Brazilian chicken and pork processor BRF SA signed a memorandum of understanding with Saudi Arabia’s sovereign fund to create a joint venture to make poultry products in the Middle Eastern country, it said Jan. 13.
BRF said in a securities filing it will hold a 70 per cent stake in the joint venture, while Saudi Arabia’s Public Investment Fund, known as PIF, will have the remaining 30 per cent.
The MOU is non-binding and aims to create a company that will produce and sell fresh, frozen and processed poultry products.
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The Brazilian company said the joint venture will require a US$350-million investment if it materializes.
The move underscores BRF’s strategy to keep a relevant share of the halal food market, where food must be prepared according to Muslim dietary requirements.
Brazil is the world’s biggest halal meat supplier, selling chicken and beef in profitable Islamic markets across the globe.
Saudi Arabia is Brazil’s fourth-biggest chicken customer, having imported 353,500 tonnes in 2021, according to trade data compiled by meat industry group ABPA, which represents large Brazilian producers and exporters.
The volume represents a 24.4 per cent drop from the previous year, as the Saudis are trying to reduce imports and boost local production of chicken products.
