Saudi-owned and world’s largest oil company invests in food
Saudi Aramco is investing in what many people hail as food for the future: hydroponics. Hydroponics means growing food crops like lettuce and fresh herbs (it started with cannabis in Canada) using a water based medium and added nutrients to a closed loop system based on plastic pipes. Hydroponics works well for growing cannabis where the cost of the product is high, but its application for food at items such as lettuce and fresh herbs is still being challenged as a viable business model.
Investors with money to spare are trying on hydroponics: Saudi Aramco has led a $18.5 million USD investment round with the The Savola Group to grow soilless agriculture at the Red Sea Farms in Saudi Arabia.
Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian public petroleum and natural gas company based in Dhahran. As of 2020, it is one of the largest companies in the world by revenue. It is 95% owned by the Saudi government ruled by the Saud family.
The Red Sea Farms is a jointly-owned Saudi Arabian and United Arab Emirates agtech business that uses less freshwater than traditional agriculture through hydroponics, an approach to farming that requires, still, a heavy dependence on synthetic fertilizers to work.
Red Sea Farms is building an indoor farm to sustainably feed guests at The Red Sea Project and be a main supplier to the luxury destination’s resort; it has partnered with Silal in the UAE to deploy new technologies for sustainable desert farming.
In January 2022, Red Sea Farms expanded into the USA and recently completed a new commercial-scale 6-hectare technology retrofit site near Riyadh, KSA and an R&D facility at the King Abdullah University of Science and Technology in Thuwal, KSA – where technologies are delivering results ahead of expectations.
What is the Red Sea Project?
The Red Sea Project is the world’s most ambitious tourism project, offering an exclusive experience of unparalleled diversity for discerning global travellers. The site encompasses an archipelago of more than 90 pristine islands, miles of sweeping desert and dramatic mountain landscapes.
Red Sea Farms, which will supply food the Red Sea Project, has raised a total of USD $36.5 million to date.
I was at a luxury, sustainable resort in Thailand called Keemala that offered hydroponics food to their guests. A peek under the hood in the backyard and I could see the hydroponics were hardly in operation. Good in theory, in practice, very difficult to do without the right oversight.
For the Red Sea Farms, the recent fund raise was co-led by Wa’ed – the venture capital arm of Saudi Aramco and The Savola Group – the leading strategic investment holding group in MENA food and retail, through their corporate venture capital program. KAUST Innovation Fund, one of Red Sea Farms’ original investors, is also participating, along with OlsonUbben LLC, an investment entity owned by Tony Olson and Jeffrey Ubben. Tony Olson is the CEO of SPINS, a leading wellness-focused data company and advocate for the Natural Product Industry, and Jeffrey Ubben is the Founder and Managing Partner at Inclusive Capital Partners and a pioneer in impact investing.
Proceeds will support Red Sea Farms’ global and regional expansion plans – including expansion of the fresh produce business in the GCC. Global expansion is focused on technology development, and productization – with first generation product sales expected by Q4 2022.