AgriFORCE has been on an acquisition spree as of late. Recently, the company has announced two in-process acquisitions, namely AgTech consulting company Delphy, and Belgian plant tissue culture propagator Deroose. "Our goal is to unlock the value of plants and food systems,” says Ingo Mueller, CEO of AgriFORCE. “Our strategy is a two-legged stool. Our Solutions side is all about how to produce better crops, more sustainably. On the Brands side, we are committed to delivering that to the consumer. The businesses of both Delphy and Deroose fit that profile -- capturing the whole value chain, starting from young plants, then it migrates up the chain, and ultimately to the consumer.”
Prepping up for the future
Ingo describes that they have been strategic in identifying those businesses that excel in what they do in their part of the chain. “They have specific know-how or an actual IP that nobody else has. Most importantly though, we are not bringing these companies into a single entity, but they can keep operating and flourish. Our role is to support them strategically and financially. In this way, we can make sure that the full extent of the horti supply chain is served, which is crucially important in light of the future challenges we all are going to face.”
Cultivation environments are changing because of climate change, and population growth coupled with political pressure would surely put the food supply chain to the test. This is exactly what Ingo and AgriFORCE want to be ready for. “Things need to change to address future challenges. For instance, California used to be the breadbasket of the USA, and so the supply chain was developed around that. But with all that is going on, everything would need to be re-established, or fixed to be sustainable.”
Knowledge is power
To achieve that goal, Ingo and AgriFORCE are very much aware that digitization is going to be one of the main drivers. Yet, at the base, there’s always knowledge. “With the advent of IoT, there’s a tremendous opportunity to use digitization to drive change,” Ingo says. “At the root of AI, there is knowledge, and there's an ever-present need for it in this industry. As a business, we want to be ahead of the curve, and thus it's essential to own the knowledge. That's why we are in the process of acquiring the Dutch consulting firm Delphy.”
At the same time, Deroose is a young plant propagator, so how does that factor into the company's strategy? “Belgian young plant propagator Deroose has an incredibly broad base of expertise and product offering: they grow peppers, pineapples, watermelons, and a lot of potted plants. So, there’s a lot of knowledge crossover and expertise that we felt could be applied in different parts of our business,” Ingo points out. That’s not all, because the biggest catch of the Deroose acquisition is a very specific IP. “What indeed motivated us was a very specific IP related to plantation crops, specifically palm oil and rubber production.” These are two key components of the consumer environment, but as land becomes scarcer, their cultivation becomes quite a challenge. “Deroose has developed a method to increase rubber tree production by over 50%, whilst also shortening the fruiting time. The same goes for palm oil production, as Deroose has a method to reduce the amount of land necessary for palm cultivation, providing the same amount of yield.”
The big changes happening in agriculture represent tremendous opportunities for companies that act strategically. “This is a once-in-a-lifetime opportunity, and these two acquisitions will put us on the right track to face the future challenges of agriculture. We’ll continue to build our platform and stay focused on bringing value to the food chain. Now, we are going to focus on how to efficiently and effectively manage our growth, and deliver what the industry expects from us. We are not going to follow, rather we are going to lead the change.”
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