Casterra Announces an Additional Purchase Order to Supply Castor Seeds to a New African Country

Rhea-AI Summary

Casterra Ag , a subsidiary of Evogene (NASDAQ: EVGN), announced a new purchase order valued at approximately $440K to supply castor seeds to a new African country. This expansion reflects confidence in Casterra's biofuel market capabilities and leverages Evogene's GeneRator AI tech. The company expects its 900-ton seed production to fulfill this order by Q4 2024. Unfulfilled orders from 2023 and new 2024 orders are anticipated to bring in around $8.4 million in revenue in the second half of 2024. The biodiesel market, estimated at $36.48 billion in 2022, is projected to grow significantly, favoring sustainable biofuel alternatives like Casterra's castor oil, which is compliant with stringent European standards.

Positive

• New $440K order expands operations into a new African country.
• Estimated revenue from 2023 and 2024 orders around $8.4 million.
• 900-ton seed production to support order fulfillment by Q4 2024.
• Growing biodiesel market expected to reach $79.12 billion by 2032.

Negative

• Price adjustment due to late 2023 order delivery affecting revenue.

Insights

Financial Analyst

The announcement of an additional purchase order worth approximately $440K is a positive indicator for Casterra Ag Ltd., signaling increased demand for their castor seeds. While the specific amount may seem small, this order highlights Casterra's successful expansion into a new African market, potentially leading to more significant orders in the future.

From a financial perspective, the company's projection to recognize approximately $8.4 million in revenues from castor seed orders in the second half of 2024 is noteworthy. This reflects a price adjustment due to a previous late delivery, suggesting that the company is addressing logistical challenges. Investors should monitor the company's ability to meet its production targets as any deviation could impact revenue recognition timelines and overall financial health.

The global biodiesel market's significant growth potential—with an expected CAGR of 8.1% from 2023 to 2032—places Casterra in a favorable position. Their high oil-yielding varieties, developed for large-scale farming in semi-arid conditions, align well with the increasing demand for sustainable biofuels. However, investors should be cautious of potential market fluctuations and regulatory changes impacting the biodiesel sector.

Market Research Analyst

Casterra's movement into a new African country underscores their strategic expansion efforts in the biofuel market. This move not only broadens their market reach but also strengthens their foothold in an industry expected to grow substantially in the coming years. The projected rise of the global biodiesel market from $36.48 billion in 2022 to $79.12 billion by 2032 reflects a robust demand environment for sustainable alternatives to petrochemical fuels.

Importantly, Casterra's castor oil, being carbon-neutral and compliant with tightening European regulatory standards, positions the company advantageously. Their elite castor seed varieties, developed using advanced breeding methods and AI technology, cater to large-scale farming on marginal soils, emphasizing sustainability. This differentiation could attract more environmentally-conscious customers and investors.

However, the competition in the biofuel industry is fierce and the company's ability to maintain its technological edge and expand its customer base will be critical. Retail investors should watch for further announcements regarding new contracts and market entries, which could provide insights into Casterra's long-term market position.

Sustainability Expert

Casterra's expansion into new African territories with its high oil-yielding castor seed varieties highlights a significant advance in the sustainability sector. The use of castor oil as a renewable and biodegradable alternative to conventional petrochemical fuels aligns with global trends toward reducing environmental impact. Castor plants' suitability for cultivation on marginal soils in semi-arid conditions ensures that they do not compete with food crops for prime agricultural land, further enhancing their sustainability credentials.

The company's focus on biofuel production addresses the increasing regulatory pressures for cleaner energy solutions, particularly in Europe where environmental standards are becoming stricter. Casterra's ability to meet these standards with its innovative seed varieties could lead to increased adoption and support from regulatory bodies.

While the environmental benefits are clear, investors should also consider the potential risks associated with agricultural production variability, such as climate conditions and soil fertility. Monitoring the company's initiatives to mitigate these risks, such as advancements in their breeding methods and AI technologies, will be important for evaluating long-term sustainability and reliability.

Current castor seed production is expected to support the supply of the new order in 2024, valued at ~ $440K 

REHOVOT, Israel, June 25, 2024 /PRNewswire/ -- Casterra Ag Ltd., a subsidiary of Evogene Ltd. (NASDAQ: EVGN) (TASE: EVGN), is a provider of an integrated solution for industrial-scale cultivation of castor plants based on its elite castor seed varieties, developed for bio-based industries including, biofuels & biopolymers. Casterra is pleased to announce the receipt of an additional purchase order valued at ~$440K from an existing customer. This order expands Casterra's operations into a new African country and solidifies Casterra's unique offering in the bio-fuel market.

Mr. Yoash Zohar, CEO of Casterra states: "This additional order reflects the confidence in Casterra's capabilities and in our castor seed varieties, developed utilizing Evogene's GeneRator AI tech-engine and Casterra's advanced breeding methods, and marks a significant step in our expansion into Africa. We expect that our previously announced seed production, now totaling 900 tons, will more than support this order, which is expected to be completed by Q4 2024, as well as earlier purchase orders received last year. Casterra remains committed to being a world leader in castor seed development and production and promoting sustainable biofuel production globally." 

Casterra anticipates that the remaining revenue from castor seed orders received during 2023 and in 2024, which were not supplied to date (including the order described in today's PR), will be approximately ~$8.4 million, reflecting a price adjustment due to late delivery of the order from 2023. Based on the planned production this year, Casterra expects to recognize revenues in this amount in the second half of 2024.

The global biodiesel market size was estimated at $36.48 billion in 2022 and it is expected to hit around $79.12 billion by 2032, expanding at a notable CAGR of 8.1% from 2023 to 2032^[1]. Biofuels offer significant advantages over conventional petrochemical fuels, presenting a renewable and biodegradable alternative with substantially lower negative environmental impact. Castor oil emerges as a standout non-fossil oil candidate due to its carbon-neutral and other properties making it compliant with tightening European regulatory standards.

Casterra's high oil-yielding varieties have been developed with traits which make the castor plants grown suitable for large scale farming on marginal soils in semi-arid conditions. Castor plants and the castor oil produced have the potential of becoming a major sustainable feedstock for the global bio-fuel industry – without competing with food crops over prime land. 

^[1] https://www.precedenceresearch.com/biodiesel-market

About Casterra AG Ltd.: 

Casterra, a wholly owned subsidiary of Evogene, is an integrated solutions company for growing castor plants, based on its elite castor seed varieties, for bio-based industrial applications, such as biofuels & biopolymers. It has built its castor genetic assets based on a broad collection of over 300 castor lines from 40 different geographic and climatic regions. As part of its development process, Casterra applies advanced breeding methods utilizing Evogene's GeneRator AI tech-engine, enabling cutting-edge plant genomics tools and agro-technique expertise to enable efficient and sustainable industrial-scale production of the castor bean. 

For more information, please visit http://www.casterra.co 

About Evogene Ltd.: 

Evogene (NASDAQ: EVGN, TASE: EVGN) is a computational biology company aiming to revolutionize the development of life-science-based products by utilizing cutting-edge technologies to increase the probability of success while reducing development time and cost. Evogene established three unique tech-engines – MicroBoost AI, ChemPass AI, and GeneRator AI – leveraging Big Data and Artificial Intelligence and incorporating deep multidisciplinary understanding in life sciences. Each tech-engine is focused on the discovery and development of products based on one of the following core components: microbes (MicroBoost AI), small molecules (ChemPass AI), and genetic elements (GeneRator AI). 

Evogene uses its tech-engines to develop products through subsidiaries and strategic partnerships. Evogene's subsidiaries currently utilize the tech-engines to develop novel life science products including human microbiome-based therapeutics by Biomica, ag-biologicals by Lavie Bio, ag-chemicals by AgPlenus, and castor seed varieties, for the biofuel and other industries, by Casterra. 

For more information, please visit www.evogene.com 

Forward Looking Statements

This press release contains "forward-looking statements" relating to future events. These statements may be identified by words such as "may", "could", "expects", "hopes" "intends", "anticipates", "plans", "believes", "scheduled", "estimates", "demonstrates" or words of similar meaning. For example, Evogene and its subsidiaries are using forward-looking statement in this press release when it discusses Casterra's ability to supply this purchase order and that its previously announced seed production will support this order as well as earlier purchase orders received last year. Such statements are based on current expectations, estimates, projections and assumptions, describe opinions about future events, involve certain risks and uncertainties which are difficult to predict and are not guarantees of future performance. Therefore, actual future results, performance or achievements of Evogene and its subsidiaries may differ materially from what is expressed or implied by such forward-looking statements due to a variety of factors, many of which are beyond the control of Evogene and its subsidiaries, including, without limitation, the current war between Israel, Hamas and Hezbollah and any worsening of the situation in Israel such as further mobilizations or escalation in the northern border of Israel,  and those risk factors contained in Evogene's reports filed with the applicable securities authority. In addition, Evogene and its subsidiaries rely, and expect to continue to rely, on third parties to conduct certain activities, such as their field-trials and pre-clinical studies, and if these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, Evogene and its subsidiaries may experience significant delays in the conduct of their activities. Evogene and its subsidiaries disclaim any obligation or commitment to update these forward-looking statements to reflect future events or developments or changes in expectations, estimates, projections and assumptions. 

Evogene IR Contact:
Rachel Pomerantz Gerber 
Head of Investor Relations at Evogene 
rachel.pomerantz@evogene.com
Tel: +972-8-9311901  

Logo: https://mma.prnewswire.com/media/1947468/Evogene.jpg
Logo: https://mma.prnewswire.com/media/1947467/Casterra.jpg   

 

View original content:https://www.prnewswire.com/news-releases/casterra-announces-an-additional-purchase-order-to-supply-castor-seeds-to-a-new-african-country-302181383.html

SOURCE Casterra Ag Ltd.

FAQ

What is the value of Casterra's new order for castor seeds in Africa?

The value of the new order is approximately $440K.

When is Casterra expected to fulfill the new castor seed order?

Casterra expects to complete the new order by Q4 2024.

What will be the revenue impact of Casterra's orders in the second half of 2024?

Casterra anticipates around $8.4 million in revenue from unfulfilled 2023 orders and new 2024 orders.

How is Casterra expanding its operations?

Casterra is expanding by entering a new African country with a $440K order.

What is the expected growth of the biodiesel market?

The biodiesel market is expected to grow from $36.48 billion in 2022 to $79.12 billion by 2032.