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Sunday, 08 January 2017 16:56

Kalamazoo biotech bets on prehistoric compost to aid plant growth

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Kalamazoo-based biotech AgTonik plans to at least double its business in the next year as it markets its line of biostimulants to the hydroponic and cannabis industries. The company refines fulvic acid, a naturally-occurring chemical compound in ancient compost that acts as a nutrient-delivery system to plants, helping to boost yields. Kalamazoo-based biotech AgTonik plans to at least double its business in the next year as it markets its line of biostimulants to the hydroponic and cannabis industries. The company refines fulvic acid, a naturally-occurring chemical compound in ancient compost that acts as a nutrient-delivery system to plants, helping to boost yields. Courtesy Photo

KALAMAZOO — One Southwest Michigan biotech company wants to leverage a little-known chemical compound to capitalize on the hydroponic and cannabis industries. 

When AgTonik LLC incorporated in 2014, the company initially produced fulvic acid for use in the nutraceutical industry. Recently, the Kalamazoo-based biotech has started to branch out to new markets as more people discover the molecule’s beneficial properties.

“The market is almost unfathomable in terms of the potential,” said Andrew Bruex, CEO of AgTonik. “We have a distributor that we’re working with out of Florida that’s marketing the product to the cannabis industry. We literally just filled some of the first orders for that. In the non-cannabis world, we’re getting traction in Europe and Australia.”

Essentially, fulvic acid acts as a nutrient delivery system to the plants, allowing growers to increase yields through a naturally-occurring compound derived from ancient composted biological material. In its products, AgTonik uses fulvic acid sourced from the Southeastern U.S. that’s about 34 million years old. The company owns the undisclosed out-of-state property where it extracts the fulvic acid and ships the material to Michigan for processing, according to Bruex.

For growers, fulvic acid offers a highly concentrated dose of nutrients since the compound can absorb approximately 60 times its molecular weight from the source material. 

The company has targeted the hydroponics and cannabis markets because they’re better suited to using fulvic acid compared to other traditional agricultural sectors. That’s because the plants are grown in a controlled environment, which makes calculating yields, inputs and returns on investment much easier, Bruex said. 

While the U.S. has been slower to catch on to the benefits of using fulvic acid compared to other countries, the market here has started to grow, he said.

“They seem to be more open and understand the value of fulvic acid-bound minerals more so than the U.S.,” he said of foreign markets. “They’re just ahead of the curve a bit, but it’s coming around pretty fast.”

The market for biostimulants, which includes fulvic acid and chemicals and extracts from seaweed and other sources that encourage plant growth, is expected to reach $3.64 billion in 2022, driven largely by demand from Europe, according to a report by Maryland Stratistics Market Research Consulting

For AgTonik, the biostimulant market could translate into substantial growth for the company if its product catches on with customers.

“I don’t like to count my eggs before they hatch, (but) I’d say that we’re going to at least double or quadruple our business next year,” Bruex said. “(The business) is so small right now that to double or quadruple is a home run, but not a grand slam. … We think this has the potential to drive our business into the multi-millions.”

AgTonik currently generates less than $1 million in annual revenues and employs four full-time workers. 

While it may take time for AgTonik to realize the full benefits of the growing biostimulant market, Bruex has designed the company to be scaleable. 

“If it went wildly successful, we could scale up pretty quickly,” Bruex said. “I have a background in factory automation and I’ve set up good manufacturing practices with expansion in mind.”

BEING MINDFUL OF ‘MOTHER EARTH’ 

The key to AgTonik’s product stems from its source material, which Bruex claims is one of the richest deposits of fulvic acid in the U.S. 

“It’s really the source material that makes a huge difference,” he said. “If we were doing the same thing out of a deposit in New Mexico or Utah, their source material is very weak compared to what we have.

“We have acres of this property and we don’t even know how deep the deposit is. The little bit of extraction we do is (just) past the surface.”

Bruex purchased the property about a decade ago from another fulvic acid operation, which he says was not properly utilizing the product. AgTonik has removed material from its property only twice over the last decade and is careful to restore the land each time, Bruex said. 

AgTonik’s philosophy of restoring its land is part of the organization’s larger commitment to sustainability, he said.

“We’re very cognizant of mother earth and we want to do things right,” Bruex said. “Right now, there isn’t anything about our process or product that has harshness to the environment or people.” 

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John Wiegand

Staff writer

[email protected]

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