Tecogen Wins First Non-Cannabis Deal In Agriculture Space
After selling a dozen chillers to the rapidly emerging cannabis industry in North America, Tecogen (TGEN – $2.96) has now inked its first transaction with an indoor vegetable grower called Beverly Greenhouses. With over 20 acres of greenhouses onsite, it is one of the larger indoor cucumber operations in Ontario, Canada.
The Company has sold both an InVerde e+ and a Tecopower CM-75 combined heat and power (CHP) unit to Beverly Greenhouses. The machines will operate independently of each other and will mainly be used to generate power. The high quality waste heat from the units will most certainly be used, but it’s not the main driver for this purchase.
The installation will generate significant cost savings for Beverly Greenhouses, as it will reduce the amount of electricity purchased from the utility. After all, utility costs are one of the biggest operating expenses for indoor farmers.
This is a breakthrough for Tecogen, as it gives the Company a foot in the door of Ontario’s vast agriculture industry. Farmers are typically well-connected with each other through partnerships and organizations. When one greenhouse operation successfully reduces costs, word gets around fast.
Greenhouse Agriculture in Ontario
Because the province of Ontario has massive amounts of available farmland, but also harsh winters, it is very well suited for indoor farming. Thanks to greenhouses, the farms can operate year-round.
Consequently, Ontario is one of North America’s biggest greenhouse vegetable producing areas with an estimated annual farm gate value of $782 million. Cucumbers, peppers, and especially tomatoes are grown in about 500 greenhouse operations.
A significant amount of greenhouse products from Ontario are exported to the United States, differentiating the sector from many other parts of agriculture that are primarily domestic in their market focus.
Although greenhouse agriculture is much more capital intensive than field agriculture, due to new construction costing up to $1 million per acre, it has several advantages. Firstly, inside a greenhouse, crops can grow all year round, yielding up to seven times more than field production. At Beverly Greenhouses, harvest starts on January 1 and comes to an end at the end of November when planting begins again. This way, Beverly Greenhouses ships anywhere from 3,000 to 12,000 cases of cucumbers each day nearly year-round.
Secondly, the production environment is tightly controlled, which means that biocontrol measures, such as insect pollination, can be utilized. This is also how Beverly Greenhouses keeps unwanted bugs away from its plants. They will use yellow sticky cards that hang from individual plants. When the number of insects that are stuck to each card reaches threshold levels, the introduction of beneficial insects is increased. Parasitic wasps, for example, are used to control whitefly, an insect pest that sucks sap from cucumber plants and negatively impacts plant vigor.
In other news, Tecogen will host a conference call at 11:00 AM on Wednesday October 18th to provide a brief update about Ultratek, the Company’s joint venture to develop the patented Ultera emissions technology for automotive applications. Speaking on the call will be Co-CEOs Benjamin Locke and John Hatsopoulos, President and COO Robert Panora, and Board member Dr Ahmed Ghoniem.
To listen to the live conference call, dial (877) 407-7186 within the US and Canada or (201) 689-8052 from other international locations. Alternatively, the call will also be recorded and available for playback for two weeks starting one hour after the end of the call. To listen to this playback dial (877) 660-6853 within the US and Canada or (201) 612-7415 from other international locations.
Clearly, Tecogen has already demonstrated consistent success in penetrating the nascent indoor cannabis industry. Moreover, with this sale it also shows that its power, heating, and cooling solutions are directly applicable to a broadening array of commercial crops.
Jeffrey Glick, Vice President of Sales for Tecogen, said, “Being able to get entry into the Canadian indoor grow industry shows how powerful and unique Tecogen’s value proposition truly is. It’s really exciting to get recognized as being a leading supplier to such an important and expanding industry.”
With 500 greenhouse operations in Ontario, the money saving initiative from Beverly Greenhouses will trigger lots of interest among other farmers. Recommendation BUY.
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