Food security and keeping water usage as low as possible are key concerns in the food industry and Saudi companies have innovated and invested in groundbreaking means of overcoming challenges in one of the world’s driest countries, developing a low-impact base for the cultivation of food
Being covered almost entirely in desert has been a mixed blessing for Saudi Arabia: the Gulf country’s economy and well-being are largely dependent on oil and scientists say deserts and arctic regions hold some of the largest hydrocarbon reserves on Earth.
But oil alone cannot fuel a nation and being one of the driest countries on the planet has its drawbacks – particularly when it comes to developing a stable and sustainable food industry.
Because of the constraints facing farmers and livestock breeders, Saudi Arabia imports 80 per cent of its food needs, with the main food imports being barley, sheep, rice, chicken and wheat.
Agricultural and food imports cost the country around $12 billion (£7.8 billion) each year and limited agricultural production is expected to result in imports either remaining at the same level or increasing in future.
Food companies have not let the challenges of growing or rearing in Saudi Arabia dissuade them from setting up shop in the kingdom.
Enterprises such as Almarai, which prides itself on the quality dairy, poultry and bakery products it produces in Saudi Arabia and the broader Gulf region, have been successfully doing business in the Gulf region for generations.
“When you are in a country or a region like Saudi Arabia, water is a key issue,” Almarai CEO Georges P. Schorderet says.
“Obviously we work in a sector which needs some water, but we have been committed to sustainability from the early days.”
Renowned Professor of Water Management Arjen Hoekstra states in his 2012 research paper for the University of Twente that “by far the largest contribution to the total water footprint of humanity is related to the production of animal products.
”Rearing the meat people eat and producing the dairy products we use accounts for 27 per cent of our water footprint, compared to only 4 per cent which relates to home water use.
This is not widely known however, as growing feed crops is “far removed from the consumer, which explains why consumers generally have little notion about the fact that animal products require a lot of land and water,” explains Prof. Hoekstra.
Almarai, on the other hand, is more than aware of what its animals need in terms of space and nourishment. As a company that prides itself on the sustainability of its goods, it has been importing feed for its cows that produce Almarai’s high-quality dairy products since it was established in Riyadh in 1977.
“In principle, there is absolutely no problem in finding this feed on the worldwide market,” says Mr Schorderet.
“You can find corn, soy and cottonseed everywhere in the world in the quantity and the quality required.”
Only alfalfa hay is difficult to source, which is why Almarai has entered into cooperative ventures in Argentina, Poland, Ukraine and the United States. The company is considering investing in even more alfalfa-growing projects in Eastern Europe, Turkey and Africa, the CEO reveals.
“By doing that we reduce the reliance on Saudi Arabia’s water resources and that is our commitment to this country,” he says.
The Almarai CEO adds that the company has also taken steps to cut down on waste at its production facilities. “We are trying to do the same with less, to reduce the consumption of water, electricity and diesel. We want to have a saving of 8 per cent in the current year, and when we have achieved that we want to move further. This is how we get more efficient and that is our commitment to the water issue.”
An alternative way of saving water – which is currently being tested in Saudi Arabia – is hydroponics.
Hydroponics is a process whereby plants are grown in mineral nutrient solutions without soil. Crops grown in hydroponic greenhouses use about 10 times less water than crops grown the traditional way, says Dr Patricia Rorabaugh of the University of Arizona’s Controlled Environment Agriculture Centre.
“Obviously we work in a sector which needs some water, but we have been committed to sustainability from the early days”
Georges P. Schorderet, CEO of Almarai
Hoping to benefit from this, Saudi’s National Agricultural Marketing Company, which is also known as Thimar, recently struck a deal with a U.K. company to build hydroponic greenhouses.
Thimar’s Managing Director Sari Almaayouf claims developing hydroponics will finally allow the country to grow crops organically.
“There is no organic crop growth in Saudi, regardless of the labels that we see or what the Agriculture Ministry is proposing or saying,” says Mr Almaayouf.
“Organics depends on several important things, which are air, water, soil and also use of chemicals, and there is nothing in Saudi that is ready to be organic,” he adds. “The water is not 100 per cent pure water. It is all salty, and this is one of the main reasons that you cannot have an organic product.”
The Thimar managing director says the hydroponic greenhouses the company is building will use “100 per cent organic water” and “much less than what we should use in the normal scenario.
For tomatoes, for example, we will use only 1 per cent of what the tomatoes would consume if you water the plant.
So this is one of the reasons that we should get organic products very soon.”
Mr Almaayouf also notes a strong foreign element in the Saudi farming and food sector, while the government has invested heavily in farming infrastructure outside of the country, where water access is not a problem.
“A large-scale project is already started in Sudan but this will take a while. This will take three to four years minimum to receive the product,” he notes.
As in other sectors of the Saudi economy, one of the main problems facing the food and agriculture sector is finding capable and trained workers.
Almarai treats this as another level of sustainability. “It is not just about the environment,” expresses Mr Schorderet.
“It is also about developing local talent. We still employ quite a lot of expat workers. When I joined this company in 2004, it had about 4,000 people and now there are 35,000. So even if we have the same percentage of local staff, 20 per cent in 2004 was 800, while now it would be 7,000 people.”
But the company has in fact increased the percentage of locals it takes on and it offers them vocational training. “It is not only offering a job, it is offering sustainable employment for the people,” continues the Almarai CEO. “We use what we call GPT – Gradual Professional Training. We take people from the universities, about 200 or 250 every year, and they go into an apprenticeship in the company. Over time they get responsibilities and we prepare them to take a leadership role.”
The company also has a partnership with the Technical and Vocational Training Corporation in Al-Kharj to train dairy workers and food technicians.
“We believe it is our duty as a leader in this region. I think it is much more important to focus on the quality of what you give to the young locals – quality employment, not just employment – because otherwise you have a lot of turnover, people come and go,” says Mr. Schorderet.
According to the investment and advisory firm Aljazira Capital, the outlook for the kingdom’s food sector is expected to remain ‘positive’ in spite of the hurdles facing the Saudi food and agriculture sector.
The Saudi government’s vision “is to secure the supply along with managing several challenges,” Aljazira states, while “diversification and product innovation are expected to continue to drive growth in the food sector.”