Saudi buys $188m stake in Brazil’s Minerva
The Saudi Agriculture and Livestock Co (Salic) will make the investment through its UK subsidiary, and will support Minerva’s expansion into the Middle East and other new markets, according to the organisation’s CEO, Abdullah Aldubaikhi. He said the deal would close during the first quarter of the 2016 financial year.
Salic recently bought the Canadian Wheat Board, Canada’s former monopoly wheat buyer, for US$200m.
Salic is ‘strategic investor’
Minerva president Fernando Queiroz told investors during a conference call: “The main reason that droves us to close the deal was the strategic partnership. Salic is not a financial investor, but a strategic investor in a region in which we have a strong participation. Minerva is the largest cooled meat exporter to the Middle East and the second largest of frozen meat.
“We have participation in the main markets. Thus, it’s very important that we have closer ties with a player that understands, that knows, that has know-how within the market”, he added, according to the Brazilian-Arab News Agency.
While Minerva has seen sales to the Middle East grow, the region has slipped in comparison to other export markets. In the 12 months to the end of June 2015, the firm’s sales to the region totalled US$263m, up 6.5% – compared to 33% total export growth for the same period.
Last year Minerva’s main growth markets in the region were Iran and Egypt, both of which lifted their bans on Brazilian beef in 2014. But the end of Saudi Arabia’s ban will open up not just the region’s largest economy, but potentially the whole GCC, leading to major growth, with Marcelo Sallum, president of the Arab-Brazilian Chamber of Commerce, suggesting the market could be worth up to US$200m a year.
Saudi Arabia’s lifting of its embargo on Brazilian beef, imposed in 2012 after the discovery of BSE in a single animal, has come only after a long and faltering official process. Brazilian officials greeted the end of the ban with enthusiasm, with the country’s minister for agriculture, Kátia Abreu, saying she expected the remaining GCC country embargoes on Brazilian beef to be lifted shortly.
“This is a very important moment for Brazil. After three years, we celebrate the end of the ban with all countries,” she said during a meeting with the Saudi Food and Drug Administration (SFDA).
The Arab Chamber’s Sallum said a number of bodies were behind the end of the embargo: “The lifting of the ban was made possible by the effort and tandem work of the Chamber, Abiec (the Brazilian Meat Exporting Industries Association), and the Brazilian Ministry of Agriculture, with collaboration from personnel from the SFDA, the Brazilian embassy in Riyadh, and the Saudi embassy in Brasília.”