Dubai: A new Saudi Arabia and India joint venture has been formed to build a rice distribution hub in Dubai to link Indian production to consumers in the Middle East, according to a media report.
Prince Mishaal bin Abdullah bin Turki and global private investor V Raman Kumar have formed the joint venture with India’s rice producer, LEAF India (Lakshmi Energy and Foods Ltd.), to create the Middle East and North Africa region’s largest hub for rice storage and distribution, Arab News said.
The venture, Innovo Specialty Foods JLT, created by an investment of about USD 27 million, aims to set up a storage, processing, polishing and packaging facility with a capacity of over 100,000 tonnes of Basmati rice during 2014, it said.
Innovo will market and distribute Basmati rice processed and packed by Pan Gulf Food and Industries exclusively across the Middle East and North Africa.
“Our concept idea of creating this rice hub will aim to contribute and deliver food security objectives in the UAE,” Kumar was quoted as saying by the paper.
“Food security is clearly an immediate priority for the UAE and wider Middle East. The region is entering a new period of economic growth underpinned by a burgeoning population with a high dependence on imported food.
“Currently, 20 per cent of all UAE imports comprise food items and 90 per cent of food is imported but there are only 3 months of basic food items stored, so food security cover is not fit for the rapidly growing economy,” he said.
Kumar said the 100,000 tonnes of Basmati rice capacity that will be created in Jebel Ali, UAE, will be a giant step for this region to strengthen its food security strategy.
“We look to take this strategy to Saudi Arabia as well in the near future. We believe that execution of a core food security strategy is essential to provide a sustainable growth platform,” he said.
The increasing demand for Basmati rice has been primarily driven by Saudi Arabia, Yemen, Iran, Iraq, Bahrain, Oman, UAE and Kuwait, accounting for over 4 million tonnes of Basmati rice consumption every year.