Brazil’s BRF to invest US$120m in Saudi poultry processing plant

SAUDI ARABIA – Brazilian food processor, BRF has entered into an agreement with the Saudi Arabian General Investment Authority to invest approximately US$120 million in setting up its first chicken processing plant in the country.

The investment will enable the company to strengthen its position in Middle East. BRF already has four meat processing facilities in the region and ranks as the largest meat exporter in the Gulf region.

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The facility will have a capacity to produce around 50,000 tonnes per year, serving the Saudi market as well as neighbouring markets. BRF said the plant’s product portfolio will include breaded and marinated products and burgers, among others.

The company’s Chief Financial Officer, Carlos Moura said that the investment underscores the company’s goal to remain a leading supplier to countries of the Gulf.

BRF said the precise location, investment schedule and capital structure of its Saudi Arabia factory would be determined later. The plant is scheduled to start operations by end-2021 and will be fully owned and operated by BRF.

BRF currently serves the Saudi market through eight plants in Brazil and a factory in Abu Dhabi.  Earlier this month BRF said its Abu Dhabi plant was being audited and that Saudi Arabia had restricted buying of some of its products.

According to the USDA, Saudi Arabia’s chicken production in 2019 is forecast at 730,000 tonnes and is projected to increase to 750,000 tonnes next year.

Chicken consumption this year is estimated at 1.33 million tonnes and is forecast to reach 1.38 million tonnes in 2020.

The halal market, which requires an animal be slaughtered in accordance with Muslim rules for its meat to be allowed for consumption, represented about 27% of BRF global food volumes, generating net sales of US$602 million in the second quarter.

The investment in Suadi is part of BRF’s plan to consolidate its investments in Islamic states, in addition to its o market and Asia.

The company has sold some of its units in Europe, Thailand and Argentina and exited the SATS BRF Food joint venture in Singapore.

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