February 18, 2021

By Lynda Kiernan, Global AgInvesting Media

Saudi Arabia’s state-owned Saudi Agricultural Livestock Investment Company (SALIC) has deepened its partnership with Brazilian livestock company Minerva Foods in a deal that will see an expansion for both companies in Australia. 

SALIC originally agreed to acquire a 20 percent stake in Minerva in December 2015 for $188.4 million. This stake was later raised to 33.83 percent in September 2020, making SALIC the single largest stakeholder in the company. 

Now the two companies are deepening their partnership through the signing of multiple agreements that will strengthen Saudi Arabia’s food security and strengthen Minerva’s market exposure and operations in the Middle East and Asia – two markets that accounted for more than 60 percent of the world’s beef imports in 2020, and which were the destination for 55 percent of Minerva’s beef exports for the first three quarters of last year.

The first is a supply contract through which SALIC will have the right to acquire up to 25,000 tons of beef at market prices from Minerva, which operates 25 slaughterhouses and three processing plants in South America.

“Minerva Foods is one of the largest meat production companies in South America and the second-largest exporter in Brazil as it produces more than 1 million tons of meat annually. Minerva Foods mainly serves the demands of foreign markets and during this year, it has already exported 750,000 tons of red meat to more than 100 countries around the globe,” noted SALIC. 

The second agreement between the pair is a non-binding memorandum of understanding (MOU) outlining the potential acquisition by SALIC of assets owned by Minerva in Australia, and the formation of a joint venture for the breeding, farming, processing, and exporting sheep and cattle.

This move would serve to reinforce SALIC’s presence in Australia – the world’s leading exporter of processed sheep meat and the second largest exporter of beef – where SALIC already acquired the 200,000-hectare Baladjie Pty Ltd from Australia’s John Nicoletti in April 2019; has established its fully owned subsidiary Australian Meridian Farms; and where it has a dual focus on grains and meat. 

Minerva too sees the move as highly synergistic with its existing operations as well as a responsible way to tap into the ever-growing global demand for animal protein.

“The company believes that Australia uniquely complements our operations in South America, maximizing sales opportunities and operating synergies, reducing risks and contributing to our strategy of consolidation in the animal protein export market,” stated Minerva.

“With the potential creation of the joint venture set forth in Australia MOU, in partnership with SALIC, the company is seeking to maximize new business opportunities, in order to meet the growing global demand for animal protein, always respecting our commitment to financial discipline.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.