If there were extra points for getting your hands dirty in your pursuit of better business models, Anders Haagen would hold some major trophies.
While introducing his Danish friend and keynote speaker, Simon Lim, CEO of ZICO Asset Management conceded that though he had long admired the courage and audacity of the banker turned eco-entrepreneur — yet he’d not always been certain that his project could work.
Then again, some of the best victories come against the odds. “It is a fantastic story — it’s a personal story. Anders is not here to talk about charts and spreadsheets,” Simon said. “He’s going to talk about his passion project, and he’s got skin in the game.”
Beginning his slide show, the long-time Danish journeyman admitted it was “a little crazy” to have been in one place in Hong Kong for the past 14 months, especially with his pet project poised at a key moment.
“I’m going to do a number of pictures from these crazy things that I did after I left banking.”
From being a China-based banker for a Brazilian firm, Anders made a mighty pivot into agri-business. “That’s always been a bit of a passion of mine,” he notes. “I launched myself into agri for a number of reasons. There was the business side — and then there was getting my hands really dirty.”
In Davao, Southern Philippines, he studied natural farming technologies. Then came a period he describes as ‘mucking about’, though with scientific method to the madness. “It was self-indulgent and I had a ton of fun.”
He went to Thailand for a workshop around soil health, microbes and farming technology, then turned his hand to mushrooming, growing a massive Indian milk mushroom — before returning to his ancient Viking heritage, and brewing his own mead. “Mead is a honey-based alcoholic drink. When you distil that, you get ethanol in one of these little brewing kits you from Ali Express.” Another less easily-perfumed experiment? Bio-gas from cow manure. “I was having a great time.”
From helping set up a trademark (‘Made By Women’), to a solar experiment with a fresnel lens developed with PolyU in Hong Kong, through to a new aquaponics system using solar energy to pump water from a fish tank to vegetable beds, Anders was “fooling around with stuff that I had no idea about”.
Yet there was clearly scientific rigour too — and soon it all became part of a bigger play. Like any proud Dane, he used his online Lego skills to good effect. “I said, wait a minute — what if we put all these things together — couldn’t we make an integrated bio-farm, where these things could be put into use?”
“So you’d collect the sugar juice, you’d allow it to ferment so have an ethanol factory. You would ferment the sugar juice, which means you are effectively creating CO₂ and alcohol. The CO₂ then gets piped into a greenhouse — so vegetables with high CO₂ concentration will grow much faster. Then you would have a fish pond and cat-tail, which is a reed that thrives on bio-waste.”
“If you put these together you generate waste though the fish farming, which goes into a bio gas tank — and provides energy for the ethanol factory, plus fertiliser.” Soon he bit the hook, getting a concession on a piece of land near Davao in the Philippines — and putting it all into action.
Anders and his small team started a shrimp farm, utilising their theories around microbes. He battled to naturally combat a potentially pathogenic bio-risk; sludge at the bottom of the shrimp pond. “We used the technology I learned about in Davao to make these ‘mudballs’, effectively probiotic pills in sun-dried mud. When you throw them into the pond they sink down to the bottom and dissolve — and release microbes into the sludge at the bottom.”
“The microbes are now very happy — they start munching up all this waste cleaning the pond bottom, giving you a cleaner environment and faster turnaround for your harvest through seeding.” The bacteria floating up in bubbles? Efficient shrimp food, saving them on the feed bill as well. “It worked really well,” he reflected. “When you can decide which microbes go into the fish pond, you protect against invasion of bad agents.”
Until this point, the project was with Anders’ own money. Then came a turning point — he was introduced to the hybrid coconut by an Indian breeder. “He showed me how productive they can be,” he noted. “He runs a commercial business in India — and we set up a joint venture.”
Thanks to hybrids, those in the industry were reaping new rewards. “The magic is this — when you harvest the sugar juice from the coconut tree before the coconuts develop, you’re harvesting four times more calories from the tree. And you’re getting a more marketable product, as the diabetic-friendly sugar is more attractive than traditional coconut oil.”
Anders soon rolled the dice again. “A friend of mine came along and said, ‘If this works at 600 hectares, can it work at 10,000?’ And I said; of course it can. Then he asked, if he could raise the money, would I scale it up with him?”
In 2014, Lionheart Agrotech was formed. To fully scale up, a new slice of heaven was identified. “It’s absolutely stunning, down the south of Palawan.” In the Philippines, the indigenous concept of ownership holds that tribal land is communal property. For Lionheart, this meant dealing with legitimate representatives of the indigenous communities and public authorities rather than tens of thousands small farmers and this was one of the key aspects that made the project possible.
The arrangements allowed the company to use a gross area of 6,000 hectares of land to develop a coconut farm of 3,500 hectares. In exchange, they paid rent to the indigenous people and the government, committing to create jobs and implement social, nutritional, education and environmental programmes that would benefit host communities and the local economy.
“My vision was to harvest the sap from the trees,” says Anders. “It’s still our dream. We want to find a solution where it becomes almost like an oil field — but it’s diabetic-friendly sugar we’re harvesting.” So began Lionheart’s massive agri-business science project.
In chasing success, layers of innovation were employed. A cover crop was used to harvest nitrogen from the air, into a form where crops could uptake it, and prevent evaporation of rain water. The team actively uses fungi, with mycelium bringing further nutrients to the crop, which then gives carbon back to the mycelium.
Lionheart set about baiting and capturing local microbiome from the soil, burying bamboo containers in clean soil to act as a trap, then putting in rice as the bait. When they come out, the furry white contents provides a rich sample of soil micro-organisms. “We mix this with molasses,” he explained. “That’s our starter culture.”
After multiplying it many times by letting it ferment in clay jars, the microbiome is used to fully saturate the plantation’s soil. “It’s a very effective sort of soil health-booster and acts with the fungi, as a defence mechanism against pests and diseases. Very effective farming — no chemicals, all organic.”
While not yet at full maturity, the project has already affected the life of the area in more ways than Anders can believe. “In terms of number of people fed per hectare, when you harvest the sap and produce a coconut sugar-based product, you’re effectively feeding many times more per hectare,” he explained. “Before we came, the traditional crop, rain-fed rice, feeds only about eight to ten people per hectare. In our model we feed several hundred per hectare. It’s basically harvesting calories.”
Anders goes to pains to add that the project is not about charity. “We’re not hiring people just to give them a job — our model uses a lot of labour, mainly to harvest the trees.” In terms of man-days per hectare, the Lionheart model employs around 580, compared with between 10 and 70 man-days per hectare for corn, coconut, sugar cane, rice and oil palm. The farm has had a huge carbon effect as well, with net carbon sequestration per year at minus 28 tons of CO2 per hectare, versus minus 6 for softwood and minus 8 for Giant Bamboo.
In terms of the UN’s Sustainable Development Goals, SDG#1, to end poverty is looking on track. From the tribal community having a 65% poverty incidence when Lionheart arrived, it is currently down to 25%. Once the farm is fully developed, this is expected to be zero, with the community gaining a job delivering US$7 per day, plus social services, pensions and health insurance.
“In terms of lowering hunger (SDG#2), Lionheart harvests enough nutrition to feed 400 people per hectare.” Comparatively, sugar cane is 65 and oil palm is 100. “We use land far more efficiently,” Anders noted. “And we only need about 200 litres to make a kilo of sugar, whereas sugar cane needs 3,000 litres.”
For sustained and inclusive growth (SDG8), there has already been a clear impact. “Before I came they were to me a community with a high poverty incidence,” says Anders. “Now some are selling birthday cakes or running photography courses. There are entrepreneurs. You put a little bit of money into a community, they will flourish.”
The incidence of illegal logging and charcoal making has dropped, as has illegal poaching. “Part of the appeal is we have this very high labour component — we draw people away from the protected area. Believe me, wildlife poaching and illegal logging is not a job you want. They love the opportunity to get a proper job — and this has built what we call an ‘economic fence’ to protect the biodiversity and the natural asset there.”
In terms of products, Lionheart is producing coconut syrup and coconut sugar, natural diabetic-friendly sweeteners obtained by evaporating water from the sap, then either consumed directly or served as an ingredient. Coconut vinegar is a staple in Southeast Asia and gaining interest from Western markets. Coconut aminos are a liquid condiment made from coconut sap and salt that can be applied as an alternative to soy sauce. These are proving popular in the United States, as they contain no GMOs and have a lower sodium content than traditional soy sauce: “They’re going completely gaga about this in on the West Coast in the United States,” says Anders.
In the planning stage: an instant coconut tablet — like an Alka-Seltzer or effervescent vitamin. “If you can imagine, you buy a sleeve of these in Los Angeles and pop it in your water after your yoga session. I think that’s a wonderful product. Very low footprint because you’re not transporting water — just the actual solids.”
Of course, there will also be personal frustrations about such a project.
“When I was not answering to anybody else, I had a wonderful time — when we got the initial 12 million dollars in from the investors, things changed a bit. Now I was responsible for other people’s money. It just adds a layer of stress: which I was either too vain to turn down, or I thought that this impact was more important than my stress levels.”
Likewise, he is in a notoriously tough place to do business. It was not uncommon to encounter people, typically from outside the area, who acted in a self-interested way that stood counter to the aims of the project. “It added a certain amount of cynicism to my outlook, I have to confess. So that’s the sacrifice.”
As to whether it’s all worth it, time will tell. But Anders already feels pride in how the project delivers in terms of return-on-investment (ROI).
“If we have to be a little philosophical here, what is good capitalism? I keep saying this and I’ll say it again — we are not ‘good people’, it’s baked into the project. But I just want to leave you with this. In traditional coconut farming, the average farmer today earns US$500 dollars per year per hectare of coconuts. If you are growing hybrids, they typically yield three times more so that’s what we did of course. We found those hybrids in Palawan.”
“Then if you irrigate, you can put four times more trees per hectare — and that’s really the secret behind our land use efficiency. So now we are 12 times better than the traditional coconut farmer.” Anders doesn’t stop there. “But wait a minute — if I harvest the sugar juice rather than wait for the coconuts to develop, I earn US$37,500 per hectare. So I think that’s pretty respectful to capital.”
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
ZICO Asset Management is proud sponsor of The Good Campfire Project, a platform where thought leaders, practitioners in finance, and business leaders come together to discover how to bring about a better world through our influence with capital deployment. We run our Campfires as a safe space where hosts, storytellers and the like-minded guests journey in shared experiences and knowledge in the hope of creating something Good.
We hope you’ve enjoyed the latest addition of our new content series. If you like to find out more about The Good Campfire Project, email to Jovel Ong at jovel.ong@zicoholdings.com.
