E Green Global
Dec 14, 2020
Discussion
Food security became more important than ever with the prolonged COVID-19 maneuver. The first food problem a nation would face during a crisis like a pandemic is the collapse of the food supply chain. Unstable food production and distribution can result in an inflation of food prices, and as household income level drops food accessibility and affordability issue may also worsen. When the smooth import and export of agricultural produces is disrupted, countries with lower food self-sufficiency rate or lower- to middle-income countries with higher Engel’s coefficient will be hit much harder. If the economic recession ends up in an inflation of food prices by continuing to lower the household income and disturbing the food supply chain, it will eventually lower the amount and quality of food intake and threaten the people’s health. Moreover, the food security crisis will be here much earlier than we are expecting if the fundamental impact of the climate change over the agricultural environment intensifies. It is already a widely acknowledged prediction that by 2050 the world population will hit 10 billion, the water and arable land will be saturated, and about 50% off the world population will suffer from food shortage. Surprisingly, South Korea is also not free from the potentially-intensified food crisis. More blatantly speaking, it is actually one of the countries with a higher risk of ending up a “food refugee.” South Korea’s food self-sufficiency ratio continued to drop for the past 5 years reaching at 45.8% last year (The Ministry of Agriculture, Food and Rural Affairs). Further, its self-sufficiency ratio for cereal crops is at 23%, making it one of the lowest among the OECD countries (Korean Rural Economic Institute). About 690 million people—or about 8.9% of the world’s population—still regularly go to bed hungry (Prevalence of Undernourishment, Food and Agriculture Organization of the United Nations). About 2/3 of those who starve are in Asia and Africa; about 19.1% of the population in Africa, 8.2% of the population in Asia and 7.4% of the population in South America suffer from malnutrition. As the spread of COVID-19 accelerated this past April, the Food and Agriculture Organization of the United Nations (“FAO”) projected that the number of those who starve will increase from 83 million to up to 132 million by the end of 2020, assuming that the global GDP growth rate drops by 4.9% to 10%. The FAO also projected that if such trend continues, we will not be able to achieve the United Nations Sustainable Development Goal 2 (“SDG 2”), which aims to achieve “zero hunger” by 2030. We need more capital and talent in order to solve such problems with agricultural innovation. The very technology that develops crops that are resilient to blight and harsh climate, and enables more harvest on the same land, will build the foundation for sustainable development. Agriculture is now emerging as the most innovative industry that will lead the agile response to the climate change and feed the increasing world population. The global market for AgTech or AgFoodTech (agriculture + technology)—which includes agricultural biotechnology, farm management software and robotics, alternative food, bioenergy and technology relevant to food distribution—is growing rapidly to be valued at around $7.8 trillion (AgriFoodTech Investing Report 2019, AgFunder). E Green Global, an Agricultural Biotech Company that Grows the Productivity of Food Crops Among various food resources, plant resources that can produce food essential for human survival are categorized as food crops. Rice, wheat, corn and potatoes are considered the world’s 4 largest food crops based on productivity, but potatoes are often considered as one of the world’s 3 most important food crops. The global market for potatoes are estimated to be worth around $140 billion, and have steadily grown over the past 10 years with the average growth rate of 3% per year (IndexBox 2019). It is expected to grow even further with the increasing world population. The problem, however, is that it is very difficult to secure enough amount of high-quality potatoes with the production system we currently have. According to an analysis by the FAO, the productivity for potatoes have increased by 46.2% over the past 50 years, which is notably lower than that of corn (158.8%), wheat (135.5%) and rice (109.6%). It is crucial to increase the supply of disease-free seed potatoes (seed potatoes with the risk of viral or fungal infections removed)—which needs to be replaced regularly—in order to increase the productivity and production sustainability of potatoes. E Green Global (“EGG”), an agricultural biotech company, scored the world’s first ever success in commercializing the Microtuber Technology (MCT), which allows the large-scale supply of disease-free seed potatoes throughout the year in a culture facility like a plant factory. Such success has placed EGG in an unrivaled position in the world’s food crop market, making it expand its trusted business in China, the United States and in Europe. Technological Advantage In the preexisting seed potato production system, the harvest was limited to 1-2 times a year, and building a large-scale greenhouse was absolutely necessary for mass production. The productivity for self- seed production also decreased each time due to the lack of smooth supply of disease-free seed potatoes. Moreover, it takes about 5 years to produce certificated seed potatoes using the preexisting Minituber (weighing about 5-30g). Over the past decades there has been active research around the Microtuber (weighing about 1g) technology to reduce this time, but no one had successfully commercialized it due to limits such as high loss rate during storage and low germination and seedling emergence rates. Through technology optimization, EGG succeeded in fast and stable supply of disease-free seed potatoes. It can produce seed potatoes with remarkably low risk of infection by putting the entire production process in a controlled environment in the lab, and accelerate the production cycle by drastically reducing the proliferation steps necessary to produce certificated seed potatoes. With such technology, EGG could reduce the time needed to produce certificated seed potatoes from 5-6 years to less than 2 years. EGG not only has overcome the limits of preexisting Microtuber with its own technology, but also is establishing a system that can supply disease-free seed potatoes at an even lower price; its seed potatoes are highly economical as they can be produced throughout the year and sowed directly without additional seedling process requiring the greenhouse. EGG plans to continue the research in technology related to biological resources, application of technologies such as AI and SmartFarm in agriculture and integrated research on other food crops. Relevant SDGs 2. Zero Hunger, Food Security and Development of Sustainable Agriculture 13. Take urgent action to combat climate change and its impacts “EGG’s MCT technology is significant because it not only helps alleviate the hunger by boosting productivity and production sustainability of potatoes, but also helps secure crops resilient to the climate and environmental change by drastically reducing the time needed to produce the certified seed.” – Inwon Park, Associate “Nobody had been successful in commercializing the MCT for decades, yet EGG made it possible with its willpower and dedication to its mission of alleviating the world hunger. We look forward to the positive social impact EGG will make, with its proven technology and the strong, devoted team.” – Hyunjoo Je, CEO/Managing Partner sourced by YD, translated by EGG Original link: http://www.yellowdog.kr/2020/11/20/investment-story-egg/
0