Al Dahra Agriculture, a subsidiary of Dubai-based Al Dahra Holding announced the acquisition of a majority stake in West Australian feed processor and supplier, Glenvar Hay.
The deal, facilitated by the Western Australian Trade Office (WATO) which was established in Dubai in 2002 with the goal of increasing investment flows between the Middle East, Africa and Western Australia, will give Al Dahra an expanded base of both strategic growers and suppliers while also giving the company increased access to farmland in the Australian state.
Established in 1925, Glenvar Hay supplies premium quality hay to buyers in Korea, Japan, and across the Middle East, and supplies oaten and lucerne hay on Australia’s domestic market.
“This initiative constitutes another milestone in terms of Al Dahra’s strategy to geographically diversify investments and establish presence in the southern hemisphere in order to ensure product availability across all seasons and mitigate market risks,” said Khadim Al Darei, vice chairman and managing director of Al Dahra Holding. “In addition, the acquisition further strengthens our commitment to our growing customer base in Asia and the Middle East and our dedication to satisfy the particular needs of those markets.”
Under the terms of the transaction, a new company called Al Dahra Glenvar Hay Pty Ltd. will be established with a manufacturing plant which will include pressing and baling technologies, storage facilities and an in-house laboratory. It’s geographic location in the heart of Australia’s wheat belt will provide Al Dahra access to ample raw materials and its proximity to ports and local highways will ensure the rapid transport and shipment of product, reports Feed Navigator.
This acquisition will add to Al Dahra’s global feed division which already consists of a portfolio of cultivated farmland and processing and baling operations spread across the U.S., Spain, Italy, South Africa, Egypt, and Pakistan. These operations supply two million tons of forage and animal feed per year to dairy and cattle production companies and livestock maintenance companies.
ACX Global, the group’s North American division owned by Al Dahra Agriculture, is headquartered in California and supplies animal feeds and forage to Asia and the Middle East.
“We’re the largest wholesale exporter of processed forage products in North America which is the source of the highest quality forage worldwide for the horses, dairy, and livestock industries,” states the company on its website, adding, “Our world class logistics team ensures a seamless movement of goods to our key markets in Asia and the Gulf.”
Middle East Seeks Overseas Feed
Saudi Arabia’s population hit 31.31 million at the start of Q2 2016, according to Trading Economics. That figure will increase to more than 34 million by 2020, and more than 39 million by 2030, according to Euromonitor.
Dwindling supplies of arable land and natural water resources have already placed a strain on the kingdom’s domestic production capacity, pushing it and other countries in the region to look for foreign sources to meet both its food demand and needed supply of water intensive inputs such as animal feed.
Due to growing pressures on precious ecological resources, the Saudi government announced last year that it would offer financial support to Saudi investors buying farmland overseas as the kingdom also announced that it was eliminating domestic production of wheat as of this year, leading to an increase in deals that would secure hay, alfalfa, feed and forage for the region’s livestock sector.
An early mover was Jenaan Investment, one of the UAE’s largest agricultural and livestock investment companies that has agricultural projects across Sudan producing alfalfa hay, Sudan grass, and millet. In 2013, the company signed a strategic partnership with South African company, Suidwes, who will act as a technical advisor providing detailed soil chemical analysis and correction recommendations in order to increase production, lower costs and mitigate risks.
More recently, in January of this year Almarai Co., the largest dairy company in the Gulf region, announced it had acquired 1,790 acres of farmland in Blythe, California for $31.8 million in order to secure supplies of alfalfa hay for its business as it aims to import all of its green fodder by 2019.
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Lynda Kiernan