As a major producer of a wide spectrum of fermentation-derived end products such as organic acids, amino acids, vitamins, and industrial enzymes, China looks poised to take the lead in filling the gap for precision fermentation capacity. In 2019, China alone produced four million tons of amino acids, which equates to almost 66% of the world’s production capacity. China also accounts for 77% (or 349,000 tons in capacity) of global vitamin production.

Known as “the world’s factory”, China has the advantage and capability to manufacture fermentation equipment, which will benefit companies who based their fermentation facilities within the country with direct access and cost savings.

“At its core, fermentation involves a tank with pH and temperature control, as well as mixing capability. Chinese fermentation equipment manufacturers are extremely price competitive, and a lot of it is exported overseas, to Thailand and other regions,” said Mr Ye Xiao Feng.

Mr Hao Jian Ming of China Fermentation Industry Association added: “Generally, equipment produced in China costs just a third of those made abroad. There is a large concentration of high-quality fermentation equipment manufacturers and operators that are based locally, which can help fermentation companies to advance quickly in building a cost advantage and scaling capacity in the bioeconomy.”

Rising consumer demand and a paradigm shift in China’s chemical industry spur meteoric growth in bioeconomy

In addition to the new policies, two other forces of change have spurred this large potential of growth for China’s bioeconomy – increased consumer demand for alternative proteins, and the dynamic change in China’s chemical industry towards adopting sustainable practices.

China’s market for alternative protein was estimated at US$910 million in 2018, compared to US$684 million in the U.S[6]. as reported in an article by Time magazine. A major contributor to this phenomenal potential is that alternative protein is more acceptable culturally to the Chinese and other Asian counterparts who have deep roots in ‘mock meats’ and plant-based substitutes as part of their diet.

The tightened environmental measures have also impacted China’s colossal petrochemical synthesis industry that constituted about US$1.5 trillion of sales in 2017[7] or nearly 40% of the world’s revenue from the chemical industry. The new policies opened a window of opportunity for bio innovators offering green technologies as an alternative production approach to large petrochemical companies. Adoption of new innovations and bio-based practices was accelerated for a wide range of products from packaging and antibiotics to agricultural additives when traditional manufacturing methods were disrupted.

Singapore’s aspiration as Southeast Asia’s agri-foodtech hub

The agrifood sector contributed US$717 billion to 2019 GDP[8] across four SEA countries – Indonesia, Thailand, Philippines and Vietnam, playing a pivotal role in SEA’s economic development and delivering critical impact to its labour market. While SEA’s agrifood sector performed well and demonstrated resilience even at the height of COVID-19 pandemic outbreak, the race is now on to increase productivity levels and strengthen environmental sustainability measures across the value chain. To do that, an increase in investment for new technologies and skills development is pertinent for sectoral growth.

Aligned to Singapore’s 30 by 30 vision — to build its agrifood capability by producing 30% of the city-state’s food needs locally and sustainably by 2030, the government allocated about US$106M[9] for research and development into agrifood and US$45 million into urban farming technologies in 2019. While global regulators had not yet established a framework for the regulation of cell-based foods, Singapore became the first country in the world to grant regulatory approval for sale of cell-based meat in 2021[10].

In the same year, Singapore Food Agency (SFA) granted a food processing license for cell-based manufacturing to a global contract development and manufacturing organization (CDMO), Esco Aster. Foodtech companies can now leverage Esco Aster’s approved platform to get to market more quickly without having to invest in its own pilot plants. These developmental milestones led by Singapore not only accelerated the pace of innovation agrifood landscape but also helped attract specialised talent in this field and investment capital in this region.

EDBI, a Singapore-based global investor, has also been actively investing in disruptive innovations including agrifood technologies in the last decade. Dr Basil Lui, Managing Partner of EDBI said, “Alternative proteins have been gaining traction in recent years as consumers become more discerning and opt to consume food that is environmentally friendly and made more sustainably. There is much potential in this space as Singapore moves towards its 30-by-30 goal, and we are keen to support and create value for high potential agrifood companies such as Next Gen Foods and Nature’s Fynd who are intending to expand in the region.”

Mr Thomas Jonas, Founder of Nature’s Fynd, a US-based biomass fermentation company, commented, “As we expand into Asia, we’re finding Singapore to be an ideal base from both operational and business development standpoints, with its forward-looking regulatory environment and food security goals. There is a strong interest in Singapore to take the lead in food tech, and that is why we’re also planning to build our first Asian manufacturing facility here in 2023.”

With dedicated support for agrifood research, A*STAR established the Singapore Institute of Food and Biotechnology Innovation (SIFBI) in 2020 to strengthen public sector research capabilities in food science, enlivening the local agrifood ecosystem.

“SIFBI is a research institute under A*STAR that spearheads agrifood innovation in Asia by leveraging its expertise in food science and biotechnology. Focus areas are wide and include discovery, strain engineering, bioprocess and fermentation optimization, food process engineering, nutrition studies and analytics, to support the development of healthy and sustainable foods for Asia,” says Dr Wong Min Hao, Strategy & Business Development Group Leader of SIFBI.

Subsequently, global investor Temasek launched the Asia Sustainable Foods Platform in 2021 that enabled the growth of food innovators in scaling sustainable food tech solutions. With the support of Singapore Economic Development Board (EDB), Asia Sustainable Foods Platform partnered with ADM, a global leader in food processing and nutrition, to enable small food tech companies to efficiently scale their fermentation innovations through a pilot launch, thus accelerating their commercial scale-up.