Saudi's Binladin Group to complete agricultural investment study soon
The Jakarta Post | November 19, 2008
The Saudi Arabia-based Binladin Group is expected to wrap up a feasibility study by the end of this year on investment in a massive food business program that will be located primarily in the eastern part of Indonesia, a senior official says.
President Susilo Bambang Yudhoyono's special envoy for the Middle East Alwi Shihab said on Tuesday the Group was expected to set up an operation on 500,000 hectares of land across Indonesia with an investment of Rp 39 trillion (US$3.3 billion).
The investment will be spent within the course of 15 years.
"They are still in the earliest stage of investing in our agricultural sector," said Alwi, who is a former Coordinating Minister for People's Welfare in the Yudhoyono Cabinet.
Alwi said the Group was doing a pilot project with experts from France deployed to carry out the feasibility study.
Aside from Papua, Alwi said the government had also offered land in Kendari, Central Sulawesi and in Lampung for the Binladin project.
Middle East companies have been aggressively investing in agricultural businesses around the globe to help them secure future food supplies as their own climatic conditions and geographical location are considered unfavorable for the production of sufficient agricultural produce.
According to the Institute of International Finance, member countries of the Gulf Cooperation Council -- Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Bahrain and Oman -- hold excess liquidity for investment of $1.5 trillion a year because of their previous oil bonanza.
Of this excess liquidity, $1 trillion is invested in their own countries, $300 billion in the United States and $100 billion in Europe, with only $60 billion invested in Asia and $40 billion elsewhere.
Minister of Agriculture Anton Apriyantono has earlier said Binladin prefers to invest in Indonesia due to land and labor potentials.
He said the Group's target was to supply staple food for the Organisation of the Islamic Countries (OIC) member countries.
The Binladin Group was established in 1931, currently employing around 85,000 people with offices in United Arab Emirates, Egypt, Lebanon, Syria, Jordan, Yemen, and Morocco.
Its operations included civil contracting; engineering services; metal products, paints, paper products and telecommunication equipment; security brokers and dealers; real estate development; production and supply of marble granite; and production of fruit juices.
Mohammad bin Ladin built the family's business. The notorious Osama bin Ladin is one of his more than 50 children. (iwp)
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