DSRT: Desert Control extends agreement with Mawarid and prepares for stage two
ISSUER
DESERT CONTROL AS
DSRT: Desert Control extends agreement with Mawarid and prepares for stage two
Sandnes/Abu Dhabi, 21 October 2021
Reference is made to the stock exchange release published by Desert Control AS
(“Desert Control” or the “Company”) on 8 June 2021, announcing the Memorandum of
Understanding (“MOU”) with Mawarid Holding Investment and its subsidiaries,
including Barari Natural Resources (“Mawarid”).
Desert Control today announces that preliminary results from the pilot project
have been assessed together with Mawarid. The interim results highlight broader
opportunities for food security initiatives that will be of significant value
when realized. Based on positive preliminary results and the successful
collaboration, the pilot project is being extended to gain further knowledge in
some additional areas, including more strategic crop varieties, formulations,
and applications of LNC that may further expand the business opportunities for
the parties. Both parties’ express commitment to move forward towards stage two
of the MOU based on the positive results and experience gained thus far. Stage
two includes to establish a strategic partnership for accelerated deployment of
LNC within the United Arab Emirates and the wider Middle East region.
"The foundation for any successful partnership is a united culture built on
shared values with transparency that foster strong relationships and trust.
Through these principles, we achieve excellent execution and solid value
creation in our collaboration. Working together as partners during the initial
pilot is evidence that we are successfully building this foundation between
Mawarid and Desert Control, says CEO Ole Kristian Sivertsen."
The first stage of the MOU is a pilot project that consists of reversing soil
degradation, creating arable land with fertile soil in desert conditions, and
reducing water consumption within agriculture, forestry, green landscapes, and
nature conservation, using Desert Control's Liquid Natural Clay (“LNC”) on
several Mawarid managed forests and agricultural properties in the United Arab
Emirates (“UAE”).
"Mawarid and Barari create value by being at the forefront of innovations and
sustainable practices and adopting them to improve the environment while driving
profitable growth," says Mawarid Holding Investment CEO Ayman El Gayar. “ In
partnership with Desert Control, we can save water, reduce fertilizer usage,
improve desert soils, fight desertification, and reduce costs for our own
operation as well as for our clients and our country. The partnership we aim to
build will have a tremendous environmental impact in UAE and the wider MENA
region."
The pilot project is well underway and is, as announced today, now extended to
include additional strategic opportunities. LNC treatment is complete for six
out of eight work packages. The treatment of vegetables indicates preliminary
water-saving measures according to targeted levels. Palm trees in developed
arable land do not yet show a significant impact from the LNC treatment. The
soil quality of the specific palm tree area was already very high before LNC
treatment, with good water holding capacity. Therefore, the pilot is extended to
include treatment of palm trees in more regular sandy soil, representative of
the majority of palm trees in the Middle East. The area for animal food (alfalfa
and panicum) has recently been seeded and still needs more time to gain
sufficient water consumption data. However, analysis from soil samples of the
animal feed area are promising, showing a significant increase in water holding
capacity in the LNC treated field compared to the control reference. A visual
demonstration is shown in this video: https://bit.ly/3nd3UWS
Further, the application of LNC for a variety of forest trees has been
completed, with the last forest area finalized on October 13. The pilot has
further been extended to include a wider variety of fruit trees to support
national food security initiatives. For both forest trees and fruit trees, the
visible results of soil improvement are positive. A visual demonstration is
shown in this video: https://bit.ly/2Xxv7Lg
The parties are optimistic about the outlook for successfully establishing the
strategic partnership based on the preliminary and indicative results from the
pilot project under the MOU. The parties further express the collaboration in
the pilot phase has been outstanding, demonstrating a good cultural fit and a
solid foundation for the future partnership.
"Today, by extending the agreement, we demonstrate commitment to develop a
long-term strategic partnership between Mawarid and Desert Control. The
preliminary results of the pilot strengthen our belief that the Liquid Natural
Clay innovation aligns with our goals to maintain the legacy of His Highness,
the late Sheikh Zayed, by greening the desert and securing food security
resources. These initiatives further align with the vision of our president H.H.
Sheikh Khalifa Bin Zayed Al Nahyan and Crown Prince H.H. Sheikh Mohamed Bin
Zayed Al Nahyan, says Chairman of Mawarid, H.H. Abdul Jaleel Alblouki. The pilot
has already demonstrated ability to reduce water demand for growing food,
protecting our natural resources and safeguarding the biodiversity and climate
of our ecosystems."
In stage two, it is Desert Control and Mawarid’s intention to establish a
strategic partnership for development of further projects and accelerated
deployment of Liquid Natural Clay in large scale operations in the United Arab
Emirates (“UAE”). It is contemplated that the Company will continue the
development and production of Liquid Natural Clay, while the partnership –
Desert Control and Mawarid collectively – will develop the go-to-market channel
and specialize in application solutions to provide LNC treatment for
agriculture, forestry, ecosystem restoration and nature conservation. Desert
Control has a global market for Liquid Natural Clay, and, under the MOU and
subject to the final terms of the partnership, Mawarid is granted exclusive
rights for UAE and a potential to expand the relationship with priority
partnership for areas in other jurisdictions across the Middle East and North
Africa. Any final agreement remains subject to the results from the pilot
project as well as commercial negotiations between the parties. Hence, it is
noted that the Company cannot provide any guarantee that the collaboration as
contemplated by the MOU is feasible or that any further agreement will be
entered into in the future.
The Company also emphasizes that the pilot project is not completed and that
final results may differ from current preliminary results. Known uncertainties
includes the fact that the pilot project has been extended in scope and
duration, and as such is not completed, and hence results are also incomplete.
Further, read-outs from sensors are not verified and may be subject to
correction based on a variety of matters such as defects and incorrect
installation. The final conclusive results from the pilot project are expected
to be available during second half of November.
For more information, please contact:
Ole Kristian Sivertsen, Chief Executive Officer
Email: oks@desertcontrol.com
Tel: +47 957 77 777 / +971 52 521 7049
About Desert Control AS
Desert Control is a company specialized in climate-smart agri-tech solutions to
combat desertification, soil degradation, and water scarcity. Its patented
Liquid Natural Clay restores and protects soil, reducing water usage for
agriculture, forests, and green landscapes. Liquid Natural Clay (LNC) enables
sand and degraded soil to retain water and nutrients. LNC increases crop yields
while reducing water and fertilizer consumption by up to 50%.
Agriculture and food production consume more than 70% of all available
freshwater. When topsoil degrades, water consumption increases further as it
permeates through sandy soils like a sieve. Simultaneously, population growth
drives the need for more food over the next 40 years than was produced in the
last 500 years, putting even more pressure on scarce resources such as water.
This is the problem Desert Control is determined to solve. There are tremendous
growth opportunities in a market that is growing rapidly. Annually, 12 million
hectares of fertile land perish to desertification.
About Mawarid Holding Investment L.L.C
Mawarid Holding Investment L.L.C (MHI) is a reputable holding company that has
wide experience, through its subsidiaries, in many diversified domains including
but not limited to Agricultural, Industrial, Services, Hospitality and other
related business in the United Arab of Emirates and in the MENA region. Mawarid
is specialized in identifying, creating, and managing services in accordance
with the highest international standards. Within its current portfolio of
diversified group of companies, Mawarid has certain subsidiaries which core
business are of an agricultural nature, including Barari Natural Resources,
Mawarid Services and Mawarid Nurseries. Mawarid, through its subsidiaries, is
one of the leaders in landscaping field as well as the conservation with
management of 438 forest and reservations in the Emirates of Abu Dhabi covering
over 200,000 Hectares comprising of 13 million forestry trees and 400,000 date
palm trees. Mawarid Holding Investment employees over 11,000 personnel within
different industries across the UAE and outside.
Important Notice:
This information is considered to be inside information pursuant to the EU
Market Abuse Regulation and is subject to the disclosure requirements pursuant
to Section 5-12 the Norwegian Securities Trading Act.
This stock exchange announcement was published by Erling Rasmussen, Chief
Financial Officer of Desert Control AS on 21 October 2021 at 11.00 CEST.
Matters discussed in this announcement may constitute forward-looking
statements. Forward-looking statements are statements that are not historical
facts and may be identified by words such as "believe", "expect", "anticipate",
"strategy", "intends", "estimate", "will", "may", "continue", "should" and
similar expressions. The forward-looking statements in this release are based
upon various assumptions, many of which are based, in turn, upon further
assumptions. Although the Company believes that these assumptions were
reasonable when made, these assumptions are inherently subject to significant
known and unknown risks, uncertainties, contingencies and other important
factors which are difficult or impossible to predict and are beyond their
control. Actual events may differ significantly from any anticipated development
due to a number of factors, including without limitation, changes in public
sector investment levels, changes in the general economic, political and market
conditions in the markets in which the Company operates, the Company's ability
to attract, retain and motivate qualified personnel, changes in the Company's
ability to engage in commercially acceptable acquisitions and strategic
investments, and changes in laws and regulation and the potential impact of
legal proceedings and actions. Such risks, uncertainties, contingencies and
other important factors could cause actual events to differ materially from the
expectations expressed or implied in this release by such forward-looking
statements. The Company does not make any guarantee that the assumptions
underlying the forward-looking statements in this announcement are free from
errors nor does it accept any responsibility for the future accuracy of the
opinions expressed in this announcement or any obligation to update or revise
the statements in this announcement to reflect subsequent events. You should not
place undue reliance on the forward-looking statements in this announcement.
The information, opinions and forward-looking statements contained in this
announcement speak only as at its date and are subject to change without notice.
Except as required by applicable laws and regulations, the Company does not
undertake any obligation to review, update, confirm, or to release publicly any
revisions to any forward-looking statements to reflect events that occur or
circumstances that arise in relation to the content of this announcement.