“Agricultural technology is experiencing phenomenal momentum today, similar to what the water industry experienced a few years back,” says Oded Distel, head of Israel NewTech. We spoke with Distel about new trends in Agritech, in the midst of the Agritech 2012 event taking place now in Tel Aviv (May 15-17). More than 7,000 foreign visitors from 115 countries are at the Agritech trade show and conference, looking into the latest innovations and discussing industry trends.

One of the more interesting trends in the world today, affecting Agritech, is connected with civil responsibility. Distel tells about a conversation he had with one of the world’s leading food & beverage companies, which is becoming more and more interested in following up on the source of its raw materials. “I think the atmosphere of civic responsibility and social awareness in the world is growing, and companies are being held accountable, even in cases like this, where the supply chain goes even 7 links back,” says Distel. “This is probably the way to fight negative practices such as child labor and practices which harm the environment.”

But the most prominent trend is the rise of Agritech innovation and the growing interest and focus on this sector, due to the world’s growing populations and evolving needs and demands on the one side, and dwindling resources on the other. A day before the opening of Agritech 2012, Israel NewTech hosted the Agrivest investment summit. “It was interesting to see companies at Agrivest that a few years ago no one would have thought would be getting involved in the sector,” says Distel, referring amongst others to IBM, which was represented at Agrivest by Rich Kottmeyer, Global Agriculture and Food Leader, IBM USA.

Another trend is the quickly growing sector within Agritech involved with seed breeding technology. By breeding seeds using advanced technologies, it is possible to improve crop quality, and use a lot less pesticides, which makes for more environmentally sound, cost-effective, efficient and even healthy crops. A number of Israeli companies are leading the work in this arena, including Kaiima, Rosetta Green, Evogene (and Evofund) and Moraflora.

At Agritech 2012, the Ministry of Industry, Trade and Labor signed a cooperation agreement with representatives of the Kazakhstan Water Authority, which is facing a number of major challenges in the water arena, both in providing water for agricultural purposes and for the population, and issues with water loss. Within the framework of the cooperation Israel NewTech will provide know-how on water technologies and solutions, and the Kazakhstan Water Authority will cooperate with Israeli water companies to try to bring together cooperations and projects. Representing Israel at the talks and signing was Oded Distel of Israel NewTech, Yaakov Lev from the Israel Water Authority, Avi Aharoni from Mekorot, and Avital Ohara from the Ministry of Energy. The Kazakhstan Water Authority was represented by Director Issakhanov Maxat and Chairman Temirgaliev Rustem.

Kaiima Commercial Rapeseed Field

There is an overall sense of foreboding in the world today that in the next few decades we will experience deficiencies in water, food and energy – mainly due to global warming. This concern has motivated heads of state, as well as international bodies such as the UN and The World Bank, to take steps to preserve the resources to sustain humanity. A great deal of international research is currently focused on finding solutions for the enhancement and improvement of food and energy-related crops which adhere to sustainable agricultural modules; in other words -agriculture which preserves resources, rather than destroys its environment. Accordingly, the emphasis has been on the ability to improve both the crop itself and its adaptability to soil conditions.

One Israeli company which has been active in this area and is showing great potential is Kaiima. The company was established in 2006 as Biofuel International with the initial intention of focusing solely on biofuel. However, after a year, “We decided to deal with the issue of sustainability and broaden our activity spectrum to the central field crops in the world today”, says Doron Gal, the company’s co-founder and CEO. “The company’s unique crop productivity enhancement technology was developed by a team of experts – including employees of former Dutch seed company De Ruiter – headed by our co-founder Amit Avidav,” Gal adds.

Today, the company focuses on 3 areas of activity:

1. Breeding widely distributed food such as wheat, rice etc.
2. Breeding high-yielding castor and sugarcane varieties, in collaboration with BP (British Petroleum)
3. Vegetable breeding – in 2005, a number of De Ruiter alumni established a company that focuses on vegetable seeds, and today the Company’s products are selling strongly, with a dominant market share in the tomato niche in Israel. In 2011 this area of activity was brought under Kaiima‘s umbrella.

According to Gal, the company encapsulates the cross between the high breeding capabilities of quality varieties and a new method of genomic multiplication. It’s this technology, in his opinion, which allows for the enhancement of crops and their improved adaptability when under stressful conditions (due to severe weather, water types, salinity), in areas most prone to disasters and crop failures.

In the field of widely distributed food, the company is in pre-commercial testing stage. “From these preliminary tests it has been found that thanks to our technology we are able to make high percentage improvements in wheat and rice yields, in varied climates – both in Israel and abroad,”, says Gal.

In the vegetable field, the company already has an extensive product range – and has made significant profits. The aim now is focusing on building an international distribution system, with a drive to develop high-yielding varieties suitable for their target markets, which will be transferred to them in seed form. “The right thing to do is export the product together with the knowledge, and not the final product”, says Gal.

In the Biofuels field, the company has high-yielding castor seeds that are already producing sales, and according to Gal “From analysis we’ve conducted, our castor is the highest producing variety of castor. We also have a number of new varieties currently undergoing tests in vast areas of Mexico, the U.S., Peru, China and other countries around the world”.

As to sugarcane, a field which Kaiima claims is very much on a global rise, the company is still at R&D stage, and the target markets for this are Brazil, the U.S., South Africa and the Far East.

Kaiima New Castor Hybrid

Kaiima Finances

• During 2007: Capital investment of $1.4 million.
• May 2008: Obtained first capital investment of $10.5 million from 3 entities: DFJ (an American-based venture fund) and DFJ Tamir Fishman and Musea Ventures.
• April 2011: Obtained second capital investment of $20.5 million from blue-chip fund Kleiner Perkins, giant Japanese conglomerate MITSUI, American agricultural venture fund EXALTA and existing investors.
• Today the company employs 50 core workers (R&D, Operations and Marketing) as well as another 100 hired agricultural workers, all in Israel.

Kaiima is now exhibiting with a booth at Agritech Israel 2012 , at Hall 10 Booth 21.

Ruzgar Barisik

Ruzgar Barisik, Senior Investment Officer at the World Bank Group’s International Finance Corporation (IFC) spoke with Israel NewTech about his recent visit to Israel, and the IFC’s plans for Cleantech investment. “Israel is a very exciting place for us: market interest in a growing number of Israeli technologies makes this a very promising area we want to be part of”,” said Barisik. “I’ll be attending Agritech Israel 2012 this month, and it will be my third visit to Israel since we launched our Cleantech Investment program this past September, meaning I’ve visited Israel more than any other country.”

To understand the background and motivations of the IFC’s cleantech program and why Israel’s cleantech industry is so well suitable to its mission, Barisik provided some background. “The World Bank was founded after World War II, with a mission to alleviate poverty worldwide. After 10 years of activity, the organization understood that to do so it needs to be active in the private sector as well as the government sector, and in 1956 the IFC was born.” Today, IFC is one of the world’s largest financiers for companies in the developing world and holds a $48.8 billion portfolio touching almost every major industry, reaching millions of people in more than 100 countries. While Israel itself is a developed country, IFC is considering Israeli companies looking to expand or invest in emerging markets.

According to Barisik, his team is looking to invest in innovative, high growth companies who are commercializing new technologies or business models, and Israel is an ideal place to find such investment opportunities, for a number of reasons. “Israeli companies are usually looking to expand their activities beyond their domestic market. They are driven by Israeli entrepreneurs who tend to be very international in their approach, having often been educated or done business abroad. Additional success drivers in Israel are the great academic and industrial research programs, the strong venture capital investment community active in the country, as well as the support of government programs like Israel NewTech.” All of these factors together create a very strong ecosystem for cleantech innovation and fits well within IFC’s mandate to help transfer strong businesses and their models to the emerging markets.

The IFC has yet to make its first investment in an Israeli cleantech company, but it appears that this will happen very soon. According to Barisik, the Cleantech Investment Program of the IFC is planning to invest some $150 million annually in 15 companies worldwide, and he expects that one to two of these investments can be made in Israel every year. The most attractive arenas for the IFC’s program in Israel are water and water treatment, agricultural technology and energy efficiency.

Barisik cites the tremendous support he has received from Israel’s government institutions and programs, in the IFC’s activities in Israel. “Israel NewTech, the Ministry of Industry, Trade and Labor, Israel’s Foreign Trade Administration and the Bank of Israel, have been extremely helpful to us, proactively introducing us to relevant Israeli companies and giving their perspective on the market,” he said.

“The bottom line is that we want Israeli companies to know that we are here; we are very impressed with Israeli cleantech companies and we are looking to make investments and provide support that goes beyond funding. We have the ability to facilitate contacts with companies and regulatory bodies internationally, that will help Israeli companies break through.”

For more details on IFC’s support of Israeli companies investing in emerging markets please click here.  IFC’s activities in Israel are managed by IFC’s Western Europe office in Paris.

The IFC also has an office in Jerusalem, which is exclusively focused on IFC’s activities in the West Bank & Gaza.

Lesico Cleantech operates in the challenging field of brackish water desalination and brine management, with an extensive expertise and knowledge gained from Ben Gurion University. The company has signed a contract in Australia which continues until 2016, and in Mexico it is in the midst of a commercial pilot project. A great start in a huge market…

Saline water is an extremely large source of available water – but is only used in 19% of all desalination plants worldwide, as opposed to the increase in the use of desalinized seawater across the globe.

Saline water is not often selected for use, and this is due to the fact that it’s difficult to treat the brine which remains after the desalination process is complete. Although it’s far from ideal, seawater offers the easier option of returning the brine to the sea. Water desalination however is a process which is often carried out far from the sea, making treating brine an expensive and challenging process.

Brine is also created when treating water in the mining industry and other heavy industries. One of the companies that have taken on the challenge of overall brine treatment is Lesico Cleantech, a company located in Holon Israel, established in 2006 by Nissim Asaf, today Lesico’s CEO.

Lesico’s activities are based on commercializing knowledge from the Zuckerberg Institute for Water Research at Ben Gurion University, expertise which has been promoted by Prof. Ora Kedem, Dr. Jack Gilron, Dr. Rami Messalem and Dr. Charles Linder.

One of the company’s technologies, and already commercially active, is the WAIV – Wind Aided Intensified Evaporation, which is a wind assisted accelerated brine evaporation process. In Melbourne, Australia, one of the company’s commercial pilot projects has already been completed successfully. As a result Lesico Cleantech signed a 4-year contract with ORICA Water Care, one of the largest water infrastructure companies in Australia, with an extension option for an additional 4 years. As outlined in the agreement, ORICA is committed to investing up to $7 million, by 2015.

According to Mr. Asaf, the technology has been taken up both in Australia and Mexico, in facilities owned by leading corporations, such as the top Australian gas provider SANTOS, a company Lesico reached through ORICA. “At SANTOS, we implemented a large commercial pilot in the field of coal seam gas” explains Mr. Asaf.

And what does brine have to do with coal seam gas? The gas production processes require a great deal of water, and when the water is pumped back from the mine, they are contaminated and thus need treatment. In order to once again utilize the water, it is treated in membranes, which results in a great deal of brine. At this point, Lesico Cleantech gets involved.

According to Mr. Asaf, the WAIV is a technology that causes the brine to evaporate in an accelerated manner, across an area which is 10 to 15 times smaller than an area needed for evaporation ponds (a common method of treating brine in inland pools), and entailing capital costs that are lower by 30%-40%.

This technology originated in Israel, and is implemented in Mekorot’s brine desalination plant in Kzti’ot, the largest brine desalination plant in the country.

Lesico’s second technology, an electro dialysis water desalination membrane process, is in its final stages of development. It is a High Recovery System, in other words a system with the capacity to take any amount of saline water and extract a higher percentage of fresh water.

Lesico’s success outside of Israel was achieved thanks to the solid support given by The Ministry of Industry’s Israel Newtech program and The Israel Export & International Cooperation Institute. With a promising contract in Australia, it seems that Lesico is looking at a bright future, both in market size and revenue.