UAE eyes investment in Chinese agriculture sector

Emirates 24/7 | 12 Mar 2011   


By VM Sathish

The UAE and other Gulf states in collaboration with Singapore companies are entering the Chinese agriculture market to ensure food security, said a senior official of International Enterprises (IE) Singapore - a government body promoting trade and investment.

Designed to enhance food security and safety for Singapore and China. IE Singapore, with 35 offices around the world, is a government body promoting trade and investment in the tiny country. In order to ensure future food security, Singapore companies have purchased huge areas of land in China to produce food products.

Speaking to this website, Dean Tan, Director, Dubai, Middle East Africa Group, IE Singapore (International Enterprise) said: "Singapore has been diversifying the sources of food supply and the Gulf countries are keen to learn from our experience. Singapore government has been involved in the development of Jilin Food Zone in the northern part of China. It is developed through private public partnership and Singapore government has been actively involved in this project. The output from the Chinese food zone goes for domestic consumption in China and for export," Dean said, adding that the Middle East sovereign wealth funds and family-owned businesses could partner with Singapore entities in these projects.

The Abu Dhabi Investment Authority and Singapore Sovereign Wealth Fund have worked out common projects, he said.

"Some of the family conglomerates in the UAE, like Al Futtaim Group, have shown interest to use our expertise and connections to enter the Chinese agricultural market. The recent UAE-Singapore joint forum held in Abu Dhabi in January and the forum held in China in 2010 focused, among other things, on these agro projects," Dean said. Al Futtaim Group, which handles the Carrefour chain of hypermarkets and supermarkets, is having interest in the farmland in other Asian countries like Pakistan.

The China Jilin Modern Agricultural Food Zone, the Singaporean-Chinese joint venture, is located on the North-Eastern region of China and north of Beijing. It covers 1,450 square kilometers - an area roughly 200 times larger than the size of Singapore's indigenous farm land. Singapore has allocated a little more than one per cent of the country's 710 square kilometers of land to agriculture. Due to urbanization, the current 7.34 square kilometers of farmland is expected to shrink further, even though local production is already limited to chickens, eggs, fish and vegetables. The Super Farm project, estimated to cost $ 18.4 billion (110 billion Yuan) will produce meat products like beef, dairy products, rice, corn and grapes.

Singapore which currently sources its food products from neighboring countries like Malaysia and Indonesia has started sourcing food from Brazil and other Latin American countries. The output from the Jilin Food Zone is planned to be exported to heavily populated cities adjacent to the Super Farm - Shanghai, Beijing and Seoul. The Jilin province has fertile soil, water and long sun light making it suitable for producing corps like corn, wheat, rice, barley, oats, rye, soyabeans, organic fruits and vegetables, blueberries, flowers and ginseng.

Dean said the UAE investors, who are not familiar with the Chinese language or culture, can utilise the Singapore experience in the Chinese market. "We have gone through the learning process in China and the GCC investors can utilise our expertise to enter China. Asian countries, especially China, will play a crucial role in the future food supply chain," he added.

There has been a considerable increase in the number of Singapore food companies, showing interest in expanding their presence in the UAE and Middle East. He said the number of Singapore companies in Gulfood almost doubled from 24 companies last year to 40 companies in 2011. When the show started, there were only six Singapore companies participating in the event. He said more Singapore companies are on the way to explore Middle East market and joint agricultural projects.

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