USA – Vertical farming business, AeroFarms has emerged from bankruptcy and appointed Molly Montgomery as acting new CEO, along with several other leadership reshuffles to drive profitability.
The New Jersey-headquartered company announced that it has successfully completed the Chapter 11 bankruptcy process, which it entered in June.
It has also obtained approval from the bankruptcy court in Delaware for an “asset purchase agreement” with its existing investors, Grosvenor Food & AgTech and Doha Venture Capital.
AeroFarms, during the Chapter 11 proceedings in June, noted that it had faced significant industry and capital market challenges.
“The company has eliminated spending on all projects that do not contribute to the ramp-up of the Danville Farm, thereby accelerating its path to profitability,” outlined the company statement.
The newly appointed CEO, Molly Montgomery is a partner at Grosvenor Food & AgTech, an agri-food investor that specializes in the US and UK markets and will also serve as executive chair of AeroFarms’ board of directors.
Montgomery replaces David Rosenberg, who co-founded AeroFarms in 2004 with his business partner Edward Harwood, to assume the position of advisor to the company’s board.
Meanwhile, the finance chief, Guy Blanchard, also assumed the additional role of president.
As part of the restructuring process, the company has eliminated spending on all projects that do not contribute to the ramp-up of the Danville Farm, thereby accelerating its path to profitability.
“This restructuring substantially strengthens AeroFarms’ balance sheet, injecting the necessary funds to achieve profitability at the flagship operation in Danville, Virginia,” the company said in an issued statement.
In another forecast report by Spherical Insights, the global vertical farming market is projected to reach USD 26.37 billion by 2030, with a compound annual growth rate (CAGR) of 24.42% from 2022 to 2030.
According to the forecast the vertical farming market heavily relies on several factors to operate like climate control technology which requires less water and energy for irrigation.
The report further outlines that vertical farming is an expensive venture because setting up a vertical farming infrastructure requires significant capital expenditures, as well as high operating costs.
Most of the operational costs of the system are directed towards controlling the environment within the buildings.
For instance, AeroFarms which occupies 70,000 square feet, had an estimated building cost of USD 39 million which is significantly higher than an acre of farmland production which costs less than USD 8000, reports Bayer.
Factors such as temperature, lighting, pollination, and plant arrangement are critical components of successful vertical farming whose costs are substantial thus limiting profitability in the sector.
For all the latest fresh produce industry news updates from Africa, Middle East and the World, subscribe to our NEWSLETTER, follow us on Twitter and LinkedIn, like us on Facebook and subscribe to our YouTube channel.
