October 23, 2019 / 9:56 AM / a month ago

Saudi Arabia's SALIC says looking at Black Sea grain terminal

CAIRO, Oct 23 (Reuters) - Saudi Arabia’s SALIC is conducting due diligence on several projects in the Black Sea region and is looking to acquire a grain terminal there, its managing director told Reuters.

SALIC, the Saudi Agricultural and Livestock Investment Co, was formed in 2011 to secure food supplies for the desert kingdom, the world’s top oil exporter, through mass production and foreign investments.

“It is part of our mandate to give importance to logistics ... so we are looking at SALIC’s presence on that side in the form of a takeover or buying a grain terminal on the Black Sea,” Khaled al-Aboodi said on Sunday.

He added that it was too early to name specific projects or locations.

Last week, the Russian sovereign wealth fund RDIF and SALIC said they signed an agreement to team up in searching for investment projects in the Russian agricultural sector.

The announcement was made as Russian President Vladimir Putin visited Riyadh for the first time in over a decade.

Aboodi said SALIC would seek to bring in Russian wheat through state grain buyer Saudi Grains Organization (SAGO) should its investments in potential Russian wheat producers or farmland come to fruition.

Russia, the world’s largest wheat exporter, had long been seeking access to the Saudi market and in August the Gulf Arab state relaxed its bug-damage specifications for imports of the grain, opening the door to Black Sea origin wheat.

SALIC is looking to bring in Russian wheat for SAGO’s international purchasing tender if it makes a sizeable purchase of a Russian agribusiness firm engaged in wheat production.

“If the company has a good amount of production, that means it is cost effective enough to ship the grain, et cetera. Then we will target bringing wheat to Saudi through SAGO,” he said.

On investments outside the Black Sea region, Aboodi said Iraq and Sudan remain of interest but that lack of infrastructure was the main hurdle in the short term.

“We are very eager to look at these countries for food security reasons,” he said.

“But it becomes difficult to build projects there as we need basic infrastructure. We need ports and roads,” he said. (Reporting By Maha El Dahan; Editing by Christian Schmollinger)

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