Saudi Arabia’s Salic to gain number of Russian agricultural assets after purchasing Singapore’s Olam Agri

The Saudi Arabian company Salic (Saudi Agricultural & Livestock Investment Co.) will gain control over a number of Russian agricultural assets through its purchase of Singapore’s Olam Agri, the Union of Grain Exporters and Producers said when commenting on information in foreign media about Olam Group receiving a proposal from Salic to acquire its agricultural division.

The union is referring in particular to the Azov Grain Terminal. Olam is a member of the union via the Azov terminal.

Salic currently owns 35.4% of Olam Agri following a deal concluded in 2022 worth $1.24 billion.

“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,” union board chairman Eduard Zernin said.

Salic has been actively seeking out investment opportunities in the Russian agricultural sector in the past few years, Zernin told Interfax. “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,” he said.

At the same time, Rusmolko is not part of Olam Agri and is not included in the scope of the deal, Rusmolko told Interfax. Rusmolko is part of Olam Global Holdings. The deal concerns only the business of the Azov Grain Terminal, the company said.

The purchase price for the remaining part of Olam Agri is estimated at $4 billion. 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 13.457 billion rubles, compared to 13.435 billion rubles in 2022, with net profit at 142.99 million rubles versus 361.5 million rubles, respectively.