Arab News | Wednesday 9 September 2009
See this report from Reuters
Ghazanfar Ali Khan
RIYADH: As part of a major initiative launched by Custodian of the Two Holy Mosques King Abdullah to ensure food security, Saudi Arabia has announced the launch of an SR2 billion [US$ 530 million] agricultural investment firm, a unique public/private partnership venture for agricultural investments abroad. The company is called the International Agriculture and Food Investment Company (Agroinvest) and will focus on domestic investment and farm acquisitions abroad to cultivate mainly wheat, rice, soybeans and other crops.
“Agroinvest will invest in projects to ensure food security and help stabilize food prices domestically,” said Osama M. Al-Kurdi, who heads the company’s launch team, at a press conference at the Riyadh Chamber of Commerce and Industry Monday night.
Agroinvest will be established before the end of 2009 and will start full-fledged operations in March 2010, said Al-Kurdi, who is also a member of the Shoura Council. He pointed out that the new firm would invest SR500 million in the domestic market, mainly in the poultry and aquaculture businesses.
The launching ceremony was attended by several Saudi officials and investors, including Samir A. Kabbani, president of National Agriculture Committee at the Council of Saudi Chambers, and Fayez S. Al-Hobail, a Ministry of Commerce and Industry official.
“The firm will raise money from public and private sector organizations like the pension fund and the General Organization for Social Insurance, and it will also go for an IPO at a later stage,” said Al-Kurdi.
He said that the company would participate with Saudi investors to acquire and promote agricultural projects. To this end, he noted that the Kingdom had identified several countries, including Brazil, Vietnam, Indonesia, the Philippines, Pakistan and Turkey. “This is in line with King Abdullah’s plan for ensuring supply of staple food, which has topped the policy agenda in the Kingdom,” he added.
He said that “choosing investment destinations would depend on incentives offered to foreign investors, geographic proximity to Saudi Arabia and political stability.”The move to set up the company, he said, is significant at this time when recent spike in international food prices has placed food security near the top of the Saudi national priorities. Currently, Africa is one of the world’s largest producers of raw agricultural products, said Kabbani, while replying to a question about the Saudi investment in Sudan.