Saudi Arabia Turns Potato Farming Challenge into Export Opportunity

Saudi Arabia Turns Potato Farming Challenge into Export Opportunity
TT

Saudi Arabia Turns Potato Farming Challenge into Export Opportunity

Saudi Arabia Turns Potato Farming Challenge into Export Opportunity

In the deserts of Hail in northern Saudi Arabia, where rugged mountains border a climate that turns mild in summer and biting in winter, an unlikely agricultural success story has emerged.

From sandy soil that appears unforgiving at first glance, uniform potatoes are harvested to meet the exacting standards of local and international markets, supplying global food companies and contributing to the growth of a thriving export industry.

Grown not on traditional farmland but in a desert landscape long constrained by water and energy shortages, the crop has become a case study in how agricultural innovation and industrial sustainability can converge, positioning Saudi Arabia among the world's exporters of potatoes and processed potato products.

Potatoes in Hail are cultivated in sandy soil that gives the crop sufficient room to grow without deformities, setting it apart from harder soils that reduce quality and market acceptance. The main challenge, however, was not the soil but groundwater scarcity, making the search for innovative irrigation solutions a necessity rather than a choice.

That marked the start of a shift. Farmers have adopted drip irrigation systems powered by solar energy to reduce consumption and increase productivity, transforming Hail into a strategic production hub that contributes to self-sufficiency and exports to global markets.

According to previous remarks by Saudi Industry Minister Bandar Alkhorayef, the kingdom developed an irrigation model tailored to potatoes grown for potato chip manufacturing and export.

Alkhorayef said at the time that PepsiCo, which produces the well-known Lay’s brand, faced difficulties exporting potatoes grown in the kingdom. He stated that the government had collaborated with the Ministry of Agriculture to address the issue.

“They had a valid concern related to water scarcity, so we developed an appropriate irrigation model, which was approved by the agriculture ministry, resolving the export problem,” he said.

According to the Ministry of Environment, Water, and Agriculture, Saudi Arabia experienced a significant increase in potato production in 2023, with output rising by 47 percent to exceed 621,750 tonnes. The self-sufficiency rate reached 86.8 percent, according to the latest officially announced figures.

Hamoud Al Saleh, founder and chairman of Lahaa Agricultural Production, one of the Saudi suppliers to PepsiCo, said the kingdom had exported potatoes to Russia for six consecutive years, in addition to other countries including Norway, Lebanon, Syria and Jordan, while also supplying local factories.

Challenges

Some European markets still face hurdles in importing Saudi potatoes due to the absence of trade protocols, while Norway has proven more flexible, continuing imports over recent years, Al Saleh said.

He said groundwater remains the biggest challenge for farmers. Speaking to Asharq Al Awsat, Al Saleh said PepsiCo supported the company in implementing drip irrigation, covering part of the cost for three years and providing experts to help design and approve the system, which significantly increased productivity.

He said yields per hectare rose to between 50 and 60 tonnes in some fields, alongside a notable reduction in water consumption. He added that Saudi potatoes show high resilience to environmental conditions.

Energy has also been a challenge, with agricultural equipment relying heavily on diesel. This has prompted many farmers to adopt solar power, thereby easing operating costs for both farmers and the state.

Al Saleh unveiled a new project costing 15 million riyals, approximately $4 million, spanning 700 hectares and utilizing a combination of diesel and solar energy, describing it as a long-term investment aimed at enhancing sustainability and reducing consumption.

Resource efficiency

PepsiCo said resource efficiency has become a central pillar of its regional strategy. Ahmed El Sheikh, president and general manager for the Middle East, North Africa and Pakistan, said the company had adopted advanced drip irrigation systems in cooperation with specialized firms and the agriculture and industry ministries.

He said this helped cut water use by around 30 percent compared to traditional irrigation, alongside a shift toward solar energy instead of diesel, which reduced fuel and energy consumption.

Regarding exports, El Sheikh stated that most products are shipped to Gulf states and Jordan, with efforts underway to explore exports to Syria from plants within the kingdom.

In terms of investments linked to Vision 2030, he stated that the company has invested 300 million riyals, approximately $80 million, in new production lines targeting both local and export markets.

He stated that local content reached 95 percent for certain packaging materials that were previously imported, while locally sourced potatoes also achieved 95 percent, with ongoing efforts to reach 100 percent.

Local content refers to the share of raw materials, manufactured inputs, or extracted resources produced inside Saudi Arabia, whether agricultural, industrial, or packaging-related.

Regarding workforce localization, El Sheikh stated that some plants, including the Dammam factory, have achieved Saudization rates of 80 percent, with the appointment of the first Saudi female plant manager.

In research and development, the company stated that it has established an R&D center with investments exceeding 30 million riyals, approximately $8 million, thereby localizing operations within the kingdom instead of relying on overseas centers.

El Sheikh said the company has reached full operational capacity in working with farmers on potato crops, calling it a major achievement that it hopes to replicate with other crops in the future.

Water scarcity by the numbers

This agricultural experience comes amid mounting challenges to water resources. The National Water Strategy says Saudi Arabia has a limited stock of exploitable non-renewable groundwater, with low recharge rates not exceeding 2.8 billion cubic meters annually.

Total water demand is estimated at approximately 24.8 billion cubic meters, with an annual growth rate of around 7 percent.

The strategy states that agriculture is the largest consumer of water in the kingdom, accounting for approximately 84 percent of total demand, and relies heavily on non-renewable resources that make up nearly 90 percent of agricultural water use.

Agriculture ministry data show irrigation efficiency does not exceed 50 percent, compared with more than 75 percent under global best practices. Fodder cultivation alone consumes about 67 percent of agricultural water, according to the latest available figures.

Government role

This shift in potato farming would not have been completed without government support. The kingdom developed and approved an irrigation model suited to potatoes grown for chips and export as the preferred method, prompting PepsiCo to expand its factories in the Eastern Province with investments exceeding 300 million riyals.

This helped make Saudi Arabia the world’s second-largest hub for potato chip manufacturing, according to previous remarks by the industry minister.

Beyond exports, the model strengthens self-sufficiency. Under this approach, Saudi potatoes have become more than just an ingredient in chips, turning into a symbol of integration between agriculture and industry and evidence of the kingdom’s ability to transform environmental challenges into global economic and investment opportunities, in line with the ambitions of Vision 2030.



Trump: ‘Time to Teach Canada You Can’t Do This Anymore’

US President Donald Trump speaks as he hosts a back-to-school-themed event to highlight his administration's education policies, in the Rose Garden at the White House in Washington, DC, US, August 24, 2026. (Reuters)
US President Donald Trump speaks as he hosts a back-to-school-themed event to highlight his administration's education policies, in the Rose Garden at the White House in Washington, DC, US, August 24, 2026. (Reuters)
TT

Trump: ‘Time to Teach Canada You Can’t Do This Anymore’

US President Donald Trump speaks as he hosts a back-to-school-themed event to highlight his administration's education policies, in the Rose Garden at the White House in Washington, DC, US, August 24, 2026. (Reuters)
US President Donald Trump speaks as he hosts a back-to-school-themed event to highlight his administration's education policies, in the Rose Garden at the White House in Washington, DC, US, August 24, 2026. (Reuters)

US President Donald Trump said on Wednesday that it was "time to teach Canada you can't do this anymore," just days after trade talks between the neighboring countries broke down.

"I had a deal, that was a pretty good deal, you know, quite good," Trump told Glenn Beck in an interview.

"They don't have anything that we have to have, okay, we can get by. I mean, there ‌are a ‌couple of things that would make it ‌a ⁠little inconvenient, but we ⁠can get them elsewhere. And it's time to teach Canada you can't do this anymore."

Trump imposed new 50% tariffs on $20 billion of Canadian imports on Saturday after talks between the two countries collapsed.

Canada hit back on Tuesday with retaliatory tariffs on about $20 billion worth of US annual imports ⁠and rolled out aid for businesses and workers, ‌matching Washington's latest duties dollar for ‌dollar.

They take effect on September 8.

Trump also announced 50% ‌tariffs on Canadian autos and parts that will take effect ‌on January 1.

Canada has said that the US refused to extend tariff relief to medium- and heavy-duty vehicles as one reason it did not reach an agreement.

The Canadian Embassy in Washington ‌did not immediately comment on Wednesday.

White House adviser Peter Navarro predicted on Wednesday that the deal ⁠Canada ⁠will ultimately strike with the US will be worse than what was offered last week.

"It just is not going to end well for Canada and I predict that the deal you got, that you turned your nose up, you're never going to get that deal again," Navarro said on C-SPAN. "Whatever you get is going to be less than that."

Navarro added that the US deal offered to Canada "made me uncomfortable" given how advantageous he thought it was for the US' northern neighbor.

"There's no way economically they should have turned it down," Navarro said.


Behind the Sun and Wind, Saudi Arabia Invests in 'Stored Energy'

“Bisha Battery Energy Storage Project” (Saudi Ministry of Energy)
“Bisha Battery Energy Storage Project” (Saudi Ministry of Energy)
TT

Behind the Sun and Wind, Saudi Arabia Invests in 'Stored Energy'

“Bisha Battery Energy Storage Project” (Saudi Ministry of Energy)
“Bisha Battery Energy Storage Project” (Saudi Ministry of Energy)

As solar and wind projects reshape Saudi Arabia's energy landscape, a new market is taking shape, focused on electricity storage. As reliance on renewable energy sources expands, batteries are emerging as a critical component of the system, storing electricity when it is available and feeding it back into the grid when demand rises.

This shift is not limited to adding a new technology to the power sector. It is gradually establishing a standalone investment activity in which batteries are evolving from a supporting solution for renewable energy projects into part of the infrastructure needed to manage electricity and enhance grid flexibility and reliability.

Saudi Arabia is taking another step in this direction with the Saudi Power Procurement Company signing four agreements for independent battery energy storage projects, with a total capacity of 2,000 megawatts for four hours and investments exceeding 4.35 billion riyals ($1.16 billion). The agreements were signed in the presence of Prince Abdulaziz bin Salman, Minister of Energy, Minister of Industry and Mineral Resources, and Chairman of the company's board of directors.

Four Projects Shaping the Storage Market

The first group includes three projects signed with a consortium comprising Saudi Energy Company, ACWA Power, and Al Sharif Contracting and Commercial Development. The projects are Al Muwayh and Hadn in Makkah Province, and Al Kahfa in Hail Province, each with a capacity of 500 megawatts for four hours.

The group also includes the Al Khashibi project in Qassim Province, with the same capacity. Its agreement was signed with a consortium comprising ENGIE and Alhaj Abdullah Ali Reda & Co. Ltd.

These projects are part of the first group of energy storage projects being developed under a build, own and operate model, as part of the energy sector's efforts to enhance the reliability and efficiency of electricity generation in Saudi Arabia.

"Storage" Strengthens Renewable Energy

In an analysis of the project, Dr. Mohammed Al-Sabban, a former senior adviser to the Saudi oil minister, told Asharq Al-Awsat that this approach addresses the energy sector's needs for the next phase, amid the rapid expansion of renewable energy sources.

He explained that battery energy storage is a key driver in strengthening the role of renewable energy sources, particularly solar and wind, within Saudi Arabia's electricity generation system.

Al-Sabban said the importance of storage stems from the nature of renewable energy sources, as the energy they generate is typically available within a limited period of no more than four hours. Storing this energy in batteries therefore plays an important role in extending the period during which it can be used and making it available to meet electricity sector needs at later times.

He noted that the current capacity, despite its importance, remains insufficient on its own given weather fluctuations and the limited period during which solar energy can be utilized, particularly after sunset. This further underscores the importance of these projects in the next phase to improve the efficiency of renewable energy utilization.

"Storage" Reshapes the Electricity System

Financial and economic adviser Dr. Hussein Al-Attas told Asharq Al-Awsat that signing these agreements simultaneously carries an important message: Saudi Arabia is no longer viewing renewable energy simply as an addition of new generation capacity. Instead, it is moving toward building an integrated electricity system encompassing generation, storage, load management, and improved grid reliability.

He explained that storage is the link that transforms solar and wind from intermittent sources into resources that can be managed and utilized when needed. He considers this a sign of greater maturity in the power sector, particularly given the targeted expansion of renewable energy sources.

These projects also contribute economically by improving the utilization efficiency of electricity assets and reducing the need to build conventional capacity that operates only during peak hours, while also enhancing grid stability. The value, he stressed, lies not only in the batteries themselves, but in the flexibility they add to the entire power system.

Billions Offer an Opportunity for Local Content

Al-Attas said the value of the contracts represents a good opportunity for local content, while emphasizing the need to distinguish between battery manufacturing itself and the rest of the value chain. He expects opportunities in the initial phase to focus on civil, electrical, construction, installation, operations, and maintenance work, in addition to some assembly and supporting systems, while cells and advanced battery technologies will initially remain more dependent on imports.

He stressed that the more important economic factor is the size of the future market. Saudi Arabia's emergence as a large and stable market for energy storage projects could create a genuine incentive to localize assembly plants, followed by some components and potentially broader manufacturing later. Industry does not move into a market simply because one or two projects exist, he noted, but when it sees sustained demand and clear economic scale. This highlights the importance of maintaining Saudi Arabia's storage program.

A Standalone Investment Asset

Al-Attas believes these projects represent an important step toward treating energy storage as an independent investment asset class rather than simply a component of a solar or wind power plant.

He explained that the presence of 15-year long-term contracts, a clear contractual structure, and predictable cash flows makes this type of asset more attractive to investors and project financiers.

He noted that storage's appeal compared with conventional generation plants lies in the different service it provides, namely flexibility and the ability to supply energy when it is needed. Compared with renewable energy projects, storage addresses one of their biggest challenges: the mismatch between the timing of generation and the timing of demand.

ACWA Expands Its Presence in Energy Infrastructure

ACWA Power stands out as one of the key parties in the three projects in Makkah Province and Hail, with a stake of approximately 35 percent. Al-Attas sees this as reflecting a move toward building a broader portfolio of energy infrastructure assets rather than focusing solely on electricity generation projects.

Through these projects, Saudi Arabia aims to increase the share of renewable energy and energy storage systems in its energy mix to around 50 percent by 2030, in line with growing electricity demand and in a way that contributes to enhancing the reliability, efficiency, and operational flexibility of the system.

The Saudi Power Procurement Company, in its capacity as the "principal buyer," is responsible for preparing preliminary studies and tendering electricity generation and energy storage projects, as well as signing power purchase agreements and energy storage service agreements with the developer consortia.

The reshaping of the electricity system is not limited to adding storage capacity. The move coincides with parallel efforts to strengthen the grid infrastructure itself to keep pace with the expected expansion of new generation sources. Saudi Energy Company has signed a cooperation agreement with Bpifrance to finance electricity grid development and expansion projects and provide financing solutions for the company's procurement and infrastructure projects.

The agreement was signed during the Saudi-French Investment Roundtable in Paris, coinciding with the official visit of Prince Mohammed bin Salman, Crown Prince and Prime Minister of Saudi Arabia, to France.

The agreement builds on a previous memorandum of understanding to establish a financing facility worth up to $3 billion, aimed at supporting the procurement program and electricity infrastructure projects, including equipment related to grid stability.

Ultimately, the picture taking shape today is not just about batteries. It is about what Saudi Arabia's electricity system could become in the coming years: solar and wind generating electricity, batteries storing it, and a grid better equipped to transmit and manage it when needed. Between these components, a new market is taking shape that could become one of the energy sector's most prominent investment stories in the next phase.


Mawani Adds 'RC2' Shipping Service to Jeddah Islamic Port

Mawani Adds 'RC2' Shipping Service to Jeddah Islamic Port
TT

Mawani Adds 'RC2' Shipping Service to Jeddah Islamic Port

Mawani Adds 'RC2' Shipping Service to Jeddah Islamic Port

The Saudi Ports Authority (Mawani) has added the "RC2" shipping service, operated by Ocean Network Express (ONE), to Jeddah Islamic Port, enhancing maritime connectivity between Saudi Arabia and the world, while reinforcing the port's growing competitive advantage and operational efficiency.

The new shipping service strengthens Jeddah Islamic Port's connections with the Chinese ports of Shanghai, Ningbo, and Nansha, as well as Aqaba in Jordan and Sokhna in Egypt, deploying vessels with a capacity of up to 1,643 twenty-foot equivalent units (TEUs).

The move is part of Mawani's efforts to improve Saudi Arabia's ranking in global performance indicators and support the flow of national exports.

Jeddah Islamic Port is an important logistics and commercial hub on the Red Sea coast. It covers an area of 12.5 square kilometers and has 62 berths, along with several specialized terminals and advanced facilities.

The port also has a number of berths for marine services, such as mooring and pilotage, and fully equipped halls for receiving pilgrims and visitors.