Agroinvest, or the International Agriculture and Food Investment Co, is the biggest of many private firms involved in foreign farm investment that were set up in the kingdom since import reliant Gulf Arab countries started buying or leasing land in developing nations to ensure food supplies.
But farmland acquisitions by foreign investors have sparked some opposition in developing nations and the United Nations last year voiced concern that farmers’ rights in developing nations could be compromised.
Usamah al Kurdi, who chairs Agroinvest’s founding committee, said his firm would not want to tarnish Saudi Arabia’s image by buying farmlands abroad.In a telephone interview with Reuters, he said: “Everybody is getting philosophical about this issue, but Agroinvest is not a real estate firm. We are in agriculture and we want to do this with firms and farmers unions in these countries.”
He added: “The ideal scenario for Agroinvest, Kurdi said, would be to “forge partnerships with local firms or farmers unions who have a project ready. If leasing the land is an option, then we will do it with our partners.”
Seeking approval from the Capital Market Authority (CMA) for the private placement “was not a legal requirement,” he said.
Kurdi said: “We have taken the initiative to seek the CMA’s approval to show how serious we are.”
He added: “We hope to raise about $533.3 million from private and institutional investors to add to the capital raised by the founders.”
He declined to say how much capital had so far been raised from Agroinvest’s founders. Kurdi said in April that 25 percent of the capital will come from founding shareholders and the remainder from institutional investors and a public offering.
Several Saudi firms have already started farm investments in countries stretching from Indonesia to Ethiopia after a sharp rise in global food prices in 2008 and after authorities prioritised safeguarding water over self sufficiency in some crops such as wheat.
In addition to investments abroad that would include rice, grains, oilseeds and soybeans, Agroinvest plans to invest in grain silos and in funds with exposure to farm investments.
Kurdi declined to go into detail and said only that several propositions were being examined for investments in Australia, Romania, Senegal, Turkmenistan and Vietnam.
He said: “Foreign investments will take 60 percent of our total investments and 40 percent will be invested locally.”
Kurdi added: “We plan investment in logistics through funds and Djibouti is being considered as a potential location.”
The company will start announcing its foreign investments after it obtains regulatory approvals to start operations “within eight to 10 weeks,” he added.
Agroinvest’s most advanced plans are in Saudi Arabia where it plans to invest in shrimp farms, poultry and greenhouses, he said. (Reuters)