Saudis and South Koreans in new land rush

Farmland is decreasing steadily in South Korea. (Photo: The Hankyoreh)

Land Gazette | Tuesday, 14 April 2009

Written by Alistair Macgregor

Two of the world's biggest land investors - Saudi Arabia and South Korea - have announced moves to improve their food security. A South Korean company is to buy 125,000 acres in Russia over the next four years and a Saudi group has set up a £600m fund to buy land.

South Korean shipbuilder Hyundai Heavy Industries has paid £4.4m for a two-thirds stake in Khorol Zerno, which owns 25,000 acres of farmland in eastern Russia near the port of Vladivostok. It plans to invest another £6m to fund the purchase of a furthern 100,000 acres by 2012. It expects the land to produce 60,000 tons of corn and beans a year by 2014.

Daewoo Logistics, another South Korean company, recently pulled out of a deal to lease 3.2m acres of land in Madagascar, following the recent political unrest there.

Meanwhile, an agricultural investment firm owned by the Saudi government says it has a £600m fighting fund to purchase land to cultivate wheat, rice, sugar and soybeans. The investment company Saudi Company for Agricultural Investment and Animal Production (SCAIAP) is owned by the Saudi government and aims to be the cornerstone of the 'King Abdullah initiative for Saudi agricultural investment abroad'. Saudi firms are said to be buying farms as far afield as Indonesia and West Africa after the government decided last year to gradually shut down wheat production in order to conserve water resources.
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