Opportunities in agrifood in the Gulf region
Business opportunities in the Gulf region in the agriculture and food sector are closely linked to population growth, a need for smart-agriculture concepts, an increase in tourism, economic growth and the purchasing power in the region.
Sectors of interest
The following sectors are especially interesting for business and investments: aquaculture and fisheries (including salt-water agriculture), horticulture and poultry.
Thematically, water-use-efficiency, food safety and value chain improvement are also promising. In these topics, green education, short and long training, and vocational training are considered essential elements in which the Netherlands has a lot to offer.
The Netherlands has a leading position in developing innovative solutions for smart agriculture techniques. These solutions for growing plants in regions with unfavourable climatic conditions can be of great use for the GCC countries.
The region is in need of water-use-efficient concepts, greenhouse technologies and irrigation management solutions. The governments have allocated funds for the development and implementation of soil-less (hydroponics) techniques.
GCC governments are open to maximizing water productivity by using alternative and non-conventional water resources such as treated wastewater and saline water in agriculture.
Farmers are encouraged to adopt smart farming practices that are sustainable: techniques and crops that are economically viable and ecologically sound.
Agricultural sustainability can be increased by relying more on 'grey water' and by selecting crops that do well with little water and by more efficient methods such as hydroponics, drip irrigation where every drop of water reaches the roots of a plant, and other modern-day equivalents of the falaj system, that provided reliable irrigation in this region for many centuries.
Any disruption in global food supply or prices, similar to the food crisis of 2007–2008, is likely to significantly impact food security in the GCC region. This makes food security a critical policy issue for GCC governments and offers opportunities for Dutch companies in this field.
Trends and developments
The opportunity to grow crops year-round in greenhouses will boost the horticultural sector. For example, the Abu Dhabi Food Control Authority is establishing a centre of expertise in collaboration with the Netherlands and a similar center is established in Riyadh by SABIC.
Strategic storage is another trend in food security in the region. This entails buying priority commodities, such as wheat, rice, edible oil and sugar, from international markets instead of investing in producing them locally. Partnerships with the private sector could develop this trend . It further entails the physical realization of new silos.
The growing trend of dining out, the stronger preference for quick meals, including fast food and ready-to-eat meals, and the dietary shift from carbohydrate-rich to protein-rich have opened up exciting growth opportunities in the sector. Additionally, healthy-food concepts are of increasing interest.
Also, the steep urbanization in the GCC countries has a profound effect on food consumption. It helps attract large supermarkets (retail formats) and improves access to foreign supplies (imports), thus widening the available range of choices.
Individual governments in the region invest in various research activities to boost production. In addition, technical training is imparted to farmers in order to increase productivity and promote optimal utilisation of available resources. Here are numerous opportunities for Dutch companies to be found.
There is substantial interest of financial and strategic investors in poultry, dairy and meat processing projects. The sectors of health foods and organic foods are gaining popularity within the GCC. They open up avenues for investment.