The Brazilian BRF for the food industry signed a memorandum of understanding with the Saudi Public Investment Fund on Thursday to establish a joint venture in the poultry market in the country.

The Brazilian company said in a statement to the stock exchange that it would hold a 70 percent stake in the project and the Saudi fund would hold the rest. Shares of the company rose 3.2 percent to 24.60 Brazilian riyals after the deal was announced.

The MoU is unrestricted and aims to establish a company for the production and sale of fresh, frozen and processed poultry products. The BRF declined to provide further details on the move, as the company focused on Monday’s shareholder vote on a decision to sell additional shares.

The Brazilian company said the joint venture would include an investment of about $ 350 million once implemented.

This step confirms the BRF’s strategy of maintaining a large share of the so – called halal food market where food is prepared in accordance with Islamic rules.

Brazil is the world’s largest halal meat supplier, supplying poultry and meat to lucrative Muslim markets around the world.

Saudi Arabia is the fourth largest consumer of Brazilian chicken. Trade data from the Meat Industry Group (APPA), which represents Brazil’s major producers and exporters, indicates that the Kingdom will import 353,500 tonnes by 2021.

However, as Saudi Arabia seeks to reduce imports and increase domestic production of poultry products, this amount is down 24.4 percent from the previous year.

(Reuters)