Pure Harvest says Covid-19 exposed global supply chain fragility

The Covid-19 pandemic exposed the fragility of global supply chains, specifically for fresh food, Sky Kurtz, the head of Pure Harvest Smart Farms told the World Green Economy Summit on Thursday.

Mr Kurtz, who set up Abu Dhabi agritech company Pure Harvest in 2017, said the crisis highlighted how the world’s dependence on food imports affects food security and how oil-dependent economies should not become “beholden to the world to supply your food needs for a fast growing population”.

“In the GCC, we import over 80 per cent of our food and in agriculture we use around 60 per cent to 70 per cent of our freshwater producing less than 1 per cent of our GDP [gross domestic product], so it's a terribly inefficient use of a critical natural resource," Mr Kurtz said.

“We have a big opportunity in using technology to change that and produce more abundant food at home. And that was the opportunity that we saw.”

The sustainable food and smart farm start-up, which registered with Abu Dhabi Global Market GM in late 2017, secured a seed investment of $4.5 million after an earlier $1.1 million pre-seed round led by Abu Dhabi-based Shorooq Investments in the same year.

The company, which aims to produce fruit and vegetables throughout the year, has raised $216 million so far, securing $60 million through two financing deals in March with plans to raise another $100m this year as it scales up operations and expands into other GCC markets.

The company’s greenhouse, which controls the temperature and humidity levels through software and hardware, yielded its first tomato crops in 2018 before later branching out into growing greens and berries in its beta greenhouse.

Mr Kurtz told the WGES summit that the Middle East can be one of the lowest cost food producers in the world, despite its “limited water and crazy climate”.

The cost structure involved in farming anywhere in the world includes light to power the plants and the systems as well as labour, land, energy, CO2, water, taxation, transport and capital, Mr Kurtz said.

But when the Middle East is benchmarked against Holland, the lowest cost producer in the world, Mr Kurtz said the region had "twice the sunlight, a fraction of the labour cost, very low taxes and cheaper energy", including “the lowest cost solar deployments in the world”. The region also has plenty of land and good transport links, he said.

“We’re within an hour of our consumer, so we pick it, pack it, cool it, ship it same day or next day, right to the consumer instead of airfreighting it across the ocean,” he said. “Now it becomes intuitive how this can be very low cost.”

Mr Kurtz described his concept as a hybrid solution, "like a high-tech greenhouse and a vertical farm had a baby".

"Sometimes we behave like a vertical farm; we close the system, recirculate the climate and use supplemental artificial light. Other times we open it up, and we behave like a greenhouse exchanging everything [with the] outside world," he said.

“Something I'm really proud of with Pure Harvest is we developed a solution that we believe is perfectly suited for anywhere within 3,000 miles of the equator. We harvest natural sunlight, which is abundant here, using that energy to power the crops.”

The GCC imports between 80 per cent and 90 per cent of its food requirements, according to British think tank Chatham House. Better food security is among the top priorities for the UAE, the second-biggest Arab economy, which aims to attain the top ranking in the Global Food Security Index by 2051.

The consumption of food is expected to grow at a compound annual rate of 2.3 per cent to reach 52.4 million metric tonnes by 2025 in the GCC, with greater emphasis falling on domestic production. The consumption will be driven by Saudi Arabia and the UAE, accounting for more than 76 per cent of the total share by 2025, according to Alpen Capital.

The Abu Dhabi government has already earmarked Dh1 billion ($272m) for an agritech incentive programme under its Ghadan 21 accelerator initiative.

Abu Dhabi Investment Office said last year it would disperse $41m to three technology companies – Pure Harvest, grocery platform FreshToHome and space research company Nanoracks – to develop local expertise and new ways to produce food in arid climates.