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.

Vertical Farming Growth Accelerated by Coronavirus

August 14, 2020

By Victoria Campisi

The coronavirus pandemic has disrupted the traditional U.S. food and agriculture supply chain, providing a potential growth opportunity for vertical farms.

One recent deal made in the space involves Singapore-based Temasek Holdings Pte and Bayer AG forming a new company called Unfold, which will develop seeds for vertical farms.

Unfold raised $30 million in an initial funding round and entered into an agreement for certain rights to germplasm—the genetic material from which plants grow—from Bayer's vegetable portfolio, according to the two firms. By utilizing the germplasm from vegetable crops, Unfold will focus on developing new seed varieties coupled with agronomic advice tailored for the unique indoor environment of vertical farms.

The venture will focus on innovation in vegetable varieties with the goal of lifting the vertical farming space to the next level of quality, efficiency, and sustainability.

"The investment in Unfold is a great example of a transformative, creative approach to developing agricultural products that meets the needs of consumers, farmers, and the planet by increasing access to fresh fruits and vegetables, supporting sustainably grown, hyperlocal production, and addressing food security challenges faced by growing urban populations,” said Jürgen Eckhardt, MD, head of Leaps by Bayer, which was built to drive fundamental breakthroughs in the fields of health and agriculture through new technologies.

Vertical farms utilize indoor growing facilities that leverage artificial light, reduce dependency on synthetic chemistry and other crop inputs, optimize water use, and allow food growth in challenging environments with limited arable land. They also help crops grow quicker, enabling the reliable growth of fresh, local produce anywhere and at anytime by utilizing less space and fewer natural resources while reducing the need for food logistics and transportation.

In July, vertical farming company Kalera announced it will open a state-of-the-art growing facility in Houston, TX, during spring 2021. The Houston facility will be the largest vertical farming facility in the state.

The new facility was introduced just two months after Kalera revealed it will be opening a new facility in Atlanta in early 2021—an announcement that took place less than two months after it opened its second Orlando, Florida farm. The Houston facility will be even larger than the Atlanta one, which is slated to be the highest production vertical farm in the Southeast.

“In light of the global pandemic and seemingly endless food safety recalls, today, more than ever, consumers are demanding food that is local and that they can trust, said Daniel Malechuk, CEO of Kalera. “Houston presents Kalera with a wonderful market for our produce, as it allows us to not only supply one of the largest cities in America, but also service cities throughout the region including Dallas-Fort Worth, Austin, San Antonio, and New Orleans." Kalera’s lettuce from the Houston farm will be available at retailers and foodservice distributors.

Meanwhile, Greenswell Growers will invest $17 million to open a hydroponic greenhouse in Goochland, VA, reported Richmond Times-Dispatch (Aug. 11). The facility will reportedly produce 28 times more product per acre than a traditional growing operation, and the company expects to yield about 3.7 million-lbs. of leafy greens, which it will distribute throughout the Mid-Atlantic region.

“Greenswell Growers is proud to bring our large-scale indoor growing facility to Goochland where we will provide delicious, safe, and sustainably grown leafy greens that are good for our community," said founder Chuck Metzgar.

In Scotland, indoor agritech specialist ISG completed a deal with vertical farming operator Vertegrow to build the first commercial vertical farm in the country. This is the first move into vertical farming for Vertegrow, diversifying alongside existing agricultural operations, currently growing crops including barley and rye in open fields.

The towers, which are expected to be operational in early 2021, will grow a variety of crops that are intended to service the local food supply chain. Vertegrow will work with a range of local customers including retailers, caterers, restaurateurs, and other local services, to deliver produce all year round.

The four-tower system will be built in Aberdeenshire in Scotland later this year.

To listen to The Food Institute's webinar featuring AeroFarms, a leader in indoor vertical farming, click here.

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About the Author

Victoria Campisi
The Food Institute
Victoria writes for the biweekly Food Institute Report, the daily Today in Food updates, and the Foodie Insider daily newsletter for consumers. She graduated from Montclair State University with a B.A. in Journalism and has a background in Nutrition and Food Science. Victoria can be reached through her email at victoria.campisi@foodinstitute.com.

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Temasek, Bayer Form Joint Vertical Farming Venture In California

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Jovi Ho

 August 12, 2020

Temasek Holdings is partnering with German multinational pharmaceutical and life sciences company Bayer AG to create a new vertical farming venture headquartered in California, as part of Singapore’s plans to boost the city-state’s supply of sustainable, locally grown produce. 

The joint venture between Temasek and Leaps by Bayer, the impact investment arm of Bayer AG, will be a US entity with commercial and research and development operations in both California and Singapore. 

The new venture, Unfold, will focus on innovation in vegetable varieties with the goal of lifting the vertical farming space to the next level of quality, efficiency, and sustainability.

Instead of focusing on external infrastructure to support plant growth, Unfold will look within the plant itself. 

“By utilizing seed genetics (germplasm) from vegetable crops, Unfold will focus on developing new seed varieties coupled with agronomic advice tailored for the unique indoor environment of vertical farms,” says Bayer. 

Unfold has raised US $30 million (S$41.19 million) in its initial funding round and entered into an agreement for certain rights to germplasm from Bayer’s vegetable portfolio. 

Global food challenges are forcing countries to rethink traditional farming practices, says John Vaske, Head of Agribusiness at Temasek.

“We need to ensure secure farm-to-fork supply chains in urban settings while we also work to reduce the overall environmental impact of farming. Reducing food waste and improving the safety, traceability and nutritional value of food are all the more important as populations grow and demand for food expands. Investments in companies such as Unfold allow us and our partners to support innovative, sustainable solutions that will benefit all of us over the long term,” says Vaske. 

Back in 2018, Temasek acquired a 3.6% stake in Bayer for 3 billion euros (S$4.85 billion), bringing its total stake to about 4% with 31 million new shares. The share sale to Temasek was part of Bayer's efforts to fund its planned US$62.5 billion takeover of seed maker Monsanto.

However, according to the latest Bloomberg data, Temasek no longer appears to own a substantial stake in Bayer. 

Unfold’s President and CEO Dr. John Purcell will move from his role as Head of Vegetables R&D, Crop Science at Bayer. 

“As a company fully focused on the vertical farming industry, Unfold will combine leading seed genetics with the best agtech experts in order to dramatically advance productivity, flavor, and other consumer preferences,” says Purcell.

“We look forward to serving the market through partnerships with vertical farming operators, technology providers, and others across the produce supply chain.”

Prior to joining the food and agriculture industry, Purcell was a post-doctoral researcher at the United States Department of Agriculture from 1987 to 1989. He earned his Ph.D. in Molecular and Cellular Biology from the University of Massachusetts. Purcell is also part owner of a family ranching operation in Montana.

Vertical farms, also known as indoor farms or plant facilities with artificial light (PFAL), help crops grow more quickly while using less space and fewer natural resources.

Investment in the vertical farming market has increased significantly in recent years mainly due to decreasing arable land, increasing market demand for local, sustainable produce, and migration towards mega-cities.

Singapore’s "30 by 30" agriculture goal aims for 30% of our nutritional needs to be produced locally by 2030, though this figure is smaller than 10% currently. 

According to the Singapore Food Agency (SFA), the 77 leafy vegetable farms here accounted for 14% of total consumption in 2019. 

Lead Photo: Credit: Bayer stock photo