The Brazilian BRF Company for Food Industries said on Thursday that it had signed a memorandum of understanding with the Saudi Public Investment Fund to establish a joint venture in the poultry market in the Kingdom.
The Brazilian company added in a statement to the Stock Exchange that it will own a 70 percent stake in the project, while the Saudi Fund will own the rest. The company’s shares rose 3.2 percent to 24.60 Brazilian riyals, following the announcement of the signing of the memorandum.
The memorandum of understanding is non-binding and aims to establish a company to produce and sell fresh, frozen and processed poultry products. BRF declined to provide more details regarding the move, with the company focusing on a shareholder vote, Monday, on a decision related to offering additional shares for sale.
The Brazilian company said that the joint venture will include an investment of regarding $350 million upon implementation.
This step confirms BRF’s strategy to retain a large share of the so-called halal food market, in which foods are prepared according to Islamic regulations.
Brazil is the world’s largest supplier of halal meat, and supplies chicken and meat to lucrative Muslim markets around the world.
And Saudi Arabia is the fourth largest consumer of Brazilian chicken. Trade data for the meat industry group (APPA), which represents major producers and exporters in Brazil, indicates that the kingdom imported 353,500 tons in 2021.
However, this amount is down from its counterpart in the previous year by 24.4 percent, as the Saudis try to reduce imports and boost local production of chicken products.
(Archyde.com)
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