Why anticipating the European economy has brought enormous benefits to iPlant: South Africa as a location.
LIVE tour of the current 20 hectare Giga-Farm in Paarl, South Africa
19. October 2022
The future lies in our past
Years ago, the founders of this project were already aware that economic conditions do
not remain in the status quo for infinity. The world is in a state of flux and so, in
concrete terms, is the situation in Europe. Possible economic complications were taken
into account and the risk of a single production site was conscious.
It did not take long until the decision was made to explore other markets early, to
localize and to build up further locations in order to minimize the entrepreneurial risk.
iPlant Global not only bet on the right horse, but can now flourish and expand
massively due to this diversification. According to the company, it also intends to
prepare for such situations in the future and to explore further solutions for foreseeable
phases in the future.
Energy crisis, war and price increases in Europe
Due to the Russia-Ukraine conflict and in connection with it the massively rising energy
prices, a price increase of 85% is also expected in Switzerland for electricity from
official sources. Electricity accounts for up to 50% of the costs in the cultivation of
CBD. It is therefore the most decisive factor in the economic cultivation of cannabis
plants. Due to the aggravated situation, certain CBD growers and large companies are
starting to sell their CBD just above or even below the production price in order to
remain liquid. Thanks to our strong network, we are able to maintain a relatively strong
purchase price of over one euro per gram, but the first companies are pushing prices
down to 0.60 cents per gram. According to an estimate by experts, this could cause up
to 50% of the cannabis companies that have been producing so far to go bankrupt or
experience major economic difficulties. We do not wish this for the market, however
iPlant Global could take precautionary measures for exactly such a scenario and
already develop solid, strong solutions for customers and business partners for this.
Precaution provides momentum & growth phase
At the end of the day, no one could have known that war would arrive with such
specific consequences for energy prices. Nevertheless, in a rapidly changing time like
today, the company thought ahead and took steps to build a facility in a separate, more
independent territory: South Africa. It became increasingly clear that the risk could be
minimized by spreading out the locations - not just in the sense of multiple sites in
Switzerland, but in the sense of global distribution - multiple continents, different
markets, autonomous economic regions. Due to its history, South Africa is an
economically very independent country with its own supply chains and raw materials
industry. The relatively small location in Switzerland as well as all people operating
there will continue in the future, but iPlant Global is now optimally positioned for the
next steps with medical cannabis
The positive consequences & effects of this location development in South Africa for iPlant Global's clientele
- Greater security due to higher economic independence in South Africa.
- Comparatively low costs for electricity or materials but locally overpaid workforce with massive motivation for the project
- Considered complications like power outages or rising prices solved thanks to solar power and long sunlight
- Client can jump on future trend as company will work with medical cannabis
- 28 soccer fields area, huge expansion is ready to go
