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Abu Dhabi, UAEMonday 12 November 2018

Brazil Foods to open food processing plant at Kizad in June

BRF Brasil Foods will begin producing goods at its plant in Abu Dhabi from June as South America’s largest food processing company bids for a bigger slice of the Arab world’s US$13 billion processed food market.
BRF Brazil Foods  will begin producing 30,000 tonnes of meat products and bread-based foods, such as pizzas, at its Kizad plant next year. Adriano Machado/Bloomberg News
BRF Brazil Foods will begin producing 30,000 tonnes of meat products and bread-based foods, such as pizzas, at its Kizad plant next year. Adriano Machado/Bloomberg News

Brazilain company BRF will begin producing goods at its plant in Abu Dhabi from June as South America’s largest food processing company bids for a bigger portion of the Arab world’s processed food market.

Stretching across 1.6 million square feet, the plant at Khalifa Industrial Zone (Kizad) will be the Sao Paulo-based company’s largest facility outside South America, employing 1,200 people.

It will begin producing 30,000 tonnes of meat products and bread-based foods, such as pizzas, but will have capacity to eventually double production.

Claudio Galeazzi,the global chief executive of BRF, yesterday said company wanted to raise its share of the total US$13 billion regional market for processed foods. Much of that amount was shipped into the region from abroad.

“Production is growing in the region but at a slower pace than demand is growing,” he said at the site of the Kizad factory. “There’s a growing population wishing to have this type of food and we fit right into that. You have the potential market growth and expect to add market share.”

BRF is the first tenant of Kizad’s 3-kilometre-long food manufacturing cluster. It signed a deal last year to set up a $120 million facility in the Dh26.5bn industrial zone taking shape in Taweelah.

“Food security is important at a national level,” said Khaled Salmeen, the chief executive of Kizad. “This investment by BRF fits into that agenda.”

Currently, BRF ships about 850,000 tonnes of food goods to the region from Brazil, with the UAE, Saudi Arabia, Egypt, Kuwait, Qatar, Bahrain, Iran, Iraq and Jordan and Lebanon accounting for about a third of its total global exports.

The company’s Sadia brand is well known across the region.

BRF plans to use the Kizad facility to help it to penetrate deeper into North African markets and Syria, once the civil war eases.

It is the largest Brazilian investment in the UAE and comes amid an increase in trade and investment ties between the two countries. Trade between the UAE and Brazil reached $2.46bn last year, up more than fourfold from $550m in 2003.

Mubadala Development and Trafigura Group, the world’s second-largest metals trader, signed a $996m deal last month to take over control of an iron-pre port in Rio de Janeiro state from the former tycoon Eike Batista.

It follows recent changes in the terms of an original $2bn invested by Mubadala in Mr Batista’s Brazilian conglomerate EBX Group in March last year.

Mr Batista’s financial collapse has raised wider questions about the level of protection offered to investors in Brazil.

Speaking in an interview at the BRF site, the Brazilian vice president Michel Temer, said, the country offered investors “institutional and legal stability”.

“We are very comfortable in offering Brazil as [an] investment opportunity for investors and we assure them all the safety they require,” he said.

Mr Temer was in the UAE to discuss with the UAE’s rulers further investment opportunities for infrastructure project including railways, ports, airports and roads.

tarnold@thenational.ae