BRF is expanding its presence in the Middle East with the planned acquisition of Joody Al Sharqiya Food Production Factory, a Saudi Arabia-based meat company.
Joody Al Sharqiya has one food processing plant located in Dammam, Saudi Arabia, which produces breaded and marinated cuts, hamburgers, and other products.
The Brazil-based BRF, in an announcement to the market, revealed its intent to acquire the company for about SAR29.7 million (US$8 million.) In addition, BRF plans to invest around US$7.2 million in the Damman plant in order to more than quadruple the facility’s capacity.
The transaction is subject to the satisfaction of conditions set forth by regulatory authorities. An agreement between the two companies was signed on May 7.
When the acquisition of Joody Al Sharqiya is finalized, it will become part of BRF’s indirectly wholly-owned subsidiary, Badi Limited.
Plans to build new plant in Saudi Arabia still intact
BRF’s announcement to acquire Joody Al Sharqiya follows an earlier move for the company to build its presence in Saudi Arabia. In October 2019, BRF announced that it signed a non-binding memorandum of understanding (MOU) with the Saudi Arabian General Investment Authority (SAGIA) about the construction and operation of a chicken processing plant in Saudi Arabia. At the time, BRF said it intends to invest about US$120 million on the facility, which would process products similar to those produced by Joody Al Sharquiya.
BRF stated that the planned acquisition of Joody Al Sharqiya does not impact the MOU with SAGIA, and that the development of that project is currently in the “technical specification and financial modeling phase.”
Earlier in 2020, the Saudi Food and Drug Authority (SFDA) informed BRF that it would temporarily suspend imports of chicken products from two of the company’s facilities in Brazil – one in Dois Vizinhos and the other in Francisco Beltrao – regarding alleged violations from BRF concerning the production of feed.
