Saudi Arabia’s SALIC is considering investing in a Russian grain producer owned by Russian conglomerate Sistema and members of the Louis-Dreyfus family, Sistema said on Thursday.
Saudi Arabia began scaling back its domestic wheat-growing program in 2008, planning to rely completely on imports by 2016 to save water. Russia, one of the world’s top grain exporters, is expected to harvest a record grain crop in 2017.
The Saudi Agriculture and Livestock Investment Company (SALIC) was formed in 2011 to secure food supplies for the kingdom mainly through mass production and foreign investments.
RZ Agro, a joint venture between Sistema and Louis-Dreyfus family members, was created in 2012. It produces grain and has a land bank of 106,000 hectares in Russia’s southern regions.
“The parties will discuss the structure and parameters of the potential deal after the due diligence of RZ Agro Holding Ltd,” Sistema said in a statement.
The memorandum of understanding was one of several signed at the Russian-Saudi Business Investment Forum in Moscow. Saudi Arabia’s King Salman is meeting Russia’s President Vladimir Putin in the Russian capital on Thursday.