SAO PAULO - Brazilian food processor BRF SA has formalized the creation of a joint venture with the Halal Products Development Company (HPDC), a subsidiary of Saudi Arabia's Public Investment Fund (PIF), according to a statement sent to Reuters on Tuesday.
The intention to set up the JV had been communicated in October 2022. BRF's stake in the new company will be 70% and HPDC will have 30%, the Brazilian firm said.
The JV's announcement underscores BRF's push to move from a purely exporter role to a local supplier of meat products in the country.
Saudi Arabia imported an annual average of 564,476 metric tons of Brazilian chicken products in the decade ended in 2022, according to data compiled by the Arab-Brazil Chamber of Commerce. Last year, however, it bought a smaller 340,000 metric tons, ranking fourth among Brazil's top chicken destinations behind the United Arab Emirates, Japan and China.
BRF said the main goal of the JV will be developing the halal meat industry in the region, referring to food that must be produced according to Muslim dietary requirements.
The JV's formalization comes days after SALIC, a wholly owned subsidiary of PIF, acquired a 10.7% stake in BRF through a follow-on share offering as part of Saudi Arabia's long-term goal to secure food security for the Kingdom.
As part of the JV, BRF said it will set up a "Halal Business Headquarters, a Halal Food Innovation Center and a Center of Excellence" at a location yet to be determined.
It did not elaborate on how much the JV intends to invest in such an endeavor.
BRF has sold products in the Middle East for over 50 years. Starting in 2009, it set up its own distribution network in Saudi Arabia, where it also acquired a food processing unit three years ago.
(Reporting by Ana Mano in São Paulo; Editing by Christopher Cushing)