MANAMA: Bahrain-based Al Salam Bank is moving into the agricultural industry. The bank yesterday announced it had signed a memorandum of understanding (MoU) with Thailand's Charoen Pokphand Group (CP Group), a major global food and agricultural company.
This alliance is part of the bank's diversification strategy.
For CP Group, this marks the organisation's business expansion into the Middle East and North Africa (Mena) region.
Al Salam and CP Group will jointly identify suitable agribusiness ventures that will generate attractive risk-adjusted returns while playing a proactive role in addressing food security in the region.
The alliance will initially carry out detailed feasibility studies to gauge the viability in various target agribusiness sectors, including livestock, staple food, aquaculture, and perishables.
The studies will comprehensively cover technical, financial and operational due diligence, in order to identify target markets in the Mena.
"This alliance falls in line with Al Salam's mission to provide unique investment opportunities that meet investors' objectives and risk appetite," said Al Salam Bank chief executive officer and board member Yousif Abdulla Taqi.
"We are also proud to support the region in addressing the critical issue of food security.
"Although Bahrain will be used as a hub, our target market will cover the Mena region in its entirety.
"The projects will play an important role in creating job opportunities for Bahrainis," Mr Taqi said.
"This MOU signifies CP Group and Al Salam's intent to establish Bahrain as the 'Halal Food Hub' of the Mena region," said CP vice-chairman Eam Ngamdamronk.
"This alliance represents CP Group's first joint venture with an Islamic bank and will serve our vision to become 'The Kitchen of the World'.
The proposed venture is envisioned to be an integrated Halal Food Company that will invest in farming, food processing, packaging, and distribution.
CP Group will provide a highly-specialised management team with extensive track record in the agricultural and food industry for this venture.