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Japanese electronics giants look to expand 'vegetable factories' overseas

A strawberry growing factory system, sold by Sharp Corp., is seen in the Middle East. (Photo courtesy of Sharp Corp.)

The business concept of growing vegetables indoors using "vegetable factories" -- which is being pushed by a number of major Japanese electronics companies -- is continuing to make steady progress overseas.

    Making use of high-precision machinery, vegetable factories offer the key advantage of being able to cultivate vegetables reliably, even in countries where weather conditions are harsh. In the Japanese market, a number of vegetable factory companies have been losing out in price wars against conventional vegetable producers that grow their crops in open fields -- forcing some of them to close down their factories. However, undeterred, these companies have been finding new opportunities overseas with their vegetable factories, and are continuing to expand in this market.

    Fujitsu Ltd., for example, will commence full scale factory-based production in Finland of vegetables such as baby greens and leaf lettuce during the first half of fiscal 2017. The company will make use of IT to create a "predominantly automatic" cultivation technique, with the hours of the lighting -- provided by LED -- being automatically managed, in addition to watering and temperature control. After a cultivation period of approximately one month, the produce grown in the Fujitsu factory will then be sold to local supermarkets. Initially, the area of the cultivation plant is set to be 1,700 square meters, with future plans to double the area of the site by around 2019, and have a shipment of 240 tons a year.

    As sunlight hours in Finland are very short in winter, it is impossible to grow leafy vegetables. The majority of such produce is generally imported from Southern Europe, but the lengthy transport times across the continent mean that the food is no longer fresh by the time it reaches Finland. With freshness being a key selling point for the company's factory-produced goods, Fujitsu states, "By growing produce in our factory, we will be able to sell fresh vegetables all year round -- so even if the price is slightly expensive, there will still be demand." In the future, the company is also aiming to sell vegetable-growing facilities in Europe.

    As for sales of such facilities, Sharp Corp. is currently making great strides. From October 2016, the company has been selling factory systems in the Middle East that can cultivate strawberries -- equipped with "Plasmacluster" air-disinfecting technology -- that have the attractive feature of cultivating high-quality strawberries, that taste as sweet at Japanese strawberries, without using any pesticides. The factory system consists of seven containers for growing strawberries -- approximately 30 square meters in size -- as well as a "clean room" container designed to disinfect the bodies of workers.

    In addition, Sharp states that strawberries in the Middle East are imported from the U.S., and are not particularly sweet, whereas Japanese strawberries offer superior quality. With this in mind, the company is hoping to sell strawberries to food and drink suppliers that target the affluent classes.

    Another major Japanese company that is active in this market is Panasonic Corp., which started producing vegetables in factories in Singapore in 2014. Currently, the company cultivates 38 different types of vegetables in this way, such as radish and Japanese brassica (mizuna), and sells the produce to Japanese restaurants in Singapore.

    On the other hand, Toshiba Corp. was forced to close its vegetable factory in the city of Yokosuka in Kanagawa Prefecture at the end of December 2016. In autumn 2014, Toshiba started producing lettuce and Japanese brassica, as part of a new business venture, after renovating the clean room in its floppy disk manufacturing plant. The company sold to supermarkets and food and drink suppliers. However, as there were no distinct differences in quality between factory produce and vegetables grown outdoors, the relatively expensive price of the factory goods meant that sales did not thrive. Ultimately, Toshiba was forced to close down its factory. Nevertheless, the company continues to sell systems and equipment that are used inside vegetable factories.

    Generally, it has become common for companies to strive toward creating systems that are capable of producing crops such as vegetables in an artificial environment -- using nutrients, air conditioning and artificial light. Development of such systems started in Japan in the 1970s, and commercial manufacturing gained momentum in the 1980s.

    According to the Japan Greenhouse Horticulture Association, there were 191 vegetable factories -- which used artificial light -- that were operational in Japan, as of February 2016. Recently, such factories have been attracting attention overseas, and have been expanding rapidly. In addition to offering stable production all year around, that is not affected by the weather, the technique makes efficient use of space because the vegetables are placed on shelves. Furthermore, there is minimal presence of bugs, and the produce can be grown without using pesticides. Utilization of idle plants and vacant stores is attracting attention but the costs of producing vegetables in factories is higher than in open fields -- and this is an issue surrounding the future spread of vegetable factories.

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