Finance and Investing

Saudis planning investments in Brazilian agribusiness

by Alexandre Rocha | 17 May, 2017
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Saudis planning investments in Brazilian agribusiness
Photo: President of the Arab Brazilian Chamber of Commerce, Rubens Hannun (centre) receives a gift from the vice-president of the Riyadh Chamber, with Brazil agriculture minister Blairo Maggi looking on

17/05/2017 - 17:36hs | RIYADH

Delegation led by Blairo Maggi, Brazil’s minister of Agriculture, met with business owners from the Arab country at the Riyadh Chamber of Commerce and Industry, where a business matchmaking also took place.

Saudi business owners are planning to invest in Brazilian agribusiness and they were able to know more about the sector and the country’s legislation, plus were presented with projects in the industry, in a seminar and through business matchmaking held at the headquarters of the Riyadh Chamber of Commerce and Industry, in Saudi Arabia, this Wednesday. The Saudi business owners met with representatives from the Brazilian government and companies that are part of the country’s delegation led by Blairo Maggi, minister of Agriculture.

“The [Saudi Arabia] Kingdom prioritizes relations with food producing countries,” said the vice-president of the Riyadh Chamber, Mansour Alshethri, during the seminar’s opening. He highlighted that Brazilian products, specially meats, has a strong market share. “This shows the trust the Saudi consumers have,” he added.

“This event is an importante step taken for investments in the agricultural sector,” pointed out the Saudi Chamber’s executive. “This meeting aims to strengthen these relations [of agricultural products] and also what is established in the Vision 2030 plan about ensuring food security,” he said.

The Vision 2030 is a long term strategy launched last year by the Saudi government to modernize the country’s economy and diversify it beyond the oil industry. Food security is especially important, since Saudi Arabia has a short supply of water and doesn’t produce enough food to meet its population’s demand, displaying the need to import the majority of what it consumes.

The country’s strategy is to save the short water resources for human consumption and invest in agricultural projects abroad, ensuring supply to its market.

“The goal of this trip is to expand our businesses, but it also aims to give thanks to the Kingdom for the opportunity it has given us in the last few years to expand these relations,” said Maggi to the Saudi business owners. He offered details on Brazil’s agricultural production and its share in the global market.

The minister reported that Brazilian exports to Saudi Arabia totaled USD 2.49 billion last year, with imports reaching USD 1.3 billion. “For the size of our economies, these numbers are not up to its potential and can be increased,” he said. “We invite you to come to Brazil, to be there, to do business in Brazil, because we offer many opportunities,” he added.

The president of the Arab Brazilian Chamber of Commerce, Rubens Hannun, who is part of the Ministry of Agriculture’s delegation, pointed out that the organization that he runs signed in 2009 a cooperation agreement with the Riyadh Chamber. “From the signing of the agreement on, trade between the two countries increased significantly, practically doubling in the following years,” he underscored. “In the food sector, the growth was significant,” he said.

With the Saudi strategy to invest in agricultural projects abroad, Hannun said that “this is the moment of giving a new boost” to businesses. “We are confidente that the moment for this improvement has arrived,” he told. He invited Saudi business owners to organize a mission to Brazil to see up close the national production and assess the investment opportunities.

The vice-president of the Riyadh Chamber replied that “inshallah” (“God willing”, a term widely used in the Arab nation) the organization will organize a business mission to Brazil and gave the floor to the organization’s president of the Agriculture and Food Security Committee, Majed Hamad Al Khamees, who confirmed the interest to organize the trip of a delegation to search for projects to invest on.

Khamees argued also for the creation of a Brazil-Saudi Arabia business council. “Due to the intensity of our trade, the council is essential to provide continuity and increase our trade relations,” he said.

Hannun agreed that it’s time to create this council and that the Arab Chamber will work alongside Brazil’s embassy in Riyadh to form the Brazilian side of the body.

Flavio Marega, the Brazilian ambassador in Saudi Arabia, said that Brazil is currently negotiating a series of agreements with the Saudi government, such as a treaty to expand to five years the term of business visas, an Agreement on Cooperation and Facilitation of Investments (ACFI), another between the Saudi Customs department and Brazil’s Federal Revenue Service, a document on the pacific use of nuclear energy and, for last, a memorandum of understanding between the Brazilian Central Bank and the Saudi Arabian Monetary Authority (SAMA). “These agreements are very important to business,” said the diplomat.

Maggi added that the Ministry of Agriculture will name soon an agricultural attaché to the embassy, a professional to focus solely on the demands and conflicts in the sector.

The minister also said that the Brazilian government will send to Congress a proposal to change the legislation to allow the purchase of rural areas by foreigners.

After the seminar, Brazilian business owners met with their Saudi counterparts in a business matchmaking session to present investment projects.

Missions

Later on, Maggi had attended a meeting and a lunch with Saudi Arabia’s minister of Agriculture, Abdulrahman Al Fadly, and was welcomed at the Saudi Food and Drug Authority (SFDA) by the Authority’s CEO, Hisham Al Jaddaei. A SFDA’s mission recently visited Brazil to inspect meat processing plants.

The day before, the minister met with representatives of the Saudi Agricultural and Livestock Investment Company (SALIC), funded by the country’s Public Investment Fund. Salic already has investments in Brazil – it has, for instance, equity stake in meat processing company Minerva – and is interested in the grains sector.

*Translated by Sérgio Kakitani

Copyright Brazil-Arab News Agency