Going high-tech for a better harvest

Pure harvest has an ambitious plan - overcome the challenges of a harsh climate and make farming high-tech.
The concept of hydroponic farming is to deploy commercially proven controlled-environment agriculture technologies to produce premium quality fruits and vegetables year-round at a lower cost than imports.
The co-founders, Sky Kurtz and Mahmoud Adi, have backgrounds in technology private equity investing at leading global investment firms. "Our vision is to supply premium quality produce directly to retailers, airlines and hospitality food distributors - substituting high cost, air-freighted, seasonal imports and enabling the UAE to advance its mission towards a more sustainable, self-sufficient food system," said CEO Kurtz.
"We believe our technology has the potential to transform the UAE and broader GCC region into a dynamic, international hub for fresh produce and help to diversify the regional economies away from dependence on the petroleum sector."
The technologies being utilised in the high-tech greenhouses and planned vertical farms differ dramatically from the existing systems used by growers in the GCC. The greenhouses feature an overpressure climate control system that not only serves to maintain the most optimal growing conditions but also keeps insects and diseases from breaching the growing area.
There are also other innovations such as advanced hydroponic irrigation systems that reuse 100 per cent of excess water and Internet of Things (IoT) technologies such as sensors and advanced data analytics that provide information to better control the climate and to provide optimal nutrition.
The foundational technology and market-related research for the venture backed by Shorooq Investments, an Abu Dhabi-based investment fund, started in 2013.
Both co-founders have worked together in validating customer interest, selecting technology partners and identifying and acquiring a site for the initial pilot. They have also engaged with UAE government and semi-governmental entities to validate key elements of the investment thesis.
Would running such a business require high operational costs compared to traditional greenhouses? "Actually, at scale our greenhouse enjoys significant operating leverage that translates into lower costs per square metre. Our higher yields mean that we also generate significantly more revenues per square metre," said Kurtz.
He estimates the market for vegetables in the UAE is over 11,000 metric tonnes per year. This is only for a sub-set of just one category of fruit and also related to the premium segment, which means the overall market size for fruits and vegetables is many, many multiples higher than this amount. Kurtz said the venture has received significant positive reaction since its launch. "In addition to customers' keen interest in procuring our future product, we have also been approached by government agencies who have invited us to share what we're building."
Pure Harvest has secured $1.1 million in pre-seed investment that has been used to acquire a 3.3 hectare farm and also to fund pre-development costs for the pilot facility.The firm is currently raising $4.5 million in seed financing and has over 60 per cent of the round already committed.
"We have a number of high-profile investors backing our venture including current and former executives from Abraaj Capital, Mubadala Development Company, the Abu Dhabi Executive Affairs Authority, Careem, a New York-based hedge fund, and others."
Hazem Abu Khalaf, Middle East private equity investor and an early investor in Pure Harvest, said: "The agriculture sector in the Middle East has inherent inefficiencies that promise the potential of substantial returns for whomever is able to tackle them successfully. Pure Harvest is ideally positioned to capitalise on this significant opportunity through deployment of best-in-class, tried-and-tested technologies."
Kurtz said although the initial plan is to start with cultivating premium tomatoes, the firm will eventually expand into other varieties of vine crops and also move into other crop verticals such as leafy greens and herbs. "We plan to expand into the GCC countries and potentially export our produce to colder climates during the winter time when our production costs are most attractive."
Regarding the challenges Pure Harvest faced since launch, he said given that they are an asset intensive business requiring large surface areas to grow, they initially faced a challenge in securing access to an appropriate site. The other major challenge was securing the sizeable funding needed to build.
The commercial activities executive of Pure Harvest said: "We founded this company to solve a fundamental need for affordable high quality, locally grown fresh fruits and vegetables."
And Kurtz's advice to new startups?
"Do your homework and sell a thesis that you fully believe. It will take longer than you think and you need to be willing to stick with it. Focus on five Ms - market, management, model, money and milestones. Mind the gaps - you don't know everything, you couldn't possibly."
-arif@khaleejtimes.com