SAO PAULO (Reuters) – BRF announced on Thursday the signing of a memorandum of understanding with Saudi Arabia’s sovereign investment fund for the creation of a joint venture that will operate in the complete chicken production chain in the Middle East country, in an agreement that contemplates investments of around 350 million dollars.
According to BRF, the new company, in which the Brazilian will have a 70% stake, will promote the sale of fresh, frozen and processed products in Saudi Arabia. The fund will own the rest of the company. BRF shares rose more than 3% this Thursday, being one of the biggest highs of the Ibovespa, which operated practically stable around 11:30 am.
The non-binding memorandum “reinforces the company’s commitment to its strategic plan and Saudi Arabia’s Vision 2030, in particular to food security in the Gulf region,” BRF said.
In addition, the agreement highlights the important market for halal products, prepared according to Muslim requirements.
Brazil is the world’s largest supplier of halal meat, selling chicken and beef in lucrative Islamic markets.
Saudi Arabia is the fourth largest customer for Brazilian chicken, having imported 353,500 tonnes in 2021, according to trade data compiled by the Brazilian Animal Protein Association (ABPA), which represents major Brazilian producers and exporters.
The volume represents a 24.4% drop from a year ago as the Saudis are trying to reduce imports and increase local production of chicken products.
(By Roberto Samora and Ana Mano)
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