Baladna’s Strategic Investment in Algeria: Energy and Milk Production Drive Major Qatari-Algerian Partnership

✏️ BY: Dr. Hana Saada

Algiers, Algeria | September 20th, 2024 — In a significant boost to Algerian-Qatari economic cooperation, the Minister of Energy and Mines, Mohamed Arkab, met with a delegation from the Qatari dairy company Baladna, led by its Chairman of the Board, Mohamad Moutaz Al-Khayyat. The discussions centered on the crucial energy needs for the integrated milk powder production project in the wilaya of Adrar. This project, an Algerian-Qatari joint venture, aims to bolster Algeria’s food security and reduce its reliance on milk powder imports while enhancing the nation’s agricultural self-sufficiency.

According to a statement released by the Ministry of Energy, Thursday’s meeting at the ministry’s headquarters saw a detailed examination of the energy infrastructure required for the project, specifically electricity and gas connections. Minister Arkab emphasized the pivotal role of energy supply in ensuring the success of this large-scale strategic initiative, noting that it was “one of the key conditions for its full implementation.” A technical presentation outlined potential short- and long-term solutions for power production, transmission, and conversion, carefully tailored to meet the operational demands of the project.

Among the attendees were influential figures, including Mohamed Boukhari, Advisor to the President of the Republic in charge of finance, banking, and international financial regulations; the Director General of Sonelgaz; the Qatari Ambassador to Algeria, Abdulaziz Ali Al-Naama; and senior officials from the Ministry of Energy and Sonelgaz. Sonelgaz, which has already undertaken several technical studies, assured attendees that it had launched projects to construct essential electrical transformers on-site to meet the project’s future requirements. This, according to Minister Arkab, underscores Algeria’s readiness to take the necessary steps to ensure the success of such a strategically important initiative.

Additionally, the discussions also focused on exploring further investment opportunities for the Baladna group in Algeria, particularly in the energy and mining sectors. Minister Arkab reaffirmed Algeria’s openness to expanding the scope of Qatari investments in line with national development goals. “This partnership is a symbol of the strong fraternal ties between Algeria and Qatar,” Arkab stated, expressing confidence in the potential for future collaboration.

Milestone Agreements for Food Security and Economic Growth

Earlier that same day, a landmark shareholder agreement was signed between Algeria’s National Investment Fund (FNI) and Baladna to formalize their joint venture in the production of milk powder in Adrar. This agreement, signed by FNI Director General Kamel Mansouri and Ramez Al-Khayyat, a delegate of Baladna, took place in the presence of high-ranking government officials, including Minister of Industry and Pharmaceutical Production Ali Aoun, Minister of Agriculture Youcef Cherfa, Minister of Finance Laaziz Faid, and the Director General of Customs, Abdelhafid Bakhouche.

During the signing ceremony, Finance Minister Laaziz Faid highlighted the critical role this project will play in addressing Algeria’s food security concerns, particularly its dependency on milk powder imports. “This project will directly contribute to securing the nation’s food needs, ensuring self-sufficiency in milk powder, and significantly reducing our import bill. It will also supply the local market with high-quality red meat and create 5,000 direct jobs,” Faid emphasized. The minister called on both Algerian and Qatari stakeholders to expand consultations and seek new, innovative areas of cooperation.

The integrated dairy project, valued at an estimated $3.5 billion, is designed to cover 117,000 hectares of land in Adrar. It will be rolled out in four phases over a nine-year period, beginning in 2026. The joint venture will be managed by a partnership in which the Algerian side, represented by the FNI, will hold 49%, while Baladna will control the remaining 51%. The large-scale operation will include three interconnected hubs, each containing a cereal and forage farm, a cattle farm for milk and meat production, and a milk powder factory.

The ambitious initiative aims to produce around 194,000 tons of milk powder annually by the final phase of the project. During the first phase, a farm will be established to meet forage needs, and a cattle farm with a capacity of 50,000 head of cattle will be constructed, along with state-of-the-art milk powder production lines. By the ninth year, the project is expected to expand to accommodate 270,000 head of cattle and generate an annual output of 1.7 billion liters of milk.

Collaboration Expands to Infant Formula Production

In a related development, a memorandum of understanding was signed on the same day between the Ministry of Industry and Pharmaceutical Production and Baladna, aimed at establishing a factory for the production of infant formula in Algeria. This agreement, signed by Amel Allame, Director General of Industrial Development, and Ramez Al Khayyat, will integrate infant formula production into the broader milk powder project already under development in Adrar.

Minister Ali Aoun, who hosted Al-Khayyat at the Ministry of Industry’s headquarters in Algiers, stressed the “vital importance” of this project and called for adherence to international quality standards in all aspects of production. Aoun reaffirmed his ministry’s commitment to providing full support and ensuring the project’s success through close coordination with the relevant sectors. “This project symbolizes a critical partnership between Algeria and Qatar and represents a cornerstone of our efforts to enhance food security while creating jobs and boosting economic development,” Aoun said.

The Qatari delegation, led by Al-Khayyat, expressed their readiness to deepen their investment in Algeria and explore additional opportunities for collaboration in agriculture, energy, and other sectors, thereby further strengthening the already robust ties between the two nations.

In conclusion, the Baladna-Adrar project represents not only a monumental step in Algeria’s journey toward self-sufficiency in food production but also a shining example of the strong and deepening economic partnership between Algeria and Qatar. As both nations continue to explore new avenues for cooperation, this initiative will likely serve as a model for future collaborative efforts aimed at fostering economic growth, innovation, and sustainability.

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