Technological complexity and high costs will continue to restrict growth of covered production, especially in the US, says Kubo CEO
Greenhouse technologies remain too complicated and, in many cases, too costly to implement. As a result, growth in this kind of controlled environment agriculture will probably remain limited for the foreseeable future.
That’s one of the key takeaways from an interview that Wouter Kuiper, CEO of Dutch greenhouse engineering company Kubo Group, gave to Investment Reports last week.
“How much cultivation needs to move under glass? A lot, but there is a restraint,” Kuiper commented. Our industry, technology and solutions are still too complicated to scale. First, we need to simplify them. Then expansion can happen very rapidly.”
While in theory greenhouses can be built anywhere in the world, his view was that such projects were not always financially viable.
“Our technology is currently limited to five or six crop types, and about 95 per cent of our market is fruit and vegetables,” he continued. “In Europe, that’s mainly tomatoes, peppers, and cucumbers. Strawberries and lettuce are still partly field-grown, but both are increasingly moving indoors.”
In the US, the impact of tariffs has had a detrimental impact on the country’s ability to grow its own produce under glass, he suggested.
“As costs rise, customers struggle and it’s difficult to increase selling prices,” he observed. “Ceramics and plastics from China, plant material from the Netherlands, bark from Finland – those inputs pushed the cost price up. Due to costs, it’s not feasible to operate large facilities in the US. In Canada, it’s much easier to build and operate – permit-wise and regulatory-wise – and energy is cheaper.”
