Imagine the picture. The camera lens gets closer and closer until it is possible to see microscopic worms crawling around a plant’s root, which, up close, appears to be the size of a melon. This is the nightmare of every farmer.
The war against plant pests is a central feature of agriculture, and critical for farming success. Minrav Holdings Ltd. (TASE:MNRV) fully owned subsidiary AgroGreen can help give farmers in Israel and around the world nightmare-free sleep thanks to its biological pesticides that have no side effects.
AgroGreen uses microorganisms - bacteria or fungi - to create pesticides; the microorganisms are the pesticides.
AgroGreen scientific manager Dr. Mordechai Keren-Zur has worked at the company for almost 20 years in its various incarnations. AgroGreen was established in 1984 as part of Yissum Technology Transfer Company of the Hebrew University of Jerusalem.
AgroGreen CEO Orna Pollack says, “Over the years, and in its past incarnations, AgroGreen has developed commercial products that are sold in the US.”
AgroGreen calls itself a start-up, despite its age. “The company’s current products now at the launch stage were developed over the past three to four years,” says Pollack. The company has two main product lines. The first, called BioNem-WP and BioSafe, are bio-nematicides for reducing nematode populations and root infestations in the soil.
“We create diseases of diseases with no side effects,” says Pollack. “We’ve developed a way to create fungi microorganisms, which is the product we’re using in the field. BioNem is based on bacteria we discovered that cause disease in nematodes, small worms that penetrate roots and kill plants. Nematodes are pest that attack many kinds of crops and houseplants. This bacterium has been patented since 1996.”
AgroGreen posted NIS 2 million revenue in 2005. The company predicts doubling revenue this year, and achieving tens of millions of dollars in revenue within five years, when it obtains licenses in Europe and the US.
Until now, Nematodes were killed with a bromide pesticide, whose main drawback is the harm it causes the atmosphere, contributing to global warming. Bromide pesticides have been delicensed and will be cease being used in Europe in the coming years.
The second type of common nematode pesticides are toxins, which are highly poisonous to both crops and farmers, their families, and animals. “Our substances are more effective, because unlike chemical substances they do not degrade. The bacteria stay in the crop and continue to work, without harming anything except nematodes,” says Pollack.
The Achilles’ Heel of biopesticides is licensing. Licensing procedures are a Via Dolorosa, especially in Europe, even though Israel’s licensing procedures are derived from Europe’s.
“We have a license in Israel, because we developed the products here,” says Keren-Zur. “Licensing is a drawn-out process. We obtained our first Israeli license in 2000, and we now have Israeli licenses for two product lines. Each license is focused on a crop. There is one license for tomatoes, another for eggplants, and so on. We’re now undergoing licensing procedures internationally. In the US, we hope to obtain biotechnology licenses that correspond to US Food and Drug Administration (FDA) certification. We have an interim product in the US that does not require licensing or licensing for different documents. The process in Europe takes four to five years, and costs an insane amount - €500,000 for each license in each country.”
Pollack says, “We have a product based on organic agricultural guidelines, so that organic farmers can also use it.”
AgroGreen’s second product line is a yeast-based biofungicide called “Shemer”. We can see fungi in action, such as the green mold that affects oranges left on the counter at home; the fungi are killing the fruit. Strawberries can be affected by similar fungi, causing them to rot. “To avoid spraying the fruit and harming the health of those eating it, we use microorganisms that have been used for thousands of years and redesigned in 2001 by Prof. Shamir Drori of the Vulcani Institute (Agricultural Research Organization). These microorganisms are protected by an international patent,” says AgroGreen.
“These biofungicides prevent fruit from rotting in a very safe way, because they contain no toxins or violent mechanism,” says Keren-Zur.
Pollack adds, “The product has been very successful on yam crops in Israel. Shemer has been used on 80% of exported yams since 2005.”
The global market for BioNem is $500 million. AgroGreen expects to complete licensing for most of its products in the US within five years. The company’s banana biopesticide alone is expected to generate tens of millions of dollars in revenue a year, once the company penetrates one of the banana-producing states.
AgroGreen recently signed a contract with MA Industries (Makhteshim Agan Ltd.) (TASE:MAIN) subsidiary Makhteshim Chemical Works, under which its agricultural department will market BioNem.
Published by Globes [online], Israel business news - www.globes.co.il - on February 13, 2006