Growing green house capsicums in Al Rahba area near Abu Dhabi. Ravindranath K / The National
Growing green house capsicums in Al Rahba area near Abu Dhabi. Ravindranath K / The National
Growing green house capsicums in Al Rahba area near Abu Dhabi. Ravindranath K / The National
Growing green house capsicums in Al Rahba area near Abu Dhabi. Ravindranath K / The National

AgTech company Silal to upgrade 80 farms in Abu Dhabi


Kelsey Warner
  • English
  • Arabic

Abu Dhabi agricultural technology company Silal is upgrading 80 farms with new smart monitoring and irrigation technology and training farmers on how to use it amid a broader push for food security in the UAE.

Silal plans to invest $54 million in the programme over two years and is aiming to improve sustainable agriculture across local farms, boost crop yields and contribute to the national AgTech strategy.

The UAE, which imports as much as 90 per cent of its food, according to one estimate by Chatham House, announced a national food security strategy in 2018.

Since then, Abu Dhabi has invested tens of millions of dollars into AgTech start-ups with a focus on technology-based solutions to boost food production, including automation, robotics and novel approaches to greenhouse or vertical farming.

The company is focused on "uplifting local farmers’ capabilities and improving their resources and skills“, said Jamal Al Dhaheri, chief executive of Silal.

The company's new initiative, announced on the sidelines of the first edition of Abu Dhabi Agriculture and Food Security Week, will provide 80 farms with one-hectare greenhouse or net house structures (about the size of 2.5 football pitches), fitted with smart irrigation and crop monitoring systems. The new system will help Silal double yields, compared to traditional farming methods.

The company plans to work with farmers to identify crop plans that maximise profitability and it will provide training on best practices.

The two-phase upgrade will start over the next two years with 40 farms selected for the first phase.

The upgraded farms will be a showcase for the potential of AgTech solutions in the UAE and the opportunity to produce import-quality fresh produce locally.

Silal will upgrade more farms after the first 80 and continue to offer training around the use of technology to increase yield and reduce operating costs.

The efforts by Silal come amid growing activity in the UAE AgTech sector.

In August, aquaculture company Pure Salmon partnered with the Abu Dhabi Investment Office to set up its global headquarters in Abu Dhabi, which was part of Adio’s Dh2 billion innovation programme. Later that month, Abu Dhabi’s holding company ADQ announced plans to start a new venture in Al Ain, aiming to boost the production of fresh fruits and vegetables in the UAE.

Last month, Abu Dhabi-based agricultural technology start-up Pure Harvest Smart Farms raised $64.5 million in growth capital, taking its total funds to over $271m, making it the most-funded AgTech player in the Middle East, North Africa and South Asia.

The specs
Engine: 3.6 V6

Transmission: 8-speed auto

Power: 295bhp

Torque: 353Nm

Price: Dh155,000

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War 2

Director: Ayan Mukerji

Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana

Rating: 2/5

Founders: Abdulmajeed Alsukhan, Turki Bin Zarah and Abdulmohsen Albabtain.

Based: Riyadh

Offices: UAE, Vietnam and Germany

Founded: September, 2020

Number of employees: 70

Sector: FinTech, online payment solutions

Funding to date: $116m in two funding rounds  

Investors: Checkout.com, Impact46, Vision Ventures, Wealth Well, Seedra, Khwarizmi, Hala Ventures, Nama Ventures and family offices

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Man of the match Kari Arnason (Iceland)

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Updated: November 23, 2021, 4:18 PM