Saudi Arabia Is Determined to Scale up Local Food Production
The Saudi Ministry of Environment Water and Agriculture (MEWA) has recently announced that it is looking for partners from the private sector to develop (1) aquaculture projects (2) date Processing projects (3) Building a date city (for trading, processing and marketing) in Medinah (4) advanced farming technologies. This will be financed out of the EURO250bln budget of Saudi government for 2019 and will bring a lot of opportunities for Dutch companies. If you are interested to join in one of the fields mentioned, please contact the Agricultural team of the Netherlands Embassy in Riyadh at RIY-LNV@minbuza.nl .
Last month Saudi Arabia announced its 2019 Budget, which is the largest ever and amount to SAR 1106 (US$ 294 billion), with SAR 131.4 billion ($US 35 billion, 24% increase from 2018 Budget) is allocated for economic resources, i.e. for mega projects and initiatives related to Vision 2030 Realization Programs, and that include funding initiatives to optimize the agricultural sector.
To put on track practical applications to meet the country’s strategic objectives for food security, Saudi Arabia has launched and introduced recently the following programs and initiatives, that would expand the opportunities for the Dutch agrofood businesses in Saudi Arabia.
National Industrial Development and Logistics Program
As part of this program, Saudi Arabia has announced investment opportunities aiming to attract $US 450 billion investment into its manufacturing, mining, logistics and energy sectors. The opportunities related to agriculture:
Processing plant for sea food
Establishment of a sea food processing plant for premium fish (e.g. Mangrove snapper, seabass) and shrimp with a capacity of about7500 tons for the first year.
The plant would operate 3 distinct lines: Fillet Packaging, Shrimp Packaging and Canning, Marinating Line.
Addressable Market: Processed sea food market size: about 150k tons (about7.5 bn SAR / $US 2 bn) in 2017 (+14% p.a.). Forecast: about546k tons by 2030 (about25 - 30 bn SAR / $US 6.7 – 8 bn).
The Ministry of Environment Water and Agriculture (MEWA), who is promoting the project, is offering guaranteed access to local aquaculture production, and dedicated food processing park with integrated hatcheries.
The required investment for the project is about120 SAR m ($US 32 m)
Development of a plant to produce Agrochemicals
With a capacity up to 55 KT p.a. Plant will focus on producing herbicides, insecticides,
fungicides and seed treatment compounds. Proffered Location is Jubail, Eastern Region of Saudi Arabia.
Addressable Market: Global market size about 10M SAR (+6% p.a.) Local market size about15K Tons (+10% p.a. or 0.1 bn SAR / $US 27 bn)
The Royal Commission for Jubail and Yanbu, who is promoting the project, is offering access to dedicated value park incentives and packages including competitive feedstock prices.
The required investment for the project is about 50-70 SAR m ($US 13.3 – 18.7 m)
Establishing marine finfish cages
Establishment of finfish farm along the red sea coast with up to 24 cages. The production capacity is about21 tons per cage.
Addressable Market: KSA market size of seafood: about340K tons in 2017 (+ 8.7% p.a.) about781K tons by 2030 (15-20 bn SAR/ $US 4 – 5.4 bn).
MEWA will offer allocated area for the farms, and accelerated process for the investment.
The required investment for the project is about30-50 SAR m ($US 8-13.4 m)
Sustainable Agricultural Rural Development Program 2025
The Program will support farmers in various regions of the Kingdom, with financial allocations amounting to SAR 7.35 billion ($US 1.96 bn) for a period of seven years in addition to SAR 1.5 billion ($US 0.4 bn) as the capital cost for the project. In addition the government’s Agricultural Development Fund (ADF) has allocated SAR 3 billion ($US 0.8 bn) to finance the program though soft loans to SME farmers.
The main sectors the Program is targeting:
- Rose and aromatic plants cultivation
- Fruits production, manufacturing and marketing
- Fish farmers
- Arab coffee production, manufacturing and marketing
- Beekeeping and production of honey
- Livestock breeders
By: Anas Monzer - Senior Policy OfficerAgriculture & Food - Agriculture team for the Gulf Region, Netherlands Embassy Riyadh