Brazilian meat processor BRF SA signed a memorandum of understanding (MoU) with Saudi Arabia’s Public Investment Fund (PIF) to create a joint venture to make poultry products in the Middle Eastern country.
According to a securities filing in January, BRF said that it will hold a 70% stake in the joint venture, while Saudi Arabia’s PIF will have the remaining 30%. The MoU is non-binding and aims to create a company to produce and sell fresh, frozen and processed poultry products. BRF said the joint venture will require a $350 million investment if it materializes, according to a news by Reuters.
The move underscores BRF’s strategy to keep a relevant stake in the so-called halal food market, where food must be prepared according to Muslim dietary requirements.
BRAZIL IS WORLD’S BIGGEST HALAL MEAT SUPPLIER
Brazil is the world’s biggest halal meat supplier, selling chicken and beef in profitable Islamic markets across the globe. Saudi Arabia is Brazil’s fourth-biggest chicken customer, having imported 353,500 tonnes in 2021, according to trade data compiled by meat industry group ABPA, which represents Brazilian producers and exporters.
The volume represents a 24.4% drop from the previous year, as the Saudis are trying to reduce imports and boost local production of chicken products.
