BayWa greenhouse strategy to lay roots globally

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BayWa greenhouse strategy to lay roots globally

Through a joint venture greenhouse project with Al Dahra Holding LLC in the United Arab Emirates, German company BayWa expects to start planting tomatoes mid-April. But this is just the tip of the iceberg as the group responds to geopolitical, market and climatic uncertainty worldwide. In the first installment of this two-part feature, Fresh Fruit Portal looks at BayWa's new endeavor that may even come to include the manufacturing of greenhouse technology. 

BayWa AG's global produce division, formerly known as the fruit division, has ambitions to build 10 greenhouses worldwide in the coming years as its answer to a growing "local-for-local" movement and climate change-related production challenges. 

"The investment volume that we’ll make available is €300 million," says CEO Klaus Lutz, adding project negotiations and feasibility studies are currently in the works in the United States (New York State, Philadelphia, Ohio), Australia (Queensland and Victoria) and Japan.

When asked whether the group has found inspiration in vertical farming and rooftop farm initiatives, BayWa's global produce general manager Christiane Bell says the strategy is altogether different.

"When we speak about urban farming and everything that comes with that term, we need to be serious. When we speak about producing in an industrial environment, it needs to be the critical mass," she says. 

"Retailers need production closer to where the customer is."

The Al Dahra JV marks the strategy's first foray, with planting imminent now just a year after a Memorandum of Understanding (MoU) was signed with the Emirati group.

"We’re very close to the time schedule and we're now building on 10 hectares. In mid-April we’re going to have the plants in. The first young plants are going to be flown in from the Netherlands and all the following plants will be propagated in an in-house nursery after finalizing the construction," says Bell.

"We will have some sleepless nights getting it through customs on time," Bell Jokes, "but we’ll be producing for the local market a good 5,000 [metric] tons (MT) of tomatoes and that is our idea.

"Our aim is sustainability in terms of the business model but also in terms of the environment and water consumption."

The tomatoes will be sold to domestic retailers under the brand "mahalli", which Bell says means local in Arabic.

Lutz says the company will follow the principles of "build, own, operate and transfer" (BOOT) to its greenhouse projects, although the Al Dahra deal is different as a JV and pilot project.

"What I’d like to point out as well is there is a shortage coming up in greenhouse technology. That's why we’re going back into the value chain so that not only do we work with greenhouse suppliers in Westland in the Netherlands, but we’re starting even a further step back producing and procuring our equipment ourselves independently to build our projects," says Lutz.

"The aim is to not only facilitate the project but be a third-party provider for the demand that is being forecasted," adds Bell.

"When you speak to greenhouse manufacturers, the forecast is skyrocketing. We are anticipating that trend and we want to be prepared and independent in this movement," she says.

Bell acknowledges the process has steep learning curve, but one that she believes BayWa can surmount.

"Also growers, as you know well, don't come around the corner every day so we’re building a mobile academy to educate and train the growers that will operate the greenhouses wherever we build," says Bell.

Stay tuned tomorrow for the second part of this feature when we discuss BayWa's apple business, its subsidiary T&G Global and plans to grow a very in-demand crop.


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