The world's first beef burger created from stem cells harvested from a living cow sits in front of Mosa Meat's Mark Post. Bloomberg
The world's first beef burger created from stem cells harvested from a living cow sits in front of Mosa Meat's Mark Post. Bloomberg
The world's first beef burger created from stem cells harvested from a living cow sits in front of Mosa Meat's Mark Post. Bloomberg
The world's first beef burger created from stem cells harvested from a living cow sits in front of Mosa Meat's Mark Post. Bloomberg

Lab-grown meat start-ups scale up as regulators grant approvals


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Slaughter-free meat is finally starting to make the jump from the lab to the factory line.

As Singapore becomes the first country to allow the sale of cultured meat, more start-ups around the world are preparing to test production of lab-grown meats like beef and chicken in factories. While there’s a long way to go, it’s a crucial step in getting cell-based products ready for supermarket shelves.

Mosa Meat, started by cultured meat pioneer Mark Post, is among at least eight companies building or operating pilot sites. The Dutch company, which made the world’s first cultivated beef burger, has been raising funds for those efforts and plans to upgrade small-scale output in the first half of next year, before moving to a full industrial site as early as the end of 2022.

“We proved already in 2013 that we can make a hamburger,” Mosa chief executive Maarten Bosch said in an interview. “Now it’s all about scaling up and getting the cost where it should be. That’s exactly what this phase is all about.”

Lab-meat start-ups have grown from a handful in 2016 to at least 60 now, according to consultant Lux Research. The sector wants to make production more humane and environmentally sustainable meat and has attracted record venture capital funding this year. Just last week, Singapore approved Eat Just to sell cultured chicken, at a time when interest in alternative proteins is growing.

There are still lots of challenges – from cutting high costs and making large-scale production feasible to winning regulatory approval. With cultivated meat costing $400 to $2,000 a kilogram to make, there’s still a long way until prices compete with conventional meats, according to Lux.

“Economies of scale are likely to help lower the cost in years to come,” said Harini Venkataraman, a Lux analyst in Amsterdam. “That is why these pilot plants are such important milestones.”

The cell-based meat market is projected to reach $140 billion in the next decade, according to forecasts compiled by Blue Horizon, which invests in alternative proteins.

Startups announcing test plants include Memphis Meats, which has received backing from Richard Branson and Tyson Foods, as well as cell-based seafood maker BlueNalu.  Aleph Farms, which this week hosted Israel’s Prime Minister Benjamin Netanyahu to taste its beefsteak, is also working on a pilot plant. Companies such as BioTech Foods, SuperMeat and Eat Just have already started testing sites.

“It’s not a question whether this is feasible,” said Ido Savir, chief executive of SuperMeat, which has started a test kitchen for cultured chicken in Israel.

“It’s a question of how long it will take us to go from a pilot setting, where we’re at, to a commercial scale. Things are becoming very exciting now.”

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.”

UAE tour of the Netherlands

UAE squad: Rohan Mustafa (captain), Shaiman Anwar, Ghulam Shabber, Mohammed Qasim, Rameez Shahzad, Mohammed Usman, Adnan Mufti, Chirag Suri, Ahmed Raza, Imran Haider, Mohammed Naveed, Amjad Javed, Zahoor Khan, Qadeer Ahmed
Fixtures:
Monday, 1st 50-over match
Wednesday, 2nd 50-over match
Thursday, 3rd 50-over match

UAE currency: the story behind the money in your pockets

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