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Verde Agritech shares take off as it reaches production capacity; unveils expansion plans for next year

The firm revealed it had been operating its plant 24 hours a day, seven days a week, just to fulfil existing orders

The Verde product is used on a variety of crops

Shares in fertilizer group Verde Agritech PLC (TSE:NPK) skyrocketed on Wednesday as it revealed its plans to expand production capacity and gave 2018's sales results.

The firm revealed it had been operating its plant 24 hours a day, seven days a week, just to fulfil existing orders for its product Super Greensand for this year's planting season.

READ: Verde Agritech boss Cristiano Veloso lifts holding in company after option exercise

It has sold nearly  40,000 tonnes of Super Greensand this season, this is around 10 times' what was sold in 2017, it noted.

"Though it pains us to turn away buyers because we have now reached maximum production capacity, we are even more determined to accelerate our expansion and supply an ever greater numbers of Brazilian farmers," said Verde's president and CEO Cristiano Veloso.

"Even when Verde achieves 800 thousand tonnes of product a year, we will represent a mere 1.5% of the total Brazilian market for potash and roughly half of the added growth in potash demand of the past years. Our expansions are only just beginning."

Next year, Verde aims to continue to use its existing plant to produce 200,000 tonnes a year of the product and, in parallel, will start building a new processing facility capable of producing a further 600,000 tonnes a year.

The total of 800,000 tonnes per annum capacity is expected to be reached in early 2020.

Notably, in 2018, more than 150 farmers have purchased the product, which is used for crops including soybeans, corn, sugarcane, coffee, cotton, banana and carrots.

The states supplied now include Minas Gerais, Goias, Sao Paulo, Mato Grosso do Sul and Mato Grosso.

Verde will be producing Super Greensand until late November this year when the planting season ends and the raining season starts.

From November to March, it will switch to the processing and selling of Alpha

Shares zoomed up in Toronto nearly 22% to $0.78, having earlier been 40% higher.

Quick facts: Verde AgriTech Plc

Price: 0.63 CAD

Market: TSX
Market Cap: $29.57 m

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on 11/08/2018

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