Bioenergy or Hydropower: Implication for Water and Food
GCC Agriculture Presentation v5
1. Feb 23, 2015
Middle East, Dubai
THE AGRICULTURE
INVESTMENT LANDSCAPE
A view from
the GCC
2. 2Global AgInvestingFebruary 2015
GCC Agriculture == Production
1.8% of total land in the GCC used for
farming and contributing only 1.4% of GDP
- Mohammad Obaid Al Mazroni (AAAID)
3. 3Global AgInvestingFebruary 2015
GCC Agriculture == Production
2015 2025 2050
Acute Water
Scarcity
50%
reduction
Absolute
Water
Scarcity
No
water
UAE data
GCC deficits
16 million MT
3 million MT
1.8 million MT
0.5 million MT
Water Situation
4. 4Global AgInvestingFebruary 2015
Food = Water = Life
1 Kg
steak
15,000 LITRES OF WATER
Water needed
To produce
more crops
For animal feed
production
For livesock
consumption
For processing
5. 5Global AgInvestingFebruary 2015
GCC by Numbers
Source – FAO and EIU
US$ 100 bn
spend on water
infrastructure by ‘16
4.6%
CAGR GCC food
consumption
> 80%
water used
for agriculture
85%
food
imports
US$ 53 bn
food imports
by 2020
40%
known
oil reserves
5%
world’s
population
1-2%
GDP
Agriculture
< 1%
fresh
ground water
Poor Agri
fundamentals
today
Going to get
much worse
6. 6Global AgInvestingFebruary 2015
Current Landscape
Price Control
& Consumer
Subsidies
Trade
Diversification
Strategic
Reserves
Domestic
Investments
Investing
Abroad
GCC
Governments
This is changing – Governments are seeking sustainable returns from investments
Food
Security
Initiatives
Focus on
Upstream
Secure
supply of
Basic
Commodities
7. 7Global AgInvestingFebruary 2015
Current Landscape
Meat / Fish
Dairy
PoultryProcessing
Distribution
Private
Sector
Land-based
protein
Focus on
Downstream
Focus on
Investment
Returns
8. 8Global AgInvestingFebruary 2015
Profile of Key GCC Players
Limited
(3 or less food groups)
Diversified
(more than 3 food groups)
International
production for
Regional markets
Regional production
for Regional
markets
Local production
for Local markets
9. 9Global AgInvestingFebruary 2015
Transactions and Trends
Less crop production
More protein production
More storage & logistics
Egypt - Land on border
with Sudan. Irrigated. Sold
locally
2011 - 25% stake in Adeco
Agro (Brazil, Argentina,
Uruguay)
Serbia - 51% of Rudnap
Group. US$ 400 million.
Food and fodder
2015 - Acquired stake from
AAAID in A’Saffa
2014 - US$100 million in
Indian Basmati rice company
(Bush Foods)
2009 - 250,000 acres of land
in Sudan (unsuccessful)
10. 10Global AgInvestingFebruary 2015
Transactions and Trends
Jordan (2014) – US$
35 million equity
investment in Al Jazeera
Agricultural Company.
Significant minority
stake. Fully integrated
poultry and chicken feed
producer and distributor
2014 – US$ 27 million food
processing facility in Dubai
Investment Park
2013-14 - Brazil’s BRFSA,
the world’s largest chicken
exporter (SADIA brand), US$
150 million processing plant,
80,000 MT pa
2014 - Fruit juice, bottled
water US$ 411 million facility
11. 11Global AgInvestingFebruary 2015
Landscape for the Future
Production
(basic, feed, meat)
Logistics
(transport, storage)
Processing
(equipment, packaging)
AgTech
technology, research
12. 12Global AgInvestingFebruary 2015
Production Landscape
TRADITIONAL
FARMING
COMMERCIAL
FARMING
PROTEIN
PRODUCTION
Date, Fresh, Camel Date, Olive Meat, Milk, Eggs
Use of less water
Greenhouse
Consolidation and/or
Reduction
More sustainable (less
water)
Reduced subsidies
Technology based
(hydroponics)
Large scale producers
dominate
Increased vertical
integration
Increasing consumption
Limited
Water saving
technologies
Saline / Arid cultivar
introduction
Agri technologies
Sustainable production
not using too much
water still promoted
Upstream production
(feed)
Downstream value-added
production & processing
Packaging
TypeTrendsOpportunities
13. 13Global AgInvestingFebruary 2015
Logistics Landscape
GOVERNMENT PRIVATE
Basic staples Storage and Distribution
Strategic Reserves
increased
More storage
(Oman - adding 300,000 MT
UAE - added 200,000 MT)
More capacity and sophisticated
Bulk dry handling increasing
Increase in warehousing facilities
Refrigerated and non-refrigerated distribution
B.O.T. of storage
facilities
Downstream value-added
production & processing
Regional 3PL
TypeTrendsOpportunities
14. 14Global AgInvestingFebruary 2015
Processing Landscape
PRIVATE
Human Food
50% of food consumed in the GCC is processed
Consumption set to increase by 7%
(urbanisation, population and income increase)
Region as a hub for other growth markets (eg.
East Africa, Somalia pasta from UAE/Oman)
Better quality and shelf-life food
Value-added dairy and meat products
Halal food products
Ready-to-eat food items
TypeTrendsOpportunities
Animal Feed
Need for feed increasing (due to
human consumption)
High productivity feed used
Large scale production
More sophisticated
15. 15Global AgInvestingFebruary 2015
AgTech Landscape
PRIVATE
Food Production Technology
Limited hydroponic production used being recognised
Irrigation innovation
Animal health / welfare management
Food Factory
Ag Finance
Water Technologies
Research and Development
TypeTrendsOpportunities
16. 16Global AgInvestingFebruary 2015
Challenges
Dominant incumbent players
Relatively small market size
Logistics efficiency
Climate (production, product restrictions)
Industry capital base
Traditional banking practices
Management capability and capacity
