Singapore's Temasek Bets on 'Skyscraper Farms' As Growth Market

Joint Venture With Bayer To Develop Seeds

To Boost Food Security In City-State

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TAKASHI NAKANO, Nikkei staff writer

September 10, 2020

SINGAPORE -- Singapore's state-backed investment group Temasek Holdings has extended its business portfolio into urban farming, a concept that will aid the city-state in its quest to become more agriculturally self-sufficient.

Temasek and German pharmaceutical major Bayer established Unfold, a 50-50 joint venture, last month. The company will develop and market seeds for vertical farming both in Singapore and at its California headquarters.

Singapore produces less than 10% of the food it consumes. The government plans to raise the ratio to 30% by 2030.

Vertical farming, officials believe, is crucial to attaining that goal. The technique grows agroponic layers of crops under artificial light inside skyscrapers. Because the plants are not dependent on weather, the method is expected to generate large yields in a relatively quickly.

"Temasek is recognized as one of the leading investors in the food and agriculture segment," said Jurgen Eckhardt, head of Leaps by Bayer -- an investment arm of Bayer. "They have investments in, and relationships with, a range of vertical farming companies."

Bayer will provide plant genetic data to Unfold, which will first develop new varieties of lettuce, spinach and tomatoes, among other crops. The company will sell seeds to food producers.

Temasek will introduce companies to the technology and expertise at Unfold and other investment targets. Temasek holds a stake in Sustenir Agriculture, a Singaporean urban farming company, providing a channel for Sustenir to cultivate Unfold's high-yield seeds.

Vertical farming is projected to grow into a $12.77 billion market in 2026, according to Allied Market Research, up from $2.23 billion in 2018.

Temasek invested 3 billion euros ($3.7 billion) into Bayer in 2018 -- funding which helped Bayer complete the acquisition of U.S. seed producer Monsanto.

The company anticipates further investments in the agricultural sector.

"Whether it's in the area of an alternative protein, aquaculture, or crop science, it's an area that requires actually more capital," said Temasek International CEO Dilhan Pillay Sandrasegara. "So far it's done well for us and we're still keen to invest more in it."

Temasek has expanded its portfolio of life sciences and agribusiness investments. Allocation in the domains stood at 8% at the end of March, or five points higher than five years earlier. The size of the holdings is about $17 billion.

The coronavirus pandemic has heightened concerns over food security. Thailand and other trading partners temporarily imposed restrictions on exports. The Singaporean government doled out 30 million Singapore dollars ($22 million) in subsidies this April to help companies produce more eggs, leafy vegetables and fish.

"In Singapore, with less than 0.8% arable land, vertical farming innovation is critical," said Unfold CEO John Purcell.

This year, Temasek has invested in startups that develop meat and fish substitutes, as well as plant-based milk. GIC, another Singaporean state investor, in May picked up shares in Apeel Sciences, a U.S. company that developed an artificial peel for fruits and vegetables to extend shelf life.

The less-than-stellar portfolio performance has also factored in Temasek's investments into agribusiness. For the year ended March, the company reported a return of minus 2.3%, the first negative result in four years. Declining stock values of domestic companies such as the banking group DBS Group Holdings and the conglomerate Sembcorp Industries were behind the setback.

When Singapore Airlines sought to raise up to S$15 billion in rescue funds this March, Temasek was the first to indicate it would sign on in light of its status as a major investor in the carrier. Saddled with its role as a financial provider of last resort, the state investment group's ability to reap returns from investments in agriculture and other growth sectors will sway its performance.

Temasek has also stepped up investment in advanced medical fields such as biopharmaceuticals in the past year, with stakes in 10 companies revealed in 2020 so far.

Vertex Venture Holdings, a Temasek unit that oversees a fund specializing in the medical field, has invested in more than 20 healthcare-related startups, including American drug developer Elevation Oncology in July.

"COVID-19 has shone a light on the importance of continued R&D investment," said Lori Hu, managing director of Vertex Ventures HC. "It has revealed critical unmet needs in the health care industry. We continue to actively look at new deals."

Leveraging its broad network, Vertex took a stake in Israeli telemedicine platform operator Datos Health in April and invested in India's IVF Access Hospitals, which specializes in infertility treatments, two months later.

Through its investments in the medical field, Temasek is also involved in the global race to develop coronavirus treatments. It was part of a group of investors to pour $250 million into Germany's BioNTech, which is jointly developing a COVID-19 vaccine candidate with Pfizer. South Korean drugmaker Celltrion, in which Temasek holds a roughly 10% stake, has brought a diagnostic kit to market in the U.S. last month.

Investments in biopharmaceutical developers carry high risks, but the payoff can be large when a treatment successfully reaches the market. Holdings in unlisted companies accounted for 48% of Temasek's portfolio as of March-end, up six points from a year earlier.

Lead photo: Courtesy of Unfold - Vertical farms use hydroponics to grow crops inside buildings.

Temasek Backs US $30m Firm For Vertical Farming Innovation to Boost Singapore's Food Supply

Temasek Is Partnering With A Unit of Bayer To Form A US $30 Million

Company To Develop Breakthroughs In Vertical Farming.

August 12, 2020

SINGAPORE - A new US $30 million (S$41.2 million) company has been formed to develop breakthroughs in vertical farming, a move that will help to further reinforce Singapore's food supply.

Called Unfold, it is a tie-up between Singapore state investment firm Temasek and a unit of German pharmaceutical and life sciences giant Bayer.

The Straits Times understands that they will have an equal share of the company, which is incorporated in the United States.

Its primary focus is on improving the quality and variety of food as well as boosting the efficiency of its production, including that of popular vegetables such as lettuce and spinach.

In doing so, it will ensure the safe and reliable supply of food, something that is vital for countries with little arable land and in times of crisis like the Covid-19 pandemic, said Bayer on Wednesday (Aug 12), when announcing the union between its investment unit Leaps by Bayer and Temasek.

Temasek's head of agribusiness, Mr. John Vaske, noted that food security is a priority for Singapore, pointing to the country's "30 by 30" goal, which is to produce 30 percent of its nutritional needs locally by 2030.

He also told The Straits Times that Singapore has been formative in developing vertical farming. "So, we have insights and knowledge of the industry that Unfold can benefit from through the set-up of its commercial, research, and development operations here."

These operations will also be established in California, where Unfold will be headquartered in the city of Davis.

The focus on the genetic potential of vertical farming also sets the company apart from most vertical farming start-ups, which invariably concentrate on developing more efficient infrastructures, Bayer said.

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The aim of the venture is to improve the quality and variety of food as well as boost the efficiency of its production. PHOTO: BAYER STOCK PHOTOS

Unfold has already entered into an agreement for specified rights to germplasm, or seed genetics, from Bayer's vegetable portfolio, a move that will enable it to develop new varieties of seeds. It also plans to come up with agronomic advice that is tailored for growing crops in the unique indoor environment of vertical farms.

These farms, also known as indoor farms, leverage on artificial light to grow crops, are less dependent on man-made chemicals, and optimize the use of water.

The company's chief executive officer is Dr. John Purcell, who was previously Bayer Crop Science's head of vegetable seeds research and development, said Bayer in its statement.

Dr. Purcell said that Unfold's investment in germplasm and crop growth models is timely as the two fields are "largely underserved"."

Some technology companies do not have access to germplasm resources. The power of Unfold is that we will combine the expertise and 100 percent focus on the genetics for vertical farming, with access to the best in class germplasm of the Bayer vegetable seed business," he added.

www.bayer.com
www.leaps.bayer.com
www.temasek.com.sg
unfold.ag

Lead Photo: PHOTO: BAYER STOCK PHOTO