Tuesday, June 16, 2009

Egypt: horticulture firm plans to double cultivation

Magrabi Agriculture, a leading exporter of Egyptian fruit and vegetables, said on Wednesday it was doubling its farmland to meet increasing demand from Europe.

Chairman Sherif El Maghraby told Reuters his company aimed to invest 900 million Egyptian pounds ($160 million) to farm 10,000 acres in Minya, around 200 km (124 miles) south of the capital Cairo.

"We actually reached a level four years ago when we had our marketing vehicles and our clients in Europe asking us for at least 50 percent over and above what we were producing," Maghraby said in an interview.

Magrabi Agriculture, which is 70 percent owned by Egypt's Maghraby family and the rest by other Arab investors, exports around 90 percent of its production, with 70 percent going to Europe.

The Minya project is expected to have turnover of 700 million Egyptian pounds a year and start in three years.

Magrabi Agriculture, which is testing the soil and underground water in the area, toyed with the option last year of investing in Sudan, further up the Nile and where some Gulf and other Arab investors are eyeing projects.

But Maghraby, who went on a visit to Sudan eight months ago, said land ownership laws and attitudes kept him away.

A Sudanese Agriculture Ministry official told Reuters last week the country was looking to attract $7.5 billion worth of Arab agricultural investments by 2010-2011.

Egypt, where water allocation is 800 cubic metres per capita per year, falls well below the water poverty line of 1,000 cubic meters per capita a year.

The African Union has criticized what Africans are now calling "land-grabs" as more and more investors from the dry Gulf Arab region and Asia buy farmland in the continent to feed their countries.

The African Union argues these investments do not provide benefits to the impoverished nations.