Join the Newsletter

Stay up-to date with food+ag+climate tech and investment trends, and industry-leading news and analysis, globally.

Subscribe to receive the AFN & AgFunder
newsletter each week.

Senik Dmytro, Ukrainian Ambassador to Singapore (L); and Yip Hon Mun, CEO, Noroo Holdings Singapore (R). Photo credit: Noroo

Noroo wants to power Asia’s smallholders and vertical farmers with its ‘seed to table’ model

August 4, 2020

South Korean chemicals company Noroo Holdings has unveiled its new global agri-solutions hub in Singapore, which will become the center of its agribusiness operations and its efforts in agritech and alt-protein.

Since incorporating in the city-state just a few months ago, Noroo Holdings Singapore has racked up revenue of S$1 million ($756,000) and is on track to double that figure in the coming year, says the unit’s CEO Yip Hon Mun.

In Southeast Asia, agribusiness and the agri-commodities trade are dominated by established local players like Olam and Agrocorp – so Noroo’s entry into the market is ambitious to say the least.

“What we wanted was to pioneer solutions for the world food supply chain [by] driving innovation through food solutions, not just through plain food trading,” Yip tells AFN.

While it’s better known for making paints, coatings, and resins, the Korean group is hardly a newbie when it comes to food and ag. It has a long history of working with farmers and food companies in North Asia, starting out as an ink manufacturer in 1945 before expanding into paint production, industrial chemicals, and agricultural inputs, among other areas.

In 2018 its seeds business, The Kiban, opened a facility in Thailand, marking Noroo’s first ag-related venture on the ground in Southeast Asia. The launch of Noroo Singapore is intended to significantly ramp up its presence in the wider region.

“We are actually complimenting what the existing food companies are doing, not competing with them per se,” Yip says.

For one thing, Noroo’s focus on the commodities side will be on ‘hard to get’ food items, rather than the more familiar products that are the bread and butter of incumbent agrifood giants in the Singapore market who typically “don’t find it attractive enough” to source such items from a business perspective, he says. 

Noroo Singapore today announced a deal with Ukrainian food producers that will see more of these ‘hard to get’ products make their way onto shelves in Southeast Asian stores, including canned seafood, canned vegetables, and frozen poultry. Noroo Singapore says it imported almost a million canned food items into the city-state last month.

Ukraine is the third largest exporter of EU-certified food into the bloc after the US and Brazil, indicative of the quality and standards that the East European country’s farmers and producers have to meet, Yip says.

“We worked through the [Ukrainian] embassy in Singapore and were able to quickly secure food supplies from [Ukraine], which is actually pretty difficult to reach,” he explains. “Often you’d run into problems with logistics, shipping, payment terms, and so on – but we were able to do it thanks to our connections and networks.”

30 by 30

In spite of Covid-related border closures and movement restrictions across the globe, Noroo says it can “consistently import food items within short timelines thanks to its agile model and strong industry relationships.”

Singapore has made it a policy priority to strengthen its food security and resilience. With almost no agricultural land of its own, the tiny, densely populated city-state currently relies on imports for over 90% of its nutritional needs. The country’s government wants that reduced to at least 70%, with the aim of domestically sourcing 30% of its needs by 2030. Other countries and cities in the region are beginning to adopt the Singaporean approach as a blueprint.

The Singapore government has launched a $21m ’30×30 Express’ grant program to boost local production. Read more here

With that in mind — and with Covid-19 forcing a rethink the world over on the internationalized food trade and the need for more localized supply chains — isn’t Noroo’s Ukraine deal already a little behind the times?

Our Singapore Food Story is around three ‘baskets,'” Yip says, referring to the Singapore Food Agency‘s framework for securing the country’s food supplies in the years ahead. As the agency makes clear, a food-resilient Singapore cannot forgo foreign imports altogether; the country simply cannot produce enough food for itself, even with technological advancements in areas such as urban agriculture.

“You don’t want to be overly reliable on one of the baskets,” Yip continues. “One basket is to diversify the source of import. So that area we do pretty well. The second basket is to produce our own food, and the last basket is about diversifying sources where we grow food” – in other words, supporting Singaporean food and ag businesses and investors to expand overseas, grow their production capacities, and import back into the country. 

Seed to table

While Noroo’s Ukraine deal is squarely focused on the first basket, its wider agri-solutions business also has designs on the other two.

One of its initiatives in this direction is its farmer-oriented ‘seed to table’ strategy. Noroo Singapore aims to sell its seeds, which it claims require fewer crop protection measures than competitors’ offerings, at affordable prices to Southeast Asian farmers – most of whom are low-income smallholders. Noroo can also provide growers with fertilizers and chemicals and consult with them to select the most appropriate inputs for their farms.

The Singapore agri-solutions hub will also allow farmers to opt-in to have Noroo take their produce to market, bypassing intermediaries and saving money both for farmers and consumers.

Noroo says this ‘seed to table’ approach will help farmers ensure higher and better-quality yields so they can get better prices when selling their produce, while reducing costs and addressing provenance concerns for end consumers too.

“It is a good example of how we integrate our food solutions and [seeds] businesses. We combine these two to offer a business model that ensures Noroo and our consumers knows exactly what goes into our food,” Yip says.

As an example, Noroo is well-known in North Asia for its Korean melon varieties. “We produce the melon seeds, work with farmers to find the best fertilizers, and Noroo will be the offtakers,” he explains. “In this way, not only do we ensure they can grow produce of premium quality, but we ensure they get the best price when we sell it for them, increasing their income.”

Filling the gaps in vertical ag

It’s not just Asia’s traditional smallholders who could stand to benefit from Noroo’s new agri-solutions hub. While the South Korean company originally focused on open field growing, using conventional plant biology and breeding methods, it is now looking forward.

“With the arrival of data analytics and machine learning, we’ve used those technologies to increase productivity for traditional farmers. But right now we are seeing increased need from urban farmers – greenhouses, rooftop farms, vertical farms,” Yip says.

“It’s still relatively new here — if you look at most vertical farms they’re outside of Asia — but we think more and more will be in Asia itself.”

Noroo Singapore is “actively looking” at ways to increase its investment and presence in indoor vertical farms, building on earlier forays into greenhouse production.

AgFunder and GROW recently launched Singapore Food Bowl – a bespoke accelerator program aimed at building a more resilient, sustainable, and decentralized agrifood ecosystem in the wake of Covid-19. Meet the 12 participating startups here

“A few years ago, we actually started investing in greenhouses as far up north as Beijing, Tianjin, and in Kazakhstan,” says Yip. “We have explored other partnerships [since then], some with US vertical indoor farms to look at ways we could work together.”

Noroo Singapore’s approach will be to partner with existing players, leveraging on their work to add value, rather than “going out there and trying to reinvent indoor farming,” he says.

In Singapore itself, that means “filling the gaps” in the local ecosystem.

“We have quite a few indoor and vertical farm [startups here.] Some are good in lighting, some are good in closed environment, some are just plain good in growing the produce,” Yip says.

But few players have looked at solving the single biggest obstacle facing all urban farms in the city-state, he continues. “In Singapore the the most challenging area is cost. For an indoor vertical farm, more than half the cost is on land, power, and labor. And the seeds most [of them] use are actually designed for open fields with sun, water, soil, and so on. So we think there is a new opportunity for customized seeds for indoor vertical farms.”

Seed genetics have largely been the domain of academic departments in Singapore, but these lack the commercial knowhow to get their research out to the farms. This is where Noroo thinks it can step in. At the other end of the value chain, the city-state’s urban farmers need corporate nous to help them source customized seeds, but also improve their revenues by buying their produce in volume and then distributing it. “We are one company that has all of this, end to end,” Yip claims.

Noroo’s ‘seed to table’ approach, originally designed to help smallholder farmers in rural Asia, could also be of value to the region’s growing number of tech-enabled urban farmers too.

Plant-based plans

Another area of exploration for Noroo’s new agri-solutions hub in Southeast Asia is plant-based proteins. A growing number of consumers in the region appear to be increasing the plant-derived component of their diets, or switching away from animal protein entirely.

Market research firm Euromonitor found that Indonesia, Thailand, and the Philippines were among the top 10 countries globally to have seen an increase in vegetarianism in their populations in recent years. Euromonitor estimates that China’s market for ‘free of meat’ food will be worth $12 billion by 2023 — increasing from $10 billion in 2018 — encouraging the likes of Beyond Meat, Cargill, Nestlé, and Danone to pile in to the country’s plant-based protein market. In spite of — or perhaps, looked at a little differently, because of — its reputation as a largely vegetarian society, India is also showing strong demand for plant-based imitations of animal meat, according to research from Pennsylvania State University.

When Beyond Meat IPOd in New York in May 2019, “everyone was rushing in to be food innovator,” Yip says.

“Today you look at what Beyond and Impossible [Foods] and Omnipork are doing, and the challenge they face is actually how can they get good quality food manufacturing partners that can scale up and make plant-based prices reach parity with meat. Not many of these companies have that kind of financial strength and experience.”

He sees potential for Noroo to get more closely involved in research and development around plant-based protein, as well as supply of the raw materials.

One area that Noroo Singapore is working on is a generalized texturalization technique that helps producers of plant-based protein to shift the texture of their product, allowing them to produce analogs as disparate as pork and prawn from the same base materials. Reducing plant-based protein’s reliance on commodities like soy and wheat by working with other grains is also a focal point for the hub.

“It makes sense for us, while we’re looking for food production powerhouses round the world like Ukraine, to also look at this new and emerging category,” Yip says, adding that Noroo has noticed an uptick in demand for plant-based food on the commodity-trading side.

“[We now] understand what the challenges are, what part of this whole plant-based economy Noroo can actually step in to, and where we can add value and invest.”

Got a news tip or story idea? Email me at [email protected]

Join the Newsletter

Get the latest news & research from AFN and AgFunder in your inbox.

Join the Newsletter
Get the latest news and research from AFN & AgFunder in your inbox.

Follow us:

AgFunder Research
Join Newsletter