Brasil Foods to open $120m factory at Kizad

South America's largest food processing company plans to set up a $120 million factory at the Khalifa Industrial Zone by the end of the year.

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.

twitter: Follow and share our breaking business news. Follow us

iPad users can read the digital edition of business section as it was printed via our e-reader app. Click here

EDITOR'S PICKS
NEWSLETTERS