INTERVIEW PlanTFarm targets US, Middle East vertical farm markets
PlanTFarm CEO Kang Dae-hyun poses at the company's main office in Pyeongtaek, Gyeonggi Province, April 8. Courtesy of PlanTFarm
PYEONGTAEK, Gyeonggi Province — One of the country's first movers in the vertical farm industry is growing ambitious with its global market expansion, first across the Middle East, Mongolia and other Central Asian countries and ultimately the United States and Canada, according to the CEO of PlanTFarm, Monday.
This kind of farming involves growing crops in vertically stacked layers in a controlled environment, often using soilless farming techniques, such as hydroponics.
CEO Kang Dae-hyun told The Korea Times that alongside the market expansion, the company is now diversifying its products from leafy produce to fruit, plant-based biomaterials and animal feed. Following tests, the company will ship out produce not just for salads and other edible purposes but also ingredients for medicines and cosmetic products as well.
The company's latest overseas asset expansion is a new vertical farm now being erected in Al Ain, the United Arab Emirates, which is scheduled for completion in September. The 2,314-square-meter farm by the company's joint venture with the UAE's local smart farm operator, Pure Harvest, took five months for complete construction of the main structure and another eight months for the indoor facilities. With PlanTFarm investing 6 billion won ($4.4 million), the new farm will grow barley grass, strawberries and leafy plants, each in a separate facility.
"We've been dedicated to growing leafy plants for the past decade. Now, it's time to expand our shipping list for exports," Kang said at his company's office in Pyeongtaek, Gyeonggi Province. "Our goal is to become a global No. 1 agtech company. It's true that vertical farms generate more production costs than greenhouse farms (because of power usage in farm operation) and their base prices are higher. Our research bureau is working on lowering those base prices and finding ways to maximize our earnings."
Butterhead lettuce grows inside one of PlanTFarm's vertical farms in Pyeongtaek, Gyeonggi Province, April 8. Courtesy of PlanTFarm
Having run vertical farms since 2008 when the concept was being put into practice by only a few local startups, Kang believes that vertical farms and other types of smart farm, with their biggest strength being a consistent production amount of natural produce regardless of natural conditions, will radically reduce the risks of price fluctuation and keep the market under control. While the country has been seeing months of inflation in markets for fruit and vegetables which hiked retail prices in virtually all food products and local restaurants, one of the keys to avoid it would have been a steadier supply.
PlanTFarm operates 46 mass production facilities across the country and another 25 at indoor facilities. The entire facilities are run by the company's seven vertical farms across the country, in locations including Icheon and Pyeongtaek in Gyeonggi Province, Cheonan and Gongju in South Chungcheong Province and Gwangju. They regularly produce about 1,800 tons of butterhead lettuce, chives, mushrooms, ginseng and other natural produce each year. Farm8, mother company of PlanTFarm, supplies its produce to the domestic market. Kang said the figure rarely changes.
"Because there are four different seasons in Korea, we often see varying supply and demand for different natural produce in each season. Prices plummet when there is excessive supply and soar in supply shortage," Kang said. "With vertical farms producing selective items in same volumes throughout the year, such risks can be prevented."
But for the company to keep a steady supply, it must carefully select which natural produce to grow by considering return on investment. Vertical farms after all run inside limited spaces and types of crop affect how efficiently they can use those spaces.
"Butterheads, for example, fit perfectly to our vertical incubation beds in six to eight tiers as their fully grown sizes don't require more than 50 centimeters between the tiers," Kang said. "Crops that grow higher than that won't cut it because we won't be able to grow them in amounts as much as butterheads."
Workers at one of PlanTFarm's vertical farms in Pyeongtaek, Gyeonggi Province, prepare salads for delivery to retailers, April 8. Courtesy of PlanTFarm
Kang has recently drawn a nod from the government for deregulating the country's restrictions on use of unoccupied soil for vertical farms. It was a major accomplishment for him after almost a decade of calling for deregulation so that more vertical farms can be built.
Minister of Trade, Industry and Energy Ahn Duk-geun, Minister of Food, Agriculture and Rural Affairs Song Mi-ryung and CEOs of other vertical farm operators in the country on March 26 visited PlanTFarm's Pyeongtaek office to encourage Kang and discuss what the government should do for the industry. The authorities reckoned that vertical farms in the country have so far been banned from using agricultural lands (because buildings are not allowed on the lands) and special industrial complexes (because the farms aren't categorized as manufacturers). And because vertical farms haven't been officially acknowledged as part of the agriculture-purposed industry, they aren't eligible for the government's value-added tax exemption.
"For the past decade, I've tried to talk to them in so many different ways into easing those regulations, and only recently they've begun listening to me," Kang said. The government, following its latest visit to PlanTFarm, issued a press release promoting its initiative to support the industry, saying exports by Korea's vertical farms increased from $4.6 million in 2022 to $143 million in 2023 and the figure is expected to jump to $15.3 billion by 2028.
"They've admitted that vertical farms operate beyond the traditional thinking as they frequently infuse the latest technologies into their operations. I asked them to arrange legal provisions for vertical farms to advance forward freely."
Who is Kang Dae-hyun?
Born in Sept. 20, 1969, Kang started his career in the vertical farm industry by entering the company in 2006. He is the CEO of Farm8 and PlanTFarm and has been vice chairman of the Korea Association of Smart Farm Industry and the Korean Society for Vertical Farm Research and Industry since 2019.
He graduated Korea University in 1995 and followed up his education on Hankyong National University's Graduate School of Future Convergence Technology where he studied biotechnology and plant and graduated in 2015.
