Issue 38

Rubber to surpass palm oil contribution to economy

The rubber industry is expected to become the number one commodity contributor to the the country's economy as palm oil is facing difficulties in the international market, said Primary Industries Minister Teresa Kok Suh Sim.

She said in terms of commodity export earnings, rubber and rubber products were currently the second largest contributor after palm oil.

“In 2017, export earnings from rubber and rubber products contributed RM32.1 billion to national exports, (up by 30.2 per cent from 2016).

“The rubber products industry has flourished from a mere 20 manufacturers in the 1970s to more than 300 today,” she said at the Malaysian Rubber Export Promotion Council (MREPC) Industry Awards Night here tonight.

Kok said 11 of the manufacturers were now major players and were listed on Bursa Malaysia with a market capitalisation of RM33.6 billion.

She also said Malaysia was among the world's top exporters of rubber products, exporting products to 195 countries.

Of significance, Malaysia is the world's largest producer and exporter of rubber gloves and is also among the top exporters of condoms and catheters globally.

“In this regard, I hope the dry rubber products segment continues to chart a more creditable growth in exports.

“These are challenging times. On the external front, the US-China trade conflict, if protracted, could affect global growth and demand. On the domestic front, the private sector has to step up investment to drive economic growth, especially in the downstream sector,” she said.

Malaysia's rubber industry needs to adopt greater automation for increased efficiency and productivity to help reduce dependency on foreign workers, she said, adding that to better compete in the global market, the industry must continuously innovate and add value to its products.  

Such investments, she noted would benefit the country in terms of transfer of technology, creating employment for Malaysians, setting up of industries and spurring innovation.

Meanwhile at today's MREPC Industry Awards 2018, 14 winners were adjudged the best in the industry for their outstanding performance and contributions to the country's economy.   

This year was the second time MREPC organised the Industry Awards after its first in 2015.

Besides awards for export excellence, this year's event introduced three new categories of awards, namely Most Innovative, Green Business and Best Marketer.  

The awards underscore the importance placed on innovation and creativity; sustainable manufacturing through adoption of green practices; and marketing efforts in showcasing Malaysian products to the world.

The rubber and rubber products industry is an important component of the Malaysian economy, supporting some 440,000 rubber smallholders, while 84,000 people are employed in the midstream and downstream activities. – Bernama

  From – The Star

Indigo's $250M round puts agtech startups on pace for banner year

Indigo Agriculture has announced that it's raised a $250 million Series E, which will be used in part to operate a new digital platform for buying and selling grain. 

Indigo's confirmation of the deal comes two months after PitchBook learned that the company had authorized the sale of up to $300 million in new shares. 

The new funding values the agtech business at $3.45 billion, per a PitchBook estimate. Indigo, which reached a $1.4 billion valuation with a $203 million round in December 2017, was already the most valuable VC-backed agtech company in the US. With the new capital, its valuation is more than double that of runner-up Ginkgo Bioworks, which is valued at roughly $1.38 billion. 

Indigo's fundraise is also the largest of the year by far for agtech companies in the US, followed by PrecisionHawk, which raised $75 million in January. With Indigo's latest round, agtech startups in the country have brought in more than $1.2 billion so far in 2018, per PitchBook data. The transaction also pushes the total number of deals in the agtech space to more than 100, and puts the year on pace for a decade-high record in terms of venture capital invested and deal count: 

Indigo officially launched its services in 2016. With a goal of finding ways to help plants thrive in difficult conditions, the company also uses algorithms and machine learning to analyze plant microbiomes and create seed coatings that produce high-quality harvests and increase yield. Another focus for the company has been helping plants use water more efficiently. 

The company has expanded its reach in the agricultural community since its founding. Its most recent product is what it's calling the Indigo Marketplace, a digital platform that lets buyers and growers of commodity crops do business directly, helping them secure the best possible prices. Indigo's marketplace operates in 40 states across the US. 

Before it launched, Indigo spun out of Flagship Pioneering, a life sciences incubator that invested in the new $250 million financing. Other backers include Baillie Gifford, Investment Corporation of Dubai and the Alaska Permanent Fund. This round brings the company's total funding to more than $615 million.

From – PitchBook

Saudi Arabia pledges $1B+ to Lucid instead of backing Tesla

The Public Investment Fund of Saudi Arabia (PIF) has agreed to invest more than $1 billion in Lucid Motors, a Newark, CA-based electric car company planning to launch its first commercial vehicle, the Lucid Air luxury sedan, in 2020. Lucid will use the cash for several purposes, including to finish developing and begin production on the Air, build a factory in Arizona and launch its North American retail strategy. The startup has raised prior VC funding from Venrock and Tsing Capital.

The announcement comes about a month after reports of an investment first emerged, which in turn came days after several reports connecting the PIF to a possible deal with Tesla. The Lucid transaction falls in line with the PIF's forward-looking plan called Vision 2030, which calls for the kingdom to pursue investments that will lessen its dependence on oil.

To that end, the PIF has been liberal in dispensing parts of its $230 billion in AUM. In 2017 alone, the wealth fund announced its intent to commit up to $20 billion to Blackstone's planned $40 billion infrastructure fund, up to $45 billion to a SoftBank-led tech fund, and an unspecified amount toward a proposed $500 billion project to build a new city called Neom on the coast of the Red Sea. To help fund such large-scale transactions, the PIF announced on Monday that it has raised $11 billion through a syndicated loan that it plans to use for general investment purposes.

The latest news would seem to erase the possibility that the PIF has immediate plans to expand its current 5% stake in Tesla, a move that seemed much more likely when CEO Elon Musk tweeted last month that he had "funding secured" to take Tesla private. Musk since retracted his statements about taking Tesla private and is now under SEC investigation.

From – PitchBook

FoodShot launches investment vehicle to improve agtech and food systems
The future of farming has a tough row to hoe, as the global population is projected to reach nearly 10 billion by 2050. New strains on the food supply created by this growth will come to test the very business models that large producers and distributors have deployed in the past to address similar challenges. But FoodShot Global hopes to smooth the path ahead by backing moonshot technologies and supporting business models that can help overcome the major barriers to feeding a growing population. 

The newly launched investment platform represents a partnership between a number of important players in the food and agtech space, including Rabobank, Mars, The Rockefeller Foundation, Generation Investment Management, Armonia and Acre Venture Partners, among others. 

For co-founder and chairman Victor Friedberg (pictured), FoodShot represents a means to bring solutions to market. Friedberg, who also co-founded  S2G Ventures, spent years investing in the food and ag sector, and he believes that new tools are required for change. FoodShot's strategies include using integrated funding across debt, equity and cash to cultivate and commercialize new tech focused on the program's theme of "Soil 3.0," a framework for conceptualizing a food system capable of sustainably producing nutrient-dense food while increasing yields for producers.

"The consumer is still going to drive this change, whether that's in Africa, China, Europe or the US," Friedberg told PitchBook. "My belief is that if you're going to actually produce a healthy, sustainable and democratized food supply, then everything down the system is going to have to change, starting with the soil." 

The program plans to make equity investments of up to $10 million and back debt funding of up to $20 million annually. And FoodShot is looking to support projects located at the intersection of food and agtech—or, as Friedberg is fond of saying, from "soil to shelf"—by employing a systems investment thesis that addresses consumer preferences for personalization and sustainability from the food supply. 

"For millions of years, nature has basically evolved to balance the books, but for the last 10,000 years or so we've perfected a system where we make mostly withdrawals," he said. "At some point in the future, nature is going to make a margin call." 

For FoodShot, heading that off means backing regenerative farming practices and the agtech that can verify the efficacy of those practices with investments into soil sensing and measuring systems. 

This area of agtech has garnered significant attention from the wider VC world in recent years, with sensors and farm equipment enjoying a bumper crop of investment last year. In 2017, VCs struck 46 deals in the space comprising some $94 million, per the PitchBook Platform. And this year has sustained that heady pace of activity, already hitting a decade high for capital invested with $106 million across 31 financings. 

"Venture capital is an amazing tool for change, but as food, agriculture and climate systems are global in nature and deeply interdependent," Friedberg cautioned, "they will require new tools, and multistakeholder and multidisciplinary solutions." 

Although producers know a lot about what's going on above the soil, they know far less about what happens underground. And that's why FoodShot is particularly interested in methods of below-ground phenotyping, which can examine a plant's physiological and biochemical properties at the interface of root and soil. 

"We don’t have a global soil map. So, we need to get to this baseline where we get below the surface and invest in tech that can do that, and that will create efficacy around regenerative farming," Friedberg said. 

To that end in particular, FoodShot will award a "groundbreaker prize" of $500,000 to support research in and development of new economic models. One example is transitional acreage where the farmer, regardless of location, would be able to look at the soil and understand quickly what's wrong in order to identify resources—from, say, microfunders—that can help to transition vulnerable tracts from destructive to regenerative practices. And Friedberg believes capital access here could come from extant companies to support new entrants. 

FoodShot-backed projects will gain access to its entire network of partners, including the University of California at Davis' Innovation Institute for Food and Health to receive lab and faculty support to develop new products and conduct field tests. Finalists will also have access to Rabobank resources, such as Terra, its food + ag tech accelerator.

From – PitchBook

Alibaba's Jack Ma says U.S.-China trade friction could last 20 years

Alibaba (BABA.N) chairman Jack Ma said on Tuesday that trade frictions between the United States and China could last for two decades and would be “a mess” for all parties involved, citing weak trade rules.

Ma was speaking at an Alibaba investor conference hours after Washington said it would impose duties on an extra $200 billion worth of Chinese imports, drawing a warning from Beijing that it would retaliate.

Ma said trade tensions would likely impact Chinese and foreign companies immediately and negatively. He predicted that Chinese businesses would move production to other countries in the medium-term to get around the tariffs.

“You may win the battle, but you lose the war,” Ma said at the shareholder event in Hangzhou.

“Middle term, a lot of Chinese business will move to other countries,” he added.

Ma said new trade rules were needed over the longterm.

“Even if Donald Trump retired, the new president will come, it will still continue...We need new trade rules, we need to upgrade the WTO,” he said, referring to the World Trade Organization.

Ma made the comments in what he said was his last speech to shareholders as chairman of the Chinese internet giant.

He announced last week that he will step down within a year and hand the company reins to chief executive Daniel Zhang.

Ma met with U.S. President Donald Trump last year in a high-profile meeting where he promised to create 1 million U.S. jobs linked to small merchants selling items on Alibaba platforms.

Trade relations have since deteriorated between China and the U.S. in a tit-for-tat escalation in tariffs.

From – Reuters
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