Analysis Agriculture Down on the farm, Saudi Arabia has a $9.8bn hole to fill By Neil Halligan November 28, 2024, 3:36 PM Reuters/Faisal Al Nasser A farmer in Al Kharj, Saudi Arabia. The agriculture sector was worth $29bn in 2023 Agriculture needs foreign investors 80% of Saudi food is imported Self-sufficiency is ultimate aim The Saudi government is stepping up efforts to attract investors to its agriculture sector after identifying a funding gap of SAR37 billion ($9.8 billion). The Ministry of Environment, Water and Agriculture says there are investment opportunities in plant and animal production, as well as fisheries, processing, manufacture of agricultural products and infrastructure development. Saudi Arabia imports 80 percent of its food at the moment, but is working to increase domestic production as part of its Vision 2030 plans for food security. Farming contributed about SAR109 billion to Saudi Arabia's economy in 2023 – up from just under SAR100 billion a year earlier. This was the sector's highest contribution so far, agriculture minister Abdulrahman Alfadley told a trade fair last month. Foreign investors are a core component of the strategy to increase that figure, says Malachy Mitchell, co-founder of agribusiness consultancy Farrelly Mitchell. “There's really enormous effort in terms of government policy, by way of incentives, soft loans through the Agricultural Development Fund and also to attract foreign direct investment." The country's Public Investment Fund is heavily involved too, as a catalyst and as an investor through its subsidiary Saudi Agricultural and Livestock Investment (Salic). Saudi Arabia has become a more attractive place to invest now that 100 percent foreign ownership is permitted in a lot of sectors, according to Mitchell. Private equity funds are looking at opportunities, “particularly businesses that are cash flow positive and established and have good strong growth characteristics”. Saudi Arabia’s food factory count rises to 1,300 Martin Keulertz: The time is right for the GCC to stockpile grain Neom aquaculture venture seeks fish self-sufficiency Saudi companies want to partner with international businesses that have the expertise and the market reach to help them develop "the local food chain”. Mitchell says: “There is a genuine drive and determination towards improving localisation and to get to self-sufficiency. It's not just an objective.” Ibrahim Malas, senior business development manager at Elite Agro Holding in Abu Dhabi, points out that some farm businesses are still recovering from the hit they took in 2018, when they were banned from growing alfalfa – used to feed cattle – because the process consumes so much water. Nadec, Almarai and Al Safi all closed massive farms, which led to smaller farms trying to fill the void by supplying the big dairies. Like other countries in the region, Saudi Arabia looked to buy land overseas and grow alfalfa for import. This has not proved trouble-free, though. An Almarai subsidiary in Arizona faces a lawsuit over the amount of water it is using. Improving water management is one of the areas being studied at Estidama, the national agricultural research centre set up in 2019. The centre's research is also helping farmers to increase crop yields, says Yoshihide Wada, a professor at King Abdullah University of Science and Technology and an expert in global hydrology and food security. Changes in Saudi eating habits are having an impact on food producers too. Restaurants “are increasingly focusing on healthy foods and higher-quality agricultural commodities", Wada says. Perhaps even more surprising, “10 percent of the Saudi population is now considered as vegetarian/vegan" –a big shift from the traditional "meat-oriented culture". On the road to self-sufficiency Saudi potato production has increased sharply in recent years. It now has a "self-sufficiency rate" of 86 percent, says the agriculture ministry. Aquaculture production jumped by 183 percent over the past five years, from 30,000 tonnes to 85,000 tonnes, according to government figures. Malas says farming giant Almarai is being encouraged to move into aquaculture because the agriculture minister "knows that Almarai will systemise it, and they can make it sustainable like they've done with the poultry industry”. Broiler chicken production now meets 60 percent of domestic demand. Controlled-environment agriculture – which Malas describes as "flavour of the month" for investors, though costly – has increased by 58 percent over the past five years, from 257,000 tonnes to around 407,000 tonnes. Organic food farming increased by 18 percent to 52,800 tonnes in the same period. The poultry market – supported by the arrival of Brazilian producers BRF and JBS – is about 70 percent self-sufficient. It is projected to reach $17.3 billion in 2024.
Aviation PIF acquires 15% stake in London’s Heathrow airport Saudi Arabia’s Public Investment Fund (PIF) has acquired a 15 percent stake in FGP TopCo, the holding company of Heathrow Airport Holdings. The stake was purchased from Spanish infrastructure giant Ferrovial and other FGP TopCo shareholders. Simultaneously, Ardian, a Paris-headquartered private equity fund, has acquired 22.6 percent of FGP TopCo from the same shareholders through a […] 4 hours ago
Economy Jordan to get $131m under IMF’s finance programme Jordan will receive $131 million from the International Monetary Fund (IMF) under its $1.2 billion extended fund facility programme. The four-year programme, approved in January 2024, remains on track, the IMF said in a statement following the completion of a second review. Jordan’s economy continues to grow amid low inflation, the fund said, adding that […] 4 hours ago
Sustainability UAE to get first lithium battery recycling plant The UAE’s first lithium battery recycling plant will become fully operational by Q2 2027. The facility, a collaboration with state-backed Kezad Group and Witthal Gulf Industries, a unit of Singapore-based Witthal Group of Companies, will have the capacity to recycle 5,000 tonnes of battery waste annually by 2027. The plant is expected to save an […] 3 hours ago
Construction Trump Towers proposed for Saudi and UAE capitals The Trump Organization intends to build Trump Towers in Riyadh and Abu Dhabi, marking its expansion across the Gulf region. The projects will be developed in partnership with Dar Global, the global development arm of Saudi-listed Dar Al Arkan, Eric Trump, the US president-elect’s son, told Reuters. The Abu Dhabi project is scheduled for launch next year, he said. Ziad El […] 3 hours ago