The facility will be based in the Khalifa Industrial Zone Abu Dhabi (Kizad), and will handle basmati rice, with other varieties coming in the future.The plant will be operational by 2015, and will have a capacity of 100,000 tonnes of rice a year, with 75,000 tonnes of this for domestic UAE consumption.
“I think we can double production over the next five years,” said Nael Khalil Saifan, chief operating officer at Al Dahra, speaking at the Global Forum of Innovation in Agriculture in Abu Dhabi this week.
The Kizad facility will also include 60 storage silos with a capacity of 30,000 tonnes.
Last year Al Dahra bought a 20% stake in Kohinoor for US$18.8m, and also committed to purchasing a minimum of 25,000 tonnes of rice from Kohinoor per year, for processing in the new facility.
The Middle East is the main global consumer of basmati rice outside the South Asian subcontinent, accounting for around three-quarters of the 4 million tonne export market.
Middle Eastern firms have become increasingly active in securing basmati rice supplies, both for regional consumption and wider re-export. This week Dubai-based Amira Nature Foods announced a US$58.6m deal to supply third-party-branded basmati rice to an unnamed customer within the EMEA region.
“We are extremely pleased to expand our relationship with this customer in the EMEA region as we believe this illustrates Amira’s leading position in the industry,” said Karan A. Chanana, chairman and CEO of Amira.
“The EMEA region continues to be a tremendous growth market for Amira’s basmati rice with strong consumption and demand in the market. We look forward to executing on our additional opportunities for growth with both our third party branded and our Amira branded products,” he added.
Last year Qatar-based Hassad Food spent US$100m on a 51% stake in Indian firm Bush Foods Overseas, also a rice producer.