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Saudi Star Ethiopian farm spending to hit $2.5bn

by Stephen White on Mar 24, 2011

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A biofuels crop plantation in Ethiopia

Sheikh Mohammed Al-Amoudi’s food company Saudi Star Agri-cultural Development has revealed plans to invest $2.5 billion by 2020 in its farming project in Ethiopia.

The company has already spent $140 million on buying equipment, clearing part of the land and developing a 25ha trial plot in the past 15 months, CEO Haile Assegide told The Saudi Gazette newspaper.

He also reveled that another 130,000ha has been allocated and there are plans to lease a further 160,000ha.

Ethiopia’s problems with food production are well documented and 15% of its population still rely on international food aid to sustain themselves. However the country’s government plans to lease 3 million hectares of land for foreign investors to grow cash crops such as palm plantations and rice.

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"There is lots of land in Ethiopia, especially in the lowland areas. So, if you develop this lowland area and make Ethiopia self-sufficient in food, I see no problem," Haile said.

While the majority of the food produced will be exported to Saudi Arabia the rest will remain in the domestic market. Saudi Star has agreed with Ethiopian government that 40 percent domestically, while 60 percent could be shipped offshore.

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