Verde announces strategic sales partnership with Lavoro, Latin America’s largest distributor of agricultural inputs

Verde AgriTech Ltd (TSX: ″NPK″) (″Verde″ or the ″Company″) announced that it has entered a strategic partnership with Grupo Lavoro (″Lavoro″), the largest distributor of agricultural inputs in Latin America, to more swiftly open up new markets for Verde’s multinutrient potassium products, BAKS^® and K Forte^® sold internationally as Super Greensand^® (the ″Product″) in Brazil (the ″Partnership″).

Lavoro operates over 190 stores, staffed by 2,500 employees in Brazil, many of whom are agronomists and farming specialists who work closely with its over 55,000 clients. Lavoro will be a distributor of Verde’s Products.

"There is an increasing demand for products that enable more sustainable food production methods. We are therefore proud to now offer Verde AgriTech's Products to our portfolio, expanding the options for our clients", commented Roberto Rosa, Lavoro's Purchasing Director.

″Over the years, Verde has assembled a formidable sales team that supports our clients from the first contact all the way through to a successful harvest. Lavoro embodies many of our team's values and competencies, but with a reach beyond Verde's current geographical scope. Furthermore, Lavoro's track record in promoting biological products in Brazil will help accelerate the successful uptake of K Forte-Bio Revolution, helping enable the fourth agricultural revolution through microorganisms across Brazil", commented Cristiano Veloso, Verde’s founder, and CEO.

The Company’s 2022 guidance updated upwards on May 03, 2022¹ provides for sales of 1,000,000 tonnes of Verde’s Product, with revenue of C$109.09 million, EBITDA of C$49.06 million and net earnings per share (″EPS″) of C$0.87. The 2023 guidance provides for sales of 2,000,000 tonnes.

Verde currently operates Plant 1 with a capacity of 0.6 million tonnes per year (″Mtpy″). Plant 2 is on track for commissioning in Q3 2022 with an additional capacity of 2.4Mtpy. With Plant 2, the Company’s overall production capacity is expected to be 3,000,000 tpy, establishing Verde as Brazil’s largest potash producer by capacity. Plant 3’s construction is planned for 2023, and is expected to add 10Mtpy, which will allow the Company to produce up to 16.4% of the current national demand for potash.

Verde has a combined measured and indicated mineral resource of 1.47 billion tonnes at 9.28% K₂O and an inferred mineral resource of 1.85 billion tonnes at 8.60% K₂O (using a 7.5% K₂O cut-off grade).² This amounts to 295.70 million tonnes of potash in K₂O, sufficient to supply Brazil’s potash demand for generations. In 2021 Brazil’s total consumption of potash in K₂O was 7.92 million.³

With over 6,000 clients since 2017, the Company achieved an Earned Growth Rate⁴ of 165% in 2021, compared to 61% in 2020, demonstrating a higher client repurchase rate and successful client referrals in Brazil, Canada, China, Thailand, Paraguay, and the Unites States.

Through its proprietary technologies - Cambridge Tech, 3D Alliance, MicroS Technology, N Keeper, and Bio Revolution⁵ - used in the development of its Products, Verde was able to achieve a triple-digit growth in revenue and sales in the last years. With the launch of Bio Revolution, Verde’s technology that enables the incorporation of microorganisms to its Product, the Company expects to become a world leader at offering a cost-efficient platform for adding microorganisms to agriculture, boosting plant productivity while improving soil biodiversity.

Verde’s Plant 1 is already endowed with a facility for deploying Bio Revolution. At Plant 2, currently under construction, a proportionally larger Bio Revolution facility will be built, and its operations will start by the end of the year.

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1 See release at: https://investor.verde.ag/verdes-2022-guidance-and-two-year-outlook-revised-upwards/
2 As per the National Instrument 43-101 Standards of Disclosure for Mineral Projects within Canada (″NI 43 -101″), filed on SEDAR in 2017. See the Pre-Feasibility Study at: https://investor.verde.ag/wp-content/uploads/2021/01/NI-43-101-Pre-Feasibility-Technical-Report-Cerrado-Verde-Project.pdf
3 Union of the Agricultural Fertilizers and Correctives Industry, in the State of São Paulo (″SIACESP″, from Sindicato da Indústria de Fertilizantes e Corretivos Agropecuários, no Estado de São Paulo).
4 The Earned Growth Rate measures the sales growth by volume generated by returning customers and new client purchases made by existing clients’ referrals. See press release at: https://investor.verde.ag/verde-doubles-year-on-year-earned-growth-rate/
5 Learn more about Verde's technologies: https://verde.docsend.com/view/yvthnpuv8jx6g4r9