Saudis invest $1.3 billion in Indonesian agriculture

Reuters | Monday, March 24 2009

Riyadh, March 24 - Saudi investors launched agricultural projects in Indonesia worth $1.3 billion last year, a top business official said on Monday, as the world's top oil exporter seeks to secure food supplies from abroad.

Mohamed Abdulkader al-Fadel, who chairs Saudi Arabia's Commerce and Industry Chambers Council, made the remarks during a meeting with Indonesia's ambassador, state news agency SPA reported.

Alwi Shihab, the Indonesian president's special envoy to the Middle East, said last week the Asian archipelago would allocate at least 2 million hectares (4.94 million acres) of farmland to joint ventures with Saudi investors to be used mainly to cultivate rice.

The move would turn Indonesia into the world's top rice exporter in 2009, Shihab said.

Saudi BinLadin Group plans to invest at least $4.3 billion in Indonesia's rice-farming sector on 500,000 hectares of land in the Papua province, Shihab said last year.

Indonesia is among countries prospected by Saudi investors under a government-sponsored push for agricultural investment outside the kingdom to secure food supplies. The countries also include Sudan, Ethiopia, Egypt, the Philippines and Turkey.

Under the plan, Saudi Arabia would import a "reasonable amount" of commodities, provide support for those investments and sign bilateral agreements with relevant governments, the government said.

Saudi Arabia, among the world's top ten rice importers, said in January it had received the first batch of rice produced abroad by local investors.

Three listed Saudi firms have already announced plans to invest in either farming or agri-business projects abroad.

A food security panel, affiliated to Riyadh's Chamber of Commerce and Industry, has identified wheat, barley, corn, soybean, maize, rice and sugar among strategic crops that should constitute priorities for foreign investments.
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