Hassad Food, the agricultural arm of Qatar’s sovereign wealth fund, said it was looking at possible purchases of Brazilian sugar and poultry assets as structural problems in those industries in the South American country created opportunities.
“We have a lot of stuff in our pipeline and Brazil is definitely part of that, not only sugar but also poultry,” Youssef Hegazy, vice president for business development at Hassad Food, said on Wednesday.
Cane mills in Brazil, the world’s largest sugar producer, have been struggling for years with weak sugar and ethanol prices, prompting increasing numbers of mills to enter bankruptcy protection while they restructure their debts with creditors.
“We realise there are structural issues in both industries in Brazil, like high debt,” Hegazy told Reuters on the sidelines of the Global AgInvesting Middle East conference in Dubai.
Hegazy did not give the names of the assets in which his company was interested, and said discussions were still in an early stage.
“We had past discussions and moved to more advanced stages, but nothing materialised then, so now we are in an early stage,” he said.
Hassad Food, wholly owned by the Qatar Investment Authority, was set up in 2008 to boost the Gulf country’s food security. The rich desert states of the Gulf, which depend on imports for 80 to 90 per cent of their food, have poured cash over the past few years into buying farmland and other agricultural assets abroad.
On the grains side, Hassad Food acquired farmland in Australia in 2009, focusing its investments there on livestock and grains. Hegazy said the next step would be to look into investing in integrated agricultural assets.
“We did a significant investment in production and we want to move into the second layer of the value chain. We are not closing the book on farmlands, but for the time being we are focusing on other layers of the chain.”
Hassad Food is also looking at grain assets in North America and Canada to diversify into the northern hemisphere and hedge against the weather, Hegazy said.
Black Sea investments are also under consideration. However, Hegazy added: “Ukraine is a great example for grains production but there is a high political risk. But we are looking into other east EU countries.”