SALIC Acquires Stake in Daawat Foods Limited

SALIC has acquired 29.91% stake in Daawat Foods Ltd. (“DFL”) from India Agri Business Fund. The investment is in line with SALIC’s strategy in investing in rice, a key commodity for SALIC, with the aim to strengthen and make the rice supply chain more efficient and robust.

DFL, is one of the manufacturing and sourcing arms of LT Foods. It houses one of the five manufacturing facilities owned by LT Group in India and currently contributes to around 22% of the total production of the Group. It caters largely to the demand from overseas markets and witnessed a revenue growth of over 20% over a 5 years period. LT Foods Ltd. is an 80-year-old Consumer Food Company delivering the finest quality rice and rice-based food brands in more than 80 countries. The Company has consolidated revenue of around USD 550M as on FY19. Its flagship brands ‘Daawat’ and ‘Royal’ enjoy leading positions in India and US respectively with a market share of 29% and 45% respectively and have strong market share in other countries as well.

SALIC was established by a Royal Decree as a Saudi Arabian Joint Stock Company on April 14, 2009, wholly owned by Public Investment Fund. Its activities are in the field of agricultural investment and livestock production in the countries that have comparative advantage in order to contribute to achieving food security, provision of food products, and stabilizing food prices in the Kingdom.

SALIC started operations in 2012 with an ambitious vision to be a world class food security focused agri business investment company. SALIC’s strategic goals is to achieve more than 50% of the rate of import coverage across all categories of goods that have been identified as strategic goods compatible with the food security strategy in the Kingdom of Saudi Arabia.

“12/21” strategy targets are 12 essential commodities grouped into three segments: supply chain, production agriculture, and animal protein sourced from 21 identified countries. To achieve this, the company has made strategic acquisitions and partnerships.

In supply chain, SALIC formed a joint venture with Bunge to establish G3 Global Holding, a grain operation in Canada. G3 Global Holding handles more than 5 million tons of grains and oilseeds, annually and completed construction of grain terminal in Vancouver in 2020, which will allow G3 to be in the top 3 grain handing companies in Canada.

In production agriculture, SALIC farms more than 200,000 hectares of farmland in Ukraine, which produce more than 1,000,000 tons of grains and oilseeds including wheat, barley, corn, and soya. It also expanded into the Southern hemisphere by acquiring Australian assets and operating 211,000 ha of land, 40,000 Merino sheep and producing 100,000 tons of grain, mainly wheat and barley. To advance efficiency in production agriculture, SALIC acquired 13.7% of Hummingbird Technologies Limited that uses machine learning applied to aerial data to deliver variable rate application of crop inputs for farmers.

In animal protein, SALIC owns 25% of Minerva Foods, a Brazilian company that is one of the largest companies in the production of meat in South America and the 3rd largest meat exporter in Brazil, producing more than 1 million tons of meat.