Dear Water Ways Shareholders,
As you are all aware these past few weeks and more recently these past several days the world is experiencing difficult times. The Corona virus has left no country, no government, no business and no individuals unaffected by changes to daily life and routines. Our daily lives. It has also caused a crisis in capital markets around the world and the purpose of this letter is for me to convey to you, our shareholders, how Water Ways technologies Inc. (“Water Ways” or the “Company”) is affected by the crisis. It is important for me to report that only in limited cases has the virus affected our business and we therefore presently do not expect a material impact on our fiscal 2020 results.
Our core business continues to be the implementation of our innovative Israeli irrigation technology in emerging countries – being those countries which in our view can benefit the most from gaining access to clean water and improved agricultural outputs. Since the completion, over a year ago, of our going-public transaction, we have also embarked on a mission to aggressively expand our business in the global legal cannabis sector, which we have successfully advanced from concept to tangible projects in multiple countries. While the cannabis sector continues to represent a modest proportion of our current revenues, we continue to expand our footprint in this lucrative sector.
Summarized below is an update of several international regions where we have focused over the past few weeks to maximize our growth opportunities:
Water Ways established a wholly owned Canadian irrigation subsidiary, Heartnut Grove WWT Inc., and successfully commenced sales of agricultural accessories and irrigation equipment to Canadian farmers. Our sales increased in January but were temporarily delayed due to the blockade on Canadian rail transport. As of last week, the blockade no longer serves as a hurdle to deliveries, and therefore, deliveries, of previously ordered goods are expected to be filled in the next weeks. I have confidence that we will see rapid growth in the Canadian market in the coming year through a qualified sales team marketing Israeli irrigation technology to Canadian farmers.
Our Chinese business encountered challenges after January of this year due to the Corona crisis. Our plans to open our sales subsidiary were delayed. I am happy to advise that as of a week ago our Chinese business is back to normal operational capacity.
Our business in Uzbekistan continuous to be strong. We have deployed two cotton irrigation projects and continue to bid for additional projects. Over the past several years flood irrigation has caused numerous environmental problems in Uzbekistan – the main one being soil salinity, which may lead to soil erosion, detrimental effects on future crops, sedimentation problems and damage to infrastructure. Water Ways believes that drip irrigation will lower soil salinity significantly and combined with fertigation practices will increase yields for growers.
After a year of financial and political uncertainty we are back to able to re-focus on growing our business in Ethiopia. We have previously received substantial orders from Ethiopia for both irrigation projects and components (See press release dated 19/2/2020. The business is growing and we are bidding for additional irrigation projects
Our South American business continuous to be strong. We are selling Israeli Irrigation technology in Peru, Colombia, Ecuador and Mexico. We have not yet seen any downturn or decline in demand in this continent.
Cannabis Industry Expansion Update
Europe and Latin America
We are currently in negotiations to deliver turnkey irrigation solutions to cannabis and hemp cultivators in several European and Latin American countries.
Israel – Medical Cannabis
The Company gained experience thorough its delivery of the irrigation, fertigation and IOT (Internet of Things) control system to an Israeli subsidiary of the Cronos Group (TSX:CRON), which operates a greenhouse cultivation project located at Kibbutz Gan Shmuel, approximately 50km north of Tel Aviv. As a result of its experience, Water Ways has received two additional orders for similar projects from two licensed producers in the Israeli market.
An overview of our focus in the cannabis sector is available here:
As a result of the challenging times we have taken measures to lower operating expenses. These include: temporary staff reductions; and a reduction in management salaries, including myself, with the intention of bringing the Company to growth and profitability.
These are not easy times around the world, but we have a sound business and I am sure we are on track to reaching our 2020 business goals.
President, CEO and Chairman of the Board of Directors
Water Ways Technologies Inc.
About Water Ways Technologies
Water Ways is the parent company of Irri-Al-Tal Ltd. (“IAT”) which is an Israeli based agriculture technology company that specializes in providing water irrigation solutions to agricultural producers. IAT competes in the global irrigation water systems market with a focus on developing solutions with commercial applications in the micro and precision irrigation segments of the overall market. At present, IAT’s main revenue streams are derived from the following business units: (i) Projects Business Unit; and (ii) Component and Equipment Sales Unit. IAT was founded in 2003 by Mr. Ohad Haber with a view of capitalizing on the opportunities presented by micro and smart irrigation, while also making a positive mark on society by making these technologies more widely available, especially in developing markets such as Africa and Latin America. IAT’s past projects include vineyards, water reservoirs, fish farms, fresh produce cooling rooms and more, in over 15 countries.
For more information, please contact
T: 403 617 7609