AGENDA

1. Business Opportunities for Northwest Companies inSaudi Arabia’s Agriculture and Food SectorsTuesday, April 10th9:00am - 10:30am PDT/12:00pm - 1:30pm EDT

2. Khalid N. Alrwis, Ph.D.Professor at the Department of Agricultural EconomicsCollege of Food and Agricultural SciencesKing Saud University, Riyadh, Saudi Arabia Moderated by: David CallahanVice President, Business DevelopmentU.S.-Saudi Arabian Business Council Tawhid Al-Saffy, Ph.D.Director, Agricultural Trade Office (ATO)U.S. Embassy, Riyadh, Saudi Arabia U.S

3. AGENDA IntroductionAbout the Business Council – David CallahanKing Abdullah Food Security Initiative - Professor Khalid N. AlrwisFood Retail Opportunities in the Saudi Market - Dr. TawhidAl-SaffyUpcoming Opportunities for U.S. companiesQuestions & Answers Closing Remarks

4. About the Business Council • Mission • To foster, develop, and expand U.S.-Saudi business ties through trade and investment and to contribute to the accurate depiction of the business environment in Saudi Arabia. • Profile • Nonprofit (Private-Sector Funded) • 400 U.S. and Saudi Members • SMEs and Fortune 500 companies • Operations in multiple industries • - Offices in Washington, DC metro area and Riyadh, Saudi Arabia

5. State Programs Initiative The Business Council has developed strategic alliances with select state trade agencies to foster bilateral business between regions of the U.S. and Saudi Arabia. The Business Council has cooperative agreements with five state trade offices: •Florida • Pennsylvania • Oregon • Virginia • Washington State

6. King Abdullah Food Security Initiative Khalid N. Alrwis, Ph.D.Professor at the Department of Agricultural EconomicsCollege of Food and Agricultural SciencesKing Saud University, Riyadh, Saudi Arabia

7. U.S.-Saudi Arabian Business Council King Abdullah Initiative for Food Security April 10, 2012 KSA, Riyadh By: Prof. Khalid Alrwis

8. Food Security • World Bank, 1986 • “Access to sufficient food at all times for an active and healthy life” • Food and Agriculture Organization, 2009 • “ Food security exists when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life.” • The Four Pillars of Food Security: • Availability. • Stability. • Accessibility. • Utilization

9. 0 Global food price volatility, world population growth and decline production levels are putting pressure on food prices 6

10. Global food price volatility, world population growth and decline production levels are putting pressure on food prices

11. Global and local challenges faced by KSA to secure affordable food for its residence External Factors Internal Factors • Global Demand Challenges • Increase in global demand due to population growth and Improvement in standard of living for most of the world nations • Changes in consumption habits • Global Supply Challenges • Climate change negatively impacting domestic production levels • Market speculations • Insufficient agricultural investment in developing countries • Sharp increase in usage of agricultural land for production of bio fuel • Reduction of food exports due to trade Barriers: • Export ban imposed by some countries • Quotas imposed on exports • Demand Challenges • Increase in demand due to fast growing population • Rise in per capita income levels leading to high demand for food products • Supply Challenges • Limited agriculture self-sufficiency and high reliance on imports • High concentration of countries supplying KSA for particular commodities • Dependence on private sector stock holding for resilience against global price volatility 5

12. 0 Global food price volatility, world population growth and decline production levels are putting pressure on food prices World Total Population (2005 - 2025); (in Billion) 6

14. In KSA, population growth and increased consumption are the main factors that will drive higher future demand % 1970 1990 2000 2005 2010 2020 2030 KSA Population Growth Forecast(1970-2030) (In Millions) Source: The 2008 revision population database (United Nations population Division) 7

15. 8 KSA is not self-sufficient in most food commodities Domestic Production by Crop (2009); (In ‘000 tons) Consumption1) by Crop (2009); (In ‘000 tons) Self-Sufficiency Levels by Crop (2009); (In % of Consumption) 1,000 2,606 Wheat 38% 570 1,159 Chicken 49% KSA plans to progressively reduce wheat production in order to preserve scarce water reserves Maize 1,700 7% Meat (Beef & Veal) 127 18% 7,400 Barley 0% Rice 1,043 0% 0% Sugar 798 0% 50% 100% 1) Consumption is equal to domestic production + imports - change in stock levels Source: FAO, USDA, Booz & Company analysis 8

16. % Currently, the country relies on nine countries for 90% of its food imports KSA Food Imports - By Country (2008); (in Million USD) Comments • For each food commodity, KSA relies on a limited number of exporters: • Sugar is mainly imported from Brazil • Maize is mainly imported from the US and Argentine • Wheat is mainly imported from Canada and the EU • Rice is mainly imported from India 90% of Food Imports 9

17. Average production and consumption and the proportion of self-sufficiency for the most important strategic commodities during the period 1990 - 2009.

18. Strategic Stuck and Coefficient of Food Security of Commodities (1990 – 2009)

19. Future Needs of Food Commodities (2008 _ 2015) / (thousand tons)

23. The Minimum Amount of Future Imports of Food Commodities (2008- 2015)/thousand tons.

27. Consequently, KSA launched the “King Abdullah Initiative for Agro-Investment Abroad” to address challenges and secure food at affordable prices • KSA leadership has taken sustainable measures to face the world food crisis by securing and ensuring affordable food supplies for the Kingdom’s citizens and residents • Vision • Protect against hunger & guarantee food security • Combat price escalation in food products • Maintain existing lifestyle of the KSA population • Goals • Strategic Components • Manage strategic food reserves • Diversify sourcing of key commodities 11

28. Moreover, KSA will diversify its sourcing of food through overseas farming investments based on a set of principles • Overseas Farming Investment Principles • Identification of Countries with agricultural investment capabilities • The main investor should be the KSA private sector • Readiness of the KSA Government to provide Financing & Credit facilities, Off-Take agreements and support needed for investors • (BITs) Signing with host countries to guarantee safety & security of investments • Guarantee of the investor's right to export crops in order to enhance KSA strategic food reserve, (with the possibility of leaving part in host country if needed) • Agreeing with hosting countries on kinds needed of the cultivated crops • Investments are long term 13

29. Project management Ministerial Committee Steering Committee P M O Technical Committees Target Countries Policies and procedures Needs / strategic stock The company's government establishment for agricultural Framework agreements Financial Support/ Off Take Agreements Consultants Management Financial Legal Agricultural Stake Holders Holding CompanyTo be established Foreign governments Saudi companies Foreign companies

30. About a dozen Targeted – Strategic Commodities Approach for Selection of Strategic Food Commodities 18

31. Target countries are selected and prioritized into 3 groups based on their level of risk and agriculture capabilities Target Countries Prioritization Comments High • Attractive Group: Countries that benefit from high agriculture capabilities and low country risks • Sound Group: Countries that benefit from fair to high agriculture capabilities, yet face medium country risks • Risky Group: Countries that benefit from high agriculture capabilities yet face high country risks 1 2 3 1 Country 1 Country 1 2 Agriculture Capabilities 3 Less Attractive Country 1 Country 1 Low Low High Country Risk Countries Visited to Date Criteria • Poland • Ukraine • Kazakhstan • Turkey • Egypt • Sudan • Ethiopia • Cambodia • Vietnam • Philippines • Brazil • Argentine • Agriculture capabilities: • Agriculture GDP and labor • Climatic and water resources • Quality of the soil • Commodities and production • Country risk: • Political and social stability • Economic stability and trade environment • Infrastructure 16 Source: Booz & Company analysis

32. Thank You www.mci.gov.sa/farming 19

33. Food Retail Opportunities in the Saudi Market Tawhid Al-Saffy, Ph.D.Director, Agricultural Trade Office (ATO)U.S. Embassy, Riyadh, Saudi Arabia U.S

34. Food Retail Opportunities in the Saudi Market • ATO services • Overview of the Saudi food retail market (demand and opportunities) • Local food processing sector • Major players in the mass grocery retail, supermarket, and hypermarket • Doing business with Saudi importers and establishing distribution channels • Quality and Labeling requirements • Shipping requirements • Upcoming in-bound mission with USDA

35. Washington State Business Development Mission to Saudi Arabia December 8-12, 2012 • Jeddah and Riyadh This mission will heavily focus on B2B meetings and site visits tailored to the individual needs of each participant.

36. Mission Deliverables • Program • Briefings on economic, regulatory, legal and investment climate • “Insight” briefing with senior U.S. businessmen in-country • Customized one-on-one meetings with potential partners • Site visits to major Saudi companies and government entities • Networking luncheons/dinners/receptions • Logistical Support and Follow-up • Visa Sponsorship • Local transportation for program events • Post mission follow-up assistance

37. Questions & Answers Please submit your questions in the Q&A box located at the bottom, right of your screen.

38. For more information on the mission and opportunities in the Saudi market, contact: Diana Rowe Research Analyst Coordinator, State Programs Initiative – Washington Tel: 703.962.9300 Email: drowe@us-sabc.org