AGRICULTURE INVESTMENT

Saudi Arabia 2020 | AGRICULTURE | B2B

A major objective of the Kingdom is addressing food security, and SALIC and ADF each play a key role in investing in local and overseas food initiatives.

Matthew Jansen
MATTHEW JANSEN
CEO
Saudi Agriculture & Livestock Investment Company (SALIC)
Muneer Fahad Alsahali
MUNEER FAHAD ALSAHALI
General Manager
Agricultural Development Fund (ADF)

Can you elaborate on your mandate and the role you play in the local agricultural sector?

MATTHEW JANSEN SALIC was established with a two-fold mandate. It works on food security for Saudi Arabia, ensuring there are strategic investments in agricultural production, livestock, and the supply chain. Second, it strives for around 5-6% returns on these investments for its shareholder. Today, the Kingdom imports 80% of its food, and we are focused on acquiring assets in this food production value chain to provide food security. Some 75% of all imports are made up of 12 food items—wheat, barley, corn, soybean, rice, sugar, edible oil, fodder, red meat, aquaculture, milk products, and poultry—and we have decided to focus on them for the coming five years. All our investments abroad are within that strategy, and we are interested in acquiring stakes in companies or accessing the volume for the importation into Saudi Arabia. For these 12 earmarked categories, we aim to achieve more than 50% import coverage.

MUNEER FAHAD ALSAHALI ADF's mandate since its inception is to support local farming production, and given that it is under the purview of the Ministry of Environment, Water, and Agriculture (MEWA), its funding and policies are aligned with MEWA's objectives. Our major activities include funding in poultry, aquaculture, and greenhouse activities as well as marketing activities for all our agricultural producers. To date, we have given out loans amounting to SAR50 billion (USD13 billion), mostly for local farming production. We conduct feasibility studies and ensure agricultural operations are commercially viable and in line with the Kingdom's agricultural and water policies. ADF supports new technologies, provided the project uses technology that conserves water and energy while increasing productivity. Such technologies that can be adapted include hydroponics, aquaponics, greenhouses, or poultry cage systems that can achieve better efficiency and greater productivity.

How do you envision technology transforming the Saudi agricultural industry?

MJ Technology is a large space, with many different applications, and there are many exciting and challenging opportunities ongoing. We focus on investing in agricultural technology, agro-tech, and food technology. Saudi Arabia can take the lead in the advancement of technology in this space, and SALIC is heavily focused on companies that produce higher yields for agricultural production or improve operations in other ways. We work closely with universities, agri-tech companies, and other advisory institutes to identify new technologies and applications.

MFA As Saudi Arabia currently faces acute water shortages, MEWA has been advocating for the use of new farming technology among farmers to address this issue. One example is the new greenhouse technology using hydroponics technology to reduce water consumption by 80%. In line with MEWA's strategy, ADF encourages investors and farmers to adopt these agri-tech by giving favorable financing margins. As a result, the majority of ADF's loan portfolio is associated with agri-tech. In addition, farmers also attend various local and overseas conferences, exhibitions, seminars, and workshops where they are exposed to new ideas, techniques, and innovations.

What is on the table for the coming years?

MJ SALIC is changing rapidly, and it has several projects on the table currently in new geographies as well. As we grow and continue to invest around the world, SALIC has become a more recognizable name with a greater presence in the food security space. It is seen as a strategic investor with a disciplined approach and focus on providing food security to Saudi Arabia and the Gulf as well as providing returns to its shareholders. SALIC aims to be a world-class food security agribusiness investment company.

MFA One of ADF's main goals is to support Vision 2030. ADF's main focus is addressing the food security issues as part of the National Transformation Program. As a result, ADF's new direction is extended toward supporting both domestic and overseas production by Saudi investors and companies. Moving forward, ADF will play a major role in food security by supporting Saudi investors to invest abroad in different crops that are not suitable for growing in Saudi Arabia. We are also trying to come up with new funding products for different kinds of products in different areas for working capital requirements. We are also supporting food security in order to achieve our KPIs with MEWA in poultry, aquaculture, and greenhouses.