The UAE's first ever project that recycles food waste and turns it into animal feed, organic fertiliser and oil was inaugurated by a top official on Friday.
Mariam Al Mheiri, Minister of Climate Change and Environment, signed an agreement to support the pioneering project by Circa Biotech, a company that farms black soldier fly larvae by feeding them leftover food waste.
The larvae consume the waste and grow before being turned into high-protein feed for livestock, among other things.
The world is witnessing a rise in capital funding for insect-farming companies
Mariam Al Mheiri,
Minister of Climate Change and Environment
“This agreement is part of the UAE’s ongoing drive to enhance food security and sustainability based on innovation, green development and climate change mitigation,” said Ms Al Mheiri after a tour of the company’s headquarters in Masdar City in Abu Dhabi.
“The project leverages nature-based solutions to address challenges resulting from the accumulation of organic waste.
“This way, it creates sustainable economic opportunities that strengthen the resilience of our food supply chain while transforming waste from an environmental burden into an economic resource.”
Circa Biotech’s project will initially produce 1.5 tonnes of organic fertiliser per month — with the goal of handling 200 tonnes of food waste per day.
The company aims to decrease dependence on more expensive fishmeal for livestock feed.
“The world is witnessing a rise in capital funding for insect farming companies,” Ms Al Mheiri said.
“Circa Biotech’s project follows the principles of circular economy by using organic waste and the nutrients it contains as inputs into the feed production process, thus enhancing food security.”
The animal feed is rich in proteins, fats, minerals and vitamins. The larvae can be harvested every 14 days, due to the short 45-day life cycle and high fertility of the black soldier fly.
In addition, this insect does not transmit diseases, nor cause damage or infestations, and is a non-invasive species.
The larvae are reared in an environment with sensors that record real-time temperature, humidity and carbon dioxide levels under special lighting.
All of this together ensures efficient water consumption and has a limited effect on the environment.
“At Circa Biotech, we developed an innovative process to upcycle food waste into protein-rich animal feed using industrial insect farming,” said Haythem Riahi, co-founder and chief executive of Circa Biotech.
“It’s a commercially viable solution to locally produce animal feed with a highly sustainable process. At a full industrial scale, we plan to produce 22,000 tonnes of animal feed per year.”
Circa Biotech has participated in several entrepreneurship competitions across the UAE and its primary goal is improving the management of organic waste in megacities with a focus on saving it from the landfill.
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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