As Southeast Asia continues to reap the benefits of the ongoing US-China trade disputes, one major industry seeing the upside is the agri-food trade.
However, there is general consensus from the farming industry that the industry needs an overhaul in the region and most likely, the rest of the world. One such area of improvement that is widely discussed in achieving supply chain traceability using big data and technologies such as blockchain.
With this in mind, we spoke to Gary Loh, founder and Chairman of DiMuto Pte Ltd, a technology firm that uses blockchain to provide end-to-end supply chain visibility to ensure traceability and trackability of business documents, goods and services. This includes food produce and supposedly reduce food wastage through inefficiency. According to the brand apparently US$110 billion is lost from food safety breaches each year, as discovered by a 2018 World Bank study.
Fresh off their latest funding from SGInnovate, Gary was kind enough to share his thoughts on the evolving industry and the role of Southeast Asia here.
Congratulations on the recent funding. How do you plan to use that funding and is any of the investment earmarked for further expansion in the region?
Yes, we will be working hard to grow the numbers of packers on the DiMuto platform, both in existing markets including Southeast Asia and new markets like Latin America and Europe.
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What was the genesis of this idea?
DiMuto is a trade solutions platform that is “Created By trade, For Trade”. Prior to founding DiMuto, Gary was the CEO of a global fruits and vegetables marketer and distributor for ten years. Experiencing many pain points while managing the supply chain and conducting international trade deals, he combined his understanding of the agri industry with over fifteen years of expertise in Banking & Finance, to create an integrated and effective solution for common problems faced in the business.
Why focus on supply chain visibility in the food industry?
Many of the challenges of the global agri-food trade are due to a lack of visible data. A perennial problem in the industry is trade disputes over product quality. Buyers would often raise trade disputes over poor products quality, and suppliers, packers and traders often face heavy burden of proof trying to show that they have indeed packed and sold quality produce according to specifications. The lengthy trade dispute resolution process means cash flow issues and reduced margins for a lot of suppliers.
How does blockchain technology feature in the entire process? Could you provide us with an overview?
We help agrifood players to digitalise their supply chain. We first digitalise physical produce with DiMuto QR and create these digital assets using our proprietary IoT device, DACky (Digital Asset Creation). Our DACky devices capture a photo of each carton of produce and associate the digital identities of these cartons to trade information like purchase orders, shipping documents, product certificates on our blockchain-powered DiMuto platform.
Our customers are then able to share relevant trade information with trade parties so that everyone involved in the trade has visibility of not just the documents for each trade, but the products as well.
At DiMuto, we place a huge emphasis successful application of our technology. Thus, while the technology is exciting, we work hard to make sure how and where we use blockchain would make sense for our customers in the trade.
Food waste and loss is a major issue in the region and the world. How has the industry tried to solve these issues before? Could you share how DiMuto’s technology helps prevent or solve this issue?
About one third of food grown around the world is wasted every year. A large part of the problem is due to the lack of supply chain visibility that makes it difficult to find the right markets for the right products.
For instance, if growers and packers cannot find a market for their product specifications, these products are actually thrown away and contribute to food wastage. Through our technology, we can determine that the produce are safe and able to meet the specifications of potential buyers, and help to move the produce to the right markets.
In this sense, DiMuto is tackling food waste right from the source compared to initiatives further down the food supply chain such as “ugly” produce – since most “ugly” produce are sold to food services in the first place.
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In terms of education and infrastructure in your industry, how does Southeast Asia fair against the rest of the world?
The produce industry in Southeast Asia is very fragmented. Coupled with relatively lower standards of education, there is a lot of complexity in the trade around the region. This is in contrast to Western markets that have large produce associations focusing on keeping up with the latest agri-tech and consumer trends. We think that there is a lot of growth potential in Southeast Asia, especially due to the region’s steady economic and population growth. That’s why we also have presence in markets such as Thailand, Malaysia, and Indonesia besides Singapore to capture data for the growing produce trade in these countries.
What has been your greatest challenge so far in building the business?
A key challenge that we have been facing is being able to let people know about the good things that DiMuto is doing, and how we have successfully applied blockchain in the industry. That’s why we are honoured to be part of the SGInnovate portfolio, and their support is invaluable in helping DiMuto expand our reach.
What’s next for DiMuto?
We will be focusing on using the data visibility we have created for each trade on our platform to provide financial services such as trade financing and insurance on a much larger scale – We have previously helped to finance over US$2million worth of fresh durians moving from Thailand to China, and will be looking to help new and existing customers finance their DiMuto-verified trades.