Saudi Arabia Is Determined to Scale up Local Food Production

Nieuwsbericht | 03-02-2019 | 14:06

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