“As a business, we found that an existing system can never generate the return that can make indoor farming profitable due to the high consumption of energy and costs. After building our in-house system, we have been trying to reduce that ever since,” says Tan Keen Hong, founder of Saturn Agtech.
Ever since 2018, the company has been tackling sustainable food production in Malaysia. They started by putting all effort into R&D, creating an efficient system that could be used in Malaysia. Tan explained that vertical farming systems in Malaysia weren’t economically viable, yet Saturn Agtech aimed to change that. Currently, the team is busy with many R&D processes to improve and to perfectionate all growing processes.
As Tan explains, Saturn Agtech’s approach is a bit different. “We want to prove that indoor vertical farming can be a profitable business anywhere in the world, today. From there on, we’ll incorporate more technology in the farm, step by step. As well as adding more crop recipes to the system. First, we want consumers to try our product. While perfecting the system until it’s more efficient, affordable, and profitable. We first want to capture more market share,” he notes.
Organic products available in Malaysia are highly-priced already, claims Tan. To avoid overpricing and ensure the affordability and sustainability of its products, the company has always benchmarked the pricing of organic produce to ensure that its indoor farming produce stays competitively priced below or at most on par with organic produce. Now the selling price is set which has been well received by consumers for the company’s flagship “HYDROFRESH” product brand, the next step for Tan is to reduce costs even more and increase the efficiency per m2 in every aspect.
“That leaves us to the launch of our latest model 3, of which we can confidently say that it’s one of the most efficient systems currently used in Malaysia. After comparing data with our neighboring country Singapore, the standard efficiency of a farm is a yearly production of 1,500 tonnes/ha/year crops. Whereas our farm produces about 2,000 – 2,300 tonnes/ha/year crops. Therefore, it’s time for us to scale up production and spread the word.”
Farm model 3
Expanding into the Asian market
The company’s standard farm model is usually 10,000 to 30,000 sq ft. As the 1st step of ASEAN expansion, they have been planning to set up their 1st pilot farm in Singapore. Tan gives away that Borneo, the world’s second-largest island, is next on the list for a similar model. Thereafter they aim to further extend Saturn Agtech’s footprint to Vietnamese, the Phillippines, Thailand & Indonesia.
“We will actually expand into major cities in Malaysia and Singapore simultaneously 1st before we expand into other ASEAN countries. In the future, we want to roll out a mega factory to mass-produce, with a similar manufacturing system as IKEA to fulfill the upcoming demand,” Tan added.
Founder and Chairman of Saturn Agtech, Tan Kee Hong and CEO Ben Chow Wen Bin
“We want to enable farming for everyone. That’s why we want to give people the opportunity to join a shareable economy. In order to do that, we’re introducing more sales channels. Let’s say someone wants to start his own farm using an empty room in their apartment, they can use our systems to grow veggies. Of course, they’ll never be able to grow as much as we do, but once the farmers have overproduction, produce can be sold to us so we already have established sales channels and can steadily increase production and fulfill greater demand. As a bonus, the farmers can earn an extra income passively with the produce,” Tan affirms.
The key strategy for the company is to contract farmers to increase production without having to build more farms. Growers can use a platform designed by Saturn Agtech, so they can monitor the production and live up to the required product quality. To maintain consistent quality, Saturn Agtech is working on a 5g-enabled system that can detect any harmful materials on the crops to ensure constant quality to prevent crop loss.
Department of Agriculture Malaysia during their farm visit last year November
Growing local crops
Saturn Agtech’s current product basket mainly includes local veggies and some import variants. In order to reach a larger audience, the company doesn’t want to rely on products that aren’t frequently used in the local cuisine. Therefore, by targeting local crops that are eaten by local communities on a daily basis, they hope to reach a much wider audience who can enjoy such healthy affordable local produce.
Tan gives away that there’s watermelon, chilies and Japanese cucumber in the pipeline. “We’ve successfully planted all these products yet, but in order to produce in a high volume we still have to improve the cost margins.” Automation is something the team is looking to tackle in a later stage, together with one of the China-based shareholders who is a specialist in automation.