Netafim signs $22M supply deal for irrigation in Peru

A subsidiary of Tel Aviv, Israel-based Netafim has signed a $22 million deal to engineer and build irrigation systems for sugar cane crops in Peru.

Netafim, which supplies proprietary smart water technologies for agriculture, signed the deal with Peru-based Maple Energy (AIM:MPLE) through its  Peruvian subsidiary Netafim Peru for the smart irrigation products and the drip irrigation system.

Maple’s $222 million sugar cane project is expected to be used to produce electricity and ethanol from sugar cane by 2010. Maple plans to cultivate 8,000 hectares of land in northern Peru for sugar cane planting, harvesting and milling. The company also plans a distillery with the capacity to process 35 million gallons of ethanol per year.

In all, Maple Energy has assembled 10,676 hectares since it began evaluating sugar and ethanol projects in Peru in 1999.

Sugar cane is a rapidly growing focus for farmers in Peru because of the stable weather and low rainfall, which allow for year round harvesting of sugar cane.

Netafim said it is the exclusive supplier of irrigation technologies for the Maple project. Netafim officials said in a news release that the deal is the first of what’s expected to be many large-scale biofuel projects for the company.

CEO Ofer Bloch said Netafim’s “proprietary smart water solutions enable optimized conditions for cultivating sugar cane intended for the production of ethanol.”

In July, Netafim acquired France's Eden Irrigation, a maker of irrigation systems for home garden, golf courses, and sports stadiums, for €7 million (see Thin film pulls in a crowd).

Netafim is jointly owned by three kibbutzim—Hatzerim, Magal and Yiftah—and by the Markstone and Tenne funds.