RIYADH: A Saudi agriculture investment firm is to expand into Australia through a partnership deal with a Brazilian livestock company.
The Saudi Agricultural and Livestock Investment Co. (SALIC), a joint stock company owned by the Public Investment Fund, has entered into an agreement with Brazil’s Minerva Foods to acquire assets in Australia and set up a joint venture for the processing and export of beef and lamb produce.
“The company believes that Australia uniquely complements our operations in South America, maximizing sales opportunities and operating synergies, reducing risks and contributing to our strategy of consolidation in the animal protein export market,” Minerva Foods said in a statement.
In a second agreement, Minerva will supply its products to SALIC for distribution in the Middle East and Asia.
In a statement, Minerva said the tie-up would strengthen its exposure in those regions, adding that the Middle East and Asia accounted for around 55 percent of its beef exports in the first nine months of last year. SALIC may purchase as much as 25,000 tons of Minerva’s products a year, the meat packer said.
In September, SALIC announced it was increasing its stake in Minerva from 25.5 percent to 33.83 percent. In a statement at the time, SALIC said: “Minerva Foods is one of the largest meat production companies in South America and the second-largest exporter in Brazil as it produces more than 1 million tons of meat annually.
“Minerva Foods mainly serves the demands of foreign markets and during this year, it has already exported 750,000 tons of red meat to more than 100 countries around the globe.”
Minerva was founded in 1992 and operates 25 slaughterhouses and three processing plants in South America, with revenues amounting to 19 billion Brazilian reals ($3.54 billion) during the 12 months ending June 30, 2020.
SALIC first bought into the Minerva business in 2015 when it acquitted a 19.95 percent stake. Established in 2012, SALIC has been operating in the agricultural and livestock investment sector and its strategic goal is to secure imports for essential food commodities, as part of the Kingdom’s food security strategy.
According to SALIC, Saudi Arabia annually consumes 550,000 tons of red meat, of which 70 percent is imported.