Case Study: Agrotech, the Environment, and Industry Pivoting
Irrigation is key to agricultural development and keeping our natural resources. Sustainable irrigation gives you stability and productivity and lowers risks in agriculture.
In mid-2017, Mexican petrochemical company, Mexichem (now Orbia) announced the purchase of 80% of Israeli drip irrigation company, Netafim. The acquisition was completed in February 2018.
Netafim at the time was the leader in the development, manufacture, and distribution of advanced drip and micro-irrigation solutions, with a presence in more than 30 countries, 17 factories, more than 4,300 employees, and sales in more than 110 countries.
"This is a transformative acquisition, which furthers Mexichem's strategy in specialty products and solutions, positioning us as an innovation leader in the high-growth micro-irrigation market. At the same time, Netafim positions us to become leading developers of solutions that address food and water scarcity (...) This acquisition will give Mexichem access to this smart technology, which can eventually be used in cooling and heating systems, water usage, datacom, and other sectors," commented Antonio Carrillo Rule, CEO of Mexichem.
JP Morgan advised Mexichem in the transaction.
But how has this acquisition helped Orbia, a company that not only sought to grow with this transaction but also to become more environmentally ethical?
In 2019, Orbia CEO Daniel Martinez discussed his future plans and the company's current situation, and how an industrial company could be good for the world.
In this interview, he expressed six global pollution problems that Orbía could help, aligned to the UN Sustainable Development goals. Where he expressed:
“With our expertise in engineering, materials and manufacturing, global presence, and financial resources, we believe we can have the strongest impact on the following six challenges, which are aligned with the UN Sustainable Development Goals: feeding the world sustainably; better managing our water systems; making cities more livable, lovable, and resilient; connecting and empowering communities with data; making health and well-being more accessible; and pushing behind sustainability to regeneration.”
He also closed the interview by saying that Orbia's expansion was aimed at reaching emerging markets and developing countries such as Ethiopia, Rwanda, and India, where they would also help with the impact of global warming, where their innovation would help the rest of the world and global warming.
How Sustainable Agriculture and Irrigation Methods can Help the World
Irrigation is key to agricultural development and keeping our natural resources. According to Netafim, sustainable irrigation gives you stability and productivity and considerably lowers risks in agriculture. Expanding irrigation by 15-25% on current agricultural land would produce 6-8% more of the world's food, feeding up to 840 million more people.
The concept that irrigation can help us feed millions more people without having to commit more land to farms is also supported by Carnegie’s Lorenzo Rosa study.
“Population trends indicate that we will need to double global food production by 2050,” Lorenzo Rosa explained. “To accomplish this, we will either need to clear more land or farm more efficiently, despite the increased stresses of a warming world.”
Currently, two-thirds of the world's crops are limited by rainwater. Climate change is expected to change rainfall trends, making dependence on rainwater detrimental to these soils.
It is for reasons like this that irrigation can help in every way, as irrigation is twice as effective as rainwater. Trying to make them irrigated crops.
On the negative side, irrigation already accounts for 85 to 95% of global human water consumption. Is it possible to use water for irrigation without affecting human consumption?
Sustainable irrigation relies on available groundwater and some local surface water sources, where the area from which it is drawn is not greatly affected. In the same study, Rosa determines what strategies may be adequate to maximize agricultural productivity without putting at risk our world's water sources.
Lorenzo Rosa found that under current circumstances, water is available to increase sustainable irrigation by 35%, increasing sustainable agricultural production to feed up to 1.4 billion more people.
Composting and the Enviroment
On average, 35% of United States households regularly recycle even simple things like paper, plastic, and glass.
Nevertheless, according to a study conducted by the South Bayside Waste Management Authority, composting materials such as eggshells, vegetables, or coffee grounds is more important than recycling.
For example, composting 1 ton of organic waste can reduce emissions as much as taking a car off the road for two months.
Not only does composting keep landfills from filling up prematurely, but it also minimizes the pollution they create.
The layers of trash burying the plant matter create a toxic environment. This airless environment causes the plant to produce methane gas. This greenhouse gas is twenty-one times more potent than carbon dioxide. Composting helps minimize landfills' contribution to climate change.
For this task, it is also important to have a biodigester, which is a system that biologically digests organic material, either anaerobic or aerobically. Biodigesters are a closed system; therefore, it gives off no odor from food waste; this will eliminate flies and rodents from the facility, increasing hygiene.
Composting also reduces chemical needs. According to the U.S. Environmental Protection Agency, spreading compost on crops minimizes the need for chemical fertilizers.
Compost not only provides the basic nutrients provided by chemical fertilizers, but it also provides a wide range of other elements and nutrients not available in chemical fertilizers. Reducing chemical fertilizers reduces associated environmental problems, such as water pollution. The nitrogen in these fertilizers causes algae blooms in lakes and the ocean, radically altering the coastal ecosystem. Chemical fertilizers also leach into groundwater and contaminate drinking water wells.
The abbreviation of technological agriculture refers to the use of technology in agriculture to increase productivity and also the quality of products and land.
In the last years, agritech has revolutionized the agricultural world, where thanks to the technological advance of automation and similar tools, the care and production on the land have increased in safety and time. It also helps us to combat global warming and the possible consequences it could have on farmland.
Agriculture technologies include the use of weather forecasts, automated irrigation, software for disease prediction, and other technologies helping in the increase of crops yield and disease control.
At BFGO, we are also proud to be developing proactively in Agrotech.
Where our CFO, Isidoro Hamui, has some experience in this matter.
He takes care of a composting and automated irrigation system that he installed in his home.
Although he mentions that initially, it can be a little difficult to understand and keep up with, only with time and experience you can fully understand more about this little land that helps the environment.
Here you can find some pictures.