A food company owned by the $65 billion Qatar Investment Authority (QIA) has launched a joint venture in Sudan as part of its strategy to generate profit and secure food supply by investing in overseas agricultural businesses.
The QIA Hassan Food seeded its joint venture with the Sudanese Government by providing an initial commitment of $100 million, which was expected to be part of a planned $1 billion in ongoing agricultural investment in Sudan.
The venture, of which Hassad owns 75 per cent, aimed to cultivate more than 250,000 acres of land in north Sudan, Nasser al-Hariji, chairman of Hassad, told Gulf media, and aimed to secure food supplies for Qatar and Sudan.
The joint venture is the most recent move by Hassad to improve food security in Qatar. In September, the company announced plans to deploy $500 million to buy stakes in food companies around the world to secure food supplies at reasonable prices.
Like most Gulf Arab nations, Qatar imports most of its food requirements, and currently sources about 95 per cent of its food from offshore markets.
According to the Economist Intelligence Unit, surging food prices in 2007 and 2008, and the export restrictions introduced by some countries on particular commodities, spurred the Gulf nations to find means other than importing to ensure food supply.
Some Gulf nations, like Saudi Arabia and the United Arab Emirates, have leased farmland in developing nations such as Sudan and Pakistan to lock-in future food sources. But Hassad prefers not to engage in such deals because it does not regard them as mutually beneficial.
“We don’t want to be in a situation where the rich are taking away food and land of the poor,” al-Hajri told the Arabian Business website in September.
Instead, Hassad aims to profit from its investments in agricultural businesses and export produce to Qatar when it is required. The financial crisis has presented many opportunities to but stakes in distressed companies.
Al-Hajri flagged efforts to build similar joint ventures with agricultural companies in Brazil, the US, Turkey and Argentina, and said a big project was already underway in Australia.
Hassad was set up by the QIA in 2008. Its initial aim is to focus on companies producing food staples, like rice, soya, sugar, meat and animal feeds. Then it aims to include fruits and vegetables, before marketing and packaging food under its own brand. The company has also flagged developing poultry farms and greenhouses to grow vegetables within Qatar.