Saudi Arabia Gets Foothold Into Russia’s Agricultural Market

Saudi Arabia’s Salic (Saudi Agricultural & Livestock Investment) has gained control over several Russian agricultural assets through its purchase of Singapore’s Olam Agri, the Russian Union of Grain Exporters and Producers has said.

The main asset is the Azov Grain Terminal. Eduard Zernin, the Union CEO, stated “Without exaggeration, this is a landmark deal which opens the door to the Russian agricultural market for Saudi Arabia. By acquiring Olam Agri, the Saudis gain control over the shallow-water grain terminal in Azov, and possibly the company Rusmolko, one of the biggest milk producers in Russia which includes three dairy complexes and a herd breeding complex in the Penza region with a livestock population of more than 33,000 head, as well as 152,000 ha of agricultural land. The company has established a closed cycle that includes production, storage, and processing of grain.”

Salic has been actively seeking investment opportunities in the Russian agricultural sector in the past few years, Zernin said. “Now after buying Olam Agri, we can say that the Saudis are entering our market. It’s difficult to overestimate the importance of this event for Russian agriculture, especially in light of the recent geopolitical risks.”

However, Rusmolko (also part of Olam Agri) is not included in the Saudi deal. Rusmolko is part of Olam Global Holdings, a separate company. The deal concerns only the business of the Azov Grain Terminal. The purchase price for the remaining part of Olam Agri is estimated at US$4 billion. If sold, it will enable Salic to gain full control over Olam Agri’s commodity portfolio, which includes grain, edible oils, and other food products.

The Azov Grain Terminal has a capacity of up to 1.4 million tonnes of grain per year. According to its financial statements, revenue in 2023 amounted to ₽13.46 billion (US$137.5 million), compared to 13.435 billion rubles in 2022, with a net profit of ₽143 million (US$1.5 million).