Philom Bios extends reach with pair of agreements

Release Date: April 4, 2006
By Murray Lyons
SP Business Editor

Business collaborations here on the Canadian Prairies and with a leading grains research funding group in Australia could be a future driver of growth for Saskatoon-based Philom Bios Inc.

The company, which now bills itself as “a world leading inoculant company,” made two announcements in quick succession in the past three days that should result in increased research, marketing and manufacturing activity at its operations in Saskatoon.

Here in Canada, the company has formed a collaboration with Winnipeg based Brett Young Seeds, a company that has sold pedigreed seeds in Canada for more than 70 years.

Brett Young has been developing its own plant growth promoter, based on rhizobacteria technology, that has been field-tested for five years in both canola and soybean production and offers what Brett Young describes as “exciting productivity enhancements” for farmers.

Biological growth promoters and inoculants help plants develop natural mechanisms for making efficient use of nutrients in the soil and can reduce the need for farmers to use chemical fertilizers.

Through the agreements, Philom Bios has acquired the worldwide licence to further develop the Brett Young formulations known by the trademarked names of BioBoost and SoySuperb and then produce and market these products to the farm community.

Lloyd Dyck, the CEO and partner in the family owned Brett Young Seeds, says it would have made little sense for Brett Young to try to scale up on its own to manufacture these biology based products when Philom Bios has capacity at its new facility in Saskatoon to do so.

In a phone interview, Dyck says Brett Young is better suited to continue research and development work on “new and novel biologicals,” rather than building the infrastructure needed to produce and package such products for the market.

“We view our partnership with Philom Bios as being with a company that has the same vision for the future with biologicals and wanting to take those products to market,” he said.

Dyck says the type of product that Brett Young’s research has produced is complementary and not a rival of biology- based inoculants that Philom Bios also marketing to growers of corn
and soybeans. “More and more people are looking at having three or four biologicals in the package, all to help the plant and meet the farmers’ needs,” he said.

Philom Bios president and CEO Calvin Sonntag says the collaboration with Brett Young will help deliver more products to farmers that allow them to get efficiency out of any expenditures on fertilizer, as well as promoting growth within plants and providing bio-control of root diseases.

Overall, he expects sales will be driven by the need by farmers to get more value out of the ever-rising expenditures for chemical-based fertilizers.

“I don’t think of Philom Bios as an inoculant company. I see Philom Bios as a company selling fertility efficiency tools,” he said. “As fertilizer prices have headed in one direction, it’s one of the things that has driven our growth.”

Speaking in a phone interview from the Canberra airport in Australia, Sonntag says the Brett Young technology was different enough from growth enhancers produced by Philom Bios that it wasn’t considered a rival. “We see it as an interesting stand-alone product, but we also see the prospect of combinations of products that will be interesting.”

Sonntag was in Australia to help launch a new company to be known as Philom Bios (Australia) Pty Ltd., which is a 50-50 joint venture with the Grains Research and Development Corp. (GRDC) of Australia.

The two parties have committed to spend $1 million AUS to support the marketing of Philom Bios products in Australia that have been field-tested there. As well, the joint venture will look
at prospects for commercial development of research done by the GRDC, an agency whose research is partly supported by a check-off fund by Australian grain growers.

Despite the distances involved, Sonntag says he is confident the existing product line for Philom Bios can be shipped economically to Australia. Sonntag points out the company’s JumpStart inoculant is so highly concentrated already that it is shipped in small plastic bottles and even the larger bulk products such as the company’s TagTeam formulations grown in peat moss powder can be shipped long distances.

“It is very clear that global export of our production from Saskatoon is very feasible and in refrigerated containers to assure product quality,” he said. “Even with the added cost of refrigerated containers, we’re going to be competitive here.”

Sonntag says Philom Bios will likely see some bottom-line results from both its collaboration with Brett Young and its Australian joint venture company by the 2008 and 2009 fiscal years.