(Singapore) Gary Loh founded one of the most exciting Platforms as a Service (PaaS) models in the perishable fruit and vegetable industry after pulling off a daunting turn-around strategy at a major Singapore-backed Chinese fruit company.
After enjoying early success as a young finance professional in Asia’s lucrative finance industry, Loh became the largest shareholder in SunMoon Ltd. The company’s operations included 1,900 hectares (4,695 acres) of Fuji apple plantation on mainland China, a cold storage facility handling 40,000 metric tons of goods a year that Loh dubbed “the forbidden city”, and 22,000 points of sales.
When he took direct managerial control. SunMoon Ltd had huge fixed costs and was burning through cash. Loh started calling the shots from the farm and factory floor in China and in the process learned first-hand about the shortcomings of the old-fashioned way of running a perishable goods business. The company’s archaic record-keeping system based on paper documents made it impossible to identify costly inefficiencies in its supply chain.
“The amount of disputes and the amount of food waste was staggering,” Loh said. “DiMuto came out of that, out of my own nightmare.”
Under Loh’s leadership, SunMoon Ltd exited farming to focus on its competitive advantage as an intermediary between fruit packing houses and customers. SunMoon Ltd was a major fruit importer to the South East Asia region when Loh received a new investment from Alibaba backed cold chain logistics company.
Founded in 2019, Singapore-based DiMuto isn’t the first company to apply blockchain technology to the fruit and vegetable business. Companies ranging from garage-office entrepreneurs to IT powerhouses such as IBM have launched blockchain platforms to bring greater transparency to the fruit and vegetable trade. Loh believes his understanding of the challenges of getting buy-in from all stakeholders gives DiMuto an edge over competitors.
Loh has applied many of the lessons he learned at SunMoon Ltd to his new company. DiMuto prioritizes buyers and sellers in its business model over other stakeholders such as transportation companies and customs clearance offices. Among the first actions made at DiMuto was building full traceability of its products starting at the packing houses.
DiMuto has opted for a subscription-based service, or something akin to a “Xerox” model, to lower the cost of using its platform for buyers and sellers. Loh said the prohibitively high entry costs of some blockchain services put off potential customers. The platform also takes into account the difficulties of recording data in poorer countries or remote locations with sub-standard internet connectivity such as sea cucumber farms in Papua New Guinea.
“The fisherman that comes off the boat for example, with basic knowledge of technology needs help to make this work,” Loh said of the DiMuto platform. “Online, offline, 3G, no G -- the complexity is in getting a solution that works for everyone, it requires us to get our hands dirty and be able to address the reality of all situations on the ground.”
Loh’s business model is starting to yield promising results. DiMuto is working with Asia’s biggest retailer, Indonesia’s largest pineapple exporter Great Giant Pineapple PT, and a major South African avocado exporter. The company is also working with the customs agencies of Australia and Japan.
DiMuto has now “closed the loop” in its business model by introducing a scoring system using AI where buyers and sellers on the platform are rated according to their reliability timeliness of delivery. The rating system could eventually help small farmers and other players in the fruit and vegetable business become creditworthy and interact with lenders through the platform.
Loh’s successful track record as an entrepreneur and the impact that DiMuto can bring in improving the supply chain of the perishable fruit and vegetable business caught the eye of the Yield Lab Asia Pacific. As a leading Agtech Fund, and part of the global federation of The Yield Lab Funds with over 60 Agtech investments globally, The Yield Lab Asia Pacific based in Singapore lead DiMuto’s latest Series A round.
Besides turning a profit for shareholders, Loh believes DiMuto can make a significant contribution to improving the industry’s sustainability because blockchain technology allows companies to pinpoint wastage. One-third of all food produced in the world, about 1.3 billion metric tons valued at $940 billion, is lost or wasted each year, according to the United Nations’ Food & Agriculture Organization.
The added accountability inherent in DiMuto’s platform will undoubtedly force the industry to raise its game and improve its sustainability metrics. This is a badly needed development in the perishable goods market.
“I’ve run listed companies, I’ve turned companies around, and when you don’t have the data, sometimes companies will cut off their nose to spite their face and not even know it. This is where data availability is the way forward and that will give you a competitive edge,” Loh said.
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17 Dec 2021.
Matt Craze and Oriana Aguillon, Spheric Research.