Earlier this week I had the chance to meet Cristiano Veloso, the founder, president and CEO of Verde Agritech, while he was in London. We talked about his company, the benefits of his product Super GreenSand, and why him and the other board members are paid in shares instead of a salary.
Today on The Next Bull Market Move we have a brand new guest. We have Cristiano Veloso. How are you today?
I’m fine, thanks. How are you?
I’m very good. So you’re in London this week, what’s the reason behind coming to London?
We have several investors in London. So twice a year I come up here to update them and obviously, meet new shareholders. Recently, a lot of Sirius Minerals’ shareholders have been contacting us, looking for another potash play. So I have meetings here in London with some of those shareholders.
And you’re the CEO of Verde AgriTech, can you give our readers a bit of background on how you started this company?
Sure. I started the company back in 2005. I’m Brazilian, and at the time, and still nowadays, there wasn’t a single company listed in a foreign stock exchange that was run by Brazilians that had seeked capital abroad.
So when I began there was a lot of interest from Brazilian geologists, Brazilian prospecting, Brazilian mine entrepreneurs to help us succeed and as a consequence, we’ve been able to assemble a very good team of not just people but projects and certainly we’re now developing one of the most exciting mineral properties in Brazil, perhaps in the world.
So the product that you are producing and selling is called Super GreenSand, what’s the difference between this and potash? What are the advantages of farmers using this?
Usually when you say potash, you’re referring to the conventional commodity. The conventional commodity is called potassium chloride or MOP, and some people just call it potash. Our product, it is also rich in potash, like the others, so it’s also a source of potash.
The advantage is, our product is a sustainable source of potash and better for farmers and better for the soil. For example, if you look at the conventional source of potash, i.e. potassium chloride, it also contains chloride. And this chloride creates a lot of problems, not just for certain types of crops but also for the environment and for the soil.
Applying one kilogram of potassium chloride to the soil, equals applying about 10 liters of Clorox to your soil. So you really have a devastating impact on soil microorganisms which were essential for the environment, for the ecosystem, and for your yields if you’re a farmer.
The other big difference is salinity. So if you look at salinity, which is also a major problem, the best way for you to compare fertilizer salinity is to divide the total product salinity by it’s potassium content. And when you do that, our salinity’s very low, our salinity’s less than 1%, when you look at salinity index, it’s zero point something, when you look at the salinity index for potassium chloride, it’s around one point something - between one and two.
And when we look at, for example, Sirius Minerals fertilizer known as POLY4, their salinity index is 5.4, they’re being the highest one among all potassium fertilizers. So we’re very happy to be developing and marketing a sustainable product which it’s not only positive for farmers, for growers, for the soil, but also for the environment.
And what markets are you targeting?
The main market is Brazil, commercial farming in Brazil. But we’ve also been selling to some niche markets abroad. So we’ve also been selling to the organic market in the United States, to organic lawn care, to the cannabis markets in certain states of the united states.
We’ve been selling it through Amazon internationally. But the amount of product abroad is certainly much smaller and will be much smaller than what we’re selling in Brazil, which is our main market.
There was recently a news update in March about Verde Agritech signing a turnkey agreement for the construction of a processing plant. What effect does this have on your bottom line in terms of producing your product now?
It will have a big impact. The plant will be operational in early Q3, and in comparison to operating through a contractor, which is what we currently do, operating it ourselves will significantly reduce costs and will allow the company to start generating more capital and more cash.
I noticed in your presentation you currently have 45 million shares outstanding, and you and the board members actually get paid in shares and not cash. Why have you guys decided to do this, as this is quite a unique strategy within an agriculture company?
It is indeed very unique and we all believe in the company. We all believe we are going to be well compensated in the future for choosing to be paid in shares instead of cash. And this demonstrates how much skin we have in the game and how much we believe in the company going forward.
And as a final question, why should investors take a look at Verde AgriTech? I know Collin Kettell from Palisade Global Investments has been a supporter of the company and has
Wow, good question. Well first of all, our market cap right now is less than half the amount of money we’ve invested in the project so far, we’ve invested over 60 million dollars and our market cap is around 30 million dollars.
In addition to that, we have a pre-feasibility study, which shows a project, a business plan, with a net present value worth about 2 billion dollars with a 280% IR. So certainly it’s a lot of growth.
The third reason I would say is, we are in production and our expansions are highly scalable so we can essentially be increasing production without the need to further dilute shareholders and continue creating value.
The other reason is our product is highly disruptive to the space, to the sector, to agriculture, high beneficial to farms and the environment, and far superior to the traditional commodity we have. So for all those reasons, I think everyone should be seriously looking at NPK as an investment.
Thank you very much.
Thank you. My pleasure.
The Next Bull Market Move
For more information about Verde Agritech visit http://www.verdepotash.com
The company symbol on the TSE: NPK
Disclaimer - Interviews are conducted in the name of research and learning from the best. Only you can decide what makes a good speculation/investment.