January 17, 2021

BRF to set up poultry joint venture with Saudi Arabian sovereign fund

Major Brazilian meatpacker BRF SA will set up a poultry joint venture with Saudi Arabia's Public Investment Fund (PIF) to produce poultry products in the country, Reuters reported.

BRF will hold a 70% stake in the joint venture.

The new poultry company aims to produce and sell fresh, frozen, and processed poultry products. The memorandum of understanding signed by both parties is non-binding.

BRF said it will require US$350 million in investment if the company materialises.

The move by BRF highlights the company's strategy to preserve its halal food market stake, where food must be prepared based on Muslim dietary requirements. Brazil is the biggest halal meat suppler in the world.

According to meat industry group ABPA, Saudi Arabia is Brazil's fourth largest chicken customer.

Brazil exported 353,500 tonnes of chicken meat to Saudi Arabia in 2021, said the industry group. The volume is 24.4% lower compared to 2020 as Saudi Arabia looks to increase local meat production and reduce imports.

-      Reuters