São Paulo – Saudi Agricultural and Livestock Investment Company (SALIC) and Brazilian food processor BRF S.A. earlier this week entered into a strategic product supply agreement allowing SALIC to acquire up to 200,000 tons of products from BRF per year whenever there is a state of food emergency in Saudi Arabia, the Brazilian firm reported on Wednesday (22).
SALIC is the owner of shares representing 11.03% of the total capital of BRF, which is a leading global manufacturer of foods, particularly chicken meat, and owns brands like Sadia and Perdigão.
According to BRF, there was no participation by SALIC or its managers in BRF’s decision-making process regarding the execution of the contract. “The company’s obligation to sell products to SALIC is conditional, among other factors, on the existence of plants authorized for export to Saudi Arabia, in a manner that does not impair the supply of the [BRF]’s products to other clients in that country,” the statement went on.
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BRF’s management says it considers the agreement to be equitable because the price to SALIC will be equivalent to an average of market prices charged by the company to other clients and the supply obligation will only exist if the company has plants authorized for export to Saudi Arabia with sufficient volume to also meet the needs of its other clients in that country.
Translated by Guilherme Miranda
