Impact Program Kentucky and Beyond
NLWorks supports a public / private collaboration, to establish a controlled environment ag-tech ecosystem in Kentucky, US using Dutch knowledge, products and services. The goal is to capitalize on the controlled environment ag opportunities in the US for the Dutch sector. Providing a substantial job growth in this sector in both countries and providing Dutch solutions to local & global societal challenges.
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Urgency to act
Feeding the world becomes an increasingly large challenge. By 2050, global population is expected to exceed 10 billion people, and a changing climate, inconsistent rainfall patterns, and unpredictable growing seasons are already affecting crop yields worldwide. At the same time, more and more arable cropland is built over for cities, as the trend towards urbanization increases internationally. The next generation will face the challenge of growing healthier food for more people while using less land in an unpredictable climate environment. A challenge which Dutch companies & knowledge institutes have taken up quite successfully.
US companies, knowledge institutes and governments therefore have turned their eyes to the Netherlands for support; as a preferred partner in creating large scale controlled environment ag-tech solutions in the US. Both US and Dutch industry parties believe this will have a positive long-term effect for the controlled environment agriculture business initiatives for the years to come in the US.
Economic & Societal Opportunities
Located in the eastern centre of the Continental US means that 70% of the US population can be reached from Kentucky in one day drive. Tomatoes can be on store shelves in New York, Chicago, Washington DC, and Atlanta within 36 hours of harvesting. Besides its proximity to markets, availability of labor is another competitive advantage; being the number one business challenge to the greenhouse industry worldwide. Kentucky has a large underutilized, skilled and hardworking labor force resulting from the collapse of the coal industry.
Additionally, the state has a business-friendly climate that allows for reduced time in construction permitting. Kentucky also has plentiful and relatively cheap natural and energy resources essential for both a greenhouse cluster and a complete ag-tech ecosystem. In the past two years Kentucky has experienced record rain fall while other areas of the US have had droughts. This makes Kentucky the ideal place to locate a greenhouse and ag-tech hub.
Thanks to guidance of the Dutch embassy network in US AppHarvest – a VC backed certified B- corporation – has been actively seeking alliance with Dutch partners willing to provide ag-tech solutions for the build-up of a new ecosystem. With the help of local government & knowledge institutes it launched an ambitious project to implement large scale controlled environment ag-tech in the Appalachian region, and making Kentucky THE sustainable ‘Ag tech capital of the USA’.
Last year AppHarvest started building their first 60-acre facility in Morehead, Kentucky, worth tens of millions of USD using primarily Dutch technologies. Appharvest has the ambition to further invest and scale up from 60 to 200 hectares in the near future and for 500 hectares of controlled environment facilities in the Appalachian region in future. Actively supported by state government, as a mean to create a sustainable & healthy food production that can help reduce poverty, provide sustainable jobs and create a healthy diet for many of its inhabitants.
The Dutch ag-tech sector can be an important ally tackling these challenges. The commercial opportunity for Dutch companies is compelling, as shown by a Wageningen University study commissioned by the Dutch Enterprise Agency (RVO), Dutch Embassy Washington DC and NLWorks. However, one of the learnings of greenhouse building in the US is that for a sustainable and scalable growth of the ag-tech business, providing techniques and hardware is not enough; an entire ecosystem needs to be created to make this transition a sustainable one.
But for each individual company this goes beyond their scope of business and capacity to take a leading role. The scale and magnitude of such a program therefore makes it necessary to have a shared ambition and business proposal between Dutch & US public and private partners. This requires a multi-annual public-private effort based on a solid business case & growth model, and a neutral party such as NLWorks to push this initiative to the next phase.
Future US-Dutch Mission
From the Dutch side this initiative has received support from the Dutch government, resulting in an on-stage annncement during the GES meeting in June 2019 by Dutch Minister of Agriculture Schouten of a first business-deal with Kentucky. From then onwards, public and private support for this initiative started to grow rapidly. Last January US Agricultural Minister Sonny Perdue visited the Netherlands in support of this US-Dutch ag-tech collaboration, followed by an incoming visit last February organized by RVO and NLWorks.
AppHarvest, Kentucky State and regional government and five regional universities visited ag-tech hotspots in preparation of finding suitable Dutch consortium partners. NLWorks subsequently stepped in to organize business & knowledge parties in an effort to come up with a Dutch proposal. Subsequently, all parties signed the collaboration agreement in June 2020. Setting the stage for future collaboration.
All participating companies & knowledge institutes are committed to the build-up of a local knowledge and education infrastructure. Starting from a shared local office facility as a launch pad for future joint business activities. Aligning Dutch and US interest and finding the right retail, logistic, knowledge, governmental and financial partners to establish a sustainable ag tech growth model for the future.