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Saudi PIF to Set Up Sawani Camel Dairy Company

Sawani contributes to the development of the local production system to reach sustainability (Asharq Al-Awsat)
Sawani contributes to the development of the local production system to reach sustainability (Asharq Al-Awsat)
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Saudi PIF to Set Up Sawani Camel Dairy Company

Sawani contributes to the development of the local production system to reach sustainability (Asharq Al-Awsat)
Sawani contributes to the development of the local production system to reach sustainability (Asharq Al-Awsat)

The Public Investment Fund (PIF) has set up the Sawani Company to enable the growth of the Saudi camel farming industry and actively contribute to its sustainable development.

Sawani aims to be a leading producer of camel dairy products, supporting Saudi Arabia's wider Food and Agriculture sector and helping to diversify the Saudi economy, in line with Vision 2030.

The company will work in partnership with the private sector to boost the production capacity of the camel dairy industry and seek to elevate the standards of the domestic production ecosystem by modernizing operations, improving the localization of knowledge, and investing in the sector's latest technologies.

PIF has invested strategically in the Food and Agriculture sector to help diversify the Saudi economy and support its unique produce industries.

Among these investments are its creation of the Saudi Coffee Company, which promotes Saudi Khulani coffee beans, and the Halal Products Development Company, which invests in the halal products sector.

Since 2017, PIF has established 84 companies in 13 strategic sectors.

Sawani will place sustainability at the center of all production, distribution, and marketing stages and raise awareness of camel dairy products' health benefits among consumers.

It will also showcase the unique history and cultural heritage of camel husbandry within Saudi Arabia.

Camel milk is commonly known for its nutritional benefits, including high amounts of minerals and vitamins such as A, B, E, and C.

It is also rich in calcium, protein, and antioxidants, considered low in cholesterol, and is easy to digest.

The Head of PIF's Consumer Goods and Retail in the Mena Investments Division, Majed al-Assaf, said Saudi Arabia has extensive experience and knowledge of the camel dairy industry and enormous potential to expand its operational capabilities and the broader ecosystem.

Assaf noted that these factors are a competitive advantage across the entire supply chain, which, alongside investment, "will enable significant growth of the industry, and eventually lead to the export of camel dairy products, which have many nutritional benefits, to regional and global markets."

The establishment of Sawani will support the growth of the Food and Agriculture sector and contribute to sustainable economic and social development, in line with Vision 2030.

A key part of the company's strategy is to increase awareness and knowledge of the industry to preserve it and drive sustainable growth by introducing the best scientific practices in modern manufacturing technologies locally.

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Saudi Arabia Raises $12 Billion in International Bonds Amid Strong Demand

Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
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Saudi Arabia Raises $12 Billion in International Bonds Amid Strong Demand

Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).

Saudi Arabia has raised $12 billion from global debt markets in its first international bond issuance of the year, attracting bids worth nearly $37 billion. This demonstrates strong investor appetite for Saudi debt instruments.

The issuance comes just two days after the approval of the 2025 annual borrowing plan by Minister of Finance Mohammed Al-Jadaan. The plan estimates financing needs for the fiscal year at SAR 139 billion ($37 billion). The funds will be used to cover the projected SAR 101 billion ($26.8 billion) budget deficit for 2025, as well as repay SAR 38 billion ($10 billion) in principal debt obligations due this year.

The National Debt Management Center (NDMC) announced on Tuesday that the issuance includes three tranches: $5 billion in three-year bonds, $3 billion in six-year bonds, and $4 billion in ten-year bonds. Total demand for the bonds reached $37 billion, exceeding the issuance size by three times and reflecting robust investor interest.

The NDMC emphasized that this issuance aligns with its strategy to broaden the investor base and efficiently meet Saudi Arabia’s financing needs in global debt markets.

According to IFR, a fixed-income news service, the initial price guidance for the three-year bonds was set at 120 basis points above US Treasury yields. The six-year and ten-year bonds were priced at 130 and 140 basis points above the same benchmark, respectively.

Strong demand allowed Saudi Arabia to lower yields on the shorter-term bonds, further demonstrating investor confidence. Economists noted that the pricing above US Treasuries is attractive in the current market, showcasing trust in Saudi Arabia’s economic stability and financial strategies.

International confidence

Economic experts view this successful bond issuance as a testament to international confidence in Saudi Arabia’s robust economy and financial reforms. Dr. Mohammed Al-Qahtani, an economics professor at King Faisal University, said the move underscores Saudi Arabia’s commitment to diversifying financing tools both domestically and internationally. He added that the funds would support Vision 2030 projects, reduce pressure on domestic resources, and attract strong international investor interest.

The issuance strengthens Saudi Arabia’s ability to meet financial needs, expand its investor base, and establish a global financing network, he said, noting that it also facilitates entry into new markets, enabling the Kingdom to accelerate infrastructure projects and capital expenditures.

Dr. Ihsan Buhulaiga, founder of Joatha Business Development Consultants, described the 2025 budget as expansionary, aimed at meeting the financing needs of economic diversification programs. He stressed that the budget deficit is an “optional” one, reflecting a deliberate choice to prioritize Vision 2030 initiatives over immediate fiscal balance.

Buhulaiga explained that the Kingdom’s approach balances two options: limiting spending to available revenues, which would avoid deficits but delay Vision 2030 initiatives, or borrowing strategically to fund Vision 2030 goals. He said that the annual budget is just a component of the larger vision, which requires sustained funding until 2030.

He continued that Saudi Arabia’s fiscal space and creditworthiness allow it to borrow internationally at competitive rates, explaining that this flexibility ensures financial sustainability without compromising stability, even during challenges like the COVID-19 pandemic.

Saudi Arabia’s debt portfolio remains balanced, with two-thirds of its debt domestic and one-third external. As of Q3 2024, public debt stood at approximately SAR 1.2 trillion, below the 30% GDP ceiling. According to the Ministry of Finance, the budget deficit is expected to persist through 2027 but remain below 3% of GDP.

Buhulaiga highlighted the importance of capital expenditure, which reached SAR 186 billion in 2023 and is projected to rise to SAR 198 billion in 2024, a 6.5% increase.

He emphasized the government’s pivotal role in economic diversification, supported by investments from the Public Investment Fund (PIF), the National Development Fund, and its subsidiaries, including the Infrastructure Fund.

The PIF recently announced a $7 billion Murabaha credit facility, facilitated by Citigroup, Goldman Sachs International, and JPMorgan. Meanwhile, the NDMC arranged a $2.5 billion revolving credit facility earlier in January, compliant with Islamic principles, to address budgetary needs.

In November, Moody’s upgraded Saudi Arabia’s credit rating to Aa3, aligning with Fitch’s A+ rating, both with a stable outlook. S&P Global assigns the Kingdom an AA-1 rating with a positive outlook, reflecting a high ability to meet financial obligations with low credit risk.

The IMF estimates Saudi Arabia’s public debt-to-GDP ratio at 26.2% in 2024, describing it as low and sustainable. This is projected to rise to 35% by 2029 as foreign borrowing continues to play a key role in financing deficits.