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FOOD PROCESSING

My first objective is for our country to be a pioneering and successful global model of excellence on all fronts, and I’ll work with you to achieve that.King Salman bin Abdulaziz Al SaudCustodian of the Two Holy Mosques

4 KEY REASONS TO INVEST IN FOOD PROCESSING IN KSA

SERVE A LARGE AND GROWING F&B MARKET

Saudi Arabia witnesses a high growth in Food and Beverages annually due to increase in population, Disposal income and inbound Umrah Visitors

Reliable transportation infrastructure, Advanced cold chain, and Rich pool of talent

The competitive advantage in food processing related to dates, seafood and Halal foods.

Low land leases, soft loans, and trade agreements

WELL-DEVELOPED FOOD PROCESSING ECOSYSTEM

KSA’S COMPETITIVE ADVANTAGE

GOVERNMENT COMMITMENT TO GROW THE SECTOR

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SERVE A LARGEAND GROWINGF&B MARKET

KSA’S FOOD AND BEVERAGE MARKET IS EXPECTED TO WITNESS 6% ANNUAL GROWTH BETWEEN 2013 AND 2021

- The animal and vegetable oil has the highest CAGR over the past and the upcoming years.

- The second highest is the seafood followed by meat and poultry.

Animal and Vegetable Oils

Dairy

Seafood

Beverages

Fruits, Nuts and Vegetables

Confectionary, Starch Product and Coffee

Meat and Poultry

0606 06

2013

10 11 12 13 13 14 15 16 17

08

07

08

08

0

20

+6%

40 36 3840

4446

4952

55

5960

Bn USD

2014 2015 2016 2017F 2018F 2019F 2020F 2021F

03 03 03 04 0404 04

0503

03 03

0303

03

040201 02

0202

02 02

0202

02

04

05

08

09 09

09 09

10 10

10 10

11

11

12 12

120505 05

05

0404

07

Animal and Vegetable Oils

Dairy

Seafood

9.0% 6.1% 6.3% 6.9%

7.0% 5.5% 6.1%

Beverages

Fruits, Nuts and Vegetables

Confectionary, Starch Productand Coffee

Meat and Poultry

CAGR 13-21CAGR: Compound Annual Growth Rate

KSA GROWTH IS MAINLY DRIVEN BY THREE FACTORS

POPULATION DISPOSABLE INCOME

INBOUND UMRAH VISITORS

People by 2030 Visitors by 2030USD per capita by 2030

39.5m 30m15.6k

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SAUDI ARABIA IS LOCATED AT THE HEART OF A THRIVING REGION

Crossroads of international trade roads between 3 continents

>10% of world trade passes through the Red Sea

Riyadh, Jeddah, Dammam are pivotal locations for distribution to key markets in the Middle East, Egypt and East Africa

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KSA’S COMPETITIVE ADVANTAGE

KSA HAS A COMPETITIVE ADVANTAGE IN FOOD PROCESSING RELATED TO DATES, SEAFOOD AND HALAL FOODS

01 02 03DATES SEAFOOD HALAL

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KSA is endowed with a rich variety of +400 types of date Suitable soil to grow exclusive dates High quality of dates in KSA with Guinness and ISO certifications for local manufacturers KSA ranked 2nd globally in dates production, constituting 16% of global production 1.3m tons per year

– 20% local consumption – 10% for charity – 10% export – 20% production of date products – 20% oversupply – 20% losses/waste

Ethanol Date Vinegar Date Core for Animal Medical Products Date Jam Date Juice

Pressed & Dried Date Coated Date Stuffed Date Date Paste Date Molasses/Syrup Date Liquid Sugar

Establish production facilities for a wide range of products:

INVEST IN THE FOLLOWING FACILITIES

Palm Waste Factory KSA has approximately 24 million palm trees, which produce significant quantity of palm remnants (627,000 ton/year). These remnants (trunk, leaf, wicker, and fibres) can be exploited by producing products (as a raw material) which are economically viable for farmers such as Organic Fertilizers, Wood, and Coal. Date Waste Factory Waste produced by the dates industry occurs during the harvesting period and the manufacturing process. The waste is estimated to be 20% of the total annual capacity of KSA’s dates production which is equivalent to 180,000 ton. Currently, there is little effort to take advantage of the waste although it can be utilized in producing Biofuels (bioethanol), Animal Feed, Citric & Lactic Acid, Xanthan Gum, Activated Carbon, and Natural Fibers.

01DATES: CURRENT SITUATION AND OPPORTUNITIES FOR INVESTMENT

CURRENT SITUATION

OPPORTUNITIES FOR INVESTMENT

Opportunity for Export

Saudi Arabia’s seafood consumption is expected to grow by 7.4% p.a. reaching 500,000 tons in 2030

Saudi Arabia’s 1,800km coastline on the Red Sea offers plenty of opportunities for investors

Clusters of fisheries with advanced infrastructure covering the full value chain (feed mills, hatcheries, grow-outs and processing plants)

KSA is strategically located to become a quality seafood exporter serving the GCC which is expected to import 770,000 tons of fish by 2030

KSA is an approved exporting country to the EU; farmed shrimp are exported to EU, Japan and the USA

Invest in the 15 locations (in Tabouk, Madinah, Makkah, Assir and Jazan) that have been identified by the government as suitable for aquaculture

Establish seafood production facilities with innovative technologies in processing and packaging to meet the growing demand

Expand export markets

02SEAFOOD: CURRENT SITUATION AND OPPORTUNITIES FOR INVESTMENT

CURRENT SITUATION

OPPORTUNITIES FOR INVESTMENT

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The word ‘halal’ literally means permissible - and in translation it is usually used as lawful.

Any food product produced in KSA is under very high Halal standards set by SFDA, which makes food products attractive to Muslims and non-Muslims alike

Saudi manufacturers are perceived as having higher Halal standards and credibility than other countries

Muslim population expected to reach 2.2 Bn by 2030 F&B spending for Muslims expected to grow at 11.9% between 2013 and 2019 to

reach USD 2.5T Halal is expected to grow from USD 1.24T in 2016 to USD 1.93T by 2022

Establish food processing facilities compliant with Halal to leverage the perceived higher credibility of Saudi manufacturers of Halal food

Leverage Saudi-made Halal meat and export to both Islamic and non-Islamic countries

03HALAL: CURRENT SITUATION AND OPPORTUNITIES FOR INVESTMENT

CURRENT SITUATION

OPPORTUNITIES FOR INVESTMENT

HALAL DEFINITION

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WELL-DEVELOPED FOOD PROCESSING ECOSYSTEM

FOOD PROCESSING IS WELL ESTABLISHED IN KSA DUE TO THREE MAIN FACTORS

Established roads, rail, seaports and airport networks connecting all Saudi cities

Segment grew at 4% CAGR from USD ~773M in 2010 to USD ~949M in 2015 Expected to further grow to USD ~1,640M by 2020

~150k current employees in the sector Access to graduates from highly recognized Saudi universities

RELIABLE TRANSPORTATION INFRASTRUCTURE

ADVANCED COLD CHAIN

RICH POOL OF TALENT

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Connecting Saudi Arabia with 81 airports in 45 countries Total capacity of ~1.5 million tons of cargoes >80M passengers hosted every year King Abdulaziz International Airport in Jeddah is the third largest airport in the Middle

East by passenger traffic (~30 Mn) Undergoing project for capacity expansion - From 55 to 100 million passengers

potentially handled annually

27 AIRPORTS

LOGISTICS AND TRANSPORTATION BY AIR

RIYADHEastern

Dammam

'Ar'ar

Najran

Sakakah

Ha'il

Al Qassim

Tabuk

Medina

Mecca

Jeddah

Jazan

Yanbu

AbhaInternational

Regional

Domestic

LOGISTICS AND TRANSPORTATION BY SEA

Largest marine network in the Middle East region 6 leading container ports >240 million tons of cargo handled in 2017

King Abdullah Port at KAEC with 4 million TEU annual capacity Fastest growing port in the world and deepest port in the Middle East Port throughput increased by 14% in first half of 2017 Planned capacity of 20 million TEU

10 MAINHARBORS

ARABIAN GULF

RED SEA

Makkah Eastern

RIYADH

JEDDAH

Dhiba Port

King Fahad Yanbu Industrial PortYanbu Commercial Port

King Abdullah Port at KAECJeddah Islamic Port

Jizan Port

Ras Al-Khair Port

Commercial Port

Inudstrial Port

Jubail Commercial PortKing Fahad Jubail Industrial Port

King Abdulaziz Seaport

FOOD PROCESSING IS WELL ESTABLISHED IN KSA DUE TO THREE MAIN FACTORS

TEU: Twenty-foot Equivalent unit

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LOGISTICS AND TRANSPORTATION BY LAND

Yemen

Iraq

Jordan'Ar'ar

SakakahAl lawf

Tabuk Ha'ilBuraidah

Al QassimAl Madinah

Dammam

MakkahAl bahah

Al bahah

'AsirAbha

NajranJazan

Eastern

RIYADH

Yemen

Oman

UAE

Kuwait

Iraq

Jordan

Bahrein

66,000 km of roadways connecting major cities and providing access to railways, ports and airports

– 5,000 km highways – 6,000 km bridges – 11,000 km double-lane – 49,000 km single-lane

>140,000 km of dirt roads 12,000 km of roads connecting Saudi Arabia’s regions to

international borders

Cargo line: 556 km starting at King Abdul Aziz Port in Dammam and ending in Riyadh

Branch lines: 486 km connecting industrial sites and facilities

>1.3 M passengers travelling annually Approx 700,000 containers handled every year

>200,000 KM OF ROADS

Extensive land connections within Saudi Arabia as well as access to Gulf Cooperation Council free trade area

>1,700 KM OF RAILS

International boundary

Express way (incl. future expansions)

Main roads

GCC-FTA countries

Non GCC-FTA countries

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GOVERNMENT COMMITMENT TO GROW THE SECTOR

KSA IS DRIVING TOWARDS FOOD SELF-SUFFICIENCY

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We will continue to build safe and

sufficient strategic food reserves, to

better guard against emergencies

KSA OFFERS A RANGE OF INCENTIVES FOR INVESTORS IN THE FOOD PROCESSING SECTOR

For establishment of food processing factories

From dedicated development funds (Saudi Industrial Development Fund, Saudi Agricultural Development Fund)

World Trade Organization (WTO)

GCC free trade agreement

Greater Arab Free Trade Area (GAFTA)

Double taxation avoidance (DTA)

Bilateral Investment treaties

LOW LAND LEASES SOFT LOANS TRADE AGREEMENTS

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CLEAR ALLOCATION OF ROLES ALONG THE INVESTMENT VALUE CHAIN

Ministry of Environment, Water and Agriculture

Saudi Food and Drug Authority (SFDA)

Ministry of Environment, Water and Agriculture

Saudi Agricultural Development Fund

Ministry of Commerce and Investment

Saudi Standards, Metrology and Quality Organization (SASO)

Ministry of Commerce and Investment

Saudi Industrial Development Fund

Ministry of Energy, Industry and Mineral Resources

GCC Standardization Organization

General Investment Authority

Saudi Industrial Property Authority

SECTOR DEVELOPER SECTOR REGULATOR LICENSES ISSUER ENABLER

EACH LOCAL AND REGIONAL ENTITY PLAYS A SPECIFIC ROLE TO SUPPORT SECTOR GROWTH

Set trade policies and regulate sector; issue commercial licenses for local and GCC investors

MINISTRY OF COMMERCE & INVESTMENT

Issue and implement standards and regulations for licensing and conformity assessment procedures of commodities, products and services in KSA

Unify standardization activities; implement compliances in the GCC

SAUDI STANDARDS, METROLOGY & QUALITY ORGANIZATION GCC STANDARDIZATION ORGANIZATION

Develop, supervise and regulate industry sector; issue policies and industry licenses

Set standards, regulate, monitor and supervise food, medicine, medical and diagnostic devices in KSA

MINISTRY OF ENERGY, INDUSTRY AND MINERAL RESOURCES SAUDI FOOD AND DRUG AUTHORITY

Attract, develop, and promote investment opportunities in KSA, and enhance all the investment affairs in the Kingdom of Saudi Arabia.

SAUDI ARABIAN GENERAL INVESTMENT AUTHORITY

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Develop, set policies and regulate agriculture sector; issue agriculture licenses

MINISTRY OF ENVIRONMENT, WATER AND AGRICULTURE

Provides loans and credit facilities for agricultural sector

SAUDI AGRICULTURAL DEVELOPMENT FUND

Supports diversification of industrial sectors by providing soft loans for industrial investments

Set-up, regulate and promote industrial cities in KSA

SAUDI INDUSTRIAL DEVELOPMENT FUND SAUDI INDUSTRIAL PROPERTY AUTHORITY

Saudi General Investment Authority is the Kingdom’s investment promotion agency, and the gateway for foreign investment. Our priorities are toattract and develop foreign investment, enhance the nation’s investment climate, increase the ease of doing business, and eliminate obstacles from investors’ journey.

To discover the countless opportunities, across major economic sectors, that Saudi Arabia has to offer:

Imam Saud Bin Abdulaziz Road

P.O. Box 5927, Riyadh 11432

Kingdom of Saudi Arabia

T + 966 11 203 5555

F + 966 11 263 2894

E invest@sagia.gov.sa

industrial@sagia.gov.sa

HEADQUARTERS

CONTACT US NOW

CONTACT INFO

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