Equity Stake Taken in Israeli Digital Ag Start-up CropX

Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Masayuki Hyodo, below: Sumitomo Corporation), via its whole subsidiary Sumitomo Corporation Europe Limited (Head Office: London, U.K.; President and CEO: Takashi Yamana, below SCEU) (below, collectively referred to as the Sumitomo Corporation Group) has acquired an equity stake in CropX Technologies Limited (Head Office: Israel; CEO: Tomer Tzach ; below, CropX), an Israeli agritech (Note 1) company (below, The Transaction). This investment into a startup company utilises the SCEU R&D investment scheme (Note2).
 
The global population is expected to grow from 7 billion to 10 billion in 2050, and food demand will increase up to 70%. At the same time, agricultural land and water resources are depleting gradually, and the farming population is ageing. As a result, digitalization of agriculture is gaining traction, as farm productivity and effectiveness need to be urgently tackled in order to respond to growing food demand.

CropX vision is “The Internet of Soil”. The company is providing digital agronomy services (Note 3) to farmers on the optimization of their irrigation and nutrition management practices. This is done via proprietary algorithms, analyzing the big data suite of soil, weather and soil data, where soil data is collected by soils sensors in real-time, showing the moisture, temperature and electrical conductivity. Farming optimization allows yield increase, labor and input cost savings, better water management and in trials in Arizona, USA, CropX trials showed that a 40% decrease of water utilization can still bring 10% yield increase. CropX sensors are installed in more than 40 countries, including USA, Canada, Mexico, South Africa, Australia, Thailand etc.

Sumitomo Corporation Group has a presence in the agriculture and food industry in 44 countries around the globe, including plant protection products, fertilizers, agricultural equipment, food etc. In addition to CropX growth, The Transaction aims to upscale our existing business via synergies with CropX technology. Our further goal is to contribute to global economic development by discerning the social needs together with the help of partnerships with innovative technology companies.

(Note 1) Agritech: industry trend to create innovative farming by the way of introducing novel technologies to agriculture.
 
(Note 2) In January 2018, Sumitomo Corporation Europe Limited introduced a “R&D Investment Support System” to enable flexible investment in start-up companies, which have been drivers of innovation (innovative technologies, services or business models) in Europe.

(Note 3) Digital agronomy services: Services, provided holistically, advise on crop production with the use of digital data on irrigation, soil, diseases and pests, weather etc.

■CropX Soil Sensor

■Material issues for Sumitomo Corporation
The Sumitomo Corporation Group has defined the “Six Material Issues to Achieve Sustainable Growth with Society” as an important factor in developing business strategies and in the decision-making process for individual businesses. This business should prove especially beneficial in “Achieving Harmony with the Global Environment”, “Contributing to the Development of Local Communities and Industries,” “Establishing a Foundation for Comfortable and Enriching Lifestyles,” and “Providing Diverse ‘Accessibility.’”