Research and development business specialises in NZ's key crop - grass.

Palmerston North company Grasslanz Technology is flourishing in the space between science and commercialisation.

The firm has made a name for itself creating and licensing intellectual property (IP) for pasture seeds: its latest licence is for a type of grass that deters birds.

The biotechnology, developed by scientists at Government-owned AgResearch, involves fungi called endophytes that, on contact with grass, produce a compound which repels birds, some insects and grazing animals. Grasslanz has licensed it to PGG Wrightson Seeds, and Christchurch, Hamilton and Auckland airports have planted it along runways to help prevent collisions between birds and aircraft.

Grasslanz' role is to "join the dots" between technology and the companies prepared to commercialise it, says chief executive Dr John Caradus. A small subsidiary of AgResearch - it employs just 12 people, including a business manager in the United States - it can get products to market faster than the larger government-owned organisation.

A former plant breeder for the Department of Scientific and Industrial Research, Caradus says much of his job simply requires "good personal chemistry" and involves building trust and understanding "that we're in it for [customers'] good as much as anything".

Identifying commercial partners who are prepared to invest and put skin in the game can be challenging, he says.

"They have to be convinced there is value in the new innovation or product. Timing is an issue. They're in it for long haul and there's a huge cost for them taking new product to market, so they have to be sure it's worth it at this stage. We work hard to demonstrate the value."

Scientists, mostly from AgResearch, approach Grasslanz with their ideas. Grasslanz then helps fund further development of those ideas and ensures the IP is protected from competitors with patents, trademarks and plant variety rights. By retaining partial or full ownership of the IP, the company maintains the value of the products it licenses.

In last year's NZ Trade & Enterprise International Business Awards, Grasslanz won the Best use of Intellectual Property category.

The company has 14 patents in 14 countries, 15 trademarks in five countries, and 185 plant variety rights applications or grants in six countries - "pretty exceptional" statistics for a New Zealand company, says Caradus - and earns royalty revenue in places including Australia, the United States, Europe and South America. Grasslanz also has a joint venture with PGG Wrightson Seeds, in the form of Grasslands Innovation, which develops forage plant breeds exclusively for that company.

It also earns a good income from the four-leaf clover seeds it has licensed to a Japanese company. The trait that produced such clover was discovered unintentionally, but "no-one could work out how to make money out of it", says Caradus.

Then, in 2009, a Japanese seed company approached Grasslanz about the seed, and bought the licence for sale in Japan.

A kilo of four-leaf clover seed now earns Grasslanz probably a hundred times the profit that it gets from a kilo of normal white clover seed, Caradus reckons.

The economic downturn of the past few years has been challenging, says Caradus, who took the helm at Grasslanz in 2006, and there has been less demand for seed from farmers. However the company's revenue growth has been 15 per cent year-on-year for the past five to six years and is now "approaching $10 million".

This growth has meant more freedom to take risks and to "fund more of the R in R&D", he says. Research into grass endophytes has shown they could be useful in other plant species, such as cereals, potentially a "huge" market, says Caradus.

Grasslanz aims to use a $50,000 grant from the Foundation for Research, Science and Technology to fund further investigation in that area. The company also plans to exploit AgResearch's expertise in biotechnology to develop forage grasses that help improve animal health, preventing problems such as bloat.

According to the UN Food and Agriculture Organisation, the world needs to produce 70 per cent more food for the projected 2.3 billion extra people by 2050, providing a growing market for anything that makes agriculture more efficient.