As we complete the harvest season, I wish to express my thanks again to shareholders for your continued support. We are grateful for all your questions and feedback and hope to provide context here to our plans.
It is an exciting time at EarthRenew as much of the foundation we laid down in the past six months begins to bear fruit. We have completed the acquisition of Replenish Nutrients, a leader in the formulation and delivery of regenerative fertilizer products to the conventional and organic markets in Canada, and welcomed Replenish’s team to the EarthRenew family. We were rewarded with a revenue line of $4.3 million for the first 6 months of the year on top of the $4.7 million they recorded in the last 6 months of 2020, prior to the acquisition.
Now, amid a backdrop of high commodity prices and reduced yield, Replenish is in the midst of a strong season of sales as farmers continue investing in their soil for next year. With such strong demand, it will be our challenge to keep up with demand this season – looking to exceed our internal sales targets for this year and create a backlog to prime sales for Spring 2022.
Our march to profitability and year-over-year growth is on track (looking to maintain that 200% growth target), but so too are we reaping the fruits of our investment in operations. In the past several months we have worked to build a business where our feedstocks are secured, production is well in hand and off-take agreements are in place as a means to expand market share.
These efforts are underpinned by new sales visibility with new software tools, as well we have developed marketing and sales programs to build consistent demand throughout the year. We’ve also confirmed, clarified, and branded our key product families and are set to launch enhancements for the remainder of the year, building into 2022. Instituting operational cadence and visibility tools is a key step to leveling up our ability to grow sales alongside planned production expansion.
Our growth plans are ambitious – we aim to grow production from 40,000 tonnes to 400,000 tonnes in the next 5 years and we are already making good on that promise. We are currently completing the upgrades at our Beiseker facility which will allow us to meet the demand for 20,000 tonnes per year of granulated product as of this spring. This facility in central Alberta will become our specialty products and custom formulation production hub and support R&D for new products and additives. We see the upgrade at the Beiseker site as foundational for the selection of technology for our larger facilities planned in western Canada and into the US.
With respect to our larger facilities under development, our opportunity at the K+S mine site in Bethune, Saskatchewan is well underway.
What many people don’t realize, is potash (the K in Super KS) is the second most valuable mineral in the country, aside from gold. In fact, Canada has the largest and richest potash resources on the globe.
Our plan to co-locate our next production facility at the K+S Potash site provides us with a cost-efficient, secure source of potash fines for use in our innovative regenerative solutions. Working within the footprint of this existing facility, we are reducing project development costs and leveraging the regional strength of the province’s potash distribution capabilities. We are closing in on final documents as we launch engineering and technical development work at the site.
Coupled with our relationships with Fertoz and GFL, we now have the supply of feedstock secured to support our next phase of growth.
With coming growth in capacity, we are also focused on offtake agreements for the produced product. To that end, we have secured a relationship with Parrish & Heimbecker (P&H), a Canadian agribusiness supply giant with more than 60 locations across the country. P&H will become one of our leading distributors of granulated products as we bring more capacity online. They have both the scale to support the growth of our business and the reach to offer our products beyond our current distribution capabilities. We plan to collaborate on education and marketing programs to energize the market and accelerate sales growth and we will replicate this program to other distributors.
As we streamline our activities and focus on the production and distribution of the Replenish Nutrients products, we have rationalized our branding. EarthRenew is being positioned as the parent company and will be forefront as we talk about production capacity development and commercialization of the core waste heat utilization technology. Replenish will continue to be the customer-facing and distribution brand for our regenerative products.
The need for sustainable soil health solutions has never been greater. Demand from consumers to purchase foods that are grown sustainably has driven large players like Cargill, PepsiCo General Mills, and McCains to make their first bets on regenerative farming.
Alongside these investments, we at EarthRenew have hit an inflection point and are undertaking a transformational capital raise to support and accelerate our growth – centered on our project at K+S. We have engaged with VIII Capital for this next phase of growth and are working with them on the stack of debt and equity to complement the grants we are pursuing. To support this activity, we are completing a short form prospectus and have released consolidated financials, with notes on the cumulative revenues for EarthRenew and Replenish for the calendar year.
Thank you again to investors, board members, partners, and to the team at EarthRenew and now Replenish. We have come together remarkably quickly in the past 6 months to chart a path forward that we are all now working hard to deliver on. We look forward to making measurable strides in the area of soil health as we work to define and grow the regenerative agriculture sector.
To hear EarthRenew CEO, Keith Driver’s video presentation of the letter, click here.