LAUREN ONG Today Online 30 May 19;
SINGAPORE — Egg producer Chew's Agriculture has taken up a 10-year, S$27 million loan by DBS, but it must meet strict standards and use the money to build and maintain cage-free facilities that will allow its chickens to live humanely and cruelty-free.
This is the first sustainability-linked loan to be granted to a small- or medium-sized enterprise in Singapore, the bank said on Wednesday (May 29). The loan was evaluated based on a series of environmental, social and governance performance metrics, it added.
Chew’s Agriculture, located at Murai Farmway near Lim Chu Kang, supplies 500,000 eggs a day, with 95 per cent distributed in Singapore.
With this loan, it can start its plans to build a new farm on Neo Tiew Road off Lim Chu Kang and equip it with bigger cage-free amenities.
This means larger litter areas and elevated perches, allowing the hens to be kept in the most optimum conditions as they lay eggs.
Apart from making the best of limited land space, the farm’s multi-tier infrastructure will also allow for an automated collection of eggs with its new technologies, which will be a more efficient alternative to the traditional system of collection by hand.
The new facility is expected to be completed in the third quarter of this year, DBS said.
Mr Edvin Lim, 28, director of Chew’s Agriculture, told TODAY that the new farm will be gearing up to increase its cage-free egg production by 200 per cent.
The loan offers businesses lower interest rates, but this is provided they meet the standards set by American non-profit organisation Humane Farm Animal Care (HFAC).
To get the HFAC certification, some of the criteria include providing livestock with wholesome and nutritious feed, having a suitable environmental design, and there must be caring and responsible planning and management of livestock.
The farm will also need to have “skilled, knowledgeable and conscientious animal care, factors which contribute to more nutritious eggs”.
Chew’s Agriculture received the certification in March.
Its cage-free eggs, priced at S$3.20 for six eggs on online grocer Redmart, make up 10 per cent of the company’s total egg production, but only 5 per cent is sold.
When asked why the company is pushing on to raise its cage-free egg production despite lukewarm demand, Mr Lim said that the company is willing to take on the challenge. Seeing European markets having success with cage-free eggs gives him the confidence, and he could possibly learn from and model after overseas companies.
Mr Lim recognises that eggs are an economical and nutritious staple in most diets and that consumers today are increasingly health- and eco-conscious.
“As a result, the demand for nutritious eggs produced in the right environment has become even more important. By providing products that are responsibly produced and ethically farmed, we can ensure that our business keeps up with the expectations of our diverse customer base,” he added.
Mr Lim said that attaining the HFAC certification has allowed the company to work with international brands and restaurants based in Singapore, opening up the market for its cage-free eggs.
To him, “it is a win-win solution that definitely sets a new benchmark for how we run our business”.
DBS said that businesses using the loan will be evaluated based on an annual sustainability review report, which will be typically assessed by an external independent party. This tracks the performance of the business in terms of governance, environmental and social criteria.
When the borrower meets or exceeds pre-determined environmental, social and governance targets, the interest rate will be reduced.
Ms Joyce Tee, head of SME banking at DBS, said that Chew’s Agriculture is paving the way for SMEs to integrate sustainable business practices into their daily operations.
The bank projects that sustainability-linked financing will grow in the SME sector, particularly since such financing options encourage and reward companies to realise their sustainable capacities.
“We are so encouraged that companies such as Chew’s are building businesses that will leave a lasting impact for the future,” Ms Tee said.
