The Union of Grain Exporters and Producers has confirmed that the Saudi Arabian company Salic (Saudi Agricultural & Livestock Investment Co.) will gain control of more agricultural assets through its purchase of Singapore’s Olam Agri.
The Union said Olam Group is finalising agreement on the deal after receiving a proposal from Salic to acquire its agricultural division.
The union with Olam as one of its strong members through the Azvov terminal is actually referring in particular to the Azov Grain Terminal, even as Salic currently owns 35.4% of Olam Agri following a deal concluded in 2022 worth $1.24 billion.
“Without exaggeration, this a landmark deal which opens the door to agricultural market for Saudi Arabia.
“By acquiring Olam Agri, the Saudis gain control over the shallow-water grain terminal in Azov, and possibly the company Rusmolko, one of the biggest milk producers in Russia which includes three dairy complexes and a herd breeding complex in the Penza region with a livestock population of more than 33,000 head, as well as 152,000 ha of agricultural land.
“The company has established a closed cycle that includes production, storage and processing of grain,” union board chairman Eduard Zernin said.
Salic has been actively seeking out investment opportunities in the agricultural sector in the past few years, Zernin said over the weekend.
“Now, after buying Olam Agri, we can say that the Saudis are entering our market. It’s difficult to overestimate the importance of this event for Russian agriculture, especially in light of the recent geopolitical risks,” he said.
However, Rusmolko is not part of Olam Agri and is not included in the scope of the deal, Rusmolko officials clarified the fact that Rusmolko is part of Olam Global Holdings and not Olam Agri.
The deal concerns only the business of the Azov Grain Terminal, the company said.
The purchase price for the remaining part of Olam Agri is estimated at $4 billion.
It will enable Salic to gain full control over Olam Agri’s commodity portfolio, which includes grain, edible oils, and other food products.
The Azov Grain Terminal has a capacity of up to 1.4 million tonnes of grain per year.
According to its financial statements, revenue in 2023 amounted to 13.457 billion rubles, compared to 13.435 billion rubles in 2022, with net profit at 142.99 million rubles versus 361.5 million rubles, respectively.
The Olam Agri division was created as part of the restructuring of the Olam Group in 2020, and in 2022 Salic acquired 35.4% of Olam Agri for US$1.24 billion.
The deal will allow Salic to gain full control over Olam Agri’s assets, which include grain, edible oils and other food products, and become a key player in ensuring food security in the Persian Gulf region and beyond.
Salic is a Saudi investment company in the field of agriculture (barley, wheat, corn, soybeans, rice, sugar, edible oil and meat).
The headquarters is located in Riyadh (Saudi Arabia).
Olam Group Limited is engaged in the supply, processing, and packaging of agricultural products.
The company includes divisions of Olam Food Ingredients, Olam Global Agri, and Olam International Limited.
The company cooperates with food manufacturers, packaged food manufacturers, and farmers.
With the deal, Olam Agri is estimated to have a total value of US$4 billion.
Interestingly, the Saudi Crown Prince and Prime Minister of Saudi Arabia, Prince Mohammed bin Salman bin Abdulaziz Al Saud, confirmed the deal during a meeting with President Bola Ahmed Tinubu.
He has assured Nigeria of support in its economic reform programmes.
The Saudi Agricultural and Livestock Investment Company (SALIC) invested $1.24 billion in 2022 to acquire a 35.43% stake in Olam Agri, one of Nigeria’s leading agricultural firms.
In addition, talks are being held so that SALIC can have more stake in the company.
The Saudis hoped the investment would make Olam one of the biggest agro-allied businesses in the world.
