UAE's Hakan Agro to expand Sudan operations
Dubai, December 23, 2010
Dubai-based food trading firm Hakan Agro DMCC is poised to expand its operations in southern Sudan but awaits the outcome of a referendum next month, which will likely see the south secede, its managing director said.
The United Arab Emirates' largest food trading firm, which already operates in the semi-autonomous south, needs to see political stability and security before investing further, Sudhaker Tomar told Reuters in an interview on Wednesday.
'Right now we are not full throttle in south Sudan,' Tomar said, but he added he was optimistic about the future of the investment climate there.
'I think the referendum looks like it will go through. It has a sizeable good hungry population and it is also a very fertile area. It's not only an import-based economy but I also foresee it will be an export-based economy.'
Southerners are widely expected to choose independence in the vote, which is due to take place from January 9.
Hakan Agro, which supplies poultry and meats there and exports oilseeds, sees further opportunities for the export of cereals and the import of rice, wheat and dairy to the south and could set up long term supply and purchase contracts, Tomar said.
'I don't see any restriction to our investments there but the situation has to be stable,' he said, adding the firm is looking for potential partners there, be they government, semi-government or private investors.
Relations between north and south Sudan have been tense in the build-up to the referendum and analysts have warned that both armies have been re-arming, stoking fears that the two sides could return to war.
Gulf firms are investing heavily in Sudan in sectors such as telecommunications and construction but much of this investment is in the largely arid north, while the more fertile south severely lacks basic infrastructure.
Companies such as Saudi-based National Agricultural Development Co (Nadec) and Abu Dhabi private firm Jenaan - have invested in farmland in Sudan - part of a Gulf drive to boost food security.
'That's because of what I call linguistic, cultural and religious affinity which at times may not make commercial sense. We feel that those investments are not always very prudent,' Tomar said, adding the firm currently has no plans to buy land in southern Sudan.
'Our business model is always working with the local people ... they shouldn't be on guard saying these people have come and they want to grab our land.'
Tomar said that logistical challenges and the lack of a 'financial system' made the south's investment climate harder.
'Southern Sudan is a land locked country so logistically it is a challenge to get things in and out ... a lot depends on the new government's relationship with its neighbours.'
Hakan Agro supplies its food to the south through the port of Mombasa in neighbouring Kenya. Djibouti could also be a supply route option in the future, he added.
'Of course (north) Sudan is an option (for supply). The business community hopes that the relationship between northern and southern Sudan is peaceful and so there is an inflow and outflow of trade.'
Sudan's south also borders Ethiopia, Uganda, Democratic Republic of Congo and Central African Republic.
Hakan Agro exports 54 food products from 52 countries to over 1,000 customers in 82 countries, according to its website.-Reuters