Agroz Solving Food Safety, Food Security and Sustainability

Agroz Vertical Farms Sdn Bhd is a company operating a Controlled Environment Agriculture (“CEA”) farm. We grow leafy greens and herbs for businesses and consumers alike, in our CEA farm. We currently operate an 8,000 sqft CEA farm in Aeon Alpha Angle in Wangsa Maju.

We are looking to fundraise for additional farms to increase of capacity to meet the market demand for CEA-grown vegetables.

CEA is a technology-based approach to food production that leverages stacked growing structures and indoor systems. These CEA systems are designed to optimize growing conditions for the health of the crop and reduce the risk of diseases and pest damage while evading susceptibility to outdoor weather conditions.

The farming industry as a whole, carries the following pain points:
- reduced arable land;
- changes in climate (extreme heat and rains);
- pest infestation due to encroachment of natural habitats; and
- traditional farming destroys the Earth's ecosystem

CEA is the practice of farming crops, mainly leafy greens, herbs, and fruiting vegetables, within an enclosed environment where different environmental parameters such as temperature, humidity, light, and nutrient levels may be precisely controlled.

This regulated environment is frequently generated using hydroponics, aeroponics, or aquaponics and can comprise indoor farming systems, greenhouses, or vertical farms.

CEA allows year-round crop production, regardless of conventional seasonal and geographic limits. The practice provides the opportunity to optimize growing conditions for improved crop development, quality, yield, and consistency.

CEA creates a controlled and predictable environment that minimizes dependency on external elements like weather, pests, and diseases, allowing more effective resource utilization, water conservation, and sustainable agriculture practices. The changing climatic conditions of the planet can potentially disrupt traditional agricultural practices.

The growing consumer demand for unique products has favored the practice of CEA to produce a nutritious and robust food supply chain globally. The practice also has the potential to produce high-quality food products for consumers using minimal water input.

Besides, CEA also reduces space utilization as it is structured to grow crops in multiple layers to maximize the space and conversion, instead of traditional farming which can only grow a single-layer crop.

Vertical farming allows us to produce crops with 70-95 percent less water than required for normal cultivation.

Datin Zaeidah Mohamed Esa, the Malaysian Director of the Agriculture Division, Ministry of Economy mentioned in a recent interview the following:

“Our import dependency is still high. In 2021, the import value was RM63.6 billion and this figure increased to RM75.6 billion in 2022. This indicates a growing demand and a change in dietary trends. If this issue is not addressed, the country’s food security will be compromised. Therefore, what we aim to achieve through this HGHV initiative is to enhance availability, accessibility, consumption, and sustainability of the agriculture industry.”

“...the focus would be on crops that relied heavily on imports from other countries, even though the country is capable of producing them.”

With that, Agroz Vertical Farm is looking to lower the import demand wherever possible, by expanding the CEA farming.

1. As a result of our CEA systems, our vegetables are fresher, tastier, and crunchier.

2. Through the hardware and software of the solutions that we deploy, we can be more efficient and effective in our yield.

3. Also our products are safer and healthier to consume as it's beyond organic, pesticide-free, and grow by mineral nutrients.

Our products include the following:

-Leafy greens (butterhead, coral, oak)
-Kale (curly green, red kale, tuscan/dino kale)
-Asian greens (milky bok choy, dwarf bok choy
-Herbs (wild rocket, arugula, basil）

Retailers, eateries, and end consumers where:

● Retailers will give us a wider reach to our customers.

● Eateries will be able to serve our vegetables to their customers and get a taste of our product.

Our customer acquisition plans are two-pronged:

For B2B Customers
We will be actively onboarding more retailers as we increase our capacity to supply.

For B2C Customers
We will be actively doing more product awareness campaigns online through digital ads and onboarding products on more online marketplaces.

The current business is in the activity of farming through CEA technology. We grow a variety of leafy greens.

Our business goals are to:-
- expand capacity to fulfill demands on quality, fresh and healthy vegetables
- to add more variety of vegetables other than our current lineup
- to start farming fruits i.e. Japanese and Korean strawberry variants and other plant fruits.

Our marketing strategy is to onboard more retailers and double down on our online penetration.

Our financial plans to fund our expansion will be a mix of equity and debt from financial institutions. We are exploring equity financing through pitchIN to raise the funding for the next farm.

● Agroz Vertical Farms is currently in the agriculture technology industry. Our operations are currently in the ASEAN region, but we are open to explore and expand to expand to SEA / European / Global regions, should there be any good opportunities.

● As demand is higher than supply, we intend to construct one new farm with the ease of the ECF campaign for CAPEX purposes. The new farm will grow crops in the CEA environment with existing and new vegetables or fruit mix. Please refer to the forecast worksheet for financial information.

● As CEA farming is relatively new in Malaysia, we will refer to global figures in terms of market share as follows:-

Controlled Environment Agriculture Market size was valued at USD 97.42 Million in 2022 and is calculated to reach USD 339.94 Million by 2030, growing at a CAGR of 14.53% from 2023 to 2030.

The Global Controlled Environment Agriculture Market size was USD 74.4 Billion in 2022. It is expected to grow at a CAGR of 18.13% and is predicted to reach a valuation of USD 377.6 Billion by 2032.

● Vertical Farming Market size surpassed USD 4.51 billion in 2020 and is poised to grow at a CAGR of over 23% between 2021 and 2027.

As CEA farming is relatively new in Malaysia, our larger competitors are mainly from the global market as follows:-

AeroFarms, Bowery Farming, Plenty, InFarm, Gotham Greens, Iron Ox, AgriCool, Nordic Harvest

DIVIDENDS
RCPS holders shall be entitled to receive a fixed cumulative dividend of eight per centum (8)% per annum of the investment amount.

ADDITIONAL BENEFITS
RCPS holders (within the Klang Valley only) are entitled to receive free vegetables to their door-step fresh from the farm, once every two weeks.

The period should be computed as follows:

Total free vegetables are equal to 30% of the invested sum, and free vegetables value per instance delivered (every 2 weeks) is valued at approximately RM50 (about 6 boxes assortment of vegetables).

For example, someone who invested RM2,000 will receive free vegetables for 6 months (RM2,000 x 30% = RM600 / RM50 = 12 times over 6 months)

Investors who invest RM100,000 and above will receive free vegetables perpetually or until their RCPS are redeemed or converted.

Note: 
The above will be applicable for as long as they are still RCPS holders. This means that if they are being redeemed, converted, or end of tenure, the RCPS holder will no longer enjoy this benefit.

PRESS

1. https://www.thestar.com.my/business/business-news/2023/08/23/agroz-launches-educational-vertical-farm-in-the-city
    
2. https://www.malaymail.com/news/life/2023/08/23/malaysias-largest-indoor-vertical-farm-in-a-shopping-mall-to-open-in-september-aims-to-educate-about-agriculture-technology/86741

REFERENCES

1. https://www.malaymail.com/news/malaysia/2023/09/19/high-growth-high-value-initiative-for-agriculture-sector-through-12mp-to-ensure-food-security-in-malaysia-says-analyst/91614
    
2. https://www.verifiedmarketresearch.com/product/controlled-environment-agriculture-market/
    
3. https://www.globenewswire.com/en/news-release/2023/04/10/2643911/0/en/Controlled-Environment-Agriculture-Market-to-Experience-Robust-Expansion-at-18-13-CAGR-from-2022-to-2032-Research-by-Market-us.html
    
4. https://www.gminsights.com/industry-analysis/vertical-farming-market

1. pitchIN and its officers and staff may also be investing in this campaign
2. Under ECF Guidelines, valuation is determined and set by the Issuer. Investors are advised to carefully peruse all investment offers and documents before making investment decisions.