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Saudi Arabia: "Greenhouse and vertical farming can undoubtedly be profitable here"

In 2023, several projects were unveiled in the Middle East, such as Saudi Arabia's Public Investment Fund's joint venture agreement with US-based AeroFarms, Mowreq's collaboration with YesHealth, and the establishment of the 2500 sq.m. Bather Smart Farm in Riyadh. What can these emerging enterprises expect from this increasingly competitive landscape?

By 2019, Saudi Arabian enterprise Mishkat had already accomplished a notable milestone: their vertical farm was believed to be the first to earn organic certification. This recognition was founded on their sophisticated use of organic pest management, including sticky traps, bumblebee pollination, and the introduction of predatory insects. However, in response to changing operational needs, Mishkat is now shifting from an 'organic' label to a 'pesticide-free' marketing model.

To delve deeper into this transformative journey and unveil more about Mishkat's achievements and plans in vertical farming, we interviewed Mr. Reesh Raoof, who has been the company's Commercial Director since its inception, and Mr. Sherif Hosny, who recently took over as CEO.

HE Faisal Alibrahim the Saudi minister of economy and planning and Sherif Hosny CEO of Mishkat.

You operate both hydroponic greenhouses and vertical farms, how do these methods compare in terms of profitability and viability?
Sherif Hosny: Both technologies can undoubtedly be profitable here in Saudi Arabia. We still have a substantial amount of produce imported from overseas, so producing it here makes a lot of sense, especially given that we can cultivate crops 365 days a year. In terms of profitability, we firmly believe these technologies are highly viable here, primarily due to the consistent demand and the substantial volume of produce still being imported. High-tech greenhouses are particularly well-suited for crops like tomatoes, peppers, aubergines, and cucumbers – basically anything that can grow vertically due to their climbing and crawling nature, as this is also a way to maximize space.

Reesh Raoof: Every cropping system has its own unique set of advantages and challenges. Summers here can be challenging for growing leafy greens in the greenhouse due to the cooling requirements. That's why we shift these crops to the vertical farm during the hotter months. We cultivate a diverse array of over 20 to 30 types of lettuces, leafy greens, and herbs on these farms.

Sherif Hosny: Indeed, we find it highly advantageous to be able to grow crops like basil or spinach, which traditionally prefer cooler climates, throughout the year. Understanding that all farming practices come with associated costs, we utilize cost-benefit analysis as a tool to guide our strategies and daily operations. We've found that certain crops are not as economically viable to grow in greenhouses as they are in vertical farms.

Mishkat's greenhouse facility

You were pioneers in obtaining an organic certification for your hydroponic farm. Why have you recently shifted your focus to being pesticide-free instead?
Sherif Hosny: Indeed, we take pride in being pioneers in operating a certified organic hydroponic farm. By March 2021, when U.S. laws changed to allow hydroponic farms to qualify as 'organic,' organic vertical farms in North America began to emerge. However, in Saudi Arabia, the laws are somewhat different, and by that point, we already held an organic certification for one year. This implied the use of 'organic fertilizers' and biological control techniques, such as the deployment of predator insects like ladybirds and bumblebees serving as pollinators.

But, there is a delicate balance between maintaining organic practices and embracing high-tech methodologies. We want to ensure that our practices align with our commitment to producing the healthiest and most sustainable crops, and currently, we see that path leading us towards a high-tech 'pesticide-free' model.

Sherif Hosny: When it comes to plant health, we place great emphasis on automation. We place great emphasis on automation when it comes to plant health. We're heavily investing in IoT, augmenting our use of data sensors to meticulously gather information and better understand plant health. These sensors help us track variables like temperature, light intensity, and moisture, as well as the exact content of fertilizers and their effects on plant growth.

This extensive data collection allows us to examine how these variables influence not just growth but also qualities like the sweetness of our tomatoes. The ultimate goal is knowledge acquisition. We're amassing data to enhance our understanding of growth patterns and learn how we can cultivate crops that are superior in quality, grow faster, and are safer and healthier.

The vertical farm

Is seeding and harvesting automated as well?
Sherif Hosny: No. While hydroponics is already more costly compared to traditional agriculture, we don't believe it's entirely about maximizing automation. The idea of a farm functioning like a spaceship may seem enticing, but we prefer to remain grounded in reality. For any tasks that can still be efficiently handled by manual labor, we choose to keep them as such.

We find that many vertical farms fall into the trap of misconception: they start with the idea that because this is high-tech, it should be automated as much as possible. Our philosophy slightly diverges from this. We do utilize some machinery from Siemens, automating aspects like lighting, shade control, irrigation, and fertilizer dosing. Yet, many processes, such as caring for plants, sowing seeds, moving plants, and harvesting, remain manual.

Could you outline your operational expansion and marketing strategies?
Sherif Hosny: We've recently entered into an agreement to double the capacity of our vertical farm here in Jeddah, a plan set to unfold over the next two months. Furthermore, we aim to extend our reach to other cities within Saudi Arabia and have already inaugurated one of our micro in-store farms in Riyadh. This year, we're looking to expand further into other major cities within the kingdom. Fast forward five years, we envision ourselves as being among the largest, if not the biggest, vertical farming system operators in Saudi Arabia.

Reesh Raoof: We tend to target niche markets, such as the HORECA sector or the fitness industry, and have found success in doing so. The majority of our leafy greens are baby leaves, generally regarded as a premium product. For instance, we've established a fruitful partnership with Novikov restaurants. This alliance and others like it have spurred us to significantly ramp up our production of leafy greens.

How does the broader society view the adoption of hydroponics, and what future challenges and opportunities do you perceive in the vertical farming industry?

Reesh Raoof: Saudi Arabia is increasingly positioning itself as a technological powerhouse, with considerable investments in high-tech and AI, or those by the Public Investment Fund in projects like NEOM. Within this expansive landscape, we see ourselves as a small but integral piece of the puzzle. The acceptance of hydroponics as a crucial part of daily life is, at present, nearly universal here.

Sherif Hosny: A significant challenge for all vertical farms at present is to reduce the initial investment costs. Currently, grow lights represent a sizable portion of the investment, but we're hopeful that technological advancements will lead to a significant reduction in these costs, similar to the evolution we've seen with solar panels. The development of more efficient cooling technologies is extremely crucial for our region. We are now contemplating an increase in the number of farms that expand beyond leafy greens, venturing into the cultivation of strawberries, saffron, and mushrooms. Yet, the" next big product" still needs to be revealed.

Recorded by Konstantin Buzin

For more information:
Mishkat Agtech Farms
[email protected]