Brazil’s major halal meat exporter BRF to invest $120 mln in new Saudi chicken processing plant

Brazil’s major food processing company BRF will invest around $120 million to build and operate a chicken processing plant in Saudi Arabia.

The company said on Tuesday (October 29) the new plant will include breaded and marinated products and hamburgers that will be primarily sold in the Saudi market.

BRF said the location, capacity, investment schedule, capital structure and other related matters will be released soon during the specification phase of the project.

In August BRF reported that 59% of the 505 thousand tons it sold internationally in the second-quarter was halal.

40% of its supply to the halal markets in 2018 was locally manufactured in the Middle East, according to its annual report.

In Islamic countries, BRF has a manufacturing plant in Abu Dhabi, UAE, and three in nearby Turkey. It also operates a plant in Malaysia.

Its halal business was “solidifying profitable growth via expansion of processed category, prices in Saudi Arabia and summer in Turkey”, the company said in August.

SAUDI CHICKEN PRODUCTION

The Saudi government has set a strategic goal of domestic poultry production to meet at least 60% of local consumption by the end of 2020.

Self-sufficiency currently stands at around 50%.

The Kingdom’s production of chicken meat in 2019 is forecast at 730,000 metric tons and is projected to increase to 750,000 MT in 2020, according to the USDA Foreign Agricultural Service.

Chicken meat consumption in 2019 is estimated at 1.33 million MT and is expected to reach 1.38 million MT in 2020.

The USDA expects Saudi chicken meat imports in 2019 to reach 630,000 MT and 660,000 MT in 2020.

Chicken meat production in Saudi Arabia is concentrated in about ten vertically integrated companies, according to the USDA.

Three large companies, Al Watania, Fakieh, and Almarai, and 7 medium farms control more than 80% of production. 

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