SALIC closes various deals to maintain products’ price stability: CEO

Saudi Agricultural and Livestock Investment Co. (SALIC), which is owned by the Public Investment Fund (PIF), launched several initiatives and concluded various deals to maintain products’ price stability and provide essential commodities for local consumers across the Kingdom amid the coronavirus crisis, Sulaiman AlRumaih, the Group CEO, told Argaam in an exclusive interview on Thursday.

SALIC’s strategic objectives aim to cover over 50% of imports of all commodities, which were defined as strategic commodities, in line with the Kingdom’s food security strategy.

The group’s land bank increased from 60,000 hectares to 400,000 hectares. Its agricultural production, particularly wheat, more than doubled to 290,000 tons in 2019 from 55,000 in 2018.

On the company’s agreements and initiatives to meet the Kingdom’s demand for essential food products, he said that the deals include purchasing 500,000 egg boxes from Ukraine.

Moreover, Saudi Grains Organization (SAGO) bought 60,000 tons of Ukraine wheat through SALIC, marking its first purchase from agricultural investments overseas. The cargo will be received next September.

SALIC also supplied 10,000 tons of red meat through Minerva Foods, and is coordinating to supply 20,000 tons of basmati rice through Daawat Foods. The company also imported 4,500 tons of onions to the local market.

Speaking of SALIC’s future investments, AlRumaih said the company aims to invest in the remaining targeted commodities within a certain timeframe, in line with the available resources.

In addition, it aims to supply a larger quantity of products manufactured by the company abroad. SALIC supplied 60,000 tons of wheat to the Kingdom in September. The company will also develop supply chain products to maintain agricultural products sustainability in the local market.

SALIC aims to support the private sector, through strategic partnerships to maintain food security.

The company’s land plots increased from 60,000 hectares to 400,000 hectares. Its agricultural production, particularly wheat, more than doubled to 290,000 tons in 2019 from 55,000 in 2018.

It also recorded significant increase in its investments in grain and red meat in Ukraine, Canada, Australia and Brazil.

SALIC was founded by Royal Decree No. 22 on April 14, 2009, as a Saudi joint stock company, owned by the Public Investment Fund, and launched operations in 2012.

Its statute stipulates that its main activity is focused on agricultural investment and livestock production in countries with comparative advantages, including providing food commodities, contributing to the Kingdom’s food security, and maintaining price stability.

The company is seeking opportunities in various countries that welcome foreign investments and enjoy comparative advantage over added value.

Clarifying SALIC’s strategic objectives, AlRumaih said that the company aims to cover more than 50% of the Kingdom’s imports.

SALIC strategy focuses on 12 product categories: wheat, barley, corn, soybean, rice, sugar, vegetable oils, green fodder, red meat, dairy, seafood and poultry.

“SALIC’s 12/21” strategy targets 12 essential commodities grouped in 3 segments: supply chain, agricultural production, and animal protein sourced from 21 countries. To achieve this, the company fostered strategic acquisitions and partnerships in several countries.

In supply chain, SALIC formed a joint venture with Bunge to establish G3 Global Holding, a grain operation in Canada, which handles more than 5 million tons of grains and oilseeds, annually. It has recently completed construction of grain terminal in Vancouver, which will allow G3 to be in the top 3 grain handing companies in Canada.

In production agriculture, SALIC farms more than 200,000 hectares of farmland in Ukraine, which produce more than 1,000,000 tons of grains and oilseeds including wheat, barley, corn, and soya.

It also expanded into the Southern hemisphere by acquiring Australian assets and operating 211,000 hectares of land, 40,000 Merino sheep and producing 100,000 tons of grain, mainly wheat and barley.

SALIC acquired 13.7% of Hummingbird Technologies Limited that uses machine learning applied to aerial data to deliver variable rate application of crop inputs for farmers.

The company acquired a 30% stake in Daawat Foods Ltd. (DFL) from India Agri Business Fund. DFL, is one of the manufacturing and sourcing arms of LT Foods. In animal protein, SALIC owns 25% of Minerva Foods, a Brazilian company that is one of the largest companies in the production of meat in South America and the 3rd largest meat exporter in Brazil, producing more than 1 million tons of meat.

As for SALIC’s affiliates, SALIC owned a 34% holding in United Farmers Investment Company (UFIC) in 2012. In 2013, UFIC acquired an agricultural company in Ukraine that manages 66,000 hectares of crop production. In 2014, SALIC launched SALIC UK Ltd and SALIC Canada Ltd. In 2015, G3 Global Grain Group was set up as a joint venture with Bunge. It also acquired 65% of Canadian wheat and barley marketing organization CWB.

In 2016, the company bought 20% of Brazil’s Minerva Foods, then upped its holding in the company to 33% in 2018.

In 2019, SALIC bought a 13.7% stake in Hummingbird Technologies. In addition, SALIC acquired 30% of DFL in 2020.

AlRumaih added that SALIC is always coordinating with the food security authorities on the food strategic stock across the Kingdom, to supply products when necessary.

To ensure supplying commodities to the Kingdom, SALIC formed a partnership with Bunge to establish G3 Global Holding, a grain operation in Canada.