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John Kahlbetzer’s Twynam Agricultural Group invests in OneCrop cotton technology

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Rich Lister John Kahlbetzer’s Twynam Agricultural Group has grabbed a cornerstone stake in an Australian technology company targeting growth in China’s cotton industry by removing plastic from the process.

By Brad Thompson

Rich Lister John Kahlbetzer’s Twynam Agricultural Group has grabbed a cornerstone stake in an Australian technology company targeting growth in China’s cotton industry by removing plastic from the process.

The multimillion-dollar backing from one of the biggest names in Australian agriculture comes after two years of trials of OneCrop’s degradable film for cotton seedings in China, where there is a push for more environmentally friendly and water-efficient farming.

The investment is one of the first significant moves by Twynam since it finalised the $115 million sale of three farms on the Lachlan River in NSW in May, in a move the Kahlbetzer family said ended an era of owning a large agricultural portfolio.

OneCrop chief executive Andrew Logan said the company was working towards its bio-film becoming the accepted substitute for agricultural plastic in China, a market worth an estimated $US2.9 billion ($4.1 billion) a year.

“Backed by this new investment, our goals for the next 12 months are to meet targets for planting cotton under film in Australia and the United States to demonstrate that our film and laying system can not only sustain big runs of broadacre cropping, but can also slash water use,” he said.

OneCrop, which has worked closely with CSIRO in Australia, points to local trial results showing yield increases of 25-50 per cent in cotton and a 15 per cent increase in water efficiency at a time of soaring irrigation costs in Australia.

The company expects to begin commercial implementation with a major Chinese cotton grower that has 600,000 hectares under non-degradable plastic.

Health problems
The widespread use of non-degradable polyethylene plastics in countries such as China, where sheets cover millions of hectares, has been blamed for environmental and health problems associated with high levels of toxins in the soil.

OneCrop’s film is made from super low-density polymers, non-genetically modified starch and oxo-degradable compounds designed to break down about four months after being rolled on to paddocks for seeding.

Mr Logan said the Twynam backing was secured after months of talks between the Kahlbetzers and OneCrop advisers Hawkesbury Partners.

“Twynam were one of the first to trial plastic film with cotton in Australia around a decade ago and have been an innovator in this space,” he said.

“As a strategic partner, they have travelled to China with us and have seen the scale of the opportunity in China, Australia and the US.”

Twynam chief executive Johnny Kahlbetzer, whose father John founded the diversified agricultural powerhouse in the 1970s, said the group had been encouraged by the field testing and increase in yield for crops under OneCrop technology.

“Twynam were an early adopter of this technology across our agricultural holdings [and] we have seen great improvements in manufacturing and adoption since then,” he said.

‘Unparalleled experience’
“We believe there is a market for broad adoption of the OneCrop film, and it provides a sustainable solution and a move away from the plastics currently used.”

Although the size of the Twynam investment was not disclosed, Hawkesbury managing director John Granger said One Crop was now well financed to continue expansion.

“Twynam bring unparalleled experience in cotton and other commodities where the OneCrop film is used,” he said.
Mr Logan said OneCrop would consider merger and acquisitions opportunities that could help to fast track its production and distribution capability.

“That’s where there is value waiting to be unlocked – in supplying quality product at scale across major global markets while we’ve got no significant competition,” he said.

“We’re not too concerned about positioning for an initial public offering. If the opportunity came along and there was sufficient reward for our early investors and shareholders to go that way, we might consider it, but the regulatory burden is significant, and we think we can grow fast enough without having to go to the market for capital.”

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