Saudis invest $70m in Danish bioprotein firm

Reuters/Dan Peled

• Saudi Industrial Investment Group to buy 24% of Unibio International
• Unibio creates protein-rich animal feed using natural gas
• Home-grown feed is crucial for Saudi livestock industry

Saudi Industrial Investment Group is investing $70 million in Unibio International, a bioprotein production technology firm in Denmark, to help increase food security in the kingdom.

SIIG told shareholders that it has signed an agreement to buy 24 percent of the company.

The investment will be in two phases: a 9.9 percent stake is to be acquired while awaiting approval from the Danish government before they make the remaining payment.

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A filing to the Saudi Stock Exchange reveals that SIIG and Unibio International are also considering developing a project in Saudi Arabia to produce bioprotein, a protein-rich animal feed made using dry gas (natural gas with a higher proportion of methane), to meet the “growing local and global demand”.

Experts say developing home-grown feed is crucial to improving the sustainability of the livestock industry in Saudi Arabia.

SIIG said the investment is part of its strategy to enter new sectors based on sustainability and technology. 

The global sustainable animal feed market was valued at $10.6 billion in 2021 and is expected to reach $58 billion by 2030.

In a research note, Najeeb Alhumaid, Saudi Arabia partner at Farrelly & Mitchell, an international food and agriculture business management consultancy firm, said feed and water are major constraints to livestock production within the kingdom. 

Saudi Arabia has a well established dairy sector and the largest producer in the country, Almarai, produces over a billion litres of milk every year. 

“However, the downside of this developed sector is that all feed must be imported, some from the other side of the world,” Alhumaid said.

“Developing home-grown feed is crucial to improving the sustainability of livestock and sustainable protein production within Saudi Arabia.”

He added: “Rising food prices, global geopolitics and environmental pressures are increasing the urgency of sustainable protein production systems for Saudi Arabia.”

Enhancing food security

In October Unibio International announced that its strategic licensing partner, Gulf Biotech, was progressing with the construction of the first single-cell protein plant in Qatar. 

Qatar is rich in natural gas resources but has little or no farmland or the ability to produce protein for its population or the surrounding region. 

Unibio said that by using its technology to produce protein locally, it will leverage the country’s abundant resources to directly enhance food security.

Food security is a pressing issue in the GCC. Saudi Arabia is investing heavily in new ways of food production for its expanding population. The kingdom is reliant on imports to meet up to 75 percent of its consumption needs.

In January the Public Investment Fund signed a joint venture agreement with AeroFarms, a US sustainable agriculture company, to build and operate indoor vertical farms across the Middle East and North Africa through a newly established company in Riyadh.

The partnership aims to enable sustainable, local sourcing of high-quality crops all year round, and the first farm in Saudi Arabia will have an annual production capacity of up to 1.1 million kilograms of agricultural crops.