"
"
In a recent statement conveyed to Reuters on Tuesday, BRF SA, the Brazilian food processor, has officially established a joint venture in collaboration with the Halal Products Development Company (HPDC), which operates as a subsidiary under Saudi Arabia’s Public Investment Fund (PIF).
The decision to create this joint venture was initially announced in October 2022. BRF will hold the majority stake of 70% in the newly formed entity, while HPDC will possess the remaining 30%, as disclosed by the Brazilian company. The unveiling of this joint venture highlights BRF’s strategic shift from being merely an exporter to functioning as a domestic provider of meat commodities.
Historical data from the Arab-Brazil Chamber of Commerce indicates that Saudi Arabia has averaged an annual import of 564,476 metric tons of Brazilian chicken products over the past decade until 2022. However, the figure dropped to 340,000 metric tons last year, ranking Saudi Arabia fourth among Brazil’s prominent chicken importers, trailing behind the United Arab Emirates, Japan, and China. BRF has outlined that the primary objective of this joint venture is to foster the growth of the halal meat sector within the region, referring to products adhering to the dietary regulations of the Muslim faith.
This formalization of the joint venture comes shortly after SALIC, a fully owned subsidiary under PIF, procured a 10.7% share in BRF through a subsequent share offering. This investment is part of Saudi Arabia’s long-term strategy to enhance the Kingdom’s food security.
As a part of this joint venture agreement, BRF is planning to establish a “Halal Business Headquarters,” a “Halal Food Innovation Center,” and a “Center of Excellence.” The exact location for these endeavors is yet to be determined, and the specific financial commitment for these projects has not been divulged.
With a presence spanning over half a century in the Middle East market, BRF has been engaged in selling its products within the region. The company commenced its autonomous distribution network in Saudi Arabia in 2009 and subsequently acquired a food processing unit in the country three years ago.
