Trade

Brazil’s JBS to open Saudi food factory as trade ties deepen

July 25, 2024, 5:57 AM

A cattle drive in the Pantanal region. Meat is a major component of Brazil's trade with Saudi Arabia

Saudi ministers touring Brazil
Meat producer plans $133m factory
PIF investing $15bn in Brazil

Brazilian multinational JBS is to open a food factory in Saudi Arabia with an investment of SAR500 million ($133 million), in a further sign of the strengthening ties between the two countries.

JBS, one of the largest meat and poultry producers in the world, will open the facility in Jeddah under its subsidiary Seara by the end of the year, it said.

The announcement came during a visit to Brazil by Saudi Arabia’s minister of industry and mineral resources Bandar Ibrahim Alkhorayef and vice minister for mining affairs Khalid Saleh Al Mudaifer.

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The two have been in the country since Monday and will remain until July 30. Their trip includes meetings in São Paulo, Brasília and Rio de Janeiro, as they explore investment opportunities in the mineral and industrial sectors.

Key meetings have been planned with the Brazilian Mining Association, mining company Vale, Minerva Foods, JBS and food producer BRF, among others.

Last month Saudi Arabia held the inaugural edition of the Latin American Future Investment Initiative in Rio de Janeiro.

At the event, Brazil’s energy minister Alexandre Silveira told reporters that Saudi Arabia’s sovereign wealth fund PIF plans to invest around $15 billion in the country, in sectors such as green hydrogen, infrastructure and renewable energy.

Trade between Saudi Arabia and Brazil, both members of the G20, is dominated by meat and energy.

Exports from Brazil to Saudi Arabia reached a 10-year high in 2023, with foodstuffs accounting for around 90 percent of the $3.2 billion total. The kingdom is the 11th-largest destination in the world for Brazilian agricultural products, according to the government in Brazil.

Brazil is Saudi Arabia’s largest trading partner in South America, with total bilateral trade in 2023 hitting around $6.7 billion.

During his visit this week, Alkhorayef also invited companies from Brazil to attend the International Mining and Resources Conference, which is to be held in Riyadh in January 2025, with a view to investing in the kingdom’s minerals sector.

Under Vision 2030, Saudi Arabia has made mining a priority industry for growth. The government estimates the country’s untapped mineral wealth at $2.5 trillion, based on exploration of 30 percent of its mineral region.

Saudi Arabia-Brazil trade highlights

Manara Minerals, a joint venture between the Saudi Arabian Mining Co (Maaden) and PIF, completed a $2.5 billion deal in May to acquire a stake in a subsidiary of Brazilian mining company Vale.

Saudi Arabia is in “early engagement” with Brazilian planemaker Embraer to replace its fleet of military transport aircraft. Embraer is touting its C-390 Millennium to replace Riyadh’s Lockheed Martin C-130 Hercules aircraft.

Saudi Agricultural and Livestock Investment Company, known as Salic, a PIF subsidiary, acquired a 10.7 percent stake in the Brazilian food processor BRF for SAR1.27 billion in July 2023.

Brazilian civil construction company OEC said last year that it plans to set up a regional headquarters in Saudi Arabia. Brazil venture capital firm Light Capital also signed an agreement with the Ministry of Investment to set up a base from which it will explore payment systems in the Middle East.

A consortium of Saudi Arabia’s PIF and Patria Investments, a large alternative-asset manager in Latin America, was awarded a 30-year concession for the capacity extension and operation of a new toll road project in Parana, Brazil.