South America's largest food processing company plans to set up a US$120 million (Dh440.7m) factory at the Khalifa Industrial Zone by the end of the year.
Brasil Foods, the world's largest poultry exporter, is the first company to announce its intention to open at the Khalifa Industrial Zone's (Kizad) food manufacturing cluster.
It will produce items such as bread, pizzas, burgers, speciality meats and marinated processed foods. The facility is expected to reach its full production capacity of about 80,000 tonnes a year by 2014.
"The Middle East is one of the strategic regions being targeted for implementing BRF's [Brasil Foods] internationalisation plans," the public-listed company said when it announced plans to open a UAE factory last August. Roberta Pavon, a spokeswoman for the firm, said last week the location of the factory would be Kizad.
Kizad, an industrial zone taking shape on the edge of Abu Dhabi, has been seeking to attract tenants for the first phase of the project opening this year, a 51 square kilometre development that cost Dh26.5 billion.
More than 40 agreements have been signed by international and local companies to either reserve land or secure long-term lease deals at Kizad, said Alexander Haex, the vice president of business development at the zone. But it has announced only a handful of company names so far.
"We see very healthy appetite in aluminium, steel, energy-intensive industries and other sectors," said Mr Haex.
Food is one of several manufacturing clusters Kizad is setting up after it was highlighted as an "enabling industry" within the Abu Dhabi Economic Vision 2030. By producing more goods locally, officials hope to reduce the GCC's huge food import bill.
Brasil Foods, based in Sao Paulo, already has a foothold in the region through its Sadia brand. Shipments to the Middle East account for 32 per cent of Brasil Foods' total exports with the company's goods sold in the UAE, Saudi Arabia, Egypt, Kuwait, Qatar, Bahrain, Iran, Iraq, Jordan and Lebanon.
But the company hopes its facility in Kizad will help it to make faster inroads into the market.
"This will be instrumental in consolidating the company's leadership in the region with enhanced brand penetration, distribution and sales as well as permitting access to new markets," it said.
Local production of processed goods will allow the company to offer items customised to regional demands and to expand its food portfolio, it said.
Brasil Foods was formed following the $3.8bn merger of Brazil's two largest meat packers, Sadia and Perdigao, in May 2009.
The company's poultry supplies to the Middle East were hit last year by unrest in Egypt and elsewhere in the region but management has said its expects such headwinds to ease.
The Middle East is not the only area of international focus for the company. In February Brasil Foods signed a joint-venture deal a with a Hong Kong firm to expand distribution of chilled poultry, pork and beef products in China.
Michel Alaby, the director general of the Arab-Brazilian Chamber of Commerce, said the building of the Kizad plant should give the company a "competitive advantage over the European and Asian players".
Brasil Foods is one of the first major international firms to publicly announce an intention to set up in Kizad. Emirates Aluminium, a joint venture between Dubai Aluminium and Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, was the first to settle in the industrial zone in Taweelah.
Part of Kizad operates as a free zone, meaning Brasil Foods will not require a local business partner.
tarnold@thenational.ae
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The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
COMPANY%20PROFILE%20
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3EAlmouneer%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202017%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Dr%20Noha%20Khater%20and%20Rania%20Kadry%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EEgypt%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%20%3C%2Fstrong%3E120%3Cbr%3E%3Cstrong%3EInvestment%3A%20%3C%2Fstrong%3EBootstrapped%2C%20with%20support%20from%20Insead%20and%20Egyptian%20government%2C%20seed%20round%20of%20%3Cbr%3E%243.6%20million%20led%20by%20Global%20Ventures%3Cbr%3E%3C%2Fp%3E%0A
Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
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Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Biog
Mr Kandhari is legally authorised to conduct marriages in the gurdwara
He has officiated weddings of Sikhs and people of different faiths from Malaysia, Sri Lanka, Russia, the US and Canada
Father of two sons, grandfather of six
Plays golf once a week
Enjoys trying new holiday destinations with his wife and family
Walks for an hour every morning
Completed a Bachelor of Commerce degree in Loyola College, Chennai, India
2019 is a milestone because he completes 50 years in business
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6.55pm: Al Maktoum Challenge Round 3 Group 1 $400,000 (D) 2,000m.
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