CEO Ben Barlow, Photo: NEM/Mark Jesser
In some ways, the company had the right product for the pandemic. It sells a highly concentrated rhizobia formula that fits in a 30-gram vial. Boxes of the vials were shipped by air at a time when shipping freight was rocketing. “The vial by air freight could replace the same quantity of three-litre bottles shipped in four 40-foot containers,” said Barlow.
A highly concentrated formula that is unique to the Australian rhizobia industry, EasyRhiz provides users with an inoculant formulation that is dormant, has a three-year shelf-life, and only requires standard refrigeration.
“We look at the liquid inoculant market in a target country, then see if we can land there for the same price or lower,” explains Barlow.
From Australia, air freight has an advantage over shipping. It can take 80 days to Europe by sea, whereas NEM can deliver a cargo to the U.S. within 48 hours by air.
Exports make up around 20 percent of NEM’s business, and this has contributed to the company’s 22 percent year-over-year (YOY) growth. “Anything that NEM does abroad has to be niche, so we target a market where our research suggests our product can land there and compete with domestic products,” says Barlow.
NEM sells a highly concentrated rhizobia formula that fits in a 30-gram vial.
Expansion driveThe YOY growth has also been matched by a growth in staff numbers. “It became apparent we were running too few staff,” notes Barlow. NEM has now grown from 12 to 60 full time and contract employees in around two years, which includes five PhDs in formulation and quality.
“Now we’re at the right numberto underpin growth in the nextfive years.”
In line with an increase in head count is a major expansion in fermentation capacity coming onstream this year. NEM will go from around 55,000 litres to 100,000 litres per week. The increase will mainly be for the non-rhizobia business, involving the production of other bacterial strains, such as Bacillus, Pseudomonas, Streptomyces and the fungus Trichoderma.
It is not just the capital outlay that means NEM has relatively few competitors that can match it for scale. The new plant has taken five years in planning and will take two to build. Barlow quips that it takes this long, even when you know what you are doing. But this leads to his serious point that moving something from the lab to putting it in a box is a difficult business. “It’s not something you can do without failure,” he adds.
Research partnershipsTo mitigate the challenges of launching new products, NEM has formed a long-term partnership with CSIRO (Commonwealth Science and Industrial Research Organisation), Australia’s premier research institute.
“CSIRO is deep in science, and we’re not inclined to go to market with a product unless CSIRO has tipped it upside down and inside out first,” says Barlow. “If you don’t, it can have a serious impact on your brand reputation.”
Forging links with the research side of the industry has been a keen part of NEM’s strategy. While there was plenty of published research on rhizobia and pulses, Barlow noticed that some Australian universities were sitting on research regarding interesting strains for cereals and oilseeds. NEM approached them and offered to acquire the IP. In return, the company pays a royalty for every box sold.
The company has now built exclusive access to libraries of 450,000 bacteria and fungi strains taken from 25,000 soil samples. From these libraries, the company is currently working with around 80,000 strains. Barlow is looking to refine the process of product development: “Some companies focus mainly on discovery. We want to pick up on those discoveries, then [using the libraries] look at those strains with the highest likelihood of success.”
This leads to his fly-wheel concept. Barlow outlines how more R&D will lead to more products, bringing greater benefit to more farmers which generates more revenue that can then be plowed back into R&D to generate more products.
“We’re looking to support further research. It’s nice to give something back to the farming communities,” says Barlow, who himself is from a farming family.
Commercial partnershipsTo grow its export potential, NEM is looking further afield for commercial partners, particularly those that might also want to enter the Australian market. Under such an arrangement, NEM could manufacture its product in Australia under commercial arrangements and use one of its 800 distribution points in the country.
“We take the view that we know our limitations. When you open a branch in another country, the chances of success can be low, so we’re actively looking for branded distribution in Europe,” says Barlow.
For companies wanting to sell into Australia, there are strict phytosanitary laws to overcome. Barlow adds that for marketing purposes it is necessary to have two years of performance data.
“From the time you shake hands, it could be three years. If we’re building the market for someone else, we want products that we’re happy with. The partner benefits by being able to produce locally at scale, and it’s cheaper than shipping from Europe.”
NEM has 800 distribution centres throughout Australia.
Boxes at the readyNEM has a series of products coming down the pipeline in the next four years. In 2024, a product aimed at cereals under abiotic stress, due to low rainfall for example, is scheduled for launch. In 2025, the company plans another product aimed at cereals based on growth promoting biologicals.
The company will dip its toe into biocontrol in 2026 with a product aimed at treating Botrytis and powdery mildew in grapes. To complete the line-up, in 2027 a product aimed at increasing soil carbon will come to market.
With customers lining up both here and overseas, all that’s left isto think about what goes on outside the box. ●
