spread.

Future plans / commercialization

In any case, EarthRenew now wants to start the market conquest. So far, the so-called Strathmore facility near Calgary has been successfully operated on a feeding place for around 25,000 animals. The facility and its operations are approved by the Alberta Department of the Environment and Parks. With the help of Stantec’s experts, EarthRenew is currently integrating a new system design that should bring several improvements.

After completing this work, EarthRenew will be able to produce numerous organic fertilizer formulations for different plant types and soil types – and thus potentially open up several new sources of sales. As soon as the plant goes into full operation, it can produce 10 tons of pellets per hour.

The commercialization process is expected to begin with tests both in the field and in greenhouses to supplement the company’s historical data and to evaluate the performance of the new organic fertilizer formulations. EarthRenrew will then select the highest quality formulations from this data and prepare them for commercial distribution in North America.

The next step is to expand the product range – through a partnership with CCm Technologies – by increasing the nitrogen content of certain fertilizer formulations so that additional sales sources are opened up. This brings the nitrogen content of chemical fertilizers closer and allows them to “poach” in their territory.

Once the company is firmly established in western Canada, EarthRenew plans to expand its North American presence to the Canadian provinces of Quebec and Ontario, as well as U.S. markets such as California, the entire Pacific Northwest and Ohio.

US expansion starts

And this process has already started! As the company published on Friday after the market closed in Canada, a feasibility study was launched together with a new partner, which is intended to examine the profitability of another, significantly larger plant at a location in the southwestern United States. It is one of the largest feeding places in this region, one of the largest markets in the world for organic agriculture, which is designed for up to 200,000 animals!

The proposed facility, the cost of which the company estimates to be $ 37 to $ 42 million, would have a production capacity of more than 70,000 tons of bio-pellets – three to four times the capacity of the Strahtmore facility – and a demonstration facility in a strategically very affordable one Represent the situation for EarthRenew, the company believes.

The feasibility study, which is expected to take around two months to complete, is expected to cost approximately $ 50,000, according to EarthRewnew. It is intended to provide the most important conditions for a declaration of intent between the company and the potential partner, who, like EarthRenew, is strongly committed to sustainability.

Cooperation with US company BiocharNow

That would be an enormously important step for the company, which also recently concluded a final supply and reseller agreement with its long-term partner BiocharNow. This agreement stipulates that EarthRenew will purchase so-called bio-coal from BiocharNow (at a preferential price), which can then be added to your own pellets in certain formulations, increasing their nutrient content and improving the smell of the product.

In turn, BiocharNow will sell this product in the United States and, according to CEO James Gaspard, will respond to specific requests from existing customers. In addition, Gaspard believes that the BiocharNow / EarthRenew product can open up new markets and win new customers!

EarthRenew is therefore facing an exciting new development stage that could lead to the company already generating significant sales in the foreseeable future. The company not only delivers products that are of great benefit to farmers, but also swims with the organic wave. Already in 2016, organic food sales were $ 120 billion worldwide, with the U.S. being the largest market with a volume of $ 38.5 billion alone. Experts estimate that the market will grow to CAD 212 to 471 billion by 2030!

In our view, Earth Renew has considerable potential, as the company is about to implement its years of research and product optimization to a significant extent in sounding coins. In addition, a positive outcome of the feasibility study for the planned, larger facility could definitely give the course a significant boost.

After a share consolidation, EarthRenew currently only shows around 44.5 million shares outstanding and, at our current price of $ 0.395, has a stock market valuation in our opinion, which is still around $ 17.6 million. We believe that this offers a lot of room for improvement.

As always, we advise interested investors to exercise caution when investing in such young, (not yet) established companies, and if so, to invest only a small part of their portfolio, the total loss of which could be offset. Any positions should also always be hedged, for example via a stop loss order.

At EarthRenew (WKN A2P6MB / CSE ERTH) We also advise interested investors to watch the detailed and very informative video report from Pinnacle Digest, which offers a very good overview of the company and its opportunities.

Risk warning: GOLDINVEST Consulting GmbH offers editors, agencies and companies the opportunity to publish comments, analyzes and news on http://www.goldinvest.de. This content is for the information of the readers only and does not constitute a call for action of any kind, neither explicitly nor implicitly to be understood as an assurance of any course developments. Furthermore, they do not in any way replace individual, expert investment advice, they are rather advertising / journalistic publications. Readers who make investment decisions or carry out transactions based on the information offered here act entirely at their own risk. The purchase of securities carries high risks, which can lead to a total loss of the capital invested. GOLDINVEST Consulting GmbH and its authors expressly exclude any liability for financial loss or the content guarantee for the topicality, correctness, appropriateness and completeness of the articles offered here. Please take note of our Terms of Use.

In accordance with Section 34b WpHG and Section 48f Paragraph 5 BörseG (Austria), we would like to point out that clients, partners, authors and employees of GOLDINVEST Consulting GmbH can hold shares in EarthRenew and can therefore hold a potential conflict of interest. We assume that other stock market letters, media or research companies will discuss the values ​​we recommend in the same period. Therefore, symmetrical information and opinion generation is likely to occur during this period. There is also a consulting or other service contract between a third party who is in EarthRenew’s warehouse and GOLDINVEST Consulting GmbH, which creates a conflict of interest, especially since this third party pays GOLDINVEST Consulting GmbH for the preparation of reports on EarthRenew. This third party may also hold, sell or buy shares in the issuer and would benefit from an increase in EarthRenew shares. This is another, clear conflict of interest.

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