Algeria and Qatar Sign $3.5 Billion Deal for Powdered Milk Production Project

The Algerian Ministry of Agriculture and Rural Development has signed a framework agreement with Baladna Q.P.S.C., a Qatari company, to establish the 'Baladna' project for producing powdered milk in southern Algeria.

The $3.5 billion project will be a 51% Baladna and 49% Algerian state-owned venture through the National Investment Fund.

The project, which covers an area of 170,000 hectares in the Adrar region, includes a farm for growing cattle feed, a farm for cattle and milk/meat production, and a factory for powdered milk production. It is anticipated to yield 200,000 tonnes of powdered milk per year, meeting 50% of Algeria's national demand for the product. The project will also supply the local market with red meat and help increase the national cattle population.

Why this matters: Algeria, a country of almost 45 million people, has faced several milk shortages in recent years and heavily relies on imports for powdered milk and other food products, with imports reaching nearly $600 million in 2021. The Baladna project aims to reduce Algeria's reliance on powdered milk imports and create jobs for the country's youth.

Baladna's CEO, Malcolm Jordan, expressed the company's enthusiasm to work with Algerian partners to build one of the world's largest vertically integrated dairy companies. "The strategic partnership aligns with Baladna's growth objectives and promises significant returns and long-term value for its shareholders," Jordan stated.

Baladna has a proven track record of achieving self-sufficiency in Qatar within 12 months and plans to replicate this success in Algeria by leveraging modern technology and best management practices to enhance dairy farming efficiency, reduce production costs, and improve control over the entire value chain.

The deal was signed between the Algerian agriculture ministry and Baladna's chairman on Wednesday in Algiers, the capital of Algeria. The project is expected to be operational by 2026, creating around 5,000 direct jobs. It is part of Algeria's strategy to produce widely consumed products in line with the national food security strategy.

Key Takeaways

• Algeria and Qatar's Baladna sign $3.5B deal to build powdered milk farm
• Project aims to meet 50% of Algeria's powdered milk demand and create 5,000 jobs
• Baladna to own 51% of the venture, with 49% owned by Algerian state fund
• Project includes cattle feed farm, cattle farm, and powdered milk factory
• Baladna aims to replicate its self-sufficiency success in Qatar in Algeria