Qatar food giant mulls $1.5bn Egypt dairy farming project

Baladna

• Baladna and Suez Authority explore deal
• Proposal includes 20,000 dairy cows
• Project supports food security drive

The largest dairy food producer in Qatar is exploring plans to invest up to $1.5 billion in a farming project in Egypt.

Baladna, which is listed on the Qatar Stock Exchange, and the Suez Canal Authority have signed a memorandum of cooperation for the proposed development in Egypt’s south-west region.

The farm would have 20,000 dairy cows, capable of producing 300 million litres of milk a year, the Qatari company said in a stock market filing.

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Baladna is also looking to cultivate 113,000 hectares (440 square miles) to meet the project’s requirements for feed, and to provide agricultural products for local consumption and export.

The prime minister of Egypt, Mostafa Madbouly, said the memorandum of cooperation was part of “extensive efforts” to strengthen economic relations between his country and Qatar. 

He said the project would support Egypt’s food security efforts as well as generating job opportunities and reducing the cost of food imports using foreign currency. 

The PM directed ministers to facilitate “the necessary procedures” to bring the project to fruition, adding that it had the government’s “unwavering support”.

Ramez Al Khayyat, managing director of Baladna, said: “We stand fully prepared to invest in this project. Our collective aim is to establish this fundamental pillar that significantly contributes to the growth of the agricultural sector and the enhancement of global food security.”

Egypt has long struggled to attract foreign investors. In July it introduced a new investment law, after announcing its intention to sell a raft of state assets to private investors in order to raise $40 billion over the next four years.

Foreign investor sentiment remains lukewarm, however. Last month, the rating agency Capital Intelligence downgraded Egypt’s long-term sovereign debt rating, saying delays in implementing structural reforms are stymying foreign direct investment.  

According to the International Fund for Agricultural Development, the farming sector accounts for 11 percent of Egypt’s GDP and employs more than one in four people.

However, recent periods of drought and water scarcity have affected agricultural productivity and food security. 

The Food and Agriculture Organisation of the United Nations said cattle and buffaloes make up about 23 percent of total agricultural value, at EGP73.5 billion ($2.4 billion). Two thirds of this is meat production and one third is milk production. 

Baladna reported revenue of QR773 million ($212 million) in the first three quarters of 2023, a rise of 9 percent, and net profit of QR65 million, up 16 percent. The business, established in 2014, is Qatar’s largest dairy and beverage producer. It supplies more than 85 percent of the country’s fresh milk.

It has more than 25,000 Holstein cows at its 240-hectare operation north of Doha. The company also produces yoghurt, laban, cheese and cream, as well as fruit juices, meat and organic fertilisers.