“Indoor farming in Singapore requires a strong business case”

“Our main strategy for the coming years is to expand GroGrace in other parts of the world. By expanding our current business, we can achieve economies of scale to prove our value. With proof of concept and proof of value, we will be able to attract impact investors. Right now we are raising a few million and we are very close to closing the deal! The financial resources will be used for the current expansion of the farm and also for some promising projects in the region,” said Grace Lim, founder and CEO for GraceGro, a vertical farm based in Singapore.

At the request of their customer, a large distributor of vegetables in Singapore, which in turn will supply the products to a high-end fast food restaurant, a total of 720m2 is dedicated to the cultivation of its current main crop, the Lalique lettuce.

Grace Lim

ASEAN Central
Geographically, all activities are concentrated around Asia, especially countries such as Malaysia, Hong Kong and Indonesia. The main focus is to raise awareness of the importance of new and innovative ways of growing food, as climate change, water scarcity and rapid urbanization means that we can no longer continue to grow food in the same way.

“We need new and innovative solutions to deliver food that can also help reduce food miles and food waste, increasing the angle of food safety and food sustainability.”

That’s why Grace strongly believes in the future of indoor gardening. By participating in the talks with the ministers from the ASEAN Economic Community, GroGrace can raise awareness among these countries. Despite the extensive horticultural areas, dependence on the weather for nutrition cannot be reliable.

“I am trying to educate people as much as possible and am starting a public-private partnership with the government to investigate whether it is possible to build an indoor farm to contribute to food security.”

The farm was opened earlier this year

Difficult to compete in the local market
Grace discusses the import problem Singapore faces, noting that it is quite difficult for a local horticulture business to compete with foreign imports. According to her, there are very few opportunities for them to sell locally, so in a way they are also competing with local (indoor) farms, even though they are all part of the 30 for 30 vision.

“Unfortunately, the market can only absorb a small part of the local raw materials at the moment. Therefore, we can only really change the game if the government cuts a certain percentage of imports and in return it should come from local farms. Then we will talk. Not now , now local farms are competing with us.”

A solid business plan is essential
Grace believes that the CapEx of building a farm is definitely an important asset to the overall economy. But ultimately it’s about keeping OpEx low and getting a good price for the products to sustain the business and build a solid business case.

“Proof of concept can be perfect, but if the market can’t absorb my products, which are grown at a certain price and sold at a certain price, then the business is not sustainable. We have to look at the viability of the whole business from OpEx, market demand, consumer etc. Our government is making a lot of investments to help horticulture entrepreneurs, but it is up to us to research energy solutions, keep labor costs low and build goodwill with distributors to be profitable,” affirms Grace.

Opportunities across the border
Indoor farming in Singapore is definitely a tricky business, shares Grace. But when the business plan is exported to other parts of Asia, the scenario can look very different. These countries have cheaper land and rent and lower energy and labor costs.

Grace: “I could break even in two years because the cost of cultivation would drop by two-thirds. Being able to grow more cost-effectively also means that the products can be sold at lower prices and reach the masses. I want ordinary people to have access to fresh, clean and nutritious produce. That’s my goal and that’s the effect I want.”

Once Grace is able to prove the value of her proof of concept as a homegrown business, she wants to be able to directly impact food security in Singapore. In two years, she wants to raise money to build a large indoor farm that can grow a few thousand tons of vegetables a year and eventually supply a large part of the market.

For more information:
Grace Lim, Co-Founder and CEO
Urban Farming Partners Singapore Pte Ltd
42D Penjuru Road, #05-02B
Singapore 609162

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