For the past decade, food insecurity has been a prominent discussion in Singapore as the small city-state seeks to ensure its food supply despite the lack of arable land (Only 1% of land available for food production) and its important reliance on food imports (90% of their food is imported). This situation was only exacerbated by the COVID-19 pandemic and the subsequent disruptions caused in the supply chains.
Nonetheless, for many years, the city-state has been proactively planning for long-term food security through the Singapore Food Agency (SFA) and developing the “three food baskets” strategy— diversifying food sources, growing locally, and growing overseas. The approach has led the city to adopt new technologies to compensate for the lack of land such as vertical farming and in general urban farming.
For instance, since 2009, real estate developers are required to incorporate greeneries into the new constructions through the LUSH program, Landscaping for Urban Spaces and High-Rises to further the development of urban farms throughout the state. Amongst other initiatives, this has led companies to sprout throughout the city-state, all providing solutions to ensure Singapore reachers its goal to produce 30% of its food consumption by 2030.
Today, companies and technology providers are growing beyond Singapore such as Sky Urban Solutions.
As a pioneering vertical farming solutions firm, Sky Urban Solutions Pte Ltd, owns and operates Sky GreensTM – the world’s first commercial-scale vertical farm that uses a low-carbon and hydraulic-powered system. Its patented system has won multiple awards, including the INDEX Award – the largest international design award. Sky Urban has implemented its technology in various projects in Singapore, Malaysia, Thailand, Vietnam, China, Canada, Denmark and Portugal.
Yesterday, the company signed an Agreement with GEM Global Yield LLC SCS, the Luxembourg-based private alternative investment group, to provide Sky Urban with a share subscription facility of up to $50 million USD for a 36-month term following a public listing.
The share subscription facility will allow Sky Urban, subject to the further terms, to draw down funds by issuing shares of common stock to GEM. Sky Urban will control the timing and the maximum size of such drawdowns and has no minimum drawdown obligation. Sky Urban has also issued warrants to GEM, exercisable upon public listing, to purchase up to 4% of the common stock of the company.
This announcement occurs as the Company embarks on its next stage of international growth as a pioneering agri-tech solutions provider since 2012. Sky Urban was advised by Paul Hastings LLP (Singapore) and Luther LLP.
“This Agreement with GEM helps to secure funding as we progress to become a public company. This facilitates our plan to roll out our micro-farm franchise model globally to fulfil our vision in becoming a leading sustainable solutions provider that help transform agriculture, feed the world and improve the livelihood of thousands of farmers”, stated by Jack Ng, the CEO of Sky Urban.
Despite the country’s effort, challenges remains to the development of vertical farms
Indeed, the first challenge is that Singapore real estate is expensive despite all the grants and assistance provided by the government to ensure their growth. Singapore is considered as the fifth most expensive city when it came to buying property and rents are nothing better. The prices then hampers’ the profitability of certain urban farms/ vertical farms and have yet to cover other expenses linked to labour and energy.
Singapore also faces a shortage in labour force as some workers seeked countries with more liberal COVID-19 policies as well as cheaper cost of living.