Riyadh: Saudi Arabia is accelerating its expansion into the global food industry with a pact to buy shares of BRF SA, Brazil’s biggest poultry producer.
It’s the latest in a series of recent moves by Saudi Arabia to secure food supplies, diversify its economy and reduce its reliance on oil - all pillars of Crown Prince Mohammed Bin Salman’s Vision 2030 strategic plan. The kingdom has ramped up its push into agriculture after the pandemic and Russia’s attack on Ukraine sent food prices to a record, upended trade flows and laid bare the fragility of the world’s supply chains.
State-owned Saudi Agricultural and Livestock Investment Co., known as Salic, and Brazil’s Marfrig Global Foods SA agreed to purchase as much as $890 million in new BRF shares. The transaction will give Salic a stake of between 10 per cent and 15 per cent.
“Saudi Arabia has been BRF’s largest chicken importer in recent years, accounting by around 7 per cent its total sales,” Leandro Fontanesi, an analyst at Bradesco BBI, said Wednesday in a report.
Saudi Arabia, which sources most of its food from abroad, has embarked on an agricultural deal spree in recent years after Salic purchased a majority stake in the former Canadian Wheat Board in 2015.
In December, Salic bought a $1.24 billion stake in Singapore-based agricultural trader Olam Agri Holdings. A month earlier, the Saudi firm agreed to buy a 9.2 per cent stake in Indian rice producer LT Foods Ltd. Salic has also partnered with Brazilian meatpacker Minerva SA to acquire slaughterhouses and a lamb processor in Australia after buying farmland there.
