In a strategic move to engage in agricultural water use efficiency, Yara has acquired the German water sensor company ZIM Plant Technology GmbH. ZIM Plant Technology sells crop water sensor technology, which is mostly used in high-precision irrigation systems to improve yields and water use efficiency.
“We will incorporate the knowledge and technology into Yara’s existing Crop Nutrition solutions, providing a valuable add-on for our offering to irrigated farming. This clearly improves Yara’s leadership position within the growing fertigation segment,” says Egil Hogna, Head of Yara Downstream.
New application in the Yara Precision Farming tool kit
The farmers’ motivation to purchase the technology is reduced water consumption, increased yields and improved crop quality. Integrating the water precision tool with Yara’s knowledge about precise application of water soluble and liquid fertilizer (fertigation) will multiply the market potential for both.
“This is a strategic step for Yara into a new segment of the precision farming business, and it is also a response to our Creating Impact strategy of addressing resource scarcity,” says Hogna.
The company ZIM Plant Technology GmbH has developed the most advanced and reliable technology to monitor the water status of the crop.
Mitigating water scarcity
Freshwater availability is predicted to become one of the major global challenges. Currently, agriculture uses about 70% of freshwater withdrawals. If water use efficiency is not improved, by 2030 the agricultural sector alone will need more water than is sustainably available. As a conservative estimate, the water sensor technology reduces water usage by 20%.
Yara anticipates selling more than 50,000 sensor systems over the next decade. "While this is a modest increase in sales volume for Yara overall , it is an important first step into doing water and fertilizer management combined through high-tech solutions. With documented increases in resource use efficiency, this will become increasingly attractive in water-scarce regions,” says Hans Goossens, Director, Yara Downstream New Business.
As a conservative estimate, the water sensor technology reduces water usage by 20 percent. With the projected sales figures, this would mean a savings of 300-500 million m3 of water a year, equivalent to the total annual domestic water consumption of Norway.
Closing of the deal, subject to normal conditions, is set for 1 January 2014.