Singaporean Plant Factories — Humble Beginnings and Tall Aspirations
*Copyright of Hokuryukan Agri-Bio Magazine — Published Spring 2018
Experimentation with outdoor hydroponic operations has persisted for more than two decades in Singapore. In the past three years, however, the refinement of these ideas, prototypes and strategies has accelerated among Plant Factories with Artificial Lighting (PFAL). These developments have been primarily driven two-fold by recent government support and growing high-end market demand for fresh and healthy products.
According to the Agri-Food & Veterinary Authority of Singapore (AVA), as of late 2017, there were between 20–30 PFAL’s in operation or in the process of development across the country. Most PFAL’s are still small scale in their operation, and many have yet to open, operating in a ‘stealth’ development mode. Thus, attempts to create meaningful commercial partnerships and supportive associations between PFAL’s has remained challenging, with highly competitive organizations vying for government support.
Despite growing interest from government and private entities alike, most new and existing Singaporean PFAL operations face similar challenges to reach profitability, and potentially wider market scalability. Among the three largest shared challenges are a lack of adequate space, limited horticultural training and complex zoning & permitting policies. Additionally, macro-economic factors such as cheaper wholesale imports have slowed domestic market development for local produce.
There is a diverse range of testing and implementation for different growing systems. Some operations like Veggie Life (Panasonic) have developed their own proprietary growing units. While other, smaller operations favor horizontally stacked Nutrient Film Technique (NFT) systems — with off the shelf components manufactured in Taiwan or China. Additionally, there are new entrants to the growing systems market, namely ZipTowers from UpGrown Farming — a vertical system gaining recent popularity in the United States. Yet, even for turnkey and off the shelf solutions, most PFAL operations continue to tweak existing systems to meet the diverse size and space variations for a better optimized growing environment.
With so many different systems, many Singaporean PFAL operations spend a great deal of time initially testing and refining their environment, often delaying production of a minimum consumable product. Moreover, with a lack of shared data and success strategies, many new PFAL farms are forced to “reinvent the wheel” when building a new facility. Optimizing these different systems is further complicated when adding technical automation in propagation and harvesting. While these processes still remain manual, operators continue to experiment with cheaper ergonomic improvements for off the shelf systems.
Singapore has a world class talent pool of engineering and financial backgrounds. Such human resources could help develop better training in the fields of horticulture and agricultural sciences at their top universities and educational institutions. By elevating horticultural knowledge, the partnerships between many PFAL operations with exceptional chemistry and biology labs will enhance quality assurance and testing with trained horticulturalists — especially among specialists with experience maintaining plants inside precision cultivation systems.
Singaporean PFAL’s tend to grow a limited number of leafy greens, despite most marketing the ability to grow dozens of other varieties. Though risky, this product specialization allows smaller and newer farms to produce enough crops to secure an adequate consumer base and sales channel before scaling up their operations. While there is a high demand for the Asian leafy greens found in the local cuisine, Curly Kale (Brassica oleracea) and other Kale varieties appear to be king as the local PFAL cash crop. With a higher premium for indoor produce, farms like Sustenir Agriculture and Packet Greens market their premium prices with attributes of ‘health’ and ‘quality’ — even building marketing materials and strategies around the crop itself.
Given the high-end market in Singapore, consumer conditions are favorable for these premium indoor products. But most facilities remain limited in the ability to quickly scale due to either an unreliable sales channel or expensive rental space in the land scarce country. Given the scale of PFAL operating in Singapore, most facilities tend to directly supply small markets like hotels, restaurants and cafes — thus, running the risk of only meeting the market demand rather than creating it. However, some companies like Packet Greens and Sustenir Agriculture have made recent forays into online food delivery services such as Honestbee, testing market viability among new sales channels.
With high aspirations from the Singaporean government, PFAL’s have garnered significant media attention for their high efficiency and quality. While food security is a primary driver for this support, many officials, including Singapore’s Minister of State, Koh Poh Koon, believes Singapore can also lead the global indoor agriculture industry with new innovations, startups and solutions. This past January, Mr. Poh Koon gave the opening keynote for the 2018 Indoor Ag-Con Asia conference, where he described the Singapore government’s stance as “strongly committed to creating a robust food and agricultural sector of the future”.
For the time being, however, government and PFAL facility relations are push-pull. Over the past 3 years, Singapore’s AVA has provided generous grants to new PFAL operations. However, these grants remain competitive, with other well established agricultural operations also competing for this same funding.
One of the biggest challenges for the government to establish this new industry is zoning and permitting. Are these PFAL facilities agricultural, industrial or something new altogether? In a country with tightly controlled zoning practices, these particular challenges are compounded when combined with food health certifications — especially in a soilless environment. For new PFAL operations, adequate permitting from 2–4 different government authorities can stall or even stop the development of a new PFAL facility. It is worth considering whether and how these identical administrative challenges are or will soon be faced in other countries working on the forefront of PFAL development.
Market factors also remain challenging for PFAL’s in Singapore, and the government has a tricky, but critical role in balancing support for this agricultural innovation without crushing the fragile and developing entrepreneurial ecosystem. Recently, the Singaporean AVA started providing PFAL facilities with Account Representatives to better support new operators. Additionally, new government organizations, namely Spark, have proposed connecting many of these new PFAL operations with supportive research institutions. In time, organizations like Spark could also connect mutually assistive private companies and startups looking to better support new ventures with financial and human capital.
The PFAL industry in Singapore is still in its early stages of development, with promising examples of scalable growth from new companies. In addition to favorable government interest and support, there are promising market and investment opportunities from a variety of multinational companies situated in Singapore — capable of further catalyzing industry growth and innovation. It is still premature to determine the financial success of PFAL’s around Singapore, but industry opportunities and their future here remain bright.
