RIYADH: A new report by the Arab-Brazilian Chamber of Commerce (ABCC) revealed several opportunities for Saudi investors looking to break into the Brazilian market by investing in key sectors.
The report identified four core industries that the Kingdom had previously invested in: Rubber and plastic manufacturing, food storage and other transport activities, chemical and machinery manufacturing, and vehicle manufacturing.
Rachel Andalaft, CEO of research and consultancy firm Mangifera Analytics, told Arab News that Saudi Arabia has traditionally seen Brazil as a “possible gateway to the rest of Latin America.”
“Brazil’s increased opportunities have opened the door for Saudi Arabians to invest in diverse Brazilian markets — not only in ongoing food markets but also oil and gas,” she said.
The Kingdom imports several food products from Brazil, mostly in the form of meat and coffee. Saudi Arabia was the premier Arab importer of poultry from Brazil in January, with 35,800 tons of poultry shipped to the Kingdom.
Also, in February of this year, the Saudi Agricultural and Livestock Investment Co., a joint-stock company owned by the sovereign wealth fund the Public Investment Fund (PIF), 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.
Additionally, Andalaft stated that the PIF would be putting funds forward to be used in Ferrograo, a crucial railroad for Brazil. “This will go from Mato Grosso to Pará, spanning about 1,000 kilometers at an estimated cost of over $3 billion,” she said.
According to Andalaft, trade relations show great potential for growth given the productive complementarities between the two countries, particularly in Brazil’s emergent renewable energy market.
“Typical market opportunities are earmarked for double-digit returns, reaching beyond an 18-percent return on investment for those investors able to create smart financing structures,” she said of the opportunities in the wind and solar energy sector in Brazil.
Arab-Brazilian trade relations are expected to retain a strong growth trajectory in the future, particularly after the ABCC announced plans in February to set up an international office in the Saudi capital of Riyadh to capitalize on trade between the two countries.