Saudi’s Nadec signs pacts to become US$1.59bn vertically integrated food business | Food Business Africa Magazine
SAUDI ARABIA – National Agricultural Development Co. (Nadec) has signed several agreements and memorandums of understanding (MoUs) as part of the five-year plan to become a vertically integrated food business and to reach 6 billion Saudi riyals (US$1.59 billion) revenue by 2027.
Nadec) was established by Royal Decree in 1981 to lessen Saudi Arabia’s dependence on agricultural imports, since then it went through successive rapid development phases placing the now Nadec Group as one of the largest agri-food companies in the Middle East/Africa region and the world.
Nadec was the first listed agricultural company in the Saudi stock market. It produces over 1.5 million liters of dairy and juice each day, serving over 40,000 GCC stores, and employing over 7,000 people.
The Saudi Arabian government owns 20% of the company’s shares, while the rest is publicly traded. The Nadec Group is organized into two separate business units, Nadec Foods for consumer products ad Nadec Agriculture for Agricultural produce.
In its new 5-year plan, the firm aims to expand in the vegetables and fruits sector and boost contract farming with large- and small-scale farmers to provide high-quality crops to customers around the Kingdom as part of its 2023-2027 strategy.
It has signed an agreement with Saudi Leha Group to form a limited liability company jointly controlled by both parties for producing and marketing high-quality potato seeds in Saudi Arabia.
In addition, it is in a MoU with Saudi Investment Recycling Company to recycle biowaste, Elion Resources Group to grow vegetation in the desert to promote sustainable agriculture and assist in accomplishing the Saudi Green Initiative goals, MiracleTree Life Science to expand contract farming and the National Center for Palm and Dates to utilize dates in manufacturing.
After securing US$64.5 million in additional funding last October, UAE-based Agritech startup Pure Harvest has now entered into a strategic partnership with Nadec to deliver a large-scale national food security project.
The partnership aims to enable the production of locally and sustainably grown fresh produce on more than 27 hectares of Nadec’s lands.
Pure Harvest will deploy production capacity over the next five years farming a wide range of crops, and Nadec will market these products to its consumer base, hotels, restaurants, and catering partners.
At the same time, Saudi Arabia’s Public Investment Fund (PIF) has signed a joint venture agreement with AeroFarms, a US-based sustainable agriculture company, to establish a joint company in Riyadh that will build and operate indoor vertical farms in Saudi Arabia and the broader Middle East and North Africa region.
The first farm in Saudi Arabia, which is expected to be the largest indoor vertical farm in the MENA region, will have an annual production capacity of up to 1.1 million kgs of crops.
The partnership is expected to enable sustainable, local sourcing of crops all year round, grown using AeroFarms’ proprietary smart agriculture technology platform.
It will also optimize the utilization of natural resources, including water and agricultural lands, with no need for arable land.
“The agreement with AeroFarms will lead to the establishment of indoor vertical farms in Saudi Arabia and the wider MENA region, increasing regional reliance on locally produced, high-quality crops are grown in a sustainable way using the latest technologies,” said Majed AlAssaf, head of consumer goods and retail, MENA investments division at PIF.
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