From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Sun Mar 29 2009 - 06:26:37 EST
Saudi firms in $40 mln farm investments in Africa
Sun Mar 29, 2009 10:41am GMT
* Saudi consortium eyes $40 farm investments in Africa
* Consortium eyes 70 million riyal investment in Egypt
* Expected to start investment in Sudan, Ethiopia this yr (Adds background)
RIYADH, March 29 (Reuters) - A consortium of Saudi agricultural companies is
looking to invest 150 million riyals ($40 million) into food production in
Africa, the Agriculture Ministry said on Sunday.
Food security has topped the policy agenda in the Gulf Arab region following
rampant inflation in 2008 that underscored the peninsula's dependence on
imports and forced countries to invest abroad to ensure supplies of staples
like rice and wheat.
The consortium, called Jenat, was set up to lead farm investments abroad for
a group of local companies, the ministry said in a newsletter published on
Sunday.
The firms include Tabuk Agricultural Development Co (6040.SE:
<http://af.reuters.com/stocks/quote?symbol=6040.SE> Quote) (Tadco), dairy
firm Almarai (2280.SE: <http://af.reuters.com/stocks/quote?symbol=2280.SE>
Quote), Food Products Co (2100.SE:
<http://af.reuters.com/stocks/quote?symbol=2100.SE> Quote) and Aljouf
Agricultural Development Co (6070.SE:
<http://af.reuters.com/stocks/quote?symbol=6070.SE> Quote), the newsletter
said.
Jenat has already launched a 70 million riyals project to plant barley,
wheat and livestock feed in a 10,000 hectares of farm land in Egypt, the
newsletter quoted as saying Jenat's board chairman Mohammed Al-Rajhi.
"Our future aim ... is to go to Sudan and Ethiopia," he said. Jenat plans to
invest 80 million riyals in the two countries, he added without elaborating.
"We expect to start this (Sudan and Ethiopia) project this year," Rajhi
said.
Saudi Arabia has urged companies to invest in farm projects abroad after
deciding last year to reduce wheat production by 12.5 percent per year,
abandoning a 30-year-old programme to grow its own, which achieved
self-sufficiency but depleted the desert kingdom's scarce water supplies.
The decision has forced many local agricultural companies, which has been
growing wheat for the domestic market, to explore alternatives to compensate
the resulting drop in their revenues.
State-owned Saudi Industrial Development Fund is granting financing
facilities to firms exploring agricultural investments abroad.
A food security panel, affiliated to Riyadh's Chamber of Commerce and
Industry, has identified wheat, barley, corn, soybean, maize, rice and sugar
among strategic crops that should constitute priorities for foreign
investments, a spokesman said.
Saudi investors have launched agricultural projects in Indonesia worth $1.3
billion last year, Mohamed Abdulkader al-Fadel, who chairs Saudi Arabia's
Commerce and Industry Chambers Council, said earlier this month. [nLN550794]
Tadco said earlier this month that it was "looking into joint-venture
proposals from firms abroad and mulls relocating some of its activities to
countries offering comparative incentives for investment". [nLE415228]
The world's largest oil exporter said in January it had received the first
batch of rice to be produced abroad by local investors as part of the King
Abdullah Initiative for Saudi Agricultural Investment Abroad.
(Reporting by Souhail Karam, Editing by Thomas Atkins and Rupert Winchester)
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