SAO PAULO, Jan 13 (Reuters) – Brazilian chicken and pork processor BRF SA (BRFS3.SA) signed a memorandum of understanding with Saudi Arabia's sovereign fund to create a joint venture to make poultry products in the Middle Eastern country, it said on Thursday.
BRF said in a securities filing it will hold a 70% stake in the joint venture, while Saudi Arabia's Public Investment Fund, known as PIF, will have the remaining 30%. Shares rose by 3.2% to 24.60 reais on the news.
The MOU is non-binding and aims to create a company that will produce and sell fresh, frozen and processed poultry products. BRF refused to provide additional details about the move as it is in a quiet period ahead of a shareholder vote on Monday to decide on a follow-on share offering. read more
Register now for FREE unlimited access to Reuters.comRegister
The Brazilian company said the joint venture will require a $350 million investment if it materializes.
The move underscores BRF's strategy to keep a relevant share of the so-called halal food market, where food must be prepared according to Muslim dietary requirements.
Brazil is the world's biggest halal meat supplier, selling chicken and beef in profitable Islamic markets across the globe. read more
Saudi Arabia is Brazil's fourth-biggest chicken customer, having imported 353,500 tonnes in 2021, according to trade data compiled by meat industry group ABPA, which represents large Brazilian producers and exporters.
The volume represents a 24.4% drop from the previous year, as the Saudis are trying to reduce imports and boost local production of chicken products.
Register now for FREE unlimited access to Reuters.comRegisterReporting by Gabriel Araujo and Ana Mano
Editing by Peter Graff and Bernadette Baum