Beirut (APD) - The Saudi Arabia-based Islamic Development Bank (IDB) will finance the establishment of two plants with combined capacity of processing 300 tons of gelatin per annum at a cumulative cost of SR 54.5 million ($14.5 million), the Riyadh-based al Iqtisadiya reported Friday.
The complex will be located in Mecca where one plant will produce gelatin and the second will manufacture pharmaceutical capsules, of which gelatin is the base material.
A source in the bank told the newspaper that the project would create the first gelatin manufacturing plant in an Islamic country and thus give Saudi Arabia a unique position.
Gelatin is an animal protein obtained by processing animal raw materials such as skin and bones. It is used in many foodstuffs, cosmetics, and pharmaceutical capsules.
The production of gelatin by prolonged boiling of animal raw materials in many countries involves use of pigskins and animals killed in ways that may lead devout Muslims to consider the products inappropriate for use or consumption. This establishes a market for gelatin that is produced in compliance with Islamic rules.
IDB will have a 20% stake in the project; Arab Company for Livestock Development Ltd. (Acolid) will own 20% and the remaining 60% will be distributed over 12 partners.
The two plants will be placed for tender bids after obtaining the approval by the 12 smaller shareholders and United Gelatin Manufacturing Company, a subsidiary of IDB and designated manager of the plants.
IDB stated that the Saudi Arabian Agricultural Bank agreed to give SR 31 million loan to finance the plants which are expected to open within a year.
Acolid will provide the plants with Sharia-compliant raw materials from animal skin and bones.
According to a leading global manufacturer of gelatin, the global market for the protein has a turnover of about $3 billion per year; world consumption is estimated at 250,000 tons.
IDB, which was established in 1975, focuses on equity capital, financing of projects and enterprises, and financial assistance to member countries, all according to Sharia principles. [TS]
By Nadim Issa, APD Staff Writer in Beirut
© APD (Arab Press Digest) 2005
