Israeli Netafim to supply irrigation system to Peru for $22 million
Israeli water solutions company Netafim signs deal with Peruvian company Maple Energy to supply services for large-scale sugar cane project in order to create ethanol as alternative energy source. Netafim said to be in negotiations for additional deals of this sort
Israeli company Netafim, which provides innovative water solutions to clients, won the tender to supply irrigation solutions to a large-scale sugar cane growing project in Peru. The sugar cane grown will be used to create ethanol as an alternative energy source.
Netafim, jointly owned by Kibbutz Hatzerim, Kibbutz Yiftach, Kibbutz Magal, Markstone Capital Group, and Tene Capital, signed the deal valued at $22 million, good news in light of the economic crisis, which has affected agricultural companies, mainly because of dried up credit sources for financing large-scale agricultural projects. Netafim themselves recently laid off more than 200 employees following a decrease in orders.
The deal, signed with Peruvian company Maple Energy, stipulates that Netafim will provide engineering, planning, procurement, and building services, while also being the exclusive supplier of irrigation equipment for the sugar cane project. Maple Energy produces energy for industrial clients from oil, gas, and ethanol and is headed by CEO Rex Canon.
The project will be spread over some 20,000 acres in southern Peru, which will be used to grow sugar cane used to produce ethanol and electricity. Infrastructure building is scheduled to be finished in 2010.
Sugar cane has become one of Peru's main crops in recent years partly because of the country's temperate climate, low rain fall, and lack of readily-available water resources.
Netafim has business in many South American companies and has recently expanded operations in Peru.
"Netafim today is the only company in the world that provides innovative irrigation systems that allow for optimal sugar cane growth for creating ethanol," said Netafim CEO Ofer Bloch. Other senior officials in the company noted that Netafim is currently in the negotiations for launching other similar projects.